Instructions for Licensed Exchange Companies in the Kingdom to Deal with Foreign Exchange and Money Transfer Companies Outside the Kingdom No. (1)

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Central Bank of Jordan
CENTRAL BANK OF JORDAN

Reference No: 4/9/418
Date: 17/5/1445 AH
Corresponding to: 2024/05/05 AD

Circular to Licensed Exchange Companies
Subject: Instructions for the conduct of licensed exchange companies in the Kingdom when dealing with exchange companies and money transfer companies outside the Kingdom No. (1)

Greetings,

In accordance with the provisions of Article (18/b) of the Exchange Operations Law No. (44) of 2015, we attach hereto the Instructions for the conduct of licensed exchange companies in the Kingdom when dealing with exchange companies and money transfer companies outside the Kingdom, issued pursuant to the decision of the Board of Directors of the Central Bank No. (2024/78) dated 2024/4/25.

Please accept our highest respect,

Central Bank of Jordan

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Central Bank of Jordan
CENTRAL BANK OF JORDAN

Instructions for the conduct of licensed exchange companies in the Kingdom when dealing with exchange companies and money transfer companies outside the Kingdom No. (1) Issued pursuant to the decision of the Board of Directors of the Central Bank of Jordan No. (2024/78) dated 2024/4/25 Based on the provisions of Article (18/b) of the Exchange Operations Law No. (44) of 2015

Article (1): These Instructions shall be known as "Instructions for the conduct of licensed exchange companies in the Kingdom when dealing with exchange companies and money transfer companies outside the Kingdom," and these Instructions shall come into effect from their date.

Article (2): The words and expressions used in these Instructions shall have the meanings assigned to them below, unless the context indicates otherwise:
The Bank: The Central Bank of Jordan.
The Company: The company licensed to conduct exchange operations in accordance with the provisions of the prevailing Exchange Operations Law.
The Foreign Company: A legal entity licensed by the competent authorities in its country to deal in foreign currencies, precious metals, or money transfers.
Precious Metals: Gold, silver, or platinum bars or ingots, or certificates of ownership of gold, silver, or platinum, as well as gold, silver, or platinum in any form or shape, excluding manufactured items.
Foreign Currency: Any currency, claim, balance, or credit in a non-Jordanian currency.

Article (3): The provisions of these Instructions shall apply to the Company in a manner consistent with the operations that the Company is permitted to conduct according to its category, based on the prevailing Exchange Companies Licensing System.

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Article (4): The Company wishing to deal with the Foreign Company must submit an application to the Bank to obtain prior approval for such dealing, according to the form prepared for this purpose. The Company must observe the following requirements to obtain approval:
a. Collect sufficient information about the intended Foreign Company to fully understand the nature of its business, its legitimacy, the licenses it holds to conduct the intended operations within its scope, and to evaluate its reputation and the type of supervision it is subject to. b. Ensure that the dealing is compatible with the operations the Foreign Company is permitted to conduct according to the prevailing legislation in its country.
c. Ensure that the intended Foreign Company is subject to anti-money laundering and counter-terrorist financing legislation in its country, and verify that it has implemented policies, procedures, controls, and systems in this field, and evaluate these controls. Confirm whether it has previously been subject to audits, legal proceedings, or sanctions in the field of anti-money laundering and counter-terrorist financing, and verify its reputation in this field.
d. Ensure that it has a good reputation and a solid financial position. e. Ensure that the Foreign Company has obtained approval from the competent authority in its country to deal with the Company, if the legislation governing its operations requires such approval. f. Ensure that the supervision of the Foreign Company by the competent authorities in its country is based on sound foundations in the supervision of exchange operations and anti-money laundering.

Article (5): The Bank may determine the documents or data it deems necessary to be submitted with the application referred to in Article (4) of these Instructions in the manner it deems appropriate.

Article (6): When studying applications submitted to the Bank, consideration shall be given to the extent to which the applying Company complies with the provisions of all prevailing legislation, particularly the prevailing Exchange Operations Law and the instructions issued pursuant thereto, and the prevailing Anti-Money Laundering and Counter-Terrorist Financing Law and the instructions issued pursuant thereto, as well as any information related to the Foreign Company intended to be dealt with.

