Palestine Monetary Authority Instruction No. 9 of 2022 Concerning the Issuance and Receipt of Financial Transfers

PALESTINE MONETARY AUTHORITY

Instruction No. (9) of 2022
Concerning the Issuance and Receipt of Financial Transfers

Based on the provisions of Law Decree No. (39) of 2022 concerning the combating of money laundering and the financing of terrorism, particularly Article (24) thereof, And in accordance with the powers delegated to us, And in pursuit of the public interest, We have issued the following Instructions:

Article (1)
Definitions

The following words and phrases shall have the meanings assigned to them below, unless the context indicates otherwise:

• The Law: Law Decree No. (39) of 2022 concerning the combating of money laundering and the financing of terrorism and its amendments.
• Person: Natural or legal person.
• Client: Person or legal arrangement.
• Financial Institution: The entity subject to the supervision of the Palestine Monetary Authority and licensed to provide financial transfer services.
• Financial Transfer: A financial transfer issued or received through the Financial Institution by electronic means on behalf of the originator, whether within or outside Palestine, regardless of whether the originator and the beneficiary are the same person.
• Aggregated Transfer: A file consisting of a number of individual financial transfers that may be directed to a specific person or different persons and sent to the same Financial Institutions.
• Originator: The person creating the financial transfer.
• Beneficiary: The person receiving the financial transfer at any financial institution inside or outside Palestine.
• Legal Arrangement: As per the definition provided in the Law.
• Beneficial Owner: As per the definition provided in the Law.
• Payment Chains: The direct follow-up payment chain in which the financial transfer and the accompanying payment message move together from the Financial Institution issuing the transfer to the Financial Institution benefiting directly or through one or more intermediary financial institutions.
• Payment Coverage: The financial transfer that combines the payment message sent directly by the Financial Institution issuing the transfer to the Financial Institution benefiting with the transfer of payment instructions (coverage) from the Financial Institution issuing the transfer to the Financial Institution benefiting through one or more intermediary financial institutions.

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Article (2)
Objective and Scope of Application

1. The provisions of these Instructions aim to:
   a. Regulate the service of issuing and receiving financial transfers, including payment chains and payment coverage. b. Reduce the risks of money laundering and terrorist financing associated with the execution of financial transfers.
2. The provisions of these Instructions apply to all Financial Institutions licensed by the Palestine Monetary Authority to provide financial transfer services inside and outside Palestine, and to money or value transfer service providers. The following are exempt from the provisions of these Instructions:
   a. Any transfer resulting from a cash withdrawal or purchases made using a credit card or prepaid payment cards, which are not used to execute financial transfers. b. Transfers and settlements conducted between Financial Institutions when the originator and the beneficiary are Financial Institutions acting on their own account.

Article (3)
Conditions for Issuing and Receiving Financial Transfers

In addition to what is stipulated in any other legislation, the Financial Institution must comply with the following conditions to issue and receive financial transfers:

1. Prepare risk-based policies, procedures, and work models to execute financial transfers, provided that they include financial transfer information, identification and verification procedures, and when to execute, reject, or suspend financial transfers lacking the required information about the originator or beneficiary, along with appropriate follow-up procedures and record retention.
2. Fulfill all information and data requirements related to external transfers.
3. When financial transfer information is available to the Beneficiary Financial Institution and competent authorities through other means, the Issuing Financial Institution must comply with the following:
   a. Include the originator's account number or a unique reference number for the financial transfer in the financial transfer for the purpose of tracking the path of the financial transfer to the originator or beneficiary. b. Provide the Beneficiary Financial Institution and competent authorities, in accordance with the Law, with all information related to the financial transfer within a maximum period of three days from the date of receiving the information request.
4. Exercise due diligence or enhanced due diligence commensurate with the risk-based approach in accordance with the prevailing Instructions.

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Article (4)
Identification and Verification Procedures

The Financial Institution must comply with the following when sending and receiving financial transfers inside and outside Palestine:

1. Ensure that all financial transfers include the following accurate information and data:
   a. Data and information about the originator as follows:
   1. Name of the originator as per the personal identity document or registration and licensing certificates.
   2. ID number of the originator or passport for non-Palestinians, for natural persons.
   3. Registration number of the originator for legal persons.
   4. Address of the originator and date and place of birth/registration.
   5. Nationality of the originator.
   6. Unique reference number for the financial transfer.
   b. Data and information about the beneficiary as follows:
   1. Name of the beneficiary as per the personal identity document or registration and licensing certificates.
   2. Identity or registration document number of the beneficiary, for incoming transfers.
   3. Country and address of the beneficiary.
   4. Beneficiary Financial Institution and its address.
   c. Subject to what is mentioned in sub-paragraphs (a1/1/b) of this Article, the Financial Institution must ensure that all financial transfers also include accurate information and data about the account numbers of the originator and beneficiary used in executing the transfer. In the absence of an account for either, a unique reference number for the transaction shall be included to allow tracking.
   d. Other data and information:
   1. The purpose of the financial transfer.
   2. The financial relationship between the originator and the beneficiary.

