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2016-01-01

Circular No. 82: Non-Profit Companies

The Palestine Monetary Authority issued Circular No. 82 to enforce Cabinet Decision No. 17/99/15 of 2016, which mandates that all registered non-profit companies and licensed non-profit lending institutions in Palestine must obtain prior written approval from the Ministry of National Economy before receiving donations, grants, or financing. The decision establishes a formal application process requiring companies to submit designated forms and supporting documentation, subject to a seven-day review by the Companies Inspector who forwards a recommendation to the Minister and Cabinet for final authorization. Annual contributions under $100,000 USD or its equivalent are exempt from this requirement, as are fixed recurring operational expenses approved once yearly, though exceeding the threshold or modifying operational costs immediately triggers the full approval procedure.

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Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Circular No. (82 / 2016)
To all banks operating in Palestine
Date: Wednesday, 18 April, 2016

Subject: Non-Profit Companies

Attached for your information is Cabinet Decision No. (17/99/15) M/W.R.H dated 2016/04/21 regarding the mechanism for granting non-profit companies approval to obtain donations, contributions, grants, and financing. Please take the necessary measures accordingly.

Deputy Governor
for Financial Stability Affairs

Supervision and Inspection Department

www.pma.ps

Ramallah - Palestine P.O. Box 452 | Tel: +970 2 2415250 | Fax: +970 2 2409922 | Phone: +970 2 2415250 | Fax: +970 2 2409922 | Ramallah - Palestine P.O. Box 452
Gaza - Palestine PO Box 4026 | Tel: +970 8 2825292 | Fax: +970 8 2844487 | Phone: +970 8 2825292 | Fax: +970 8 2844487 | Gaza - Palestine P.O. Box 4026
Email: info@pma.ps | Email: info@pma.ps

State of Palestine
Cabinet of Ministers

Cabinet Decision No. (17/99/15) M/W.R.H for the year 2016
Regarding the mechanism for granting non-profit companies approval to obtain donations, contributions, grants, and financing

Based on the powers authorized to us by law
And in light of public interest requirements
And after reviewing the amended Basic Law of 2003 and its amendments;
And the Companies Law No. (12) of 1964 and its amendments;
And the Law Decree on Combating Money Laundering and Financing of Terrorism No. (20) of 2015;
And the Non-Profit Companies System No. (3) of 2010 and its amendments;
The Cabinet of Ministers decided in its meeting held in Ramallah on (2016/04/21) as follows:

Article One

  1. Non-profit companies registered with the Ministry of National Economy shall submit an application to the Companies Inspector at the Ministry of National Economy to obtain prior approval for donations, contributions, grants, and financing, using the designated form for this purpose.

  2. The Companies Inspector shall review the applications submitted to him, considering the uses and disposal of donations, contributions, grants, and financing that require approval for acceptance, in a manner consistent with the nature of the non-profit company's activities, its approved internal regulations, objectives, and goals. To this end, he may consult any government entity he deems appropriate to verify the company's activities and data. The Inspector shall refer the application to the Minister of National Economy, accompanied by his recommendation to approve or reject the application, within a maximum period of seven days from the submission of the request.

  3. Non-profit companies must provide the Companies Inspector with any documents or data he requests, to ensure that the expenditure of donations, contributions, grants, and financing aligns with the objectives and goals for which the company was established.

  1. The Minister of National Economy shall refer the application, accompanied by his recommendation, to the Cabinet of Ministers to take the appropriate decision regarding it.

  2. The General Secretariat of the Cabinet of Ministers shall provide the Ministry of National Economy with a copy of the decision immediately upon its issuance.

  3. The Companies Inspector shall provide the Palestine Monetary Authority with the Cabinet Decision issued regarding this matter.

  4. The Palestine Monetary Authority shall notify all banks operating in Palestine of the Cabinet Decision.

Article Two

  1. Paragraph (1) of Article One of this Decision shall apply to non-profit lending institutions licensed by the Palestine Monetary Authority, except for matters related to obtaining financing regulated by the Palestine Monetary Authority's instructions.

  2. The Palestine Monetary Authority shall provide the Companies Inspector with the written approvals granted to the companies mentioned in paragraph (1) of this Article.

Article Three

  1. Non-profit companies are exempted from the requirement of the Minister of National Economy, based on a recommendation by the Companies Inspector, to obtain approval for donations, contributions, grants, and financing, provided that their annual total does not exceed (one hundred thousand US dollars) ($100,000) or its equivalent in the legally circulating currency in all their bank accounts.

  1. Non-profit companies are exempted from the requirement of the Minister of National Economy, based on a recommendation by the Companies Inspector, to obtain prior approval for donations, contributions, grants, and financing once a year regarding fixed recurring operational expenses. In the event of any modification to the value of operational expenses, an application for approval must be submitted again.

  2. The Palestine Monetary Authority, in cooperation and coordination with the Financial Follow-up Unit, shall establish mechanisms to implement what is stated in paragraph (1) of this Article. In the event that a non-profit company exceeds the exempted amount, it shall be subject to the provisions stipulated in Article One of this Decision.

Article Four

All provisions conflicting with this Decision are hereby repealed.

Article Five

All competent authorities shall execute the provisions of this Decision according to their respective jurisdictions. This Decision shall take effect from the date of its issuance and be published in the Official Gazette.

Issued in Ramallah on 2016/04/21.

Rami Hamdallah
Prime Minister

Follows Cabinet Decision No. (17/99/15) M/W.R.H for the year 2016

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