Article (7): The Company, after obtaining approval and when dealing with the Foreign Company, shall be committed to the following:
a. Adherence to the provisions of all prevailing legislation in the Kingdom, particularly the Anti-Money Laundering Law and the instructions issued pursuant thereto. b. Dealing through means and mechanisms authorized for the Company to use according to the prevailing legislation in the Kingdom.
c. Restricting dealing to the scope permitted for the Foreign Company to deal in by the competent authorities in its country and in accordance with all prevailing legislation governing its operations.

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d. Establishing controls and procedures that mitigate risks that may arise from dealing with Foreign Companies and working to reverse them within its policy. e. Recording operations related to such dealings in books and records systematically in a manner that allows for the extraction of a database specific to such dealings, showing all details related to each operation, in accordance with the prevailing legislation. f. Providing the Bank with the volume of the Company's dealings within its periodic statistical reports according to the forms and mechanism approved by the Bank. g. Ensuring that agreements signed with the Foreign Company intended to be dealt with comply with all prevailing legislation in the Kingdom. h. Verifying the continued availability of the requirements specified in Article (4) of these Instructions throughout the duration of the contract and dealing. Otherwise, the Company must immediately close its dealing lines with the Foreign Company, taking necessary settlements, and notifying the Anti-Money Laundering and Counter-Terrorist Financing Unit immediately if the closure of the dealing line is related to a suspicion of money laundering or terrorist financing, according to the form or means approved by the Unit for this purpose, in accordance with the provisions of the prevailing Anti-Money Laundering and Counter-Terrorist Financing Law and related instructions.
i. Monitoring for any negative data regarding the Foreign Company, including persons within its ownership, management, or control structure, particularly matching their names against international and national sanctions lists. In the event of any such negative data, the Company must document this, conduct necessary studies by the relevant departments in the Company, and make the necessary decision at an appropriate administrative level in the Company, documented systematically, and inform the Bank thereof.
j. Permanently keeping at the Company's headquarters, according to the time periods specified by record-keeping requirements in the prevailing legislation, all evidence proving that the Company has met the requirements and conditions set forth in these Instructions, including evidence proving that the Foreign Company it deals with continues to meet the requirements and conditions set forth in these Instructions. The Company must also provide the Bank and any competent authority with such evidence immediately upon request and whenever necessary.

Article (8): In addition to the conditions and requirements set forth in Articles (4) and (7) of these Instructions, the Company wishing to provide electronic money transfer services shall be committed to the following:
First: Verifying that the electronic payment system intended to be used for dealing is approved according to the provisions of the Electronic Payment and Money Transfer System No. (111) of 2017 and the instructions issued pursuant thereto, when wishing to deal as a principal agent without the right to grant sub-agencies to other companies.

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Second: In addition to what was mentioned in the First point, and in case the Company wishes to deal as a principal agent with the right to grant sub-agencies to other exchange companies, it shall be committed to the following:
a. Establishing a written and duly approved policy containing the procedures intended to be followed for selecting sub-agents and managing dealing ceilings for the service, whether provided directly by the Company or indirectly through its sub-agents, both individually and collectively, and adhering to these policies. b. Restricting the granting of sub-agencies to exchange companies licensed for this purpose according to their category as specified in the prevailing Exchange Companies Licensing System.
c. Determining the awareness procedures and means intended to be followed towards educating sub-agents and raising their readiness to limit identity theft and account hacking attempts.
d. Permanently keeping at its headquarters internal and external audit reports, in addition to supervisory reports issued by approved global electronic payment system companies, as well as any supervisory reports concerning the dealings of sub-agents (if any), with the necessity of providing them to the Bank upon request and whenever necessary.

Article (9): The Company (participating in any of the electronic payment systems licensed and approved by the Central Bank of Jordan, managed and operated by licensed exchange companies) may deal with parties participating in the same system, in accordance with the rules of participation and related legislation.

Article (10): In addition to the conditions and requirements set forth in Articles (4) and (7) of these Instructions, the Company wishing to deal with the Foreign Company in the field of importing foreign banknotes and coins and precious metals, and exporting any of them, shall be committed to the following:
a. Adherence to the prevailing legislation in the Kingdom governing the import and export of foreign banknotes, coins, and precious metals, and adherence to the obligation to submit declarations to the competent authorities accompanied by the necessary approvals for the shipping process. b. Taking necessary measures to manage and mitigate risks arising from dealing in the import and export of foreign banknotes, coins, and precious metals, such as verifying that funds are prepared appropriately for shipping, insuring shipments, and preparing all requirements for the safe and secure arrival of those shipments, to avert any negative repercussions on the Company's financial situation.
c. Keeping at the Company's headquarters a copy of all supporting documents for each import and export operation of foreign banknotes, coins, and precious metals, including any specific prior approvals that may be required by the prevailing legislation in the Kingdom and the legislation governing the operations of the Foreign Company.

