Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Instructions No. (1) of 2021

Regarding the Compliance Officer and Contact Person Function

Based on the provisions of Decision No. (41) of 2016 regarding the licensing and regulation of the banking profession, particularly Articles (12) and (27) thereof, and after reviewing the provisions of Law Decision No. (20) of 2015 regarding the prevention of money laundering and the financing of terrorism and its amendments, and in accordance with the powers delegated to us, and in the public interest, we have issued the following instructions:

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Article (1)

Definitions

The words and phrases contained in these instructions shall have the meanings specified below, unless the context indicates otherwise:

Compliance Officer and Contact Person: The employee appointed in a banking company with the prior written approval of the Palestine Monetary Authority to perform the duties and responsibilities outlined in these instructions.

Compliance Risks: The risks that a banking company may face in the event of violating the provisions of laws and instructions governing the operations of banking companies in Palestine, particularly Decision No. (41) of 2016 regarding the licensing and regulation of the banking profession and Law Decision No. (20) of 2015 regarding the prevention of money laundering and the financing of terrorism and its amendments, which may affect the reputation and continuity of the banking company.

Related Parties: Any person connected to the banking company through any of the following relationships:

1. Holding a significant share of 10% or more of the banking company's capital.
2. Being a member of the board of directors of the banking company or an executive therein.
3. Being a first or second-degree relative of any person holding a significant share in the banking company, a member of its board of directors, or an executive therein.
4. Serving as a consultant to the banking company.
5. The external auditor of the banking company.

First-Degree Relatives: Father, mother, son, and daughter, and the relatives of one spouse in the same degree of kinship are considered relatives of the other spouse.

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Article (2)

Objective and Scope of Application

1. The provisions of these instructions aim to regulate the operations of banking companies in accordance with applicable laws and legislation.
2. The provisions of these instructions apply to each of the following:
   • a. A banking company licensed to provide remittance services.
   • b. A banking company holding a principal agency for rapid remittances.
   • c. A banking company that has three or more branches.
   • d. Any other banking company that the Palestine Monetary Authority determines must appoint a compliance officer.

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Article (3)

Appointment of the Compliance Officer and Contact Person

1. The banking company must comply with the following:
   • Appoint a compliance officer and contact person, subject to obtaining the prior written approval of the Palestine Monetary Authority, by submitting a written application for the appointment of the candidate including the following attachments:
     • a. A copy of the candidate's identification and passport.
     • b. The candidate's curriculum vitae and academic and professional certificates.
     • c. A letter clarifying whether the candidate holds any nationality other than Palestinian.
   • 2. Notify the Palestine Monetary Authority immediately in the event of a vacancy in the position of compliance officer and contact person, explaining the reasons, and submit an application to appoint another candidate within a maximum period of (3) three months from the date of the vacancy.
   • 3. In the event of the removal of the compliance officer and contact person from work for any reason, the banking company must assign one of its employees to act as compliance officer and contact person temporarily for a maximum of (3) three months.

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Article (4)

Conditions Required for the Compliance Officer and Contact Person

The following conditions must be met by the compliance officer and contact person:

1. Must be dedicated full-time to working for the banking company in this position.
2. Must not be a related party to the banking company.
3. Must be independent in their work from other executive activities and operations of the banking company, and possess sufficient authority to access all information.
4. Must possess the qualifications, experience, and personal and professional attributes that enable them to perform their duties and responsibilities efficiently.
5. Knowledge and familiarity with all instructions, laws, and legislation governing the banking profession, including those related to the prevention of money laundering and the financing of terrorism.
6. Must have completed specialized courses in the field of prevention of money laundering and the financing of terrorism.

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Article (5)

Responsibilities and Duties of the Compliance Officer and Contact Person

The compliance officer and contact person must perform the following duties and responsibilities:

1. Ensure the banking company's compliance with Decision No. (41) of 2016 regarding the licensing and regulation of the banking profession, Law Decision No. (20) of 2015 regarding the prevention of money laundering and the financing of terrorism and its amendments, and the instructions issued thereunder.
2. Identify and report compliance risks that the banking company may face, establish controls and measures to ensure compliance and mitigate potential risks, and submit reports, violations, and regulatory updates to the company's board of directors.
3. Develop indicators, scenarios, and regulatory reports to monitor suspicious activities and transactions, oversee ongoing operations, classify customer risks, and apply a risk-based approach.
4. Take measures to ensure the confidentiality of data and suspicious transaction reports submitted to the Financial Intelligence Unit, and respond to the Unit's requests for any information or records.
5. Raise and enhance awareness among the banking company's employees regarding the requirements of legislation related to banking operations and the prevention of money laundering and the financing of terrorism.
6. Follow up on customer complaints, address them, and submit related reports to the Palestine Monetary Authority in accordance with the provisions of the applicable instructions.

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Article (6)

Penalties

Anyone who violates the provisions of these instructions shall be penalized in accordance with the provisions of Articles (23) and (24) of Decision No. (41) of 2016 regarding the licensing and regulation of the banking profession and its amendments.

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Article (7)

Repeal

1. Instructions No. (01) of 2014 regarding compliance oversight at banking companies are hereby repealed.
2. Any provision conflicting with the provisions of these instructions is hereby repealed.

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Article (8)

Rectification of Status

Banking companies must rectify their status in accordance with the requirements of these instructions within (6) six months from the date of their issuance.

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Article (9)

Implementation and Entry into Force

All competent authorities shall, each within their respective jurisdiction, implement the provisions of these instructions, which shall apply from the date of their issuance.

Issued in the city of Ramallah on 10/06/2021.

Dr. Firas Malham
Governor
[Signature]

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Note:
Ramallah & Al-Bireh Governorate - Palestine P.O. Box 452
info@pma.ps | Fax: +970 2 2415310 | Tel: +970 2 2415251
Gaza - Palestine P.O. Box 4026
Fax: +970 8 2844487 | Tel: +970 8 2825713
www.pma.ps