Central Bank of Jordan Circular on Ultimate Beneficial Owners of Shareholders

10/1/929
1/6/1442 AH
14/1/2021 AD
Circular to all Jordanian banks operating
Greetings,

Continuing the Central Bank's approach of following up on and reviewing its issued instructions and making any amendments to them in accordance with international best practices, and based on the Central Bank's role in enhancing disclosure and transparency requirements for Jordanian banks, and in line with the recommendations of the Financial Action Task Force (FATF) regarding international standards for combating money laundering, terrorist financing, and the proliferation of weapons, and in accordance with the provisions of Article (22/E/9) of the amended Instructions for Corporate Governance of Banks No. (63/2016) dated 1/9/2016 and Article (25/W/10) of the amended Instructions for Corporate Governance of Islamic Banks No. (64/2016) dated 25/9/2016, which included that it is the responsibility of the Board of Directors, within the requirements of disclosure and transparency, to ensure that the bank's annual report includes the names of shareholders who own (1%) of the bank's capital, identifying the Ultimate Beneficial Owner of these shares or part thereof, and clarifying whether the shareholding is pledged in whole or in part. In order to ensure that the data related to these beneficiaries is continuously updated and appropriate, I decide the following:

For the purposes of applying the provisions of this circular, the Ultimate Beneficial Owner is defined as the natural person who owns or controls, directly or indirectly, 1% or more of the bank's capital.

It is the responsibility of the bank's Board of Directors to ensure the implementation of necessary procedures to guarantee the provision of sufficient, accurate, and up-to-date information on the ultimate beneficial owner of the shares in the bank's capital, with the necessity of providing all means to verify the validity of documents and papers related to the data and information of the ultimate beneficial owner of those shares, by relying on reliable and independent sources.

As of the date of issuance of this circular, the bank must create a special register to meet the requirements of the provisions of this circular, whereby the bank retains the details of data of each ultimate beneficial owner as stated in this circular, and this register must be updated with any changes that occur to the ultimate beneficial owner of the shares, whether directly or indirectly, within (10) working days from the date the bank becomes aware of it, with the necessity of informing the Central Bank of the details of that change during the aforementioned period. The special register of the ultimate beneficial owner's data must be retained from the date of acquiring the status of the ultimate beneficial owner until (5) years from the date the person ceases to have the status of the ultimate beneficial owner.

The special register of the data and information of the ultimate beneficial owner must include, at a minimum, the data mentioned below, supported by all documents, papers, and data, whether paper-based or obtained from electronic databases, issued by reliable and independent entities, confirming the validity of the data and information used to verify the identity of the ultimate beneficiaries or for the purpose of reaching the ultimate beneficiaries, such as (registration certificates, association registration certificates, Civil Status Department data, etc.):

• The number of shares owned by the ultimate beneficial owner and their percentage of the bank's capital, clarifying the categories of those shares (nature of voting rights associated with them), as well as whether the shares are pledged in part or in whole, with the name of the party in whose favor the shares are pledged and the reasons for the pledge.
• The determinants and criteria by which the person acquired the status of the ultimate beneficial owner of the shareholding in the bank's capital, and what reinforces the bank's adherence to the methodology specified in this circular to reach the ultimate beneficial owner, in a manner that enables any party reading the records to be able to understand the reason for reaching this decision.
• The date the natural person acquired the status of the ultimate beneficial owner and the date the status ceased.
• The full name of four parts of the ultimate beneficial owner, nationality, date and place of birth, and place of residence.
• The national number and valid ID card number if the ultimate beneficial owner holds Jordanian nationality.
• The valid passport number, country and date of issue, and expiration date for persons who do not hold Jordanian nationality.
• All contact means for the ultimate beneficial owner, including phone number and email.
• Marital status.
• Names of children, mother, father, husband/wife.
• The country of tax residence of the ultimate beneficial owner with details of tax identification numbers issued by those countries.
• What reinforces the bank's search in available databases to verify that the ultimate beneficial owner is not listed on international sanction lists related to money laundering, terrorist financing, and proliferation of weapons, or local terrorist lists, or any other negative information.
• What proves that the bank has updated the ultimate beneficial owner's information periodically and continuously, whether upon the occurrence of developments or during periodic reviews.
• The ultimate beneficial owner's declaration form for the shareholding in the bank's capital shown in Appendix No. (1) of this circular, filled out by the ultimate beneficial owner and signed properly.

