Palestine Monetary Authority Instructions No. 6 of 2022 Concerning Money Transmittals

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Palestine Monetary Authority PALESTINE MONETARY AUTHORITY

Instructions No. (6) of 2022 Concerning Money Transmittals

Based on the provisions of Decision No. (41) of 2016 regarding the licensing and supervision of the exchange profession, particularly Articles (9) and (27) thereof, And based on the provisions of Decision No. (20) of 2015 concerning the combating of money laundering and financing of terrorism and its amendments, 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 words and phrases appearing in these instructions shall have the meanings assigned to them below, unless the context indicates otherwise:

• Exchange Company: As defined in Decision No. (41) of 2016 regarding the licensing and supervision of the exchange profession.
• Exchange Company (for remittances): An exchange company that has obtained the approval of the Palestine Monetary Authority to conduct money transfer business.
• Correspondent Company: As defined in Decision No. (41) of 2016 regarding the licensing and supervision of the exchange profession.
• Money Transfer: The electronic transfer of funds from one person to another through financial institutions licensed to conduct this activity.
• Internal Transfer: A money transfer executed within Palestine between exchange companies.
• External Transfer: A money transfer executed between an exchange company and a licensed exchange agent outside Palestine.
• Rapid Transfer: A money transfer executed through an exchange company via one of the rapid transfer companies approved by the Palestine Monetary Authority.
• Originator (Real Sender): The payment order requesting the exchange company to issue a money transfer by sending the funds electronically to the beneficiary.
• Beneficiary (Real Beneficiary): The person receiving the funds sent under the money transfer.
• Compliance Officer and Contact Person: The employee appointed in the exchange company with the prior written approval of the Palestine Monetary Authority to perform the tasks and responsibilities outlined in the effective instructions.
• Due Diligence: Identifying the customer, their legal status, activity, source of funds, purpose and nature of the business relationship, and the real beneficiary (if any), verifying all such information, and conducting continuous monitoring within the framework of an ongoing business relationship by any means specified under relevant legislation.

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• UN Security Council Resolutions Implementation Committee: The committee formed by a decision of the Head of State, responsible for implementing resolutions issued by the United Nations Security Council under Chapter VII, relating to the combating of financing of terrorism and the prohibition of financing weapons of mass destruction.
• Person: A natural or legal person.

Article (2) Objective and Scope of Application

1. The provisions of these instructions aim to regulate money transfer work by relying on electronic systems that ensure the safety and correctness of their execution.
2. The provisions of these instructions apply to exchange companies licensed by the Palestine Monetary Authority.

Article (3) Conditions for Conducting Money Transfer Business

An exchange company may conduct money transfer business provided it adheres to the following conditions:

1. The legal form of the exchange company must be a company.
2. The availability of clear and specific policies and work procedures that define the mechanism for handling, executing, settling, and supervising money transfers.
3. Establishing specific measures, procedures, and controls to limit the risks of using transfers in money laundering or terrorism financing operations, taking into account the size and frequency of transfers, and conducting continuous due diligence to study the activities of the originator and/or the real beneficiary in relation to information concerning their activity and income.
4. Executing money transfers through electronic system(s) characterized by security, protection, speed, and accuracy, meeting the due diligence requirements for money transfers according to these instructions, and capable of storing and archiving transactions according to the legal period under effective legislation.
5. Immediate and accurate registration of all information related to executed money transfers on the accounting system qualified by the Palestine Monetary Authority.
6. Appointing a compliance officer and contact person in accordance with the effective instructions of the Palestine Monetary Authority.
7. Training employees to enhance their capabilities regarding the laws and instructions regulating the exchange profession in Palestine, qualifying them to apply anti-money laundering and counter-terrorism financing procedures.
8. Appointing an internal auditor at the exchange company that owns five branches or more. The Palestine Monetary Authority may compel an exchange company with fewer than five branches to appoint an internal auditor based on the size, risk, and nature of its business, at the discretion of the Palestine Monetary Authority.

