Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Instructions No. (21) of 2021

Concerning the Opening and Management of Money Changers' Accounts

Based on the provisions of Legislative Decree No. (9) of 2010 concerning Banks, particularly Articles (43) and (72) thereof, and Decision No. (41) of 2016 regarding the licensing and supervision of the money changing profession, particularly Article (27) thereof, and Legislative Decree No. (20) of 2015 concerning the combating of money laundering and terrorist financing, 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)

Objective and Scope of Application

1. These Instructions aim to regulate the management of money changers' accounts and govern the contractual relationship with them.
2. The provisions of these Instructions apply to all banks licensed by the Palestine Monetary Authority to conduct banking business.

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Article (2)

Opening the Account

When opening an account for a money changer, the bank must adhere to the following:

1. Obtain the information required in the account opening application in accordance with the prevailing Instructions concerning account opening.

2. Obtain the following documents and retain them in the account opening file:

   أ. A copy of the valid license to practice the money changing profession issued by the Palestine Monetary Authority, after verifying the original. ب. An updated list of names of persons authorized to sign on behalf of the money changing company, according to the registration certificate and their authorities. ت. A written undertaking from the bank to use the account exclusively for money changing business activities permitted under prevailing legislation.

3. Open the account under the commercial name of the money changer as recorded in the license certificate issued by the Palestine Monetary Authority, and restrict all its transactions through this account.

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Article (3)

Permitted Services and Activities for Money Changers through Their Bank Account

1. Buying and selling currencies, provided that the value of a single transaction does not exceed the sum of the money changer's capital and existing facilities.

2. Depositing and collecting purchased checks for collection through the bank account exclusively.

3. Depositing bank checks issued by another bank into the account, provided that the source is known regarding the drawer.

4. Issuing bank checks, provided that the value of these issued and outstanding checks does not exceed the value of the money changer's capital and existing facilities.

5. Credit Facilities:

   أ. Money changers may be granted credit facilities as follows:

   1. The credit facilities must be in the form of a loan or guarantee for the purposes of permitted money changing business.
   2. The credit facilities must be granted under the commercial name of the money changer.
   3. The money changer must obtain written approval from the Palestine Monetary Authority to obtain credit facilities exceeding (20,000) twenty thousand US dollars, excluding guarantees issued in favor of the Authority and facilities granted with 100% cash collateral.

   ب. Money changers, shareholders of the money changing company, and natural persons owning money changing shops may be granted credit facilities or guarantees in their personal names, provided that these facilities are not used for money changing business.

6. Providing the remittance service as a sub-agent for the bank (the principal agent for a fast remittance company), provided that:

   أ. The money changer obtains written approval from the Palestine Monetary Authority to operate as a sub-agent for the bank. ب. Organizing a work agreement between the bank and the money changer containing the terms and conditions of contracting between the two parties. ت. Specifying the agreement duration as one year, renewable by mutual agreement, ending at the end of the first quarter of the following fiscal year regardless of the signing date. ث. Notifying the Palestine Monetary Authority of the money changer's intention to cancel the agreement at least two weeks prior to the cancellation date during its validity, clarifying the reasons and justifications for cancellation. ج. Not imposing any conditions that conflict with or restrict market rules (supply and demand).

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Article (4)

Prohibited Activities

The money changer is prohibited from the following:

1. Dealing with money changers in financial derivatives, except for hedging purposes.
2. Opening more than one main account for money changers at the bank.
3. Individual money changers or shareholders of the money changing company managing other accounts at the bank in a manner that indicates their use for money changing purposes.
4. Unauthorized persons at the money changer executing any financial transactions on the money changer's account.
5. Depriving money changers of preferential rights for collecting and facilitating checks, or depriving checks of small collection rights.

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Article (5)

Supervision of the Money Changer's Account

The bank must supervise the money changer's account through the following:

1. Review and approve account opening transactions for money changers, and review them periodically according to the money changer's risk classification level.
2. Continuously and accurately monitor the money changer's transactions with the bank to verify the nature of operations and their compliance with these Instructions.
3. Monitor checks deposited into the money changer's accounts at other banks, or into other money changers' accounts.
4. Exercise due and/or enhanced diligence according to the money changer's classification at the bank, based on the risk classification level (customers, products and services, distribution channels, geographic dimension).
5. Continuously monitor operations according to specific scenarios and indicators that ensure the detection of unusual and suspicious movements and activities.

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Article (6)

Reports

The bank must provide the Palestine Monetary Authority with a quarterly report containing statistical data on money changers' accounts according to Annexes No. (1) and No. (2).

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Article (7)

Final Provisions

The bank must adhere to the following:

1. Cease dealing with any person suspected of practicing the money changing profession without obtaining the necessary license from the Palestine Monetary Authority, and notify the Palestine Monetary Authority thereof.

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Article (8)

Repeal of Conflicting Provisions

1. Instructions No. (2012/6) concerning the management of money changers' accounts are repealed.
2. Instructions No. (12) of 2019 concerning the prohibition of money changers from sub-agencies are repealed.
3. Clauses (5) and (6) of Article (4/1/8) of Instructions No. (2009/8) concerning opening and closing accounts, dormant accounts, bank secrecy, remittances, and safekeeping are repealed.
4. All provisions conflicting with these Instructions are repealed.

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Article (9)

Penalties

Anyone who violates the provisions of these Instructions shall be subject to the penalties stipulated under the prevailing provisions of the Banks Law and the Combating Money Laundering and Terrorist Financing Law.

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Article (10)

Implementation and Enforcement

All competent authorities, each within their respective jurisdiction, must implement the provisions of these Instructions, effective from the date of their issuance.

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Issued in the city of Ramallah on 11/10/2021 AD.

Dr. Firas Malham
Governor

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Annex No. (1)

Statistical Data for the Year

Transfers from one account to another	Currency buying and selling operations	Total movements during the year	Historical data
Transfer from account	Transfer to account		Number
			Money Changer Name
			Money Changer Account Number
			Branch
			Currency
			Account Nature
			Fixed Movements
			Paid Movements
			Deposits Received
			Withdrawals Received
			Check Deposits
			Money Changer Account Due
			Value of Incoming Remittances
			Value of Outgoing Remittances
			Bank Checks
			Purchases (Seller)	Purchases (Buyer)
			Buyer	Buyer

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Annex No. (2)

Financial Position as of 31/12/

Limit	Existing Balance	Account Nature	Currency	Branch	Money Changer Account Number	Money Changer Name	Number