Instructions No. (9) of 2022 Concerning the Issuance and Receipt of Financial Transfers

Palestine Monetary Authority
PALESTINE MONETARY AUTHORITY

Instructions No. (9) of 2022 Concerning the Issuance and Receipt of Financial Transfers

Pursuant to the provisions of Legislative Decree No. (39) of 2022 concerning the combating of money laundering and the financing of terrorism, particularly Article (24) thereof, and 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 expressions shall have the meanings assigned to them below, unless the context indicates otherwise:

• Law: Legislative Decree No. (39) of 2022 concerning the combating of money laundering and the financing of terrorism and its amendments.
• Person: Natural or legal person.
• Client: Person or legal arrangement.
• Financial Institution: The entity subject to the supervision of the Palestine Monetary Authority and licensed to provide financial transfer services.
• Financial Transfer: A financial transfer issued or received through the Financial Institution via electronic means on behalf of the Originator, whether within or outside Palestine, regardless of whether the Originator and the Beneficiary are the same person.
• Aggregated Transfer: A file consisting of a number of individual financial 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 financial transfer.
• Beneficiary: The person receiving the financial transfer at any financial institution within or outside Palestine.
• Legal Arrangement: As defined in the Law.
• Beneficial Owner: As defined in the Law.
• Payment Chains: The direct follow-up payment chain in which the financial transfer and the accompanying payment message move together from the originating Financial Institution to the Beneficiary Financial Institution directly or through one or more intermediary Financial Institutions.
• Payment Coverage: A financial transfer that combines the payment message sent directly by the originating Financial Institution to the Beneficiary Financial Institution with the transfer of payment instructions (coverage) from the originating 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 financial transfers, including payment chains and payment coverage. b. Mitigate the risks of money laundering and the financing of terrorism associated with the execution of financial transfers.
2. The provisions of these Instructions shall apply to all Financial Institutions licensed by the Palestine Monetary Authority to provide financial transfer services within and outside Palestine, and to Money or Value Transfer Service Providers, except for the following:
   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 financial transfers. b. Transfers and settlements conducted between Financial Institutions when the Originator and the Beneficiary are Financial Institutions acting on their own account.

Article (3)
Conditions for Issuing and Receiving Financial Transfers

In addition to what is stipulated in any other legislation, the Financial Institution must comply with the following conditions for issuing and receiving financial transfers:

1. Develop risk-based policies, procedures, and working models for executing financial transfers, provided that they include financial transfer information, identification and verification procedures, and specify when financial transfers lacking required information about the Originator or Beneficiary shall be executed, rejected, or suspended, along with appropriate follow-up procedures and record retention.
2. Fulfill all information and data requirements related to external transfers.
3. When financial transfer information is available to the Beneficiary Financial Institution and competent authorities through other means, the originating Financial Institution must comply with the following:
   a. Include the Originator's account number or a unique financial transfer reference/identification number in the financial transfer for the purpose of tracking the transfer's 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 financial 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 a risk-based approach in accordance with prevailing Instructions.

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Article (4)
Identification and Verification Procedures

The Financial Institution must comply with the following when sending and receiving financial transfers within and outside Palestine:

1. Ensure that all financial transfers include the following accurate information and data:
   a. Data and information about the Originator as follows:
   1. Name of the Originator as per personal identification 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 financial transfer reference/identification number.
   b. Data and information about the Beneficiary as follows:
   1. Name of the Beneficiary as per personal identification document or registration and licensing certificates.
   2. Identification 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 sub-paragraphs (a1/1/b) of this Article, the Financial Institution must ensure that all financial transfers also include accurate information and data regarding the account numbers of the Originator and Beneficiary used in executing the transfer, and in the absence of an account for either, a unique process identification number shall be included to allow for tracking.
   d. Other data and information:
   1. Purpose of the financial transfer.
   2. Financial relationship between the Originator and the Beneficiary.
2. Ensure that the Originator's data provided when requesting the issuance of the financial transfer matches the data the Financial Institution holds regarding them in its due diligence procedures.
3. Refrain from executing the financial transfer if unable to fulfill any of the requirements stipulated in these Instructions.
4. The aggregated transfer file for individual cross-border transfers initiated by the Originator must contain the required and accurate information about the Originator and Beneficiary as specified under paragraph (1) of this Article, in a manner that enables complete tracking of this information in the Beneficiary State, including the Originator's account number or a unique process identification/reference number.
5. Take the following actions:
   a. Verify the accuracy of the data and information accompanying the financial transfer. b. Verify customer information in case of suspicion of money laundering or terrorism financing.
   c. Verify that the Beneficiary's IBAN belongs to the country to which the transfer is intended and with which the customer has a commercial relationship.
   d. Obtain all supporting documents and records regarding the purpose of the transfers and the relationships between the Originator and the Beneficiary.

Article (5)
Simplified Identification Procedures

The Financial Institution may simplify the identification procedures for cross-border financial transfers, provided it complies with the following:

1. Obtain prior written approval from the Palestine Monetary Authority.
2. The amount of a single transfer does not exceed USD 1,000 or its equivalent.
3. The financial transfer must include accurate information and data about the Originator and Beneficiary, including names and account numbers used in executing the transfer, and in the absence of accounts for either, a unique process identification number shall be included to allow for tracking.
4. Verify customer information in case of suspicion of money laundering or terrorism financing.

Article (6)
Retention of Information and Records

The Financial Institution must comply with the following:

1. Retain identification information for financial transfers, their execution transactions, and the documents and records obtained as part of due diligence, in accordance with the provisions of the Law.
2. Provide electronic archiving of 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 financial 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 financial transfer.

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2. Retain all information received from the originating Financial Institutions or another intermediary Financial Institution for the period specified in the Law.
3. Take all necessary measures to process cross-border financial 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 working procedures to determine when financial transfers lacking required information about the Originator or Beneficiary shall be executed, rejected, or suspended, and to define appropriate follow-up procedures.

Article (8)
Obligations of the Beneficiary Financial Institution

The Beneficiary Financial Institution, when receiving any financial transfer, must comply with the following:

1. Take all necessary measures to identify cross-border financial transfers that lack the required information about the Originator or Beneficiary, including follow-up procedures during or after execution as circumstances dictate.
2. Verify the identity of the Beneficiary of financial transfers if not previously verified, and retain all data and information received from the originating Financial Institutions in accordance with the provisions of the Law.
3. Adopt risk-based policies and working procedures to determine when financial transfers lacking required information about the Originator or Beneficiary shall be executed, rejected, or suspended, and to define appropriate follow-up procedures.

Article (9)
Money or Value Transfer Service Providers

1. Subject to what is stipulated in any legislation, no person shall provide money or value transfer services without obtaining prior written approval from the Palestine Monetary Authority.
2. A Money or Value Transfer Service Provider must comply with the application of the provisions of these Instructions, whether the transfer is conducted directly or through an agent in any of the countries where it conducts its business.
3. A Money or Value Transfer Service Provider, if it itself controls both 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 a suspicious transaction report is required. 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 resolutions, including taking freezing measures and necessary measures to prohibit transactions with persons and entities subject to a prohibition.
2. Screen the parties to the financial transfer against the sanctions lists issued by the United Nations Security Council and the National Listing before executing the financial 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 purview, and they shall apply as of their date of issuance.

Issued in the city of Ramallah on 24/08/2022 AD

Dr. Firas Malham
Governor
(Signature)