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Article (4) Procedures for Obtaining Approval to Conduct Money Transfer Business

1. An exchange company must comply with the following: a. Submit a written request to the Palestine Monetary Authority to obtain prior approval to provide external and rapid transfer services. b. Submit a written request to the Palestine Monetary Authority to obtain prior approval in case the exchange company wishes to cease providing money transfer services. c. Provide the Palestine Monetary Authority with the licensing certificates of correspondent exchange companies issued by the regulatory authorities in the home country, if issued, or send a letter in which the exchange company undertakes to provide the Palestine Monetary Authority with them immediately upon issuance by the regulatory authorities in the home country, no later than the end of the first quarter of each year.
2. The Palestine Monetary Authority's approval for external and rapid transfer business is automatically renewed for the exchange company upon the renewal of its license, and the approval is automatically revoked upon the revocation of the license or in accordance with the provisions of the law.

Article (5) Money Transfer Data

The accounting system must include the following data:

1. Outgoing Transfer: Name of the originator (sender), ID number or passport number, date of transfer, transfer amount (in currency), name of the beneficiary, delivery location, nature of the originator's work, and the exchange company must retain the following information for each transfer: a. Source of funds for the transfer originator. b. Purpose of the transfer. c. Commission collected. d. Country of the beneficiary. e. Type of transfer (external transfer, rapid transfer with clarification of the rapid transfer company name). f. Relationship between the originator (sender) and the beneficiary. g. Supporting documents.
2. Incoming Transfer: Name of the real beneficiary, ID number or passport number, date of transfer, transfer amount (in currency), name of the transfer source, issuing location, nature of the beneficiary's work, and the exchange company must retain the following information for each transfer:

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a. Purpose of the transfer.
b. Date of delivery.
c. Commission collected.
d. Country of the transfer source.
e. Type of transfer (external transfer, rapid transfer with clarification of the rapid transfer company name).
f. Relationship between the originator (sender) and the beneficiary.

Article (6) Rapid Transfer Company

The following conditions must be met by the rapid transfer company for which an exchange company is permitted to obtain an agency:

1. It must be licensed by the official authority in the home country.
2. It must have a dedicated electronic system for transfer work approved by the official authority in the home country for cross-border money transfers, meeting the data reporting requirements for money transfers according to the provisions of these instructions.
3. It must have policies and work procedures that consider relevant laws and instructions, including the field of combating money laundering and financing of terrorism, due diligence, and the "Know Your Customer" principle.
4. It must be included in the list of rapid transfer companies registered in Appendix No. (1).

Article (7) Conditions for Conducting Rapid Transfer Business as a Principal Agent

The following conditions must be met by an exchange company wishing to obtain a principal agency:

1. The minimum capital of the exchange company must be as follows: a. In cities: (500,000) five hundred thousand US dollars or its equivalent in other currencies. b. In rural areas: (250,000) two hundred and fifty thousand US dollars or its equivalent in other currencies.
2. Depositing a cash security with the Palestine Monetary Authority valued at (20,000) twenty thousand US dollars or its equivalent in other currencies, provided that the total cash security deposited with the Palestine Monetary Authority does not exceed (30,000) thirty thousand US dollars or its equivalent in other currencies, including cash securities for licensing and branching.
3. The agreement between the exchange company and the rapid transfer company must be in Arabic or translated by a legal translator before being presented to the Palestine Monetary Authority for prior approval.

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Article (8) Conditions for Conducting Rapid Transfer Business as a Sub-Agent

The following conditions must be met by an exchange company wishing to obtain a sub-agency:

1. The minimum capital of the exchange company must be as follows: a. In cities: (250,000) two hundred and fifty thousand US dollars or its equivalent in other currencies. b. In rural areas: (100,000) one hundred thousand US dollars or its equivalent in other currencies.
2. Obtaining the sub-agency from an exchange company or bank licensed to provide rapid transfer services as a principal agent in Palestine.
3. The agreement between the exchange company and the principal agent must regulate the work of rapid money transfers and define the rights and obligations of each party, and be presented to the Palestine Monetary Authority for prior approval.

Article (9) Rapid Transfers

1. An exchange company holding a principal agency for rapid transfers may grant one or more sub-agencies according to the size of its business, provided it obtains prior written approval from the Palestine Monetary Authority.
2. All conditions related to the exclusivity of providing rapid transfer services from a single provider, restricting work with rapid money transfers for a specific time period, or any penalty conditions related to them are considered null and void.