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d. Recording shipping operations in a manner that allows for the extraction of a database specific to such dealings, showing all details related to each operation, and including a separate entry for the total volume of such dealings in the final accounts, showing the revenues realized from them under a separate item. e. Conducting necessary and continuous studies regarding the volume and type of imported and/or exported currencies within the dealing to ensure consistency with the volume of the Foreign Company's capital, the nature of its dealings, and the geographical region it is located in, and monitoring any changes, documenting them, and taking necessary measures, including knowing the source of funds as required.

General Provisions

Article (11): The Company shall be committed to the following:
a. Any special orders, circulars, or conditions issued by the Governor to regulate the Company's dealing with the Foreign Company or any specific controls or markets, as appropriate. b. Informing the Bank if the Company cancels the contract and/or temporarily stops dealing with the Foreign Company, stating the reasons and justifications, within a maximum of three working days from the date of cancellation and/or suspension.

Article (12): The Bank may request the Company to stop dealing with the Foreign Company it deals with without providing reasons. The Company shall be committed to immediately stopping work, making necessary settlements, and stopping any dealings in which those parties are involved, and providing the Bank with evidence thereof.

Article (13): The Bank may take any of the measures or impose any of the penalties specified in the prevailing Exchange Operations Law and related prevailing legislation in the event of the Company's violation of any of the provisions of these Instructions and the orders and circulars issued pursuant thereto.

Article (14): All circulars issued by the Bank on this subject that conflict with the provisions of these Instructions are repealed.

The Governor
Dr. Adel Al-Sharqas

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Central Bank of Jordan
Central Bank of Jordan

Application Form for Obtaining Approval to Deal with a Foreign Company

Date of Application: / /
1 - Name of Exchange Company: ............................................................

• Company Category: A [ ] B [ ] C [ ] D [ ]
  2 - Name of Foreign Company: ............................................................
• Country of Origin of the Foreign Company: ............................................................
• Nature of Business of the Foreign Company: ............................................................

3
Nature of Required Dealing
[ ] Issuance and receipt of money transfers
Supporting Attachments for the Application

1. The requirements set forth in Article (4) of these Instructions.
2. Ownership structure and management of the intended Foreign Company.
3. Statement on whether the intended Foreign Company is part of the same financial group, and whether any partners in the Company or any of its directors have a direct or indirect material interest in the intended Foreign Company.
4. Mechanisms for dealing with the Foreign Company.

Electronic Transfer Services
[ ] Dealing as a principal agent without the right to grant sub-agencies to other exchange companies [ ] Dealing as a principal agent with the right to grant sub-agencies to other exchange companies

1. No objection from the owner of the electronic payment system intended to be dealt with, according to the nature of the required dealing.
2. A comprehensive and detailed risk assessment study, including an analysis of all types of risks and corresponding controls intended to be provided to control and manage these risks.
3. The policies and procedures followed by the Company to manage electronic dealing risks with money transfer service providers at the Company's headquarters and any branches (if any).
4. The Company's financial position as of the date of submitting the application, in case the type of dealing with the provider is as a principal agent for the Foreign Company owning the electronic payment system, with the possibility of granting sub-agencies.

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Central Bank of Jordan
Central Bank of Jordan

[ ] Dealing as a sub-agent for an electronic money transfer company through its principal agent

1. Specification of the name of the principal agent intended to be dealt with as a sub-agent.
2. No objection from the intended principal agent.

Import and Export
[ ] Foreign Banknotes and Coins
[ ] Precious Metals

1. The requirements set forth in Articles (4) and (10) of these Instructions.
2. Expected volume of shipments.
3. Mechanism of the shipping process.
4. Type of currencies/precious metals intended to be imported and exported.
5. Nature of insurance on the amounts/precious metals intended to be shipped.
6. Supervisory controls taken by the Company to manage the associated risks.

We, the undersigned (Board of Directors / Board of Managers / Partners) on behalf of ...................................., the Company applying for approval to deal with the aforementioned Company, certify the accuracy of the data and information provided to the Central Bank for this purpose.

General Manager of the Company / Authorized Signatory: ............................................................
Date: ............................................................
Signature: ............................................................

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