Instructions No. 3 of 2022 Regarding the Accounting System, Reports, and Financial Statements

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Palestine Monetary Authority PALESTINE MONETARY AUTHORITY

Instructions No. (3) of 2022 Regarding the Accounting System, Reports, and Financial Statements

Pursuant to the provisions of Decision No. (41) of 2016 on the Licensing and Regulation of the Money Changer Profession, particularly Articles (18, 19, 20) thereof, and in accordance with the powers delegated to us, and to achieve the public interest, we have issued the following Instructions:

Article (1) Objective and Scope of Application

1. The provisions of these Instructions aim to regulate transactions and financial reports through the accounting system of money changers.
2. The provisions of these Instructions apply to money changers licensed by the Palestine Monetary Authority.

Article (2) Accounting System

Money changers must comply with the following:

1. Use one of the accounting systems qualified by the Palestine Monetary Authority.
2. Ensure the accounting system used is compatible with the activities and services provided by the money changer.
3. Sign an agreement with the company providing the accounting system that includes the rights and obligations of each party, and indicate therein the guarantee of the money changer's right to retain and access historical data even after the termination of the relationship between the two parties, provided that all financial obligations incumbent on the money changer are fulfilled.
4. Obtain the prior written approval of the Palestine Monetary Authority in case the money changer wishes to change the accounting system used.
5. Record all financial transactions in the accounting system immediately upon occurrence and in accordance with accounting standards, with the necessity of notifying the Palestine Monetary Authority in case of a technical malfunction or system failure and working to resolve it as quickly as possible.
6. Exercise precision when entering all data into the accounting system and other systems used, particularly customer-related data which includes the name and identification number (ID card, passport, registration/license number) and other data specified in the financial reports according to these Instructions.
7. Provide customers with invoices or receipts extracted from the accounting system and/or other systems used by the money changer, which verify the executed financial transaction, including the money changer's name, transaction amount, nature, execution date, and any necessary details to achieve the principle of disclosure, transparency, and protection of both parties.

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

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8. Conduct a cash balance count at the end of each working day and reconcile it with the balances in the accounting system, with the necessity of documenting this, stating the reasons for any discrepancies, and resolving them if any, in accordance with accounting standards.
9. Do not split financial transactions regardless of their value.
10. Maintain a backup of all data from the accounting system and other systems used for a period of no less than (10) years on a secure external storage device and in a secure location outside the workplace, ensuring business continuity and facilitating access at any time.

Article (3) Financial Reports

Money changers must provide the Palestine Monetary Authority with data, information, and reports related to their activity on a periodic and accurate basis as follows:

1. Send financial reports extracted from the accounting system through the money changer's dedicated email address approved by the Palestine Monetary Authority.
2. Send financial reports and disclose all transactions in accordance with Annex No. (1).

Article (4) Audited Final Financial Statements

1. The money changer must provide the Palestine Monetary Authority with audited final financial statements for the fiscal year ended no later than the end of the first quarter of the following calendar year, which must include the following: a. Report and opinion of the external auditor. b. Audited statement of financial position and income statement. c. Statement of financial position and income statement extracted from the accounting system, to be stamped with the money changer's seal. d. Letter from the external auditor explaining the reasons for discrepancies between accounting system reports and audited financial statements, if any. e. Any events that have affected/are affecting the money changer's operations.
2. The audited statements must be stamped with the external auditor's seal.
3. The Palestine Monetary Authority may request the money changer to include any other information it deems necessary in the financial statements.

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Article (5) External and Internal Auditing

1. The money changer must contract with an external auditor who meets the following conditions: a. Licensed and listed on the register of practicing auditors issued by the Auditing Profession Council. b. Holds a valid practicing certificate issued by the Palestinian Association of Certified Public Accountants.
2. The Palestine Monetary Authority may request the money changer to appoint an internal auditor for the company as it deems appropriate.

Article (6) Rectification of Status

All money changers must rectify their legal status to comply with the provisions of these Instructions within a maximum period of (3) three months from the date of their issuance.

Article (7) Penalties

Anyone who violates the provisions of these Instructions shall be penalized in accordance with the provisions of Decision No. (41) of 2016 on the Licensing and Regulation of the Money Changer Profession.

Article (8) Repeal of Conflicting Provisions

1. Palestine Monetary Authority Instructions No. (2012/5) regarding accounting system reports, issued on 26/12/2012, are hereby repealed.
2. Any provision conflicting with the provisions of these Instructions is hereby repealed.

Article (9) Implementation and Enforcement

All competent authorities, each within their respective jurisdiction, must implement the provisions of these Instructions, which shall apply from the date of their issuance. Issued in Ramallah on 18/01/2022.

Dr. Firas Malham Governor [Signature]

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Annex No. (1): Reports to be Provided to the Palestine Monetary Authority:

Report No.	Report Name	Reporting Period	Submission Deadline
1	Statement of Financial Position	Quarterly	No later than the fifth working day of the following month.
2	Income Statement	Quarterly	No later than the fifth working day of the following month.
16	Outward Remittances Report	Weekly	End of business on Thursday until midday on Sunday of the following week.
17	Inward Remittances Report	Weekly	End of business on Thursday until midday on Sunday of the following week.
20	Foreign Currency Sales and Purchases with the Public Report	Weekly	End of business on Thursday until midday on Sunday of the following week.
18	Purchased Checks Report	Monthly	No later than the fifth working day of the following month.
19	Foreign Currency Sales and Purchases with Banks and Money Changers Report	Monthly	No later than the fifth working day of the following month.
28	Issued Checks Report	Monthly	No later than the fifth working day of the following month.