Article (10) Conditions for Conducting External Transfer Business

The following conditions must be met by an exchange company wishing to conduct external transfer business:

1. The minimum capital of the exchange company must be (1,000,000) one million US dollars or its equivalent in other currencies. In case the company wishes to execute external transfers via the SWIFT international transfer system, its capital must not be less than (2,000,000) two million US dollars or its equivalent in other currencies.
2. Depositing a cash security with the Palestine Monetary Authority valued at (50,000) fifty thousand US dollars or its equivalent in other currencies. The Palestine Monetary Authority may, based on its assessments, require the exchange company to increase the value of the cash security according to the nature and size of the company's business risks.

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Article (11) Conditions for Conducting Internal Transfer Business

An exchange company may conduct internal transfer business (within Palestine) provided it adheres to the following:

1. Notifying the Palestine Monetary Authority in writing before commencing internal transfer business.
2. Both the real sender and the real beneficiary must be residents of Palestine.
3. Transfers must be exchanged only with banks or exchange companies licensed by the Palestine Monetary Authority.
4. Adhering to obtaining money transfer data according to the provisions of Article (5) of these instructions.

Article (12) Ceiling for External and Internal Money Transfers

The daily ceiling for external and internal money transfers specified for the originator or beneficiary must not exceed (100,000) one hundred thousand US dollars or its equivalent in other currencies. Electronic controls must be put in place to prevent the execution of a money transfer exceeding the mentioned ceiling, whether executed in a single transfer during the day or split into multiple transfers.

Article (13) Ceiling for Rapid Money Transfers

The daily ceiling for rapid money transfers specified for the originator or beneficiary must not exceed (20,000) twenty thousand US dollars or its equivalent in other currencies. Electronic controls must be put in place to prevent the execution of a money transfer exceeding the specified ceiling, whether executed in a single transfer during the day or split into multiple transfers.

Article (14) Bank Guarantee, Cash Deposit, and Cash Security

1. The maximum limit for the total value of bank guarantees, cash deposits, and cash securities with the Palestine Monetary Authority for an exchange company (general ordinary, limited ordinary, private joint-stock), including cash securities for obtaining branch licenses and conducting transfer business, is (50,000) fifty thousand US dollars or its equivalent in other currencies.
2. The maximum limit for the total value of bank guarantees, cash deposits, and cash securities with the Palestine Monetary Authority for a public joint-stock exchange company, including cash securities for obtaining branch licenses and conducting transfer business, is (100,000) one hundred thousand US dollars or its equivalent in other currencies.
3. The Palestine Monetary Authority may require the exchange company to increase the value of cash securities according to the nature and size of the company's business risks.

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Article (15) Settlement of Money Transfers

An exchange company must comply with the settlement of money transfers as follows:

1. Executing the settlement of money transfers through one of the licensed banks inside or outside Palestine, pursuant to an agreement signed between the exchange company and the bank that clarifies the rights and obligations of each party, provided that prior approval from the Palestine Monetary Authority is obtained for this.
2. Providing the bank operating inside Palestine through which settlement is conducted with a detailed statement from the accounting system qualified by the Palestine Monetary Authority of all money transfers executed with the correspondent company to match the values of outgoing and incoming transfers, and providing it with copies of money transfer issuance forms extracted from the accounting system, signed by the customer, accompanied by a copy of the ID proof for each money transfer.
3. Conducting settlement at least once a month with the correspondent company, rapid transfer companies, or the principal agent for rapid transfers.

Article (16) Opening a Bank Account with Banks Operating Outside Palestine

An exchange company may open a bank account with any of the banks operating outside Palestine for the purpose of settling money transfers, provided it adheres to the following:

1. Obtaining prior written approval from the Palestine Monetary Authority to open the bank account.
2. The external bank must have a physical presence, and dealing with shell financial institutions is prohibited.
3. The purpose of opening and using the account must be limited to settling money transfers executed through the exchange company, by conducting financial transfers to correspondent companies.
4. The exchange company's account at the correspondent bank must be funded through outgoing money transfers via the SWIFT system or through incoming transfers from accounts of correspondent exchange companies at the same bank, or by cash deposit according to the Palestine Monetary Authority's approval for shipping processes via crossings and borders.
5. Providing the Palestine Monetary Authority, upon request, with a stamped and signed bank statement from the correspondent bank.

