Palestine Monetary Authority

Circular No. (238/2022)
To all banks operating in Palestine
Date: Thursday, September 29, 2022

Subject: Non-Profit Companies System

Attached is a copy of the decision issued by the Council of Ministers No. (20) for the year 2022 regarding the Non-Profit Companies System, published in Official Gazette Issue No. (194).

Accordingly, it is requested to take the necessary measures regarding this matter; including putting in place the necessary measures and controls to ensure that non-profit companies obtain the required approvals under the aforementioned System to receive funds in their accounts at banks.

Supervision Group
Palestine Monetary Authority

---

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 Fax: +970 8 2844487 | Tel: +970 8 2825713 www.pma.ps

```markdown

State of Palestine

Official Gazette
Palestinian Documents

Issued by
The Official Gazette Office
Issue 194

Correspondence: The Official Gazette Office
Ramallah - Al-Masayeen - Al-Barqawi Building - opposite Millennium Hotel Tel: 02-2971654 | Fax: 02-2986008 Email: og@lab.pna.ps Electronic Reference: mjr.lab.pna.ps ```

```markdown
2022/09/25
Palestinian Facts
Issue (194)

Non-Profit Companies System

No. (20) for the year 2022

The Council of Ministers,
Based on the provisions of the Basic Law amended in 2003 and its amendments, particularly the provisions of Article (70) thereof, And the provisions contained in Law No. (42) for the year 2021 regarding Companies, particularly the provisions of Article (2/29) thereof, And after reviewing the Law-Decree No. (39) for the year 2022 regarding the combating of money laundering and terrorist financing, And based on the proposal of the Minister of National Economy, And on what was approved by the Council of Ministers on 2022/08/15, And on the powers delegated to us, And to achieve the public interest, We have issued the following System:

Chapter One

Definitions and General Provisions

Article (1)

Definitions

1. The words and expressions used in this System shall have the meanings assigned to them below, unless the context indicates otherwise:

   • The Law: Law-Decree No. (42) for the year 2021 regarding Companies.
   • The Minister: The Minister of National Economy.
   • The Registrar: The Company Registrar appointed by the Minister.
   • Non-Profit Company: Any company registered in accordance with the provisions of the Law and this System, or related legislation, which does not aim to achieve profit.
   • Competent Authority for the Non-Profit Company: The official body under whose jurisdiction the primary activity of the non-profit company falls.
   • Competent Authorities: Any government body tasked with combating money laundering and terrorist financing according to its jurisdiction, the Public Prosecution, and judicial police officers.
   • The Unit: The Financial Monitoring Unit established under the provisions of Law-Decree No. (39) for the year 2022 regarding the combating of money laundering and terrorist financing.
   • Beneficiary of the Non-Profit Company: A natural person or a group of natural persons who have received charitable, humanitarian, or other types of assistance through the services provided by the non-profit company.

2. The definitions contained in the effective Law-Decree regarding the combating of money laundering and terrorist financing shall apply wherever they appear in this System.

Reference No: 194-9-2022
62
The Official Gazette Office
Electronic Reference for the Official Gazette mjr.lab.pna.ps ```

2022/09/25
Palestinian Facts
Issue (194)

Article (2)
Form of the Non-Profit Company

1. The non-profit company shall take the form of a private joint-stock company, and the provisions of the private joint-stock company regarding its registration, capital, and fees collected for the registration process shall apply to it, insofar as no provision exists in this System.
2. Non-profit companies in Palestine are subject to the effective Anti-Corruption Law.

Article (3)
Objectives of the Non-Profit Company
The establishment of any non-profit company requires that its objectives be to provide a service or economic, social, cultural, community, developmental, or other activity that provides benefit to the public interest, without aiming to achieve profit. If it generates returns or profits, they shall not be distributed among its shareholders.

Article (4)
Registration Application
The application for registration of the non-profit company shall be submitted to the Registrar in accordance with the provisions of the Law and the systems and instructions issued pursuant to it, accompanied by the following documents:

1. The Articles of Association signed by all shareholders.
2. The Internal Regulations signed by all shareholders.
3. The names of the directors, board members, and authorized signatories for the company, their nationalities, their ID or passport numbers, and their addresses. For legal persons, their registration number shall be added.
4. Copies of the identity documents of the shareholders, directors, board members, and authorized signatories for the company.
5. Any other data or documents requested by the Registrar or required by effective legislation.

