Instructions No. 2 of 2022 Regarding the Issuance and Receipt of Money Transfers

PALESTINE MONETARY AUTHORITY

Instructions No. (2) of 2022
Regarding the Issuance and Receipt of Money Transfers

Based on the provisions of Law-Decree No. (39) of 2022 concerning the prevention of money laundering and the financing of terrorism, particularly Article (24) thereof, 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 prevention of money laundering and the financing of terrorism and its amendments.
• Person: Natural or legal person.
• Client: The person or legal arrangement.
• Financial Institution: The entity subject to the supervision of the Palestine Monetary Authority and licensed to provide money transfer services.
• Money Transfer: A financial transfer issued or received through the Financial Institution by electronic means on behalf of the originator, whether within or outside Palestine, whereby funds are sent and received for a specific purpose for the benefit of a specific beneficiary at another financial institution, regardless of whether the originator and the beneficiary are the same person.
• Batch Transfer: A file consisting of a number of individual money transfers that may be directed to a specific person or different persons and are sent to the same financial institutions.
• Originator: The person creating the money transfer.
• Beneficiary: The person receiving the money transfer at any financial institution inside or outside Palestine.
• Legal Arrangement: As defined in the Law.
• Beneficial Owner: As defined in the Law.
• Payment Chains: The direct sequential chain through which the money transfer and the accompanying payment message move together from the issuing financial institution to the beneficiary financial institution directly or through one or more intermediary financial institutions.
• Payment Cover: The money transfer that combines the payment message sent directly by the issuing financial institution to the beneficiary financial institution with the transfer of payment instructions (cover) from the issuing financial institution to the beneficiary financial institution 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 money transfers, including payment chains and payment cover. b. Mitigate the risks of money laundering and terrorist financing associated with the execution of money transfers.
2. The provisions of these Instructions apply to all financial institutions licensed by the Palestine Monetary Authority to provide money transfer services inside and outside Palestine, and to money 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 money transfers. b. Transfers and settlements carried out between financial institutions when the originator and the beneficiary are financial institutions acting on their own account.

Article (3)
Conditions for Issuing and Receiving Money Transfers

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

1. Prepare risk-based policies, procedures, and work models to execute money transfers, provided that they include money transfer information, identification and verification procedures, and when to execute, reject, or suspend money transfers that lack the required information about the originator or beneficiary, as well as follow-up procedures and record retention.
2. Fulfill all information and data requirements related to external money transfers.
3. When the money transfer information available to the beneficiary financial institution and competent authorities through other means exists, the issuing financial institution must comply with the following:
   a. Include the originator's account number or a unique money transfer reference number in the money transfer for the purpose of tracking the money transfer path 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 money 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 money transfers inside and outside Palestine:

1. Ensure that all money transfers include the following accurate information and data:
   a. Data and information about the originator as follows:
   1. Name of the originator according to 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 money transfer reference number.
   b. Data and information about the beneficiary as follows:
   1. Name of the beneficiary according to 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 stated in paragraphs (1/a, 1/b) of this Article, the Financial Institution must ensure that all money transfers also include accurate information and data about the account numbers of the originator and beneficiary used in executing the transfer, and in case no account exists 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 money 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 money transfer matches the data held by the Financial Institution about them within the framework of due diligence procedures.
3. Refrain from executing the money transfer if unable to fulfill any of the requirements stipulated in these Instructions.
4. The batch file of individual transfers executed across borders for 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.

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5. Take the following actions:
   a. Verify the accuracy of the data and information accompanying the money 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 money transfer is intended to be issued and with which the customer has a commercial relationship.
   d. Obtain all supporting documents and evidence regarding the purpose of the money transfer between the originator and the beneficiary.

Article (5)
Simplified Due Diligence Procedures

The Financial Institution may simplify the identification procedures for money transfers executed across borders, provided that the following are complied with:

1. Obtain prior written approval from the Palestine Monetary Authority.
2. The amount of a single money transfer does not exceed 1,000 US dollars or its equivalent.
3. The money transfer includes accurate information and data about the originator and beneficiary, including the name and account numbers used in executing the transfer, and in case no accounts exist 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 money transfers, transaction execution records, and documents and evidence obtained within the framework of due diligence in accordance with the provisions of the Law.
2. Provide electronic archiving of money 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 money 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 money transfer.

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2. Retain all information received from issuing financial institutions or from another intermediary financial institution for the period specified in the Law.
3. Take all necessary measures to process cross-border money 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 money 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 money transfer, must comply with the following:

1. Take all necessary measures to identify cross-border money 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 money transfers if not previously verified, and retain all data and information received from issuing financial institutions in accordance with the provisions of the Law.
3. Adopt risk-based policies and work procedures to determine when to execute, reject, or suspend money transfers lacking the required information about the originator or beneficiary and to determine appropriate follow-up procedures.

Article (9)
Money Value Transfer Service Providers

1. Subject to what is stipulated in any legislation, it is prohibited for any person to provide money value transfer services without obtaining prior written approval from the Palestine Monetary Authority.
2. The money 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 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 transaction report or not. b. Submit a suspicious transaction 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 decisions, including taking freezing measures and necessary measures to prohibit transactions with persons and entities subject to a ban on dealing.
2. Inquire about the parties to the money transfer on the lists of sanctions issued by the United Nations Security Council and the National Listing List before executing the money 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 of issuance.

Issued in Ramallah on 28/08/2022 AD

Dr. Firas Malham
Governor

[Signature]

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