Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Circular No. (15/2022)
To all banks operating in Palestine
Date: Sunday, 29 May, 2022

Subject: Preventive Measures Before Cashing Checks for Beneficiaries

In reference to Palestine Monetary Authority Instruction No. (6) of 2017 and its amendments regarding the security and technical specifications of checks, and with the aim of reducing the risks of money laundering and terrorist financing crimes, and detecting any forgery or counterfeiting cases that the bank may encounter when cashing checks, the Palestine Monetary Authority emphasizes to banks the necessity of adopting the following preventive measures before cashing checks for beneficiaries:

1. Providing the necessary tools to detect signs of forgery and counterfeiting, and to verify the integrity of security and technical specifications and markings on check papers before cashing them for beneficiaries.

2. Continuously training employees, especially first line of defense staff (customer service and tellers), on security and technical specifications and markings, and on how to distinguish and detect forged/counterfeit checks.

3. Alerting and raising employee awareness regarding indicators suggesting attempts to manipulate and obliterate (manually, by erasing, or with chemical substances) the surface of the check paper, and attempts to remove basic and editable content elements of the check, including the following indicators:

• Reaction of inks on the check paper surface due to manipulation and obliteration, manifesting as stippling (black spots/dots) in various locations on the check surface, color changes, and the check turning pale.
• Disappearance of designs in editable areas of the check (beneficiary name, amount in numbers and words, signature, and date), causing the background of those elements to turn white.
• The hologram mark turning black or silver due to chemical reactions of inks.
• Failure to appear and blurring of hairlines, shapes, geometric designs, and disappearance of secret inks when the check paper surface is exposed to UV light.
• Damage to the Matrix Bar Code mark and inability to read it due to chemical reactions.
• Interference and non-appearance of the VOID mark when photographing the check paper due to chemical reactions.
• Disappearance and non-appearance of designs and geometric shapes in the name and amount in words/numbers areas.

4. Refusing to cash checks at the counter in the following cases:

• Suspicion and belief in the existence of concealment and/or hiding of facial and physical characteristics, which affects camera recordings and the integrity of identity verification procedures for natural persons, such as: wearing sunglasses and hats, etc.
• Suspicion of abnormal behavior and conduct by customers inside bank branches and offices, such as: signs of panic and fear, excessive tension and nervousness, constant preoccupation with using mobile phones, etc.

5. Urging government and public authorities, institutions, and departments to establish and adopt special measures and controls for printing and cashing checks drawn for beneficiaries, including:

• a. Using modern payment methods to transfer funds and settle dues instead of using checks.
• b. Not issuing any negotiable and transferable checks to third parties, by adding the phrase "Pay to the first beneficiary only" on the check paper surface during the printing process according to security and technical specifications, and not adding it later using stamps.
• c. Determining and adopting financial ceilings and authorities for accepting the cashing of checks for beneficiaries, taking into account the check amount and risk assessments in their determination.
• d. Verifying the identity of check presenters to the bank for counter collection, and establishing arrangements that ensure the bank can communicate with those institutions and entities to verify the authenticity and integrity of checks before cashing them for beneficiaries.

6. Immediate reporting to the Anti-Money Laundering and Counter-Terrorist Financing Department at the Palestine Monetary Authority upon discovering or suspecting any cases of check forgery or counterfeiting, with renewed emphasis on the necessity of not tolerating and taking the necessary legal measures to combat check forgery and counterfeiting crimes.

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Supervision Group
Palestine Monetary Authority

Copy: To the esteemed Financial Follow-up Unit

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Contact Notes:
Ramallah & Al-Bireh Governorate - Palestine P.O. Box 452, Ramallah & Al-Bireh Governorate - Palestine P.O. Box info@pma.ps | Fax: +970 2 2415310 | Fax | Tel: +970 2 2415251 | Tel Gaza - Palestine P.O. Box 4026, Gaza - Palestine P.O. Box Fax: +970 8 2844487 | Fax | Tel: +970 8 2825713 | Tel www.pma.ps