Article (5)
Shareholders and Authorized Signatories
The number of shareholders of the non-profit company must not be less than seven shareholders, with a board of directors consisting of at least five members. The number of authorized signatories for the company's operations and accounts must not be less than two jointly.

Article (6)
Capital of the Non-Profit Company

1. The capital of the non-profit company must be sufficient to achieve its objectives, according to the type of its activity, and in accordance with the provisions of related legislation.
2. The non-profit company must provide the Registrar, within sixty days from the date of its registration, with evidence that the shareholders have paid the value of the non-profit company's capital from their private bank account.

Reference No: 194-9-2022
63
The Official Gazette Office
Electronic Reference for the Official Gazette mjr.lab.pna.ps

2022/09/25
Palestinian Facts
Issue (194)

Article (7)
Competent Authority for the Non-Profit Company

1. The non-profit company is obliged to obtain prior preliminary approval for its registration from the competent authority designated for it by the Registrar, before being granted approval for registration.
2. The competent authority for the non-profit company has the right to verify that the company's operations are consistent with its objectives and goals stated in its Articles of Association and Internal Regulations.
3. In the event that there is no competent authority associated with the non-profit company's activity, the Registrar is competent to make the appropriate decision regarding registration or non-registration.
4. Competent authorities are obliged to follow up on the implementation by the non-profit company of projects and activities for which it previously obtained funding, in a manner consistent with its plans and strategies.

Article (8)
Financial and Administrative Reports

1. The non-profit company shall keep special records in which it records the reality of its meetings, decisions, income and expense accounts, all its assets, and the expenses it has incurred or will incur in pursuit of its objectives.
2. The non-profit company must submit an annual report to the Registrar regarding its operations and activities, its funding sources, accompanied by its budget certified by the authorized signatories for the non-profit company and its auditor.
3. Non-profit companies are obliged to submit actual, financial, and administrative periodic reports to the competent authority for the non-profit company every three months, where these reports include the stages of implementation of projects and activities for which the non-profit company previously obtained funding.
4. When the shares of any shareholder are transferred to another person for any reason, he shall not receive compensation exceeding the funds he paid for those shares.
5. The non-profit company is obliged to open a tax file with the tax authorities, and must provide the Registrar with evidence of opening the file, within three months from the date of registration for a new non-profit company, and three months from the date this System comes into force for a non-profit company registered before the issuance of this System.
6. The non-profit company is obliged to open a bank account for itself within Palestine, licensed by the Palestine Monetary Authority.

Reference No: 194-9-2022
64
The Official Gazette Office
Electronic Reference for the Official Gazette mjr.lab.pna.ps

2022/09/25
Palestinian Facts
Issue (194)

Article (9)
Prohibitions on Shareholders

1. It is prohibited for any shareholder in the non-profit company to do the following:
   a. Have a direct interest for himself or his relatives up to the fourth degree with any for-profit company implementing its projects. b. Receive salaries, bonuses, or allowances from the non-profit company in which he is a shareholder.
   c. Be a member of any association working for the same objectives.

