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Anti-Money-Laundering and Countering Terrorism Financing (AML CTF) Policy

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DESCRIPTION PAGE

Contents

Introduction 3

Terms and Expressions 4

Introduction to AML and CTF 11

First Policy Objectives 14

Second Scope of Policy 14

Third Principles of Money Laundering and Terrorism Financing 14

Fourth Tasks and Responsibilities 15

Fifth Policy of Accepting Clients According to Expected Risk Level 17

Sixth Accepting Financial Transactions Policy 18

Seventh Internal Measures 24

Eighth Suspicion, Analysis, and Reporting 26

Ninth Training and Spreading the AML CTF Culture 27

Tenth General Rules and Guidelines 28

Accreditation 30

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INTRODUCTIONAnti-Money Laundering (AML) operations are considered a real and serious threat to financial and banking systems for countries throughout the world, representing a threat to the sovereignty, identity, and reputation of a country. This threat has met with widespread and increasing interest represented in concerted efforts to combat money laundering and terrorism financing operations, with countries and international bodies cooperating to combat these criminal activities through issuing laws and instructions and setting stringent criteria to protect financial and economic systems from these activities.As part of the National Bank’s Board of Directors and executive management keenness to comply with the AML CTF Law that was ratified by the State of Palestine President, and instructions and circulars issued by the Palestinian Monetary Authority (PMA) and the Financial Follow-up Unit (FFU) in this respect, this policy has been approved and implemented by all managers, officials, and employees, each according to their responsibility, for the purpose of identifying procedures for dealing with financial transactions and taking due diligence to identify current or potential clients, verifying their personal and legal identity and legal status, and identifying the real and end beneficiaries, as well as continuing to have full knowledge of client banking operations as long as they deal with the Bank, as this represents one of the important systems to combat money-laundering and terrorism-financing activities (Know Your Client), in addition to the objective of protecting the Bank and its staff from being subjected to risks of reputation, transactions, and legalities that could lead to financial losses and criminal, administrative, and civil penalties.Money-laundering is a process undertaken by criminal individuals or parties to conceal the basic source of income derived from criminal acts. This process may follow one pattern that may be very simple in nature (real estate, jewelry, vehicles), or may be very complex in nature (numerous financial transactions through banking and fictitious companies networks) for the purpose of making it look virtually legal, providing the income resulting from such operations with a legal means to be circulated in the banking system so it can be freely and legitimately used during three stages of laundering it:

• Stage One: Placement, namely, employing, investing, or introducing money generated from the original crimes or an illegitimate action into the financial system.

• Stage Two: Layering, which is concealing and/or camouflaging the relationship between the money and its illegitimate sources through a series of complicated financial and non-financial operations.

• Stage Three: Integration, which involves integrating laundered money into the economy in a manner that makes it difficult to distinguish it from money from legitimate sources.

Terrorism and terrorism-financing are defined by the Palestinian Law as any act that leads to terrorizing people and destabilizing national security. Terrorism-financing is defined as any transfer or movement of money among natural persons or legal entities that leads to terrorist acts. This crime is connected to the original money laundering crimes according to the Palestinian Law.

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Terms and ExpressionsThe following terms and expressions shall have the meanings attached to them hereunder, unless otherwise indicated in the context:

Monetary Authority Palestinian Monetary Authority

Governor Governor of the Monetary Authority

Committee The National Committee to combat money-laundering and terrorism financing established under the provisions of article (19) of the law.

Unit The Financial Follow-Up Unit established under the provisions of article (23) of the law.

Property All types of assets, whether corporeal or incorporeal, movable or immovable; legal instrument or documents of any form, including electronic or digital, proving rights of ownership of such assets or a share thereof; currency in circulation; foreign currencies; banking credits; traveler’s checks; bank checks; cash transfers; shares; securities; bonds; drafts; and documentary credits; and any interest on and shares in profits; or any other income or value due or resulting from such assets.

