Decision No. (55) of 2022 Regarding the Amendment of Decision No. (132) of 2011 on the Licensing and Supervision System for Specialized Lending Institutions and Its Amendments

mjr.lab.pna.ps Official Gazette Office | Reference No.: 193-8-2022 Issue No. 193 | Date: 2022/08/14

Decision No. (55) of 2022 Regarding the Amendment of Decision No. (132) of 2011 on the Licensing and Supervision System for Specialized Lending Institutions and Its Amendments

President of the State of Palestine Chairman of the Executive Committee of the Palestine Liberation Organization

Based on the Basic Statute of the Palestine Liberation Organization, and the Amended Basic Law of 2003 and its amendments, and after reviewing Law No. (2) of 1997 concerning the Palestinian Monetary Authority and its amendments, and on Decision-Law No. (9) of 2010 concerning Banks and its amendments, and on Presidential Decision No. (132) of 2011 on the Licensing and Supervision System for Specialized Lending Institutions and its amendments, and upon the proposal of the Board of Directors of the Palestinian Monetary Authority dated 2022/06/24, and based on the powers delegated to us, and in pursuit of the public interest, we have decided as follows:

Article (1) Reference shall be made to Decision No. (132) of 2011 on the Licensing and Supervision System for Specialized Lending Institutions and its amendments, for the purposes of implementing this amendment within the original system.

Article (2) Article (1) of the original system is amended as follows:

1. The definition of "Specialized Lending Institutions" is amended to read as follows: Specialized Lending Institution: A legal entity licensed to conduct any of the activities specified in Article (11) of this system.
2. A new definition is added as follows: Branch: The legally subordinate part of a specialized lending institution that conducts any of the activities specified in Article (11) of this system.

Article (3) Article (4) of the original system is amended to read as follows:

1. A legal entity wishing to conduct any of the activities specified in Article (11) of this system must submit an application for the required license from the Monetary Authority, and no person may conduct any of these activities without obtaining a prior license issued by the Monetary Authority.

mjr.lab.pna.ps Official Gazette Office | Reference No.: 193-8-2022 Issue No. 193 | Date: 2022/08/14

2. The license to conduct any of the activities specified in Article (11) of this system shall be granted only to public or private joint-stock companies, whether for-profit or non-profit, or to foreign companies registered in Palestine under the law.
3. No new company may be registered with the Companies Registrar if its purpose is to conduct any of the activities specified in Article (11) of this system, except after obtaining prior written approval from the Monetary Authority.

Article (4) Article (7) of the original system is amended to read as follows: The Monetary Authority shall issue instructions regarding the opening, closing, transfer, and suspension of operations for specialized lending institutions and their branches.

Article (5) Article (11) of the original system is amended to read as follows: A specialized lending institution may conduct any of the following activities in accordance with instructions issued by the Monetary Authority:

1. Lending or financing operations of all types.
2. Retail transfer services in accordance with relevant instructions.
3. Payment services as an agent in accordance with relevant instructions.
4. Micro-insurance services as an agent, subject to prior approval.
5. Opening accounts and deploying funds with banks.
6. Borrowing in accordance with relevant instructions.
7. Investment in equity, subject to prior approval.
8. Receiving grants and donations.
9. Any other services permitted by the Monetary Authority.

Article (6) Article (21) of the original system is amended by adding a new paragraph numbered (5) as follows: 5. The specific requirements and conditions for conducting the activities specified in Article (11) of this system.

Article (7) Article (22) of the original system is amended by adding a new paragraph numbered (13) as follows: 13. The competency and suitability conditions required for market entry, including holding ownership shares and assuming key positions and board membership.

mjr.lab.pna.ps Official Gazette Office | Reference No.: 193-8-2022 Issue No. 193 | Date: 2022/08/14

Article (8) A new article numbered (22) bis is added to the original system as follows: Specialized lending institutions must comply with the following:

1. Laws and regulations related to combating money laundering and terrorist financing, and the recommendations and instructions issued by competent authorities in accordance with relevant legislation.
2. Adopting a risk-based approach to ensure the identification, assessment, understanding, monitoring, measurement, and management of risks effectively, taking into account the results of any national risk assessment conducted and risk factors related to their customers, countries or geographic regions, products and services, operations, and service delivery channels. The nature and extent of the risk assessment must align with the nature and size of financial institutions, and risk classifications must be consistent with the size and complexity of their operations, expanding the scope of their customer base and products, and the magnitude of risks they face.
3. Establishing policies, controls, and procedures consistent with prevailing legislation to manage money laundering and terrorist financing risks, approved by senior management.
4. Taking necessary measures to mitigate money laundering and terrorist financing risks, along with operational procedures for identifying, assessing, and managing such risks.
5. Conducting risk assessments prior to launching products, practices, or technological applications, and taking appropriate measures to manage and mitigate arising risks.
6. Allocating necessary human resources and technical capabilities commensurate with the money laundering and terrorist financing risk level of the specialized lending institution, along with continuous training for staff for AML/CFT purposes.
7. Documenting their risk assessments in accordance with this article, updating them, and providing them to the Monetary Authority upon request.

Article (9) All provisions inconsistent with this Decision are repealed.

Article (10) All competent authorities shall implement the provisions of this Decision, each within their respective jurisdictions. This Decision takes effect from the date of its publication in the Official Gazette.

Issued in Ramallah on: 2022/08/08 Gregorian Corresponding to: /10 Muharram 1444 Hijri

Mahmoud Abbas President of the State of Palestine Chairman of the Executive Committee of the Palestine Liberation Organization