Reference No: 194-9-2022
64
The Official Gazette Office
Electronic Reference for the Official Gazette mjr.lab.pna.ps

```markdown
2022/09/25 Palestinian Facts Issue (194)

d. Appoint any of his relatives in the non-profit company up to the fourth degree. e. Participate in more than one non-profit company. f. Participate in any for-profit company working in the same field as the non-profit company.

2. a. It is prohibited for the non-profit company to collect or provide cash or in-kind donations within or outside Palestine, to any entity, without obtaining the Registrar's approval, according to a written request submitted to him containing detailed data.
   b. It is prohibited for the non-profit company to participate in any for-profit company or to convert its legal form into a for-profit company.

Article (10)
Returns

1. Any net returns achieved by the non-profit company are considered a surplus for it, and they may not be used except to achieve its objectives and the goals for which it was established, and to expand its activities and increase its assets.
2. The non-profit company is not allowed to distribute any of its net returns directly or indirectly to any of the shareholders.
3. The non-profit company is not allowed to have multiple fields of work; it is required to specialize in a specific field, and it is prohibited for it to engage in any purely commercial activities.

Article (11)
Salaries and Operational Expenses

1. The non-profit company shall adopt a salary scale for its employees.
2. The total of salaries and operational expenses of the non-profit company shall not exceed a specific percentage of its budgets, determined annually, and shall not exceed (25%).
3. The provisions of paragraph (2) of this Article are exempted for specialized lending institutions subject to the legislation of the Palestine Monetary Authority, and non-profit companies that are invested in pursuant to a decision issued by the Council of Ministers or the Minister, each according to their jurisdiction regarding the nature of the company's work and activities.
4. The non-profit company is obliged to periodically provide the Registrar with administrative reports and financial reports (financial statements).
5. The non-profit company is obliged to annually provide the Registrar with a list of the names and salaries of its employees.
6. The non-profit company is obliged to open tax files for its employees in accordance with the effective Income Tax Law, and is obliged to monthly provide the Registrar with tax deductions for its working employees.
7. The non-profit company is obliged to provide the Registrar with any changes occurring in the salaries of its employees, within one month from the date the change occurred.
8. The non-profit company is obliged to periodically, semi-annually, provide the Registrar with an analysis derived from its financial statements, and an analysis of its projects and their impact on society.

Reference No: 194-9-2022 65 The Official Gazette Office Electronic Reference for the Official Gazette mjr.lab.pna.ps

2022/09/25 Palestinian Facts Issue (194)

Article (12)
Financial Resources

1. The financial resources of the non-profit company include gifts, donations, grants, financing, and aid, and funding sources for its projects from foreign or local entities, provided that these gifts, donations, grants, financing, and aid are unconditional.
2. Prior approval from the Council of Ministers and/or the Minister is required to accept gifts, donations, grants, financing, and aid, and to state their purpose.
3. The non-profit company has the right to establish income-generating activities and projects after obtaining the Registrar's approval, provided that its returns are used to serve its objectives.
4. The non-profit company has the right to utilize movable and immovable funds to achieve its objectives and goals, except for participating in any for-profit company.

Article (13)
Mechanism for Approving Funding Sources

The mechanism for granting non-profit companies approval to receive gifts, donations, grants, financing, and aid is as follows:

1. Non-profit companies registered with the Ministry of National Economy shall submit a request to the Registrar for prior approval for gifts, donations, grants, financing, and aid on the dedicated form, and non-profit companies must provide the Registrar with any documents or data requested, to ensure that the expenditure of gifts, donations, grants, financing, and aid is consistent with the objectives and goals for which the non-profit company was established.
2. The Registrar shall study the applications submitted to him, considering the uses and disposal of gifts, donations, grants, financing, and aid for which approval is sought to accept them, in a manner consistent with the nature of the non-profit company's work, its approved internal regulations, and its objectives and goals. To this end, he may seek the assistance of any government body he deems appropriate to verify the non-profit company's operations and data, and the Registrar shall submit the application to the Minister, accompanied by his opinion, to accept or reject the application within a maximum period of one week from the date of completing the application.
3. If the total annual amount of funding sources exceeds ($100,000) (one hundred thousand US dollars), or its equivalent in the legally circulating currency.
4. The General Secretariat of the Council of Ministers shall provide the Ministry of National Economy with a copy of the decision immediately upon its issuance.
5. The Registrar shall provide the Palestine Monetary Authority with the Council of Ministers' decision issued regarding this matter.
6. The Palestine Monetary Authority shall inform the banks operating in Palestine of the Council of Ministers' decision.

Reference No: 194-9-2022 66 The Official Gazette Office Electronic Reference for the Official Gazette mjr.lab.pna.ps ```

```markdown

Palestinian Facts

Article (14)

Non-Profit Lending Institutions

1. The provisions of this System shall apply to non-profit lending institutions licensed by the Palestine Monetary Authority, except for what relates to obtaining financing which is regulated by the instructions of the Palestine Monetary Authority.
2. The Palestine Monetary Authority shall provide the Registrar with the risk positions granted to the companies mentioned in paragraph (1) of this Article.