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Predicate Offenses 1. Participating in a criminal group or an organized fraud group. 2. Human trafficking and smuggling refugees.3. Sexual exploitation of children and women.4. Illegitimate trading in intoxicating drugs and hallucinogens.5. Illegitimate trading in weapons and munitions.6. Illegitimate trading in stolen goods and other stolen items.7. Embezzlement and bribery. 8. Fraud.9. Forgery of currency10. Forgery and piracy of products and goods.11. Crimes which violate the provisions of the Environment Law.12. Murder or severe harm. 13. Kidnap, detention, or hostage-taking. 14. Burglary and theft.15. Smuggling.16. Intimidation, threatening, or blackmail.17. Forgery.18. Piracy against air and marine navigation.19. All types of electronic piracy 20. Crimes stipulated in articles (87, 88, 89, and 99) of the current applicable Financial

Securities Law21. Corruption crimes.22. Tax crimes 23. Illegitimate sale or leakage of land in accordance with current legislation in Palestine,

including mediation, or any other act aimed at transferring land ownership to another state for the purpose of attaching it or parts thereof to its ownership.

24. Credit abuse 25. Crimes stipulated in the current Palestinian Archaeology Law.26. Financing terrorism and terrorist acts.

Proceeds Property resulting directly or indirectly, partially or fully, from a predicate offence.

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Financial Institution Any natural person or legal entity subject to laws in effect in the state of Palestine, whose profession or activities are connected to any of the activities stated hereunder, whether the person or entity engaged therein for the benefit of himself/itself or his/its customers. Anyone who undertakes as a profession one or more of the following activities or processes listed hereunder in favor or on behalf of a client:1. Accept deposits and other money due from the public.2. Lending.3. Financial leasing.4. Transfer of assets or value. 5. Issuing and managing repayment instruments. 6. Financial guarantees and obligations.7. Dealing in the following

• Short term debt instruments.• Foreign currencies • Exchange of currencies, interest rates, and financial instruments connected to the

stock exchange markets.• Transferrable securities.• Regulatory commission for dealing in futures contracts.

8. Participation in issuing securities and providing financial services related to these issues. 9. Management of individual and group portfolios.10. Depositing and managing cash or solvent securities on behalf of others. 11. Other forms of investing, managing, or regulating funds or cash on behalf of others. 12. Life insurance and insurance underwriting, and other forms of investment in the insurance

sector. 13. Cash and currency exchange.14. Any other activities or operations identified by the Committee. 15. The Committee may decide in case a natural person or legal entity practiced any of the

activities or operations mentioned above incidentally or on a very limited scale, based on quantitative and conclusive criteria that indicate that money-laundering risks are miniscule after this decision becomes applicable in a law, completely or partially on that natural person or legal entity.

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Designated Non-Financial Businesses and Professions

1. Real estate agents and brokers.2. Dealers in precious metals and precious stones.3. Other dealers who deal in high-value transactions, including antiquities dealers.4. Attorneys and accountants when they prepare and execute transactions and participate

therein to the credit of their customers with respect to the following activities:• The purchase and sale of real estate.• Management of customers’ funds, securities, and other assets.• Management of bank accounts, savings, or securities.• Regulation of shares in the establishment, operation, or management of companies.• Establishment, operation, or management of legal persons, or legal arrangements, and

the purchase of business corporations. 5. Providers of credit and corporate services not covered by the law, and persons who

provide the following services to other parties on a commercial basis:• Service as an agent for the establishment of legal entities.• Work or arrangement of work for another person as a director or secretary of a company,

or a partner in a partnership, or in a similar position relating to other legal persons.• Provision of: a registered head office, commercial address, store address, mailing

address, administrative address for a company, partnership, or any other legal entity, or other arrangement.

• Work or arrangement of work for another person as a trustee of an express trust.• Work or arrangement of work for another person as a nominated shareholder for

another person. 6. The Committee may determine the extent of commitment of any of the nonfinancial

professions and business determined in this annex by money laundry procedures stated in the original law, partially or totally, if it turns out that the risk of money laundry or terrorism financing is insignificant through quantitative and absolute standards. The Committee may add any of the activities carried out by ordinary or legal persons to consider them within the determined non-financial business and professions, following quantitative standards stipulating that the risk of money laundry is significant, partially or totally.