For the purposes of applying the requirements of this circular and for the purpose of identifying the ultimate beneficial owner, the following methodology must be taken into consideration sequentially:

• If the shareholder directly in the bank is a legal entity or any legal arrangement, the ultimate beneficial owner of that shareholding is traced by tracking the natural persons benefiting from the shareholdings in those legal entities, regardless of the number of legal entities or legal arrangements, as long as it leads to the natural person's indirect ownership of 1% or more of the bank's capital, as shown in the explanatory diagram in Appendix No. (2).
• If it is not possible to identify the natural person benefiting from the shareholding as stated in item (a) above, the bank must conduct the necessary verification of the extent of control by another person (who does not own the shareholding in the bank) over the natural or legal person owning the bank's shares by studying a number of factors that may indicate the existence of control, such as (the ability to make decisions, the ability to influence decisions indirectly through family relationships or close relationships with the person owning the bank's shares, or through any contract or arrangements or participation in financing projects, or through a general power of attorney or obtaining authorization to attend general assembly meetings, paying attention to persons who pay the debts and obligations of the legal entity if they are not owners, paying attention to persons to whom the revenues or profits of the legal entity are transferred).
• If it is not possible to identify the natural person benefiting from the shareholding as stated in items (a) and (b) above, the bank must conduct the necessary verification by studying the nature of the management of the legal entity and obtaining accurate information about any person who has the authority to make an influential strategic decision, such as the General Manager or the Board of Directors, or any person exercising executive control over the regular daily affairs of the legal entity.

Emphasizing the necessity of following the methodology explained in item (5) above regardless of the nationality of the natural or legal person or the legal arrangement participating in the bank, whether Jordanian or foreign nationality.

The requirements of the provisions of this circular are exempted from shareholdings in banks that belong to:

• Legal entities participating in banks owned by 40% or more by the Jordanian Government.
• The Social Security Corporation.
• Any other local public institutions.
• Governments of countries participating in Jordanian banks or any official entities in those countries.
• Banks and financial institutions whose shares are listed in one of the financial markets and are subject to disclosure requirements that ensure a sufficient degree of transparency regarding the ultimate beneficial owner of those banks and financial institutions, provided that the bank retains the documents and evidence confirming that.

For the purposes of meeting the requirements of the provisions of Article (22/E/9) of the amended Instructions for Corporate Governance of Banks No. (63/2016) dated 1/9/2016 and Article (25/W/10) of the amended Instructions for Corporate Governance of Islamic Banks No. (64/2016) dated 25/9/2016, the ultimate beneficial owner's data must be disclosed in the annual report as shown in Appendix No. (3) of this circular, taking into consideration the following:

• If the status of the ultimate beneficial owner applies to a natural person participating directly or indirectly in the bank's capital, the word (himself) is entered in the ultimate beneficial owner field.
• If the shareholder in the bank's capital directly or indirectly is from the exempted cases according to the provisions of items (7/a, b, c, d) above, the word (himself) is entered in the ultimate beneficial owner field with an appropriate description of the shareholder, including -if available- the law by which the public/official entity was established if they are Jordanian public and official institutions.
• If the shareholder in the bank's capital directly or indirectly is from the exempted cases according to the provisions of item (7/e), the name of the ultimate beneficial owner of this bank and/or institution is entered as disclosed to the financial market in which the bank's or financial institution's shares are listed.
• If the status of the ultimate beneficial owner applies to the natural person according to the methodology stated in item (5) of this circular, the name of the natural person and the criteria by which he acquired the status of the ultimate beneficial owner are entered.

It is required to review the existing records held by the bank regarding the ultimate beneficial owner's data and ensure that they meet all the requirements of the provisions of this circular within two months from the date of issuance of this circular, and inform the Central Bank if the bank is unable to meet any of these provisions.