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Article (17) Prohibitions

An exchange company is prohibited from doing the following:

1. Executing internal money transfers through persons practicing the exchange profession without a license from the Palestine Monetary Authority.
2. Executing money transfers if any of the data specified in Article (5) of these instructions are not fulfilled.
3. Executing external and rapid money transfers via telephone, fax, or email.
4. Conducting and executing money transfers of all kinds for the benefit of any of the following persons: a. Listed on the UN Security Council sanctions list. b. Listed on the National Listing "Local List" issued by the UN Security Council Resolutions Implementation Committee. c. Anonymous persons or persons holding fictitious or pseudonymous names. d. Where there are indicators of suspicion of money laundering or terrorism financing.
5. Acting as an intermediary for other exchange companies regarding money transfers and conducting internal, external, or rapid money transfers on their behalf or through them, except for exchange companies holding a sub-agency for rapid transfers from a principal agent.

Article (18) Disclosure

An exchange company must comply with the following:

1. Providing the customer with a receipt proving the execution of the money transfer they made, including the name of the exchange company, the name of the real sender and beneficiary, the transfer amount and purpose, date, commission amount, and any information the exchange company deems necessary to increase disclosure and transparency and protect the rights of both parties.
2. Clearly disclosing to customers the cost of providing money transfer services on issuance forms and execution receipts, and disclosing the price list in a prominent place in the exchange company and its branches.
3. Educating employees and customers about fraud, scam, extortion, and any financial crimes they may be exposed to and their risks, and providing educational brochures on this matter within company branches and via their social media channels.

Article (19) General Provisions

An exchange company that has obtained approval to provide money transfer services must comply with the following:

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1. Assessing the risks of conducting internal, external, and rapid money transfers, including money laundering and terrorism financing risks, and establishing necessary controls and measures to manage and reduce those risks, before launching or providing the service and/or making any modifications to it.
2. Refunding the transfer amount to the sender if the real beneficiary fails to receive it within one month from the date of its arrival.
3. Providing the Palestine Monetary Authority, upon request, with agreements signed with SWIFT and correspondent companies, copies of policies and procedures of these institutions regarding combating money laundering and financing of terrorism, answers related to the Wolfsberg questionnaire on combating money laundering and financing of terrorism, and any other matters requested by the Palestine Monetary Authority.
4. Sending and receiving money transfers executed using the SWIFT international transfer system must be limited to SWIFT messages of type MT-103 for Single Customer Credit Transfer, and this type of transfer must be issued with triple supervision involving the following three stages:
   • Stage One: Data Entry (Creation of Message)
   • Stage Two: Data Verification (Verification)
   • Stage Three: Approval (Authorization)
5. Issuing and delivering money transfers to customers in the same currency, unless otherwise agreed in writing.
6. Executing the money transfer for the real sender in outgoing transfers and the real recipient in incoming transfers personally and directly.
7. Using issuance forms extracted from the accounting system qualified by the Palestine Monetary Authority.
8. The transfer source must sign the issuance request, and the beneficiary must sign for the receipt of the transfer amount upon receiving it.
9. Obtaining prior approval from the Palestine Monetary Authority for all advertisements related to providing money transfer services.
10. Continuous supervision of money transfers and conducting continuous due diligence.

Article (20) Penalties

Anyone who violates the provisions of these instructions shall be punished according to the provisions of Decision No. (41) of 2016 regarding the licensing and supervision of the exchange profession, and the provisions of the effective law on combating money laundering and financing of terrorism and its amendments.

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Article (21) Repeal of Conflict

1. Instructions No. (1) of 2017 concerning money transfers are repealed.
2. Instructions No. (1) of 2019 concerning granting exchange companies sub-agency for rapid transfers are repealed.
3. Anything conflicting with the provisions of these instructions is repealed.

Article (22) Execution and Enactment

All competent authorities must execute the provisions of these instructions, each according to their jurisdiction, and they shall apply from the date of their issuance.

Issued in Ramallah on 3/03/2022.

Dr. Firas Malham Governor [Signature]

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Appendix No. (1): List of Permitted Rapid Transfer Companies:

1. Exchange companies must comply with providing rapid money transfer services through any of the companies listed in the table below:

Name in Arabic	Name in English
Western Union	Western Union
MoneyGram	MoneyGram
Shift Financial Services	Shift Financial Services
Cash Express	Cash Express
GMG	GMG
RIA	RIA

2. Rapid money transfer services may be provided through other companies besides those listed in the table above, provided that prior written approval is obtained from the Palestine Monetary Authority.

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