Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Circular No. (253 / 2019)

To all banks operating in Palestine

Date: Tuesday, October 29, 2019

Subject: Internal Audit of the Anti-Money Laundering and Counter-Terrorist Financing Environment.

Continuing the Palestine Monetary Authority's efforts to monitor and strengthen the anti-money laundering and counter-terrorist financing environment, and to ensure the effectiveness of implemented measures, the bank's internal audit department must regularly assess its anti-money laundering and counter-terrorist financing programs and procedures. Accordingly, we emphasize the necessity of adhering to the following:

1. Include in future internal audit plans an examination of the anti-money laundering and counter-terrorist financing environment, which shall cover:

• The effectiveness and efficiency of anti-money laundering and counter-terrorist financing policies, procedures, and operational programs.
• Due diligence and enhanced due diligence procedures, and the extent of focus on high-risk customers and transactions.
• The effectiveness of applying the risk-based approach.
• The effectiveness of bank staff in implementing policies and procedures.
• The effectiveness and relevance of training programs provided to bank staff.
• The effectiveness and efficiency of known standards and scenarios applied to banking programs and systems, including their ability to identify risks, unusual activity, and suspicious cases.
• The adequacy of record retention and provision of related statistics.
• The extent to which the bank addresses deficiencies identified during previous audit operations.

2. Provide us within one week from the date hereof with the latest internal audit report conducted on the anti-money laundering and counter-terrorist financing environment, to assess the effectiveness and efficiency of the function in mitigating money laundering and terrorist financing risks, evaluate the quality and effectiveness of due diligence procedures, systems, and programs used to monitor unusual transactions and suspicious cases, and review measures taken to address identified deficiencies.

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Supervision and Inspection Department
Palestine Monetary Authority

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