Palestine Monetary Authority

Instructions No. (2) of 2022

Regarding the Issuance and Receipt of Financial Transfers

Based on the provisions of Law-Decree No. (39) of 2022 concerning the Prevention of Money Laundering and the Financing of Terrorism, particularly Article (24) thereof, In accordance with the powers delegated to us, And in pursuit of the public interest, We have issued the following Instructions:

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Article (1)

Definitions

The words and phrases below shall have the meanings assigned to them, unless the context indicates otherwise:

• The Law: Law-Decree No. (39) of 2022 concerning the Prevention of Money Laundering and the Financing of Terrorism and its amendments.
• Person: Natural or legal person.
• Client: Person or legal arrangement.
• Financial Institution: The entity subject to the supervision of the Palestine Monetary Authority and licensed to provide financial transfer services.
• Financial Transfer: A financial transfer issued or received through the Financial Institution by electronic means on behalf of the originator, whether Palestinian or foreign, whereby funds are sent and received for a specific purpose for the benefit of a specific beneficiary at another financial institution, regardless of whether the originator and the beneficiary are the same person.
• Batch Transfer: A file consisting of a number of individual financial transfers that may be directed to a specific person or different persons and are sent to the same financial institutions.
• Originator: The person creating the financial transfer.
• Beneficiary: The person receiving the financial transfer at any financial institution inside or outside Palestine.
• Legal Arrangement: As per the definition provided in the Law.
• Beneficial Owner: As per the definition provided in the Law.
• Payment Chain: The direct subsequent payment chain in which the financial transfer and the accompanying payment message move together from the issuing Financial Institution to the beneficiary Financial Institution directly or through one or more intermediary Financial Institutions.
• Payment Coverage: The financial transfer that combines the payment message sent directly by the issuing Financial Institution to the beneficiary Financial Institution with payment instructions (coverage) from the issuing Financial Institution to the beneficiary Financial Institution through one or more intermediary Financial Institutions.

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Article (2)

Objective and Scope of Application

1. These Instructions aim to:

   • a. Regulate the service of issuing and receiving financial transfers, including payment chains and payment coverage.
   • b. Reduce the risks of money laundering and terrorist financing associated with the execution of financial transfers.

2. The provisions of these Instructions apply to all financial institutions licensed by the Palestine Monetary Authority to provide financial transfer services inside and outside Palestine, and to money or value transfer service providers. The following are exempt from the provisions of these Instructions:

   • a. Any transfer resulting from a cash withdrawal or purchases made using a credit card or prepaid payment cards, which are not used to execute financial transfers.
   • b. Transfers and settlements conducted between financial institutions when the originator and the beneficiary are financial institutions operating on their own account.

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Article (3)

Conditions for Issuance and Receipt of Financial Transfers

In addition to what is stated in any other legislation, the Financial Institution must comply with the following conditions for issuing and receiving financial transfers:

1. Prepare risk-based policies, procedures, and forms of work to execute financial transfers, provided that they include financial transfer information and identification and verification procedures or refusal or execution of the application of the financial transfer that is determined based on the required information about the originator or beneficiary of the transfer, and appropriate follow-up procedures and record retention.

2. Retain all information and data related to external financial transfers.

3. When financial transfer information is required by the beneficiary Financial Institution and competent authorities:

   • a. Include in the financial transfer, according to the issuance number or the unique identification/reference number of the financial transfer, for the purpose of tracking the path of the financial transfer to the originator or beneficiary.
   • b. Provide the beneficiary Financial Institution and competent authorities with all information related to the financial transfer within a maximum period of three days from the date of receiving the information request.

4. Exercise due diligence or enhanced due diligence commensurate with the approach based on the prevailing Instructions.

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Article (4)

Identification and Verification Procedures

The Financial Institution must comply with the following when sending and receiving financial transfers inside and outside Palestine:

1. Ensure that all financial transfers include the following accurate information and data:

   a. Data and information about the originator as follows:

   • 1. Name of the originator according to the personal identity document or registration and licensing certificates.
   • 2. ID number of the originator or passport for non-Palestinians, for the natural person.
   • 3. Registration number of the originator for the legal person.
   • 4. Address of the originator and date and place of birth/registration.
   • 5. Nationality of the originator.
   • 6. Identification number/unique reference number of the financial transfer.

   b. Data and information about the beneficiary as follows:

   • 1. Name of the beneficiary according to the personal identity document or registration and licensing certificates.
   • 2. ID document number or registration number of the beneficiary, for incoming transfers.
   • 3. Country and address of the beneficiary.
   • 4. Beneficiary Financial Institution and its address.

   c. With due regard to what is stated in paragraphs (1/a) and (1/b) of this Article, the Financial Institution must also ensure accurate information and data about the account number of the originator and the beneficiary used in executing the transfer, and in case there is no account for either of them, a unique reference number for the process must be provided that allows for tracking.

   d. Other data and information:

   • 1. The purpose of the financial transfer.
   • 2. The financial relationship between the originator and the beneficiary.

