Circular No. 27 (2025) Results of the National Risk Assessment for Money Laundering and Terrorist Financing

Results of the National Risk Assessment for Money Laundering and Terrorist Financing

1. First, the key results of the national and baseline risk assessment for Money Laundering (ML) and Terrorist Financing (TF) crimes in the State of Palestine:

Chapter 1: Summary of ML Risk Assessment Results at the National Level. The ML risks in the State of Palestine are assessed as "Medium to High". Accordingly, the following factors were evaluated regarding these risks:

Risk Category	Details	Risk Level	Assessment
ML Risks (at least): Money laundering, fraud, corruption, bribery, tax evasion, poor banking supervision, poor credit assessment, and financial sanctions.	High
Financial Institutions (banks, non-banks)	Medium to High
Securities & Financial Intermediation	Medium to High
Lending/Deposits	Low to Medium
Electronic Payments (including clearing & settlement, and payment instruments)	Medium to High
Insurance	Low to Medium
Real Estate & Property Management	Low to Medium
Financial Services (trusts, foundations, legal/accounting professionals)	Low to Medium

It is also assessed that the national ML risk assessment has two main factors: The first relates to the weakness of the national level (national level) ML risk assessment, and the second relates to the capacity to mitigate ML risks at the national level (national level), based on the state's mitigation capacity. Recently, in 2024, and consequently, this was reflected in the National Risk Assessment which noted an important observation: the number of electronic fraud cases has increased, especially since 2017-2023.

Chapter 2: Summary of ML Risk Assessment Results at the Sectoral Level. The assessment is based on evaluating ML risks for each sector according to risk levels, weaknesses, and relevant factors:

Chapter 3: Summary of ML Risk Assessment Results for the Electronic Payment Sector. The assessment evaluates ML risks in the electronic payment sector (national level to medium), based on ML risk ratings for this sector, and national-level ML risk weaknesses in the sector. The assessment shows that general and specific risks in electronic payment sectors, according to:

Risk Category	General Weaknesses	Specific Weaknesses
Electronic Payment Sector (National Level to Medium)	Low to Medium	Low to Medium
Securities & Financial Intermediation (National Level to Medium)	Low to Medium	Low to Medium
Lending/Deposits (National Level to Medium)	Low to Medium	Low to Medium
Electronic Payments (National Level to Medium)	Low to Medium	Low to Medium
Securities/Securities Intermediation (National Level to Medium)	Low to Medium	Low to Medium
Real Estate/Property Management (National Level to Medium)	Low to Medium	Low to Medium
Financial Services/Trusts & Foundations (National Level to Medium)	Low to Medium	Low to Medium

Chapter 4: Summary of TF Risk Assessment Results at the National Level. The assessment evaluates TF risks at the national level (low to medium), with TF risk ratings in Palestine assessed as "Low to Medium". Accordingly, the following TF risks are evaluated:

Risk Category	National Level Assessment
Financial Institutions (Banks, Non-banks)	Low to Medium
Securities & Financial Intermediation	Low to Medium
Insurance (Life/Non-life)	Low to Medium

The assessment shows weaknesses in TF mitigation at the national level (national level), resulting from strong capacity to mitigate TF risks at the national level (national level). Accordingly, the weakness of the national sectoral level is assessed as "Low to Medium".

Chapter 5: Summary of TF Risk Assessment Results at the Sectoral Level. The assessment results for TF risks across sectors range from "Low" to "Medium", according to:

Sectoral Level TF Risks	Risk Level	General Weaknesses	Specific Weaknesses
Financial Institutions (Banks, Non-banks)	Low to Medium	Low to Medium	Low to Medium
Securities & Financial Intermediation	Low to Medium	Low to Medium	Low to Medium
Lending/Deposits	Low to Medium	Low to Medium	Low to Medium
Electronic Payments	Low to Medium	Low to Medium	Low to Medium
Securities/Securities Intermediation	Low to Medium	Low to Medium	Low to Medium
Real Estate/Property Management	Low to Medium	Low to Medium	Low to Medium
Financial Services/Trusts & Foundations	Low to Medium	Low to Medium	Low to Medium

Chapter 6: Summary of TF Risk Assessment Results for the Electronic Payment Sector. The following clarifies the criteria for evaluating TF risks in the electronic payment sector:

Risk Category	National Level Assessment
Financial Institutions (Banks, Non-banks)	Low to Medium
Securities & Financial Intermediation (National Level to Medium)	Low to Medium
Real Estate/Property Management (Sectoral)	Not Applicable
Securities & Financial Intermediation (Sectoral)	Not Applicable
Real Estate/Property Management (Sectoral)	Not Applicable
Financial Services/Trusts & Foundations (Sectoral)	Not Applicable
TF Risk Rating for National Level	Low to Medium
TF Risk Rating for Sectoral Level	Low to Medium
TF Risk Rating for Cross-border/International	Low to Medium
TF Risk Rating for Domestic/Local	Not Applicable

The assessment shows weaknesses in TF mitigation at the national level (national level), based on:

Electronic Payment Sector	General/Specific Factors
Financial Institutions (Banks, Non-banks)	Low to Medium
Financial/Regulatory Authorities (Issuing)	Low to Medium
Financial/Regulatory Authorities (Receiving)	Low to Medium
Sectoral Financial/Regulatory Authorities (Issuing)	Low to Medium
Sectoral Financial/Regulatory Authorities (Receiving)	Low to Medium
Institutional Risk Profile	Low to Medium
Customer/Client Due Diligence (CDD/KYC)	Low to Medium
Money Laundering/Terrorist Financing Suitability/Effectiveness	Low to Medium