Circular Regarding Self-Assessment of All Types of Money Laundering and Terrorist Financing Risks No. (11627/4/2/10) Dated 2016/9/4

Central Bank of Jordan

No.: 10/2/11627
Date: 5/12/1437 AH
Corresponding to: 7/9/2016 AD

Circular to Banks Operating in the Kingdom

Greetings,

Recognizing the risks associated with money laundering and terrorist financing operations in the Middle East and North Africa region, and implementing the recommendations issued by the Financial Action Task Force (FATF) regarding the combating of money laundering and terrorist financing, and preparing for the "Mutual National Assessment of the Anti-Money Laundering and Counter-Terrorist Financing System" process to be conducted by the Middle East and North Africa Financial Action Task Force (MENA FATF) in the Kingdom during 2018.

We request that you be informed of the necessity to begin, as a first step in the above national assessment process, by conducting a self-assessment according to the Risk-Based Approach (RBA) for all types of money laundering and terrorist financing risks faced by the bank. This is to be done by identifying, assessing, and understanding (Identify, Assess, Understand) those risks at the level of each of (customer risks, countries or geographic regions, products and services and processes, and service delivery channels), documenting this, and taking effective measures to mitigate those risks (Mitigation). The assessment must be updated at least annually or whenever there is a need to conduct this assessment due to any material change in the nature of the risks the bank may be exposed to. You are required to provide us with the above assessment based on the bank's data as of 31/12/2016, with a maximum deadline of 28/4/2017, and periodically every year.

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Central Bank of Jordan

And we would like to draw attention to the following in this regard:

1. The necessity of preparing a special methodology for the self-assessment process, approved by the Bank's Board of Directors or the Regional Manager for non-Jordanian banks.
2. Providing a report by the Internal Auditor regarding the progress of the self-assessment results and the measures that must be taken to mitigate high risks that emerged as a result of the assessment.
3. To assist in preparing the self-assessment, you may refer to a number of references from the Financial Action Task Force (FATF) website, including the "Technical Compliance Methodology for the Recommendations of the Financial Action Task Force and the Effectiveness of Anti-Money Laundering and Counter-Terrorist Financing Systems for 2013," the working papers "Risk-Based Approach Guidance For The Banking Sector" and "National Money Laundering And Terrorist Financing Risk Assessment."

Please accept our highest regards,

The Governor
Dr. Ziad Fariz