Article (15)

Exemption of Non-Profit Companies

1. Non-profit companies are exempted by a decision of the Minister, based on the Registrar's proposal, from obtaining approval for gifts, donations, grants, financing, and aid, if their total annual amount does not exceed ($100,000) (one hundred thousand US dollars) or its equivalent in the legally circulating currency in all their bank accounts.
2. Non-profit companies are exempted by a decision of the Minister, based on the Registrar's proposal, from obtaining prior approval for gifts, donations, grants, financing, and aid once a year regarding fixed monthly operational expenses, and in the event that any modification occurs in the value of operational expenses, they shall submit a request to obtain approval again.

Article (16)

Supervision of Non-Profit Companies

1. The Registrar shall supervise the compliance of non-profit companies with everything related to the implementation of the provisions of the Law and this System and the instructions issued pursuant to it. To this end, he may commission the non-profit company's auditor or appoint another auditor or any specialized employee, at the company's expense, to audit its entries and all its operations.
2. The Ministry is obliged, in coordination with the competent authority for non-profit companies, to verify the extent to which the non-profit company's activities and programs requiring funding are consistent with the proposed Government plan.
3. The competent authority for non-profit companies is obliged to ensure the approval of the non-profit companies' projects submitted for funding, in accordance with their programs and plan, and to verify the compliance of these companies with implementing the projects according to their vision through field audits of the projects and their presentation.
4. The competent authority for non-profit companies is obliged to provide the Registrar with evidence of the compliance of non-profit companies with implementing the projects according to their vision as stated in paragraph (3) of this Article.

Article (17)

Liquidation of the Non-Profit Company

1. The Registrar may warn any non-profit company to rectify its status before referring it for liquidation, within a maximum period of one month from the date of the warning.
2. In addition to the liquidation provisions contained in the Law, the Registrar may, after exhausting the period stipulated in paragraph (1) of this Article, refer any non-profit company for liquidation in any of the following cases:
   a. If it violates the provisions of the Law, this System, and other related legislation. b. If it engages in activities and operations that do not fall within its objectives.
   c. If any activity it engages in results in a violation of public order or public morals pursuant to a final judicial ruling.
   d. If it does not conduct its operations for a period of one year, or suspends its operations for a period exceeding one year.
3. After completing the liquidation process, the company's funds and assets shall be distributed as follows:
   a. The amount of their actual contribution to the company's capital at the time of its establishment shall be returned to the shareholders. If the company's funds are insufficient to pay off the shares, the distribution shall be proportional to each shareholder's contribution to its capital. b. If the company's funds exceed its capital, the remainder shall be returned to any non-profit company or community body with similar objectives by a decision of the Minister based on the Registrar's proposal.

Article (18)

Registration of Branches of Foreign Non-Profit Companies

1. Any foreign company may register a branch in Palestine for non-profit purposes if the branch meets the conditions and requirements according to the provisions of the Law and this System.
2. The procedures applicable to the registration of the branch of a foreign non-profit company shall be the same as those applicable to the foreign company pursuant to the Law.

Chapter Two

Anti-Money Laundering and Counter-Terrorist Financing Procedures

Article (19)

Supervisory Authorities

For the purposes of organization, supervision, and oversight of procedures to combat the crime of money laundering and terrorist financing, the Registrar is considered the supervisory authority for non-profit companies.

Article (20)

Risk Assessment

The Registrar shall undertake the following:

1. Assess money laundering risks associated with the non-profit company sector.
2. Assess terrorist financing risks, including:
   a. Identifying the sub-group that is susceptible by virtue of its activities, size, characteristics, or features to the risk of exploitation for terrorist financing, and for this purpose, it may use all available relevant information sources held by the authorities.