Financial Transaction Any disposition of property, including any purchase, sale, loan, pledge, transfer, transport, delivery, or other disposition of property affected by a natural person or legal entity, including: the deposit, withdrawal, or transfer of funds from one account to another; conversion of currency; granting of a loan or extension of credit; purchase or sale of shares, debt securities or certificates of deposit; or the rental of safe deposit boxes.

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Wire Transfer Any transaction executed by electronic means on behalf of a natural person or legal entity through a financial institution to provide a sum of money to a payee in another financial institution.

Client Natural person or legal entity in a business relationship with any financial institution or any designated non-financial business or profession.

Casual Client A client who is not connected to the Bank with a continuous relationship. A client who does not maintain an account with the Bank and is implementing a financial transaction at the Bank (currency exchange, quick transfer).

Non-Resident Natural person or legal entity whose usual place of residence is outside Palestine and/or who has not completed a minimum of one year residence in Palestine regardless of his citizenship, with the exception of families and individuals who have a permanent economic activity and residence, even if intermittently (PMA Instructions number 9/2009 dated 28/12/2009).

Shell Bank Any bank that has one or more of the following characteristics: 1. Has no work place where he meets his clients or customers. 2. No one person or more are employed in it to practice an actual activity or management

role.3. Does not maintain records of his operations.4. Is not subject to inspection by a specialized control authority in the country where it was

established or in any other country.5. The Shell Bank definition does not apply to a bank that does not have a fixed headquarters

if it is affiliated with a licensed bank with a physical presence and is subject to effective control.

Beneficial Owner A natural person who owns or controls definitively the agent or account of a person who acted on the natural person’s behalf in executing a transaction; or a person who exercises effective and definitive control of a legal entity or its management.

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Politically-Exposed Persons

Politically-exposed persons are those who occupy any of the following positions, regardless of whether they were locals or foreigners, together with their families and those associated with them: 1. 1. Persons occupying important political positions or high-ranking positions.

• Head of the state, his advisors, and heads of state institutions.• Prime Minister and Cabinet members and persons with similar positions. • Secretary-generals of ministries and Ministry secretary generals and persons with

similar positions. • Managers and general managers in government positions and public services persons

with similar positions.• Directors and heads of public institutions and agencies persons with similar positions.• Speaker and members of the Legislative Council.• Chairman and members of the Judicial Council• Judges of courts at all levels.• Public prosecution members• Directors and leaders of security agencies and high-ranking officers, directors of

departments and sections therein.• Directors and leaders of the Palestinian Public Security, directors of departments and

sections in headquarters and governorates.• Chairmen and high ranks in political parties and Palestinian factions, and those who

hold important positions in these parties and factions.2. Chairmen, representatives, and directors of non-governmental charity organizations and

associations, national and government agencies, and members of the board of directors. 3. Ambassadors, consuls and members of the diplomatic corps.4. Chairmen and directors of international organizations and their deputies and representatives. 5. Executive officers in government-owned companies.

Competent Authority

All government agencies assigned to combat money-laundering operations according to its authorities including public prosecutors and law enforcements.

AML Officer Person entrusted with the tasks stipulated in the PMA instructions number 3/2015.

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Department Anti -Money Laundering Department at the National Bank

Terrorist Acts The terrorist acts stipulated for in the penal code and any enforced laws in Palestine.

Terrorist Anyone who commits any of the following acts: 1. Commits or attempts to commit, or participates as an accomplice in any terrorist act by any means directly or indirectly; and organizes terrorist acts or directs people to commit terrorist acts 2. Contributes in terrorist acts with a group of persons acting with a common purpose, such contributions shall be willfully made with the aim of enhancing terrorist acts to be made with knowledge of the intention of the group to commit any of the terrorist acts.

