Palestine Monetary Authority

Instructions No. (9) for 2022

Concerning the Issuance and Receipt of Money Transfers

Based on the provisions of Legislative Decree No. (39) of 2022 concerning the combating of money laundering and the financing of terrorism, particularly Article (24) thereof, and 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 following words and phrases shall have the meanings specified below, unless the context indicates otherwise:

• The Law: Legislative Decree No. (39) of 2022 concerning the combating of money laundering and the financing of terrorism and its amendments.
• Person: Natural or legal person.
• Client: Person or legal arrangement.
• Financial Institution: Entity subject to the supervision of the Palestine Monetary Authority and licensed to provide money transfer services.
• Money Transfer: Financial transfer issued or received through the Financial Institution via electronic means on behalf of the Originator, whether within or outside Palestine, whereby funds are sent and received for a specific purpose for the benefit of a designated Beneficiary at another Financial Institution, regardless of whether the Originator and Beneficiary are the same person.
• Batch Transfer: A file consisting of a number of individual Money 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 Money Transfer.
• Beneficiary: The person receiving the Money Transfer at any Financial Institution within or outside Palestine.
• Legal Arrangement: Defined in the Law.
• Beneficial Owner: Defined in the Law.
• Payment Chain: The direct follow-up payment chain through which the Money Transfer and the accompanying payment message move together from the Originating Financial Institution directly to the Beneficiary Financial Institution or through one or more intermediary Financial Institutions.
• Payment Coverage: The Money Transfer that combines the payment message sent directly by the Originating Financial Institution to the Beneficiary Financial Institution with the transfer of payment instructions (Coverage) from the Originating 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. The provisions of these Instructions aim to:

   • Regulate the service of issuing and receiving Money Transfers, including payment chains and payment coverage.
   • Mitigate the risks of money laundering and the financing of terrorism associated with executing Money Transfers.

2. The provisions of these Instructions apply to all Financial Institutions licensed by the Palestine Monetary Authority to provide Money Transfer services within and outside Palestine, and to Money or Value Transfer Service Providers, excluding from the provisions of these Instructions the following:

   • Any transfer resulting from a cash withdrawal or purchases made using a credit card or prepaid payment cards, which are not used to execute Money Transfers.
   • Transfers and settlements conducted between Financial Institutions when the Originator and Beneficiary are Financial Institutions acting on their own account.

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Article (3)

Conditions for Issuing and Receiving Money Transfers

In addition to what is stipulated in any other legislation, the Financial Institution must comply with the following conditions when issuing and receiving Money Transfers:

1. Develop risk-based policies, procedures, and business models for executing Money Transfers, provided that they include Money Transfer information, identification and verification procedures, and procedures for when to execute, reject, or suspend a Money Transfer that lacks the required information about the Originator or Beneficiary, along with appropriate follow-up procedures and record retention.
2. Fulfill all information and data requirements related to external Money Transfers.
3. When the required Money Transfer information is available to the Beneficiary Financial Institution and competent authorities through other means, the Originating Financial Institution must comply with the following:
   • Include the Originator's account information or a unique Money Transfer reference/identification number for the purpose of tracking the Money Transfer's path to the Originator or Beneficiary.
   • Provide the Beneficiary Financial Institution and competent authorities, in accordance with the Law, with all information related to the Money Transfer within a maximum period of three days from the date of receiving the information request.
4. Exercise due or enhanced diligence commensurate with a risk-based approach in accordance with prevailing Instructions.

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Article (4)

Identification and Verification Procedures

The Financial Institution must comply with the following when sending or receiving Money Transfers within and outside Palestine:

A. Data and information about the Originator as follows:

1. Name of the Originator as per personal identification document or registration and licensing certificates.
2. ID number of the Originator or passport for non-Palestinians, for natural persons.
3. Registration number of the Originator for legal persons.
4. Address of the Originator and date and place of birth/registration.
5. Nationality of the Originator.
6. Unique Money Transfer reference/identification number.