Reference No: 194-9-2022 69 The Official Gazette Office Electronic Reference for the Official Gazette mjr.lab.pna.ps

2022/09/25 Palestinian Facts Issue (194)

b. Identifying the threats posed by designated terrorist entities according to the legal procedures in force in the State to non-profit companies, and the possibility of those companies being exposed to risk or being misused to support and finance terrorism, and then taking appropriate and effective measures to address these identified risks and reviewing them periodically to ensure their adequacy.

c. Reviewing the appropriateness and effectiveness of procedures, including legislation related to non-profit companies, to prevent their misuse in supporting and financing terrorism and terrorist organizations, and working to improve them whenever necessary.

d. Re-evaluating the non-profit company sector periodically by reviewing new information about potential weaknesses in the sector that could be exploited in terrorist activities according to the laws in force in Palestine, to ensure the effective implementation of procedures.

Article (21)
Supervision and Oversight of Non-Profit Companies

The Registrar shall undertake the following:

1. Ensure the compliance of non-profit companies with the requirements of the provisions of this Chapter and other related rules and measures for combating money laundering and terrorist financing, and verify this, including monitoring their compliance with risk-based procedures according to the provisions of Article (23) of this System. To this end, it may take the necessary means of office and field supervision to verify this compliance.

2. Determine the frequency and intensity of supervision in the field of combating money laundering and terrorist financing based on its understanding of money laundering and terrorist financing risks, and the degree of risk associated with non-profit companies, according to the risk assessment contained in Article (20) of this System.

3. Audit the annual financial statements issued by the non-profit company to ensure that all funds are fully utilized and spent in a manner consistent with the purpose of the announced activities of the non-profit company.

4. Coordinate and cooperate locally with competent authorities, each regarding its jurisdiction.

Article (22)
Beneficiaries of Non-Profit Companies

Non-profit companies identified within the sub-group according to the provisions of Article (20) of this System must, to ensure that the non-profit company is not exploited or charitable funds are not used to finance and support terrorists and terrorist organizations, take the following two measures:

1. Obtain the identity of the beneficiaries of the non-profit company and the associated non-profit companies.

2. Document the identity of its main donors, with the necessity of ensuring the confidentiality of their information.

Reference No: 194-9-2022 69 The Official Gazette Office Electronic Reference for the Official Gazette mjr.lab.pna.ps

2022/09/25 Palestinian Facts Issue (194)

Article (23)
Risk-Based Procedures

The Registrar may apply the following two measures:

1. Require non-profit companies not in the sub-group specified according to the provisions of Article (20) of this System to apply the measures stipulated in Article (22) of this System, either fully or partially, in proportion to the nature and degree of risk associated with them.

2. Take any additional measures it deems appropriate to limit the exploitation of non-profit companies in financing terrorism or money laundering, in proportion to the nature and degree of risk associated with them and their changes.

Article (24)
Competence and Suitability Standards

1. It is a condition for the registration of a non-profit company that its founder meets the following competence and suitability standards:

   a. He has not been convicted by a court of a final judgment for crimes of theft, fraud, embezzlement, forgery, breach of trust, bad credit, or any crime violating honor or public morals, or any crime of money laundering or terrorist financing, unless his reputation has been restored.

   b. He has not declared bankruptcy or become unable to pay his debts such that he became insolvent.

2. The conditions contained in paragraph (1) of this Article shall apply to the persons stipulated in Article (26) of this System.

Article (25)
Registration of Basic Information

In addition to the provisions contained in the Law, the Registrar shall register the following basic information, taking into account the legal form of the non-profit company:

1. The name of the non-profit company, its status, and proof of establishment.

2. The address of the main office or main place of work. If the non-profit company is foreign, the name and address of its legal representative in the State must be stated, along with evidence thereof.

3. The Articles of Association or Bylaws and Internal Regulations, or any other similar documents.

4. The names of related persons holding senior management and board positions in the non-profit company, and a list of directors.

Article (26)
Obtaining and Identifying Beneficial Owner Information

Non-profit companies must obtain information regarding their beneficial owners and declare this to the Registrar, with beneficial owners to be identified according to the following sequential approach:

1. Obtain the identity of the natural person who has an ownership share equal to or greater than (25%) of the shares of the non-profit company, either directly or indirectly, or the natural person who exercises actual control over the non-profit company through ownership shares or through membership.

