Regulatory Alerts2019-01-01
Circular No. 206 of 2020 on Criminal Methods
The Palestine Monetary Authority issued Circular No. 206 of 2020 to mandate banks implement enhanced precautionary and protective measures against emerging fraud and extortion schemes targeting customers via social media and communication platforms. The circular outlines specific criminal tactics, including fake bank employee impersonation, frozen dollar scams, prize draw fraud, and blackmail, requiring banks to exercise strict due diligence, verify transfer purposes, and screen beneficiaries against internal and international sanctions lists. Banks are further instructed to conduct regular customer awareness campaigns, maintain internal suspect lists, report suspicious activities immediately to the AML-CFT department, and utilize certified currency counting machines.
Palestine Monetary Authority
PALESTINE MONETARY AUTHORITY
Circular No. (2020/206)
To all banks operating in Palestine
Date: Tuesday, 03 November 2020
Subject: Criminal Methods
The Palestine Monetary Authority urges banks to take precautionary and protective measures to avoid criminal methods that fall under the crimes of fraud and extortion stipulated in Article (3) of Law Decree No. (20) of 2015 on Combating Money Laundering and Terrorist Financing and its amendments. These methods include receiving messages or calls via communication and social media platforms from fraudulent individuals residing inside or outside the State of Palestine, urging them to:
A. Disclose information related to their bank accounts, issued bank card numbers, usernames, and passwords for internet banking services under the pretext of being bank employees aiming to update customer data, after which fraudsters hack customer data and use it for their own benefit in online purchases, executing money transfers, or performing electronic payment services such as bill payments and mobile top-ups.
B. Send a money transfer for a specified amount to purchase frozen dollars at a price lower than the nominal purchase value, in exchange for the fraudster's commitment to send a corresponding money transfer worth more than the sent amount (i.e., the purchase price); this is known as the "Frozen Dollar Scam".
For example: sending a transfer of $3,000 in exchange for receiving a transfer of $5,000. It should be noted that the fraudster may begin by persuading the victim to send a small amount and then a larger transfer to reassure the victim, after which they cut off communication.
Palestine Monetary Authority
PALESTINE MONETARY AUTHORITY
C. Send a money transfer to cover a valuable transfer that will be sent to them in the form of prizes or aid, and the transfer receipt is often forged with the statement "The transfer will not be delivered to the beneficiary until it is modified", and/or contacting citizens and defrauding them using fake social media pages bearing the names of prominent figures, including but not limited to: princes, princesses, and TV show hosts.
D. Send a transfer to participate in a draw for large cash and in-kind prizes and/or send a transfer for a nominal amount to purchase a luxury car.
E. Send a money transfer aimed at extorting citizens out of fear of publishing videos or recorded materials of them.
In order to safeguard the stability and integrity of the banking sector and mitigate money laundering and terrorist financing risks, and to prevent citizens from falling victim to fraud and scam crimes, we reiterate the necessity of adopting the following precautionary, protective, and cautionary measures, which include:
1. Exercise due diligence to identify the source of cash deposit funds, identify and verify the purpose of transfers and the financial relationships between the sender and the beneficiary, and support this with supporting documents. Transfers shall not be executed if the identification procedures for electronic transfers stipulated in Article (7) of Instructions No. (2) of 2016 issued by the National Committee for Combating Money Laundering and Terrorist Financing are not met.
2. Prepare awareness and educational leaflets for customers to mitigate the risks of criminal methods, to be distributed periodically at bank headquarters and branches and through the bank's social media channels.
3. Enhance bank staff's capabilities regarding the risks of fraud and scam crimes via communication and social media platforms, and strengthen and raise customer awareness of these risks prior to executing financial transfers.
Palestine Monetary Authority
PALESTINE MONETARY AUTHORITY
4. Comply with the reporting obligations stipulated under Law Decree No. (20) of 2015 on Combating Money Laundering and Terrorist Financing and the instructions issued thereunder.
5. Work on maintaining internal lists of individuals suspected of employing the aforementioned criminal methods.
6. Notify the Palestine Monetary Authority immediately upon discovering the aforementioned criminal methods, by sending details and circumstances of these methods via the official email of the Anti-Money Laundering and Combating the Financing of Terrorism Department: AML-CFT@pma.ps
7. Comply with the requirement to provide currency counting and inspection machines in accordance with Circular (2013/169).
8. Do not execute rapid financial transfers before automatically querying the names of customers and beneficiaries of such transfers against the bank's internal watchlists and the effective local and international sanctions and freezing lists in the State of Palestine.
Supervision Group
Palestine Monetary Authority
Ramallah & Al-Bireh Governorate - Palestine P.O. Box 452
info@pma.ps | Fax: +970 2 2415310 | Tel: +970 2 2415251
Gaza - Palestine P.O. Box 4026
Fax: +970 8 2844487 | Tel: +970 8 2825713