If the bank violates any of the requirements of the provisions of these instructions, it shall be subject to one or more of the penalties and procedures prescribed by the Banks Law No. 28 of 2000 and its amendments.

The work of Circular No. (10/1/13751) dated 21/10/2018 is repealed.

Please accept the highest respect,
Governor
Dr. Ziad Fries

Appendix No. (1)
This form is filled out by the ultimate beneficial owner (the natural person)

1. Personal Data:
   1.1 Full name in Arabic:
   Family Name
   Grandfather Name
   Father's Name
   First Name
   2.1 Full name in English according to passport:
   First Name
   Middle Name
   Grandfather Name
   Surname
   3.1 Gender
   Male
   Female
   4.1 Date of Birth:
   Year
   Month
   Day
   5.1 Place of Birth:
   6.1 Nationality:
   7.1 Other Nationalities:
   8.1 Jordanian Civil Status ID:
   Expiry Date
   Place of Issue
   Document Number
   National Number
   9.1 Passport:
   Expiry Date
   Issue Date
   Place of Issue
   Passport Number
   10.1 Marital Status:
   Married
   Single
   Divorced
   Widowed
   11.1 Wife's name according to identity proof document:
   12.1 Children's names according to identity proof document:
   13.1 Father's name according to identity proof document:
   14.1 Mother's name according to identity proof document:

2. Residence Information in the Hashemite Kingdom of Jordan:
   1.2 Residence:
   Resident
   Non-resident
   2.2 Permanent Residence Address:
   Address (1)
   Address (2)
   Country
   City
   Region/State
   Postal Code
   Phone Number
   Mobile Number
   Fax Number
   Email

3. Educational Qualifications:
   1.3 The following table is filled out according to the ultimate beneficial owner's educational qualifications
   Graduation Year
   City/Country
   University/College/School Name
   Qualification/Major

4. Professional Experience:
   1.4 Information about current employer:
   Employer Title
   Employer Address
   Employer Phone
   Job Title
   Length of Service
   Employer Website
   2.4 Ultimate Beneficial Owner's Employment Record:
   3
   2
   1
   Employer Name
   Nature of Work
   Job Title and Details of Tasks and Duties
   From
   (Month/Year)
   To
   (Month/Year)
   From
   (Month/Year)
   To
   (Month/Year)
   From
   (Month/Year)
   To
   (Month/Year)
   Length of Service
   Reason for Leaving Job

5. Politically Exposed Persons (PEPs)
   1.5 Politically Exposed Persons
   1.1.5 Does the ultimate beneficial owner or any of his relatives (first degree) or business partners hold or previously hold a high public office in the Kingdom, such as head of government, judge, military, high-ranking government position, or was a prominent politician or prominent figure in a political party or senior executives in state-owned companies.
   Yes
   No
   If the answer is yes, provide the person's data and position.
   Does the ultimate beneficial owner or any of his relatives (first degree) or business partners hold or previously hold a high public office in a foreign country, such as head of state or government, judge, military, high-ranking government position, or was a prominent politician or prominent figure in a political party or senior executives in companies owned by a foreign state. Yes No If the answer is yes, provide the person's data and position.
   2.1.5 Does the ultimate beneficial owner or any of his relatives (first degree) or business partners hold or previously hold a prominent position in an international organization.
   Yes
   No
   If the answer is yes, provide the person's data and position.

6. Financial Status
   1.6 Approximate annual income of the beneficiary (in Jordanian Dinar)
   10,000 – 50,000
   50,001 – 100,000
   100,001 – 500,000
   500,001 – 1,000,000
   More than 1,000,000
   2.6 Approximate net worth of the ultimate beneficial owner (in Jordanian Dinar)
   10,000 – 50,000
   50,001 – 100,000
   100,001 – 500,000
   500,001 – 1,000,000
   More than 1,000,000
   3.6 Source of wealth of the ultimate beneficial owner
   4.6 Source of financing for purchasing shares in the bank (directly or indirectly)
   5.6 Does the ultimate beneficial owner have a family relationship up to the third degree within the ultimate beneficial owners in the bank (directly or indirectly)
   6.6 How the ultimate beneficial owner contributes to the bank:
   Direct Investment
   Indirect Investment through:
   Guardianship over:
   Custodianship over:
   Agency for:

7. Criminal Record
   1.7 Is the ultimate beneficial owner currently a party to any civil case?
   Yes
   No
   2.7 Are there currently any judgments or orders issued against the ultimate beneficial owner that have not been complied with?
   Yes
   No
   3.7 Has the ultimate beneficial owner ever declared bankruptcy or filed for bankruptcy?
   Yes
   No
   4.7 Has any person ever managed the ultimate beneficial owner's business, with or without his consent?
   Yes
   No
   Provide details if the answer to questions 1.7 to 4.7 is yes:
   5.7 Has the ultimate beneficial owner (or any company or enterprise in which he is or was a partner, major shareholder, CEO, or administrative manager) ever:
   1.5.7 Been banned/prohibited from practicing any trading, commerce, or profession requiring a license, registration, or approval under the systems and regulations in force in the Kingdom or any foreign country?
   Yes
   No
   2.5.7 Been subject to disciplinary procedures or proof of indiscipline or incompetence by a professional or regulatory body regarding any trading, commerce, or profession he practices?
   Yes
   No
   3.5.7 Previously been subject to (or his company/enterprise) an investigation related to commercial activities by a criminal investigation body or regulatory body?
   Yes
   No
   4.5.7 A court judgment convicting him of fraud, deception, or breach of honor and trust, or committing a prohibited act?
   Yes
   No
   5.5.7 Subject to any criminal or judicial proceedings that are still ongoing?
   Yes
   No
   6.7 Has any government authority in the Hashemite Kingdom of Jordan or outside it during the past ten years done any of the following:
   1.6.
   7 Discovered that the ultimate beneficial owner, directly or indirectly, provided false data or omitted providing any data?
   Yes
   No
   If the answer is yes, please provide details:
   2.6.7 Discovered that the ultimate beneficial owner, directly or indirectly, is involved in violating its rules or systems?
   Yes
   No
   If the answer is yes, please provide details:
   3.6.7 Discovered that the ultimate beneficial owner, directly or indirectly, was the cause of the rejection, suspension, cancellation, or imposition of restrictions on his license to practice any work related to financial activities?
   Yes
   No
   If the answer is yes, please provide details:
   4.6.7 Issued any judgment or decision against the ultimate beneficial owner, directly or indirectly, regarding financial activities?
   Yes
   No
   If the answer is yes, please provide details:
   5.6.7 Imposed a financial penalty or fine on the ultimate beneficial owner regarding financial activities?
   Yes
   No
   If the answer is yes, please provide details:
   6.6.7 Issued a judgment against the ultimate beneficial owner to cease any activity?
   Yes
   No
   If the answer is yes, please provide details:

8. Beneficiary Declaration:
   I, the undersigned, declare that the information in this form (including all attached documents and papers) is complete, accurate, and correct. I also declare that I am the ultimate beneficial owner of the investments in [Bank Name] through investment in [Bank Name], and on my personal responsibility. I also undertake to inform [Bank Name] in writing without delay in the event of any change in the information or data provided under this form. Beneficiary Name:
   Date: / / .
   Beneficiary Signature

Appendix No. (2)
Ownership Percentage
Ultimate Beneficial Owner
(45%)(5%)
Through Legal Entity (B)
2.25%
Natural Person (E)
(55%)(5%)
Through Legal Entity (B)
2.75%
Natural Person (W)
5%
Direct shareholding
5%
Natural Person (J)
(40%)(90%)
Through Legal Entity (D)
36%
Natural Person (Z)
(10%)(90%)
Through Legal Entity (D)
9%
Natural Person (H)
(100%)(50%)(90%)
Through Legal Entity (D)
45%
Natural Person (Y)

Appendix No. (3)
Major Shareholders whose shareholding percentage is equal to or exceeds (1%) Shareholder Name Nationality Number of Shares Owned Percentage of Shareholding in Bank Capital Ultimate Beneficial Owner Number of Pledged Shares Percentage of Pledged Shares of Total Shareholding Pledge Party