Terrorist Organization

Any group of terrorists who commits any of the following acts: 1. Commits or attempts to commit terrorist acts deliberately by any means directly or indirectly; or accomplices in executing or organizing terrorist acts, or directs others to commit terrorist acts. 2. Contributes in committing terrorist acts with a group of people acting with a common purpose, to contribute in deliberately to affirm the terrorist act or with the knowledge of the intention of group to commit terrorist acts.

Foreign Terrorist Fighters

The foreign individuals who travel to a country other than their residence or nationality country, for the purpose of committing, or planning or preparing or participating in terrorist acts or providing or receiving terrorist training.

Financial Intermediary

Any funds or instrument used or intended to be used in any manner, total or partial, to commit one or more of the predicate offences.

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Identification of the Palestinian AML CTF Law

Law Resolution Number (20) for the Year 2015 Regarding AML and CTF

1. 1. Any person who commits any of the following acts shall be considered to have committed the crime of Money-Laundering: • Conversion or transfer of property with the knowledge that the property is the proceeds of a crime to thereby

conceal or disguise the illegal source of the property or to aid a person complicit in the commission of a predicate offence to escape the legal consequences of his acts.

• Concealment or disguising of the actual nature, source, location, disposition, movement, or ownership of property or rights to property with the knowledge that such property constitutes the proceeds of a crime.

• Acquisition, possession, or use of property with the knowledge, at the time of the receipt of such property, that the property constitutes the proceeds of an offence for purpose to conceal and disguise illegal source of such property.

• Participating in, aiding, abetting, conspiring in, and providing advice or counsel on, facilitating, colluding in, concealing, or attempting to commit any of the acts stipulated in this article.

2. Knowledge, intent, or aim-given that they are basic elements necessary for [establishing] the crime shall be derived from factual, objective circumstances to establish the concealed source of proceeds without the need to obtain evidence of the predicate offence.

3. The laundering of property obtained from any predicate offence committed inside or outside the National Authority’s territories shall be considered a crime, provided the predicate offence is criminalized under the law in effect in the country where the crime occurred. The crime of Money-Laundering shall also apply to persons who commit the predicate offence.

4. Terrorism financing: Anyone (natural or legal person) who commits willful or attempts to commit directly or indirectly by any means to provide or to collect money from legal or illicit source, to be used or with the knowledge that the money will be used partially or fully for terrorist acts, terrorist organization, terrorist association, terrorist group or to commit any terrorist acts.

5. Any of the acts mentioned in clause (4) of this article is considered a Terrorism Financing offence, even if the offense did not actually occur or if the money was not actually used to commit or try to commit the terrorist offense or if the money did not connect to a certain terrorist offense regardless of the country where the terrorist act occurred or attempted to commit.

6. Anyone is banned from doing the following acts: • Recruiting, organizing, transporting or equipping of terrorist foreign fighters, moving, providing, preparing terrorist

fighters, or financing their travels and other activities.• Traveling or attempting to travel from Palestine to any other country for the purpose of committing , participating

, planning or preparing any terrorist acts or providing or receiving of terrorist training.• Providing or collecting money willfully or knowing that money will be used to finance foreign fighters’ moves and

travels or to facilitate or to organize their travels.• Entry or transit the state of Palestine for the purpose of terrorist related intentions”.

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Risks and PenaltiesWhereas the National Bank is considered part of the local and international banking system, it is responsible and obligated to combat money-laundering operations, and may be subjected in case of being involved in money-laundering transactions or in case it failed to install and implement policies and procedures related to combating money-laundering transactions to risks of its reputation being tainted and financial risks, or the possibility of severe disciplinary measures that may be imposed on it by official financial control agencies that could reach suspending the legal entity (bank) form work totally or partially for a minimum period of one month and a maximum period of one year if it committed any of the crimes stipulated in this law. In case of a repetition, the court may decide to cancel the legal entity’s registration or liquidate it. The bank, as a legal entity is considered responsible for crimes committed by the individual responsible for the actual management in it, and is subject to fines stipulated in the current AML Law, in addition to penalties stipulated in the law, that may amount to repealing the bank’s license.

