Palestine Monetary Authority

(2009/ 9) Instructions No. To all banks operating in Palestine Date: Monday, December 28, 2009

Subject: Instructions on Resident and Non-Resident Persons

Based on the provisions of Banking Law No. (2) of 2002, and for the purpose of defining resident and non-resident persons for banking uses, the Palestine Monetary Authority has decided to issue instructions addressing the following:

(1/9) Resident Natural Person (2/9) Resident Legal Person (3/9) Non-Resident Person

The provisions of these instructions shall apply from the beginning of 2010, and any previous instructions shall be repealed to the extent that they conflict with these instructions, except for instructions related to the credit information system.

LEGAL SUPERVISION OF BANKS Palestine Monetary Authority

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Ramallah - Al Bireh P.O. Box 452 - Tel.: 02-2409920 - Fax: 02-2409922 Gaza - P.O. Box 4026 - Tel.: 08-2825713 - Fax: 08-2844487 E-mail: info@pma.ps www.pma.ps

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Palestine Monetary Authority

(1/9) Resident Natural Person

For the purposes of these instructions, a resident natural person is defined as a person who resides in Palestine for a period of one year (continuously or intermittently) or more, regardless of nationality.

The following categories of individuals shall be treated as residents:

1. Travelers: Persons who leave the country for specific periods of less than one year.

2. Individuals, workers, and employees: Persons who make repeated trips outside Palestine or work temporarily or permanently in other countries while their families reside in Palestine, including:

   a. Workers who work for a period of a year due to seasonal labor demand in another country and then return to their families. b. Workers who cross the border to work in a neighboring country periodically on a regular daily basis or at longer intervals (e.g., once a week). c. Employees working in foreign embassies and consulates and similar entities within Palestine. d. Employees working in international organizations within Palestine. e. Members of local ship and aircraft crews or other mobile equipment operated partially or wholly outside Palestine. f. Members of diplomatic and military missions, civilian employees, and envoys dispatched by the Government (National Authority) to work abroad, who are considered residents in Palestine. g. Students shall be treated as residents in Palestine regardless of the duration of their studies abroad, provided that part of their families remains residing in Palestine. h. Patients traveling abroad shall be treated as residents in Palestine even if their stay abroad extends for one year or more, as long as they belong to families residing in Palestine. i. Prisoners in the prisons of the neighboring country who were captured under exceptional and short-term or special circumstances. j. Foreigners who have been granted Palestinian nationality by the Palestinian National Authority and reside in Palestine. k. Foreign workers employed by business institutions that meet the conditions for a resident legal person shall be treated as residents in Palestine if they reside in Palestine for more than one year.

3. Persons residing in Jerusalem: Palestinian natural persons who meet the conditions outlined in paragraphs (a) to (i) and reside in Jerusalem shall be treated as resident persons.

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Ramallah - Al Bireh P.O. Box 452 - Tel.: 02-2409920 - Fax: 02-2409922 Gaza - P.O. Box 4026 - Tel.: 08-2825713 - Fax: 08-2844487 E-mail: info@pma.ps www.pma.ps

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Palestine Monetary Authority

(2/9) Resident Legal Person

Foreign business institutions (companies, private and public sector institutions) shall be considered resident in Palestine in the following cases:

1. If they operate permanently within Palestine and have economic interests related to the production of goods or provision of services, or if they own land or buildings in Palestine. It is required that the institution has at least one production or service facility in Palestine, with the necessary infrastructure and capacity to operate the facility indefinitely. Main centers located outside Palestine for these institutions shall not be considered resident in Palestine.

2. If the institution is registered with the Companies Registrar in Palestine as a business institution licensed to conduct business in Palestine.

3. Branches of foreign non-profit institutions that conduct their operations within Palestine for more than one year, excluding foreign embassies and consulates and representation offices of international and regional institutions.

4. Branches of foreign airline and shipping companies operating in Palestine.

5. Legal persons (companies and institutions) owned by Palestinians holding Jerusalem ID cards and residing in Jerusalem shall be treated as resident persons.

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Ramallah - Al Bireh P.O. Box 452 - Tel.: 02-2409920 - Fax: 02-2409922 Gaza - P.O. Box 4026 - Tel.: 08-2825713 - Fax: 08-2844487 E-mail: info@pma.ps www.pma.ps

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Palestine Monetary Authority

(3/9) Non-Resident Person

Any person who does not meet any of the conditions outlined in clauses (1/9 and 2/9) above shall be considered a non-resident.

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Ramallah - Al Bireh P.O. Box 452 - Tel.: 02-2409920 - Fax: 02-2409922 Gaza - P.O. Box 4026 - Tel.: 08-2825713 - Fax: 08-2844487 E-mail: info@pma.ps www.pma.ps