Reference No: 194-9-2022 70 The Official Gazette Office Electronic Reference for the Official Gazette mjr.lab.pna.ps

2022/09/25
Palestinian Facts
Issue (194)

2. After applying paragraph (1) of this Article, if there are still doubts about identifying the beneficial owner, or when no actual control is exercised through ownership shares or through membership, the identity of the natural person who exercises control over the non-profit company through means other than ownership or membership must be obtained.

3. In the event that the natural person is not identified under the application of paragraphs (1, 2) of this Article, the identity of the natural person holding the position of senior administrative official must be obtained.

Article (27)
Record Keeping

1. Non-profit companies must keep the following information:

   a. Information related to the objectives of their announced activities and their purpose.

   b. All records containing detailed local and international transactions for a period of at least (10) years from the date of the transaction's execution, to verify that funds were received and spent in accordance with the company's purposes and objectives.

   c. The basic information referred to in Article (25) of this System.

   d. A register of its members and the nature of voting rights.

   e. A register of its members and shareholders, including the number of shares owned by each shareholder and share classes, including the nature of voting rights associated with them.

   f. Beneficial owner information referred to in Article (26) of this System.

2. The non-profit company must keep the information stipulated in paragraph (1) of this Article accurately and sufficiently at its main headquarters and update it promptly. In the case of foreign non-profit companies, it must be kept at its main headquarters within Palestine, with the necessity of notifying the Registrar of the place of keeping.

3. The liquidator of the non-profit company, or those managing its winding up, or other persons concerned with the dissolution of the non-profit company, must keep the information referred to in paragraph (1) of this Article for a period of at least (10) years from the date of the company's dissolution, liquidation, or cessation of existence.

4. The Registrar must keep all basic information and beneficial owner information stipulated in Articles (25, 26) of this System and any data obtained pursuant to the provisions of this Chapter accurately, sufficiently, and updated promptly, for a period of at least (10) years from the date of the non-profit company's dissolution, liquidation, or cessation of existence.

Article (28)
Controls and Reports

Non-profit companies must:

1. Register changes occurring to the basic information or beneficial owner information stipulated in Articles (25, 26) of this System with the Registrar according to the periods specified in effective laws.

Reference No: 194-9-2022
71
The Official Gazette Office
Electronic Reference for the Official Gazette mjr.lab.pna.ps

2022/09/25
Palestinian Facts
Issue (194)

2. Put in place the necessary and appropriate controls to ensure that all funds are fully utilized and spent in a manner consistent with the purpose of the announced activities of the non-profit company and its objectives.

3. Issue an annual financial report signed by a certified auditor, including detailed financial statements regarding revenues and expenses, and submit it to the Registrar for audit.

Article (29)
Cooperation and Coordination

1. The non-profit company must cooperate and coordinate with the Registrar to the greatest extent possible in identifying beneficial owners by providing all basic information and beneficial owner information stipulated in Articles (25, 26) of this System, as well as the information stipulated in paragraph (1) of Article (27) of this System to the Registrar, promptly.

2. The non-profit company must provide the information referred to in paragraph (1) of this Article promptly to the Registrar through the company's board of directors members or its director resident in Palestine. The company may authorize another natural person, a lawyer, or any other regulated profession who is responsible before the Registrar to provide that information to him or provide any other additional assistance, provided that the authorized person is registered in the State of Palestine.

Article (30)
Making Information Available to the Public

---

The Registrar must provide information related to non-profit companies to the public as follows:

1. Make the basic information stipulated in Article (25) of this System and any changes thereto available to the public, by dedicating a window on their websites and ensuring it is updated promptly.

2. Make explanatory information regarding non-profit companies available to the public, including:

a. A description of their different types or forms and their basic characteristics. b. Clarification of the procedures for their establishment and registration.
c. Clarification of the company's procedures for obtaining the basic information stipulated in Article (25) of this System and registering it with the Registrar.
d. Clarification of the company's procedures for obtaining information related to the beneficial owner stipulated in Article (26) of this System and registering it with the Registrar.

Article (31)
Concluding Transactions through Organized Financial Channels

Non-profit companies must execute their financial transactions through financial institutions.

