Central Bank of Jordan: Guidelines for Identifying Beneficial Owners

CENTRAL BANK OF JORDAN

Guidelines for Identifying Beneficial Owners

These guidelines are issued by the Central Bank of Jordan to implement the requirements of the Anti-Money Laundering and Terrorist Financing Law and its Executive Regulations, in accordance with the recommendations of the Financial Action Task Force (FATF). The purpose of these guidelines is to define the procedures for identifying the Ultimate Beneficial Owner (UBO) of customers and to ensure compliance with anti-money laundering and counter-terrorist financing regulations.

1. Definitions

For the purposes of these guidelines, the following terms shall have the meanings set out below:

• Ultimate Beneficial Owner (UBO): The natural person(s) who ultimately owns or controls the customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those who exercise ultimate effective control over a legal person or arrangement.

2. Identification of Beneficial Owners

Financial institutions and other obligated entities must identify the beneficial owners of their customers. This identification process involves taking reasonable measures to verify the identity of the beneficial owner(s) and understanding the ownership and control structure of the customer.

3. Criteria for Identifying Beneficial Owners

The beneficial owner is identified based on the following criteria:

• Ownership: Any natural person who ultimately owns or controls, directly or indirectly, 25% or more of the shares or voting rights in a legal person.
• Control: Any natural person who exercises ultimate effective control over the management of a legal person or arrangement, regardless of shareholding percentage.
• Senior Managing Official: In cases where no natural person is identified under the ownership or control criteria, the senior managing official of the legal person or arrangement shall be regarded as the beneficial owner.

4. Verification of Identity

Financial institutions must verify the identity of the identified beneficial owners using reliable, independent source documents, data, or information. This includes obtaining and verifying:

• Full name
• Nationality
• Date of birth
• Place of birth
• Residential address
• National identification number or equivalent

5. Ongoing Monitoring

Financial institutions must conduct ongoing due diligence on the business relationship with the customer, including scrutinizing transactions to ensure they are consistent with the institution's knowledge of the customer, their business, and risk profile. This includes keeping information on beneficial owners up to date.

6. Record Keeping

Financial institutions must maintain records of the identification data and verification documents obtained for beneficial owners for at least five years after the business relationship ends or the transaction is completed.

7. Reporting

If a financial institution suspects that a customer is involved in money laundering or terrorist financing, or if it cannot identify the beneficial owner, it must report this to the relevant authorities in accordance with the law.

8. Penalties

Failure to comply with these guidelines may result in administrative, financial, or criminal penalties as prescribed by the Anti-Money Laundering and Terrorist Financing Law and its Executive Regulations.

9. Effective Date

These guidelines shall come into effect from the date of their publication in the Official Gazette.

10. Amendments

The Central Bank of Jordan reserves the right to amend these guidelines as necessary to reflect changes in laws, regulations, or international standards.

CENTRAL BANK OF JORDAN

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