Money laundering is a serious global issue that affects economic stability, fuels organized crime, and undermines legal financial systems. Like many countries, Jordan has taken strong steps to fight money laundering by implementing robust legal frameworks and regulatory mechanisms.
Over the past two decades, the Kingdom has shown its commitment to international standards by strengthening its anti-money laundering (AML) and counter-terrorism financing (CTF) laws.
In this blog post, our best lawyers in Jordan will explore the key aspects of AML laws in Jordan, including relevant legislation, regulatory bodies, compliance obligations, and recent developments in the field by the best Orient law firm.
Understanding Money Laundering in Jordan
The practice of hiding the source of funds gained unlawfully in order to make them seem genuine is known as money laundering. Financial crimes have come under greater attention in Jordan, particularly in light of cross-border economic activity and regional instability. To protect the honesty of the financial system, the Central Bank of Jordan and other organisations have increased enforcement.
Key AML Legislation in Jordan
To effectively combat money laundering and the financing of terrorism, Jordan has adopted a comprehensive series of laws and regulations. These legislative measures form the backbone of the Kingdom’s efforts to strengthen financial integrity and align with international best practices.
Among the most significant of these laws is Law No. 46 of 2007 on Anti-Money Laundering and Counter Terrorism Financing. This foundational piece of legislation laid the groundwork for Jordan’s modern AML/CTF regime.
Moreover, in response to evolving global standards and recommendations, this law was later amended by Law No. 27 of 2017, which significantly enhanced the legal framework to bring it into greater alignment with the guidelines set forth by the Financial Action Task Force (FATF).
Key Highlights of the Law:
- A comprehensive and clear definition of money laundering offenses, covering a wide range of illegal activities.
- Mandatory customer due diligence (CDD), with enhanced procedures for high-risk clients and transactions.
- Obligations for financial and certain non-financial entities to promptly report suspicious transactions (STRs).
- Strict penalties for non-compliance, including fines and potential criminal prosecution.
- Establishment of a national Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) unit to oversee enforcement and coordination.
Key Institutions Involved
The implementation and enforcement of Jordan’s AML laws involve several key institutions working in coordination to ensure compliance and mitigate risks:
1. Anti-Money Laundering and Counter Terrorism Financing Unit (AMLU)
This is the country’s official financial intelligence unit (FIU). It is primarily responsible for receiving, analyzing, and sending suspicious transaction notifications to appropriate law enforcement agencies. The AMLU also serves as the key link with foreign peers, helping to coordinate worldwide efforts to combat financial crime.
2. Central Bank of Jordan
The Central Bank supervises financial institutions, issues rules, and ensures AML compliance among banks, money exchangers, and fintech companies.
3. Judicial Authorities and Law Enforcement
Jordan’s prosecutors and courts have become increasingly involved in dealing with complex financial crimes, collaborating with the AMLU to bring offenders to justice.
Compliance Obligations for Businesses
Jordanian AML law requires a broad variety of firms to comply with AML/CTF regulations, including:
- Banks and financial institutions
- Insurance firms
- Money Transfer Services
- Real Estate Agents
Key compliance requirements include:
- Implementing Know Your Customer (KYC) procedures.
- Ongoing monitoring of transactions.
- Reporting suspicious activity to the AMLU.
- Providing staff training on AML practices.
- Establishing internal policies and controls.
Non-compliance may result in administrative penalties, financial fines, or even criminal prosecution.
Jordan and International Cooperation
Jordan is an active member of international bodies such as:
- The Middle East and North Africa Financial Action Task Force (MENAFATF).
- The Egmont Group facilitates information exchange between FIUs globally.
Jordan’s AML efforts are regularly evaluated by international organizations to ensure compliance with global standards. These assessments have prompted reforms that have significantly strengthened the AML legal framework.
Challenges and Future Outlook
While Jordan has made notable progress, challenges remain, including:
- The growing complexity of cross-border transactions.
- Evolving money laundering methods, particularly via digital currencies.
- The need for greater public-private cooperation.
To address these, Jordan continues to invest in capacity building, regulatory technology, and legal modernization. The government is also working to enhance transparency in the ownership of companies and improve the effectiveness of investigations and prosecutions.
Conclusion
In conclusion, Jordan’s commitment to combating money laundering is evident through its continuously evolving legal and institutional frameworks. By not only aligning with international best practices but also actively enhancing local enforcement mechanisms, the country is clearly taking critical and proactive steps to safeguard its economy and strengthen financial integrity.
For businesses operating in or engaging with the Jordanian market, understanding and complying with AML regulations is more than just a legal requirement—it is an essential component of responsible and sustainable financial management. Staying compliant not only protects your organization from legal risks but also contributes to building a more transparent and secure financial system.
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