Reference Number: 194-9-2022
72
Official Gazette Office
Electronic Reference for the Official Gazette
ELECTRONIC REFERENCE FOR THE OFFICIAL GAZETTE mjr.lab.pna.ps

Article (32)

Inspection and Examination

The Registrar shall undertake the following:

1. Provide expertise in the field of inspection and examination and the ability to inspect non-profit companies suspected of being exploited to support and finance terrorism.
2. Access all information regarding the management of any non-profit company, including financial information and information regarding its programs, within the context of investigation or inquiry procedures, and provide such information to the competent authorities upon request, each according to its jurisdiction, promptly.

Article (33)

Cooperation and Coordination at the Local Level

For the purpose of implementing the provisions of this Chapter, the Registrar must provide cooperation and coordination to local entities to the greatest extent possible as follows:

1. Coordinate and exchange information with competent authorities, the Unit, and authorities supervising financial institutions and specified non-financial businesses and professions, and ensure facilitating access for those entities to information related to non-profit companies available to the Registrar under the provisions of this Chapter.
2. Enhance and develop scientific research regarding non-profit companies and ensure the exchange of information among the non-profit company sector, the public sector, and the private sector, to build relationships based on cooperation between the public sector, the private sector, and the non-profit company sector, ensuring an understanding of the risks posed by non-profit companies and strategies aimed at reducing risks, and increasing awareness and enhancing effectiveness and capabilities to combat the exploitation of non-profit companies for money laundering or terrorist financing purposes.

Article (34)

Exchange of Information

The Registrar shall take the necessary mechanisms to ensure the immediate exchange of information related to non-profit companies available to the Registrar under the provisions of this Chapter, with competent authorities, the Unit, and authorities supervising financial institutions and specified non-financial businesses and professions, with the aim of taking preventive measures or conducting investigations when there is suspicion or reasonable grounds for suspicion that the non-profit company:

1. Serves as a front for fundraising by a terrorist organization and/or participates in exploitation for the purpose of financing terrorism.
2. Is exploited as a channel for financing terrorism, including evading asset freezing procedures, or other forms of supporting terrorist activities stipulated in the laws in force in Palestine.
3. Conceals or hides secret transfers of funds allocated for legitimate purposes which are redirected in favor of terrorists or terrorist organizations.
4. Is exploited in the crime of money laundering.

---

Article (35)

Awareness Programs

1. The Registrar must establish awareness and cultural programs to enhance communication with the non-profit company sector and consolidate awareness among non-profit companies and donors regarding the following:
   a. Potential vulnerabilities of non-profit companies that expose them to the risk of being misused in supporting and financing terrorism and money laundering crimes. b. Measures that non-profit companies can take to protect themselves from the risk of being exploited for terrorist financing and money laundering crimes, which ensure that non-profit companies fulfill their obligations.

2. Non-profit companies are committed to cooperating and coordinating with the Registrar as follows:
   a. Implementing best practices adopted by the Registrar to address vulnerabilities, enabling them to protect themselves from being misused in terrorist financing and financing terrorist organizations. b. Establishing clear policies to enhance transparency, integrity, and public trust in their management.

Article (36)

Examination of Lists and Implementation of UN Security Council Resolutions

1. The Registrar must examine the name of the non-profit company, the names of its founders, members, and beneficial owners against the listing lists issued by the UN Security Council Sanctions Committee, before approving the registration of the non-profit company and following it up periodically.
2. The Registrar must implement immediately the resolutions issued by the UN Security Council Sanctions Committee on the non-profit company sector.

Article (37)

Feedback

The Registrar cooperates with the Unit and authorities supervising financial institutions and specified non-financial businesses and professions to establish guidelines and provide feedback that would help financial institutions and specified non-financial businesses and professions apply anti-money laundering and counter-terrorist financing measures related to the non-profit company sector, particularly those related to detecting and reporting suspicious transactions and activities.

