Intent Declared Summary
The Financial Action Task Force (FATF), in its 2007-2008 Annual Report names Jordan as one of the jurisdictions that has committed to implementing the FATF's 40+9 recommendations. According to the International Monetary Fund's (IMF) 2004 Article IV Consultation report, once the draft law on anti-money laundering (AML) is passed by Jordan, the country will be brought into full compliance with international standards. On May 2007, Jordan's Parliament endorsed this law on anti-money laundering. However, due to the relative newness of the law, there is little information publicly available addressing its comprehensiveness. A 2008 report by the U.S. Department of State (DoS) notes that Jordan enacted the AML law in 2007, and that the law criminalizes money laundering and stipulates as a criminal offense any crime stated in international agreements endorsed by Jordan. Revisions made to the Penal Code in 2001 criminalizes terrorist activities, specifically the financing of terrorist organizations. However, the 2008 U.S. DoS report points out that the government of Jordan still faces significant challenges and is still in the process of determining which law enforcement agency will be responsible for the conduct of financial investigations relating to AML/combating the financing of terrorism (CFT) activities. The AML law established the Anti-Money Laundering Unit as the designated Jordanian Financial Intelligence Unit and also provides the framework for freezing and seizing of funds related to money laundering. With regard to international treaties, the 2008 U.S. DoS report notes that Jordan has signed but has yet to ratify the UN Convention against Transnational Organized Crime. Despite the 2007 AML Law and remarks in the 2004 IMF report noting that the enactment of the law would in effect bring Jordan into full compliance with international standards, there has been no comprehensive assessment since the passing of the law on Jordan's compliance with the FATF's forty recommendations and nine special recommendations.
General Overview
According to the International Monetary Fund's (IMF) 2004 Article IV Consultation report, once the law on anti-money laundering is passed by Jordan, the country will be brought into full compliance with international standards. A 2008 report by the U.S. Department of State (DoS) reports that Jordan enacted the anti-money laundering law (AML) in July 2007. The 2007 AML law criminalizes money laundering and stipulates as a criminal offense any crime stated in international agreements that Jordan is party to. However, given the relative newness of the law, there is little information that addresses its comprehensiveness with respect to the Financial Action Task Force's (FATF) 40 plus 9 recommendations and special recommendations. Furthermore a 2007 Article IV Consultation report by the IMF noted that, at the time, "Jordan needed to improve the overall legislative and institutional framework" (p. 17) for anti-money laundering.
Besides criminalizing money laundering, per the 2008 U.S. DoS report, the new AML law requires obligated entities to undertake due diligence in identifying customers, refrain from dealing with anonymous persons or shell banks and report any suspicious transaction to the financial intelligence unit (FIU). In addition, obligated entities must comply with instructions issued by competent regulatory bodies. Under the new law all financial institutions are required to report suspicious transactions, however, lawyers and accountants are not considered obligated entities under the law. The AML law also provides the framework for freezing and seizing of funds related to money laundering. It also authorizes Customs to seize or restrain undeclared money crossing the border and report it to the FIU.
The new AML Law also established the Anti-Money Laundering Unit (AMLU) as the designated Jordanian FIU. The AMLU is an independent entity housed within the Central Bank of Jordan. It is primarily responsible for receiving and analyzing suspicious activity reports (SARs). The 2008 U.S. DoS report notes that financial institutions file suspicious transactions reports (STRs) and also cooperate with prosecutors' requests on narcotics trafficking and terrorism related information. The AMLU received over 30 SARs in 2007. However, no arrests or convictions for money laundering or terrorist financing were made the same year. Jordan is a party to the 1988 United Nations (UN) Drug Convention, the UN International Convention for the Suppression of the Financing of Terrorism, and the UN Convention against Corruption. Jordan has signed but has yet to ratify the UN Convention against Transnational Organized Crime. Jordan is a charter member of the Middle East and North Africa Financial Action Task Force (MENAFATF) and in 2007 Jordan held the presidency of MENAFATF.
The Principles
II1. Legal Systems and Related Institutional Measures
There is insufficient information publicly available regarding Jordan's compliance with the FATF's recommendations relating to this principle. However, based on the information provided in the 2008 U.S. DoS report, Jordan enacted an anti-money laundering law (AML) in July 2007. The 2007 AML law criminalizes money laundering and stipulates as criminal offense any crime stated in international agreements that Jordan is party to. The law requires obligated entities to undertake due diligence in identifying customers, refrain from dealing with anonymous persons or shell banks, and report any suspicious transaction to the FIU. Furthermore, the 2001 revision to the Penal Code criminalizes terrorist activities, specifically the financing of terrorist organizations.
The new AML Law also established the AMLU as the designated Jordanian FIU. The AMLU is an independent entity housed within the Central Bank of Jordan. It is primarily responsible for receiving and analyzing SARs. The 2008 U.S. DoS report notes that financial institutions file suspicious transactions reports and also cooperate with prosecutors' requests on narcotics trafficking and terrorism related information. The AMLU received over 30 SARs in 2007. However, no arrests or convictions for money laundering or terrorist financing were made the same year.
II2. Preventive Measures - Financial Institutions
There is insufficient information publicly available regarding Jordan's compliance with the FATF's recommendations relating to this principle. However, based on the information provided in the 2008 U.S. DoS report the new AML Law requires obligated entities to undertake due diligence in identifying customers, refrain from dealing with anonymous persons or shell banks and report any suspicious transaction to the financial intelligence unit. In addition, obligated entities must comply with instructions issued by competent regulatory bodies. Under the new law all financial institutions including banks, foreign exchange companies, money transfer companies, stock brokerages, insurance companies, credit companies, and any company whose articles of association state that their activities include debt collection and payment services, leasing services, investment and financial asset management, real estate trading and development, and trading in precious metals and stones are required to report suspicious transactions. The Banking Law also allows judges to waive bank secrecy provisions in criminal cases including money laundering and terrorist financing. The 2001 revision to the Penal Code criminalizes terrorist activities, specifically the financing of terrorist organizations. Furthermore, guidelines issued by the Central Bank state that banks should research all sanctions lists relating to terrorist financing including those issued by individual countries and relevant authorities. Banks and other financial institutions are required to maintain records for a period of five years.
II3. Preventive Measures - Designated non-Financial Business and Professions
There is insufficient information publicly available regarding Jordan's compliance with the Financial Action Task Force's recommendations relating to this principle. However, according to the information provided in the 2008 U.S. DoS report, under the new AML law real estate trading and development, and trading in precious metals and stones are required to report suspicious transactions. However, lawyers and accountants are not considered obligated entities under the law.
II4. Legal Person and Arrangements & Non-Profit Organizations
According to a 2007 U.S. DoS report, charitable organizations are governed by the Social Organizations Act of 1966 and are subject to regulation by the Ministry of Social Development. The report also indicates that anybody collecting donations, subscriptions, or contributions for an illicit organization can be imprisoned for a period not exceeding 6 months, according to the Penal Code. The donations collected by charitable organizations are required to be deposited in a bank, and the Central Bank, by law (Instructions No. 29 of 2006), is required to verify the identity of any charitable organization that opens a bank account. Despite the above information, none of the publicly available sources directly address Jordan's compliance with the FATF's recommendations for this principle.
II5. National and International Co-operation
Jordan is a party to the 1988 UN Drug Convention, the UN International Convention for the Suppression of the Financing of Terrorism, and the UN Convention against Corruption. Jordan has signed but has yet to ratify the UN Convention against Transnational Organized Crime. Jordan is a charter member of the MENAFATF and in 2007 Jordan held the presidency of the MENAFATF. The 2008 U.S. DoS report indicates that the new AML law provides the framework for cooperation with foreign judicial authorities in providing assistance in foreign investigations, extradition, and freezing and seizing of funds in accordance with current legislation and bilateral and multilateral agreements. Also, in 2004, the United States and Jordan signed an agreement regarding mutual assistance between their respective customs administrations with regard to customs offences and the sharing and disposition of forfeited assets. Nevertheless, there is insufficient information publicly available regarding Jordan's compliance with the Financial Action Task Force's recommendations relating to this principle.