The AML Law issued by the PMA stipulated the imposition of the following penalties: Decision by Law number (20) for the year 2015 regarding AML and CTF.

Article (37) Money-Laundering Offences PenaltyWithout prejudice to any more severe penalty stipulated in the Penal Code or any other law, a person who commits the crime of money laundering shall be punished by the following 1. If a person commits the crime of money laundering stemming from a predicate offence that is a misdemeanor, the

person shall be punished by imprisonment of 1-3 years and a fine no less than the value of money of crime 2. If he committed the crime of money laundering stemming from a predicate offence that is a felony, the person shall be

punished by imprisonment of 3-15 years and a fine no less than the value of money of crime. 3. If he attempts to commit the crime of money laundering, or aids, abets, facilitates, or consults regarding the commission

of this crime, he shall be punished of the penalty imposed on the primary perpetrator

Article (38) Exemption from PenaltyAny criminal who undertakes to report, to the Unit, the crime of money laundering or terrorism financing before the Unit or any competent authority has knowledge of the crime, shall be exempt from the penalty established in this law. If the report occurs after the Unit or another competent authority has knowledge of the crime, in order for the criminal to be exempt, the report must lead to the arrest of the other criminals or seizure of the property that is the object of the crime.

Article (39) Legal Entity Penalty1. A legal entity that commits the crime of money laundering or terrorism financing shall be punished, without prejudice to

the liability of any natural person subordinate to the legal entity, by a fine of (JD10,000)- (JD200,000) or the equivalent in currencies in circulation.

2. A person responsible for the actual management of a violating legal entity shall be punished by the penalty stipulated

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in clauses (1,2) of Article (37) and clause(1)of Article(43)of this law if his knowledge of the crime is demonstrated, or if the offence occurred as a result of his breach of his employment duties.

3. A legal entity shall be jointly liable for payment of adjudicated fines and damages if the crime that occurred in violation of this law was committed by one of its employees on its behalf and to its benefit.

Article 43 Terrorism Financing Penalty1. Any person who commits or attempts to commit a Terrorism Financing crime provided for in clauses (4,5,6) of article

(2) of this law, shall be punished with imprisonment of no less than (5) years and fine of no less than (JD50,000), confiscating all instruments used or intended to be used in the crime. Also shall be punished of the penalty imposed on the primary perpetrator who: aids, abets, facilitates, or consults regarding the commission of this crime.

2. Each person who refrains from implementing the provisions of articles (6,7,8,9,10,11,14,29) of this law, shall be punished with imprisonment of no less than(1)year and no more than (3) years and fine of no less than (JD5,000), and no more than (JD100,000), or what equals in active money; or by both of these penalties.

3. Any person who violates the provisions of articles (16,29)of this law shall be punished with imprisonment of no less than (3) months and no more than (1)year, or fine of no less than (JD1,000) and no more than (JD10,000), or by both penalties

4. Any person who violates the provisions of the article (35) of this law shall be punished by a fine of no more than (10%)of unauthorized money value or on disclosure, false acknowledgment of money; penalty doubled if violates repeated

5. The court may issue a temporary or permanent injunction prohibiting a person from engaging in his activity if the person has been convicted of violating the provisions of the articles specified in clause (2) of this article.

Article (44) Penalty for Violation of Provisions of the Law1. Any person who violates the provisions of this law or any instructions issued in this regard, and does not comply

with these requirements deliberately or through gross neglect, shall be deemed to have committed an administrative violation. The supervisory authority may, upon detection the commission of such violation by financial institutions and non-financial businesses and professions, adopt measures and impose one or more of the following penalties:• A warning to comply with specific instructions.• Submission of periodic reports by the concerned financial institution or non-financial business or professions, sating

the measures which it takes or sating compliance with the specified instructions. • Written warnings. • Imposition of a fine of JD1,000 - JD50,000 or the equivalent in the currency in circulation. • Prohibition of persons from employment in financial institutions and non-financial businesses and professions. • Replacement or restriction of the authorities granted to the mangers, chiefs, or controlling owners, including the

appointment of a special director. • Suspension, restriction, or withdrawal of a license, and a prohibition on continued engagement in the business or

profession. 2. Information on the measures taken under clause(1) of this article may be published to inform the public.