B. Data and information about the Beneficiary as follows:

1. Name of the Beneficiary as per personal identification document or registration and licensing certificates.
2. Identification or registration document number of the Beneficiary, for incoming transfers.
3. Country and address of the Beneficiary.
4. Beneficiary Financial Institution and its address.

C. Subject to what is stated in paragraphs (1/A, 1/B) of this Article, the Financial Institution must ensure that all Money Transfers also include accurate data and information about the Originator's and Beneficiary's accounts used to execute the transfer, and in the absence of an account for either, a unique transaction identification number shall be included to allow tracking.

D. Other data and information:

1. Purpose of the Money Transfer.
2. Financial relationship between the Originator and the Beneficiary.

2. Verify that the Originator's data provided when requesting the issuance of the Money Transfer matches the data retained by the Financial Institution under due diligence procedures.

3. Disclose the inability to comply with any of the requirements stipulated in these Instructions.

4. The batch file of individual cross-border transfers must contain the required and accurate information about the Originator and Beneficiary as specified in paragraph (1) of this Article, in a manner that allows complete tracking of this information in the country where the Originator's account number or unique transaction reference/identification number is located.

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Article (5)

Simplified Due Diligence Procedures

The Financial Institution may simplify identification procedures for cross-border Money Transfers, 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 USD 1,000 or its equivalent.
3. The Money Transfer must include accurate information and data about the Originator and Beneficiary, including the name and account number used to execute the transfer, and in the absence of an account, a unique transaction identification number shall be included to allow tracking.
4. Verify customer information 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 and transactions related to Money Transfers, their documents, and records obtained under due diligence in accordance with the provisions of the Law.
2. Provide electronic monitoring of transfer records and tracking of individual information, and provide information in cases of prosecution for criminal activities.

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Article (7)

Obligations of the Intermediary Financial Institution

When receiving or executing Money Transfers from a chain on behalf of other Financial Institutions, the Intermediary Financial Institution must comply with the following:

1. Ensure that all information and data related to the Originator and Beneficiary of the Money Transfer are complete.

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Article (8)

Obligations of the Beneficiary Financial Institution

When receiving any Money Transfer, the Beneficiary Financial Institution must comply with the following:

1. Take all necessary measures to identify cross-border Money Transfers that lack the required information about the Originator or Beneficiary, including follow-up procedures during or after execution as circumstances dictate.
2. Verify the identity of the Money Transfer Beneficiary if not previously verified, and retain all data and information received from the Originating Financial Institutions.
3. Adopt risk-based policies and procedures to determine when to execute, reject, or suspend a Money Transfer lacking the required information about the Originator or Beneficiary, and define appropriate follow-up procedures.

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Article (9)

Money or Value Transfer Service Providers

Subject to any other legislation, no person shall provide Money or Value Transfer services without obtaining prior written approval from the Palestine Monetary Authority.

Money or Value Transfer Service Providers must comply with these Instructions, whether the transfer is conducted directly or through an agent in any country where they conduct business.

If the Money or Value Transfer Service Provider is itself the controller of the transfer source and the Beneficiary, it must comply with the following:

• Collect all information about the Originator and Beneficiary for the purpose of determining whether to file a suspicious activity report.
• Submit a suspicious activity report to the Financial Intelligence Unit in any relevant country concerning the suspicious transaction and provide all related information.

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Article (10)

Implementation 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 resolutions, including taking freezing measures and necessary measures to prohibit transactions with persons and entities subject to a prohibition.
2. Screen Money Transfer parties against the sanctions lists issued by the United Nations Security Council and the National Listing before executing the Money Transfer.

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Article (11)

Penalties

Anyone who violates the provisions of these Instructions shall be punished in accordance with the provisions of the Law.

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Article (12)

Implementation and Enforcement

All competent authorities shall implement the provisions of these Instructions, each within its respective competence, and they shall apply as of their date.

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Issued in the city of Ramallah on 28/08/2022

Dr. Firas Malham Governor

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Note: 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 www.pma.ps