   2. Ensure that the originator's data provided at the time of issuing the financial transfer matches the data held by the Financial Institution according to due diligence procedures.

   3. Refuse to execute the financial transfer if unable to meet any of the requirements stated in these Instructions.

   4. The batch file of individual transfers executed across borders must contain the required and accurate information about the originator and the beneficiary, as specified in paragraph (1) of this Article, in a manner that allows for complete tracking of this information in the beneficiary country, including the originator's account number or a unique identification/reference number for the process.

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Article (5)

Simplified Due Diligence Procedures

The Financial Institution may simplify the identification procedures for financial transfers executed across borders, provided it complies with the following:

1. Obtain prior written approval from the Palestine Monetary Authority.

2. The amount of a single transfer does not exceed 1,000 US dollars or its equivalent.

3. The financial transfer includes accurate information and data about the originator and the beneficiary, including the name and account number used in executing the transfer, and in case there are no accounts for either of them, a unique reference number for the process must be provided that allows for tracking.

4. Verify information related to the client in case of suspicion of money laundering or terrorist financing.

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Article (6)

Retention of Information and Records

The Financial Institution must comply with the following:

1. Retain all information related to financial transfers and their transactions, and documents and records obtained as part of due diligence according to the provisions of the Law.

2. Provide an electronic archive of financial transfer records and transactions to facilitate the reconstruction of individual processes and provide information in cases of prosecution for criminal activities.

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Article (7)

Obligations of the Intermediary Financial Institution

The Intermediary Financial Institution must comply with the following when executing or receiving a financial transfer from a chain on behalf of other financial institutions:

1. Ensure that all information and data related to the originator and beneficiary of the financial transfer are present.

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Article (8)

Obligations of the Beneficiary Financial Institution

The Beneficiary Financial Institution must comply with the following when receiving any financial transfer:

1. Take all necessary measures to identify cross-border financial transfers that lack the required information about the originator or beneficiary, including follow-up procedures at the time of execution or thereafter as per the current reality.

2. Verify the identity of the beneficiary of the financial transfer if not previously verified, and retain all data and information received from the issuing Financial Institutions.

3. Adopt risk-based policies and procedures to determine when financial transfers lacking the required information about the originator or beneficiary are executed, refused, or suspended, and determine appropriate follow-up procedures.

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Article (9)

Money or Value Transfer Service Providers

1. With due regard to what is stated in any legislation, any person providing money or value transfer service without obtaining prior written approval from the Palestine Monetary Authority is considered to be operating illegally.

2. The money or value transfer service provider must comply with the application of these Instructions during the transfer, whether directly or through an agent in any country where it conducts its business.

3. The money or value transfer service provider, if it is itself the controller of the source of the transfer and the beneficiary, must comply with the following:

   • a. Collect all information about the originator and the beneficiary to provide a suspicion report or otherwise.
   • b. Submit a suspicion report to the follow-up unit in any of the countries related to the suspicious financial transaction and provide all information related to it.

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Article (10)

Application of Targeted Financial Sanctions

The Financial Institution must comply with the following:

1. Apply the sanctions stipulated in Presidential Decree No. (14) of 2022 concerning the implementation of Security Council decisions, including taking renewal procedures and necessary measures to prohibit transactions with persons and entities prohibited from dealing with them.

2. Inquire about the parties to the financial transfer on the lists of sanctions issued by the United Nations Security Council and the national listing list before executing the financial transfer.

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Article (11)

Penalties

Anyone who violates the provisions of these Instructions shall be punished according to the provisions of the Law.

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Article (12)

Implementation and Entry into Force

All competent authorities must implement the provisions of these Instructions, each within its jurisdiction, and they shall apply from the date of their issuance.

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Issued in Ramallah on 28/08/2022

Dr. Fares Malham Governor

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