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First: Policy Objectives• Review and create banking policies and work procedures to include controls and precautionary measures against the

bank using any form of work to complete money-laundering operations or financing terrorism. • Identify the acceptable general framework for dealing with clients at different levels (individuals, companies, financial

institutions, etc.) • Identify a framework for monitoring and reviewing bank accounts and continue to update client information based on

the nature of their accounts’ management.• Identify the general framework for receiving suspicion reports from all branches and departments and the manner of

studying them.• Identify the general framework to submit suspicion reports to the Financial Follow-up Unit after studying and analyzing

them.

Second: Scope of PolicyThis policy applies to all the National Bank’s operations and activities throughout Palestine, and on all its managers, officers, staff, and employees, regardless of their rank, regarding the Bank’s services and products. This policy also applies to branches outside Palestine, to the extent that it complies with the principles and laws related to money-laundering and terrorism-financing, and to the extent that helps implement this policy in such a way that it does not contradict the recommendations of the finance work group in this respect, and in accordance with the specificity of each state in this area, in a way that does not lead to the cancellation of this policy. Each office or branch of the National Bank should identify clients, their citizenships the nature of their activities, their addresses, and their references in all possible ways available through completing official documents authenticated form official parties to ensure the completion of “Know Your Client” procedures in accordance with the presented policy, and to avoid suspicious cases, reporting them in various activities, and to the AML CTF officer in the first place, who will be responsible in relevant cases for preparing suspicious transactions reports or any other reports according to the requirements of the Financial Follow-up Unit, or any specialized official parties or authorities in this field.

Third: Principles of Money Laundering and Terrorism Financing• Not to deal with accounts numbers or deal with or enter in banking relations with unknown people or people with

fictitious or symbolic names, or with shell companies or banks. • Implement due diligence measures when dealing with individuals or parties that are classified as high risk, according

to client classification by level of risk stated in the “Know Your Client” policy.• Complete and absolute cooperation with specialized local and international government control agencies in a manner

that does not contradict the banking secrecy instructions prevailing in Palestine.• Continue to set policies and procedures that ensure identifying customers, the nature of their activity and transactions. • Continuity of the presence and use of cooperation and communication channels with the Financial Follow-up Unit in

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any suspicious money-laundering or financing terrorism operations. • Plan for the training of all Bank employees in the field of AML CTF.

Fourth: Tasks and Responsibilities1. Board of Directors’ Responsibility • Establish an AML CTF department that enjoys complete independence from the other Bank’s activities and work.• Approve the organizational structure of an AML CTF department in a manner that ensures its affiliation with the Board

of Directors and the Auditing Committee emanating from it.• Approve an AML CTF policy and evaluate the level of effectiveness with which the Bank manages AML CTF risks at

least once every year, reviewing it after every change made to it.• Monitor and review the implementation of this policy through the reports submitted to it from the Internal Audit and

Compliance Committee emanating from the Board of Directors.• Take the necessary measures to reinforce the values of safe professional practices inside the Bank in a manner that

makes compliance with laws, regulations, and instructions implemented a basic objective the implementation of which is a duty.

2. Executive Management Responsibility• Ensure the presence of an updated AML policy according to the latest local and international issues, and ensure that

it is circulated to all the National Bank’s branches and departments.• Adopt and circulate an AML CTF policy to all Bank directors, officers, and staff at all levels, in such a way that each

person suspected of money-laundering or terrorism-financing is reported to the AML CTF department.• Ensure that the right procedures and measures that are suitable when detecting violations or suspicions related to

AML or CTF are implemented and that the parties concerned are informed of these violations. • Provide the AML CTF department with independence from any executive activity at the