Article (38)

Allocation of Resources

For the purpose of implementing the provisions of this Chapter, the Registrar, competent authorities, and the Unit must:

1. Allocate the necessary human, financial, and technical resources for supervision, oversight, and inquiry into the non-profit company sector, each according to its jurisdiction, commensurate with the level of money laundering and terrorist financing risks for the non-profit company sector, the size of the sector, and its complexity.
2. Continuous qualification and training of human resources for the purpose of combating money laundering and terrorist financing.

```markdown
2022/09/25 Palestinian Gazette No. (194)

Article (39)
International Cooperation Regarding Non-Profit Companies

The Council and competent authorities must provide international cooperation as follows:

1. Provide international cooperation promptly regarding basic information and information related to the beneficial owners of non-profit companies, based on bilateral or multilateral agreements or memorandums of understanding or the principle of reciprocity, and in a manner that does not conflict with the laws and regulations in force in Palestine, through the Ministry of Justice and the Ministry of Foreign Affairs and Expatriates, including:

a. Facilitating access to basic information available in the records approved by the Registrar or available to competent authorities. b. Exchanging information about members in non-profit companies, and shareholders regarding non-profit companies.
c. Competent authorities using their investigative or inquiry powers to obtain beneficial owner information on behalf of the foreign counterpart.

2. Issue appropriate procedures to respond to international requests regarding obtaining information about any non-profit companies suspected of financing terrorism and money laundering or any other forms of supporting terrorism stipulated in the laws in force in Palestine.

3. Follow up on the quality of assistance received from other countries in response to requests for basic information and beneficial owner information of non-profit companies, or requests for assistance in locating beneficial owners residing abroad.

Chapter Three
Final Provisions

Article (40)
Disciplinary Measures Imposed on Non-Profit Companies

1. Without prejudice to any specific measures stipulated in any of the other laws, and if the Registrar discovers any violation committed by the non-profit company of the obligations imposed on it under the provisions of Chapter Two of this System, or based on what is referred to it by the competent authorities or the Unit, the Registrar must take the necessary measures to impose one or more of the disciplinary measures stipulated in Paragraph (3) of this Article, according to its assessment of the severity of the violation.

2. Without prejudice to any specific measures stipulated in any of the other laws, and if the Registrar discovers any violation committed by the company of the obligations imposed on it under the provisions of Chapter Two of this System, or based on a recommendation from the competent Ministry or what is referred to it by the competent authorities or the Unit, or by the Minister based on a recommendation from the Council, take the necessary measures to impose one or more of the disciplinary measures stipulated in Paragraph (3) of this Article, according to its assessment of the severity of the violation.

3. The disciplinary measures imposed by the Registrar and the Minister are as follows:

a. Warning to comply with specific instructions. b. Written warnings.

75
Electronic Reference for the Official Gazette
ELECTRONIC REFERENCE FOR THE OFFICIAL GAZETTE mjr.lab.pna.ps Reference Number: 194-9-2022 Official Gazette Office

2022/09/25 Palestinian Gazette No. (194)

c. Suspension/Temporary suspension/Revocation of the non-profit company's license in accordance with the effective legislation.
d. Preventing the offender from working in the non-profit company sector for a period determined by the Registrar in accordance with the effective legislation.

4. For the purpose of informing the public, information regarding measures taken under the provisions of this Article may be published.

Article (41)
Rectification of Status

Non-profit companies must rectify their status in accordance with the provisions of the Law and this System starting from the date the provisions of the Law come into effect.

Article (42)
Issuance of Instructions

The Minister shall issue the necessary instructions to implement the provisions of this System.

Article (43)
Repeal

1. Decision No. (3) of the year 2010 of the Council of Ministers regarding the Non-Profit Companies System and its amendments is repealed.

2. Everything that conflicts with the provisions of this System is repealed.

Article (44)
Entry into Force

All competent authorities shall, each within its respective competence, implement the provisions of this System, and it shall be enforced from the date of its publication in the Official Gazette.

Issued in the city of Ramallah on the date: 15/08/2022 Gregorian Corresponding to: 17/Muharram/1444 Hijri

Dr. Mohammad Shtayyeh
Prime Minister

76
Electronic Reference for the Official Gazette
ELECTRONIC REFERENCE FOR THE OFFICIAL GAZETTE mjr.lab.pna.ps Reference Number: 194-9-2022 Official Gazette Office ```