2. Ensure that the originator's data provided when requesting the issuance of the financial transfer matches the data the Financial Institution holds about him in due diligence procedures.

3. Refrain from executing the financial transfer if unable to fulfill any of the requirements stipulated in these Instructions.

4. The aggregated transfer file for individual cross-border transfers executed by the originator must contain the required and accurate information about the originator and beneficiary as specified under the provisions of Paragraph (1) of this Article, in a manner that allows full tracking of this information in the beneficiary country, including the originator's account number or a unique reference/number for the transaction.

5. Take the following actions:
   a. Verify the accuracy of the data and information accompanying the financial transfer. b. Verify customer information in case of suspicion of money laundering or terrorist financing.
   c. Verify that the beneficiary's IBAN belongs to the country to which the transfer is intended and with which the client has a commercial relationship.
   d. Obtain all supporting documents and evidence regarding the purpose of the transfers and the relationship between the originator and the beneficiary.

Article (5)
Simplified Identification Procedures

The Financial Institution may simplify identification procedures for cross-border financial transfers, provided it complies with the following:

1. Obtain prior written approval from the Palestine Monetary Authority.
2. The amount of a single transfer does not exceed USD 1,000 or its equivalent.
3. The financial transfer includes accurate information and data about the originator and beneficiary, including names and account numbers used in executing the transfer. In the absence of accounts for either, a unique reference number for the transaction shall be included to allow tracking.
4. Verify customer information in case of suspicion of money laundering or terrorist financing.

Article (6)
Retention of Information and Records

The Financial Institution must comply with the following:

1. Retain identification information for financial transfers, transactions for their execution, and documents and evidence obtained within the framework of due diligence in accordance with the provisions of the Law.
2. Provide electronic archiving of financial transfer records and transactions to facilitate the reconstruction of individual transactions and provide information in cases of prosecution for criminal activities.

Article (7)
Obligations of the Intermediary Financial Institution

The Intermediary Financial Institution, when receiving or executing financial transfers or a chain thereof on behalf of other Financial Institutions, must comply with the following:

1. Ensure that all information and data related to the originator and beneficiary are attached to the financial transfer.

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2. Retain all information received from Financial Institutions issuing the transfer or from another intermediary financial institution for the period specified in the Law.
3. Take all necessary measures to process cross-border financial transfers that lack the required information about the originator or beneficiary in accordance with the provisions of these Instructions.
4. Adopt risk-based policies and work procedures to determine when to execute, reject, or suspend financial transfers lacking the required information about the originator or beneficiary and to determine appropriate follow-up procedures.

Article (8)
Obligations of the Beneficiary Financial Institution

The Beneficiary Financial Institution, when receiving any financial transfer, must comply with the following:

1. Take all necessary measures to identify cross-border financial transfers that lack the required information about the originator or beneficiary, including follow-up procedures during or after execution as the situation dictates.
2. Verify the identity of the beneficiary of financial transfers if not previously verified, and retain all data and information received from Financial Institutions issuing the transfer in accordance with the provisions of the Law.
3. Adopt risk-based policies and work procedures to determine when to execute, reject, or suspend financial transfers lacking the required information about the originator or beneficiary and to determine appropriate follow-up procedures.

Article (9)
Money or Value Transfer Service Providers

1. Subject to what is stipulated in any legislation, it is prohibited for any person to provide money or value transfer services without obtaining prior written approval from the Palestine Monetary Authority.
2. The money or value transfer service provider must comply with the application of the provisions of these Instructions, whether the transfer is made directly or through an agent in any of the countries where it conducts its business.
3. The money or value transfer service provider, if it is itself the controller of the source of the transfer and the beneficiary, must comply with the following:
   a. Collect all information about the originator and beneficiary for the purpose of determining whether to submit a suspicious activity report or not. b. Submit a suspicious activity report to the Financial Intelligence Unit in any of the countries related to the suspicious financial transaction and provide all information related to it.

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Article (10)
Application of Targeted Financial Sanctions

The Financial Institution must comply with the following:

1. Apply the sanctions stipulated in Presidential Decree No. (14) of 2022 concerning the implementation of Security Council resolutions, including taking freezing measures and necessary measures to prohibit transactions with persons and entities prohibited from dealing with them.
2. Inquire about the parties to the financial transfer on the lists of sanctions issued by the United Nations Security Council and the National Listing List before executing the financial transfer.

Article (11)
Penalties

Anyone who violates the provisions of these Instructions shall be punished in accordance with the provisions of the Law.

Article (12)
Implementation and Enforcement

All competent authorities shall implement the provisions of these Instructions, each within its respective competence, and they shall apply from the date thereof.

Issued in Ramallah on 24/08/2022 AD

Dr. Fares Malham
Governor
(Signature)