Money Laundering has been identified as a major threat both to Arab Banking Corporation Jordan (ABC) and to the banking community generally. ABC is a unit of the Arab Banking Corporation group. The group is incorporated in Bahrain and regulated by the Central Bank of Bahrain. ABC's international units are required to follow their local regulations in addition to the regulations followed by the parent bank.
ABC Jordan has adopted strict procedures for dealing with the threat posed by Money Laundering in accordance with the Central Bank of Jordan (CBJ) & Central Bank of Bahrain (CBB) regulations. ABC-Jordan has furthermore adopted the CBJ regulations as a minimum standard to be followed.
ABC-Jordan has issued an anti-money laundering manual which has been approved by the Board of Directors and complies with the CBJ & the parent bank regulations & FATF recommendations and international best practice in this respect. These procedures include specific requirements with regard to, amongst other things:
The appointment of a Money Laundering Reporting Officer.
Procedures regarding the identification of customers including the prohibition of numbered accounts or accounts for shell banks.
Regular internal and external inspection and auditing of compliance with procedures.
Procedures for reporting suspicious transactions.
Procedures for profiling customer's transactions and business.
Procedures for education and training of employees in anti-money laundering requirements.
Implementing internal controls for the prevention of money laundering.
Know your Customer (KYC) Guidelines
ABC has strict KYC procedures in place which include the validation of business and individual customer identities and place of residence prior to commencing business with any customer. Such information is updated on a regular basis and archived once the business relationship finishes. The procedures include profiling of the customer's transactions as to size, frequency, nature and hence potential risk. No anonymous or numbered accounts are opened nor does ABC open any accounts for banks which do not maintain a physical presence in their country of incorporation i.e. shell banks.
Suspicious Activity Reporting
Any staff identifying an account or transaction as suspicious is required to report the case to the unit Money Laundering Reporting Officer (MLRO). The MLRO will review the facts and determine whether the suspicion is allayed or whether a report to the local regulator is required. If necessary the MLRO will discuss the transaction with the Group MLRO but if suspicions remain, the filing of a Suspicious Transaction Report (STR) cannot be suppressed. Under no circumstances will staff “Tipp-off” the customer that an STR is being prepared.
All accounts are screened on a regular basis against lists of suspected or designated criminals and terrorists provided by the regulator and any matches therewith reported to the regulators.
Unusual Large Transactions
All cash transactions larger than $10,000 must be reviewed, reported and the rationale thereof clarified before proceeding with the transaction.
It is a requirement that all employees who have potential contact with customers or who process transactions on behalf of customers are required to undertake anti-money laundering training. Relevant new employees should be provided with an AML ‘Joining Pack’ summarizing relevant regulations and their responsibilities with regard to them. They must also be given AML/CFT training within three months of joining.
All ABC units are required by law to maintain records which are appropriate to the scale, nature and complexity of the customer's business. All identity or business relationship records must be kept for a minimum period of 5 years from the end of the bank's relationship with the customer.
Compliance and audit
ABC’s internal audit and compliance functions (The Unit MLRO) have important responsibilities in independently evaluating and ensuring adherence to local and Group policies.
ABC's internal audit unit conduct periodic review to ensure compliance with the AML procedures. In addition the external auditors (Ernst & Young) are required to conduct an audit to ensure that the unit is in compliance with the parent bank regulations as it is requested by the CBB. Furthermore the regulators own inspectors conduct periodic reviews of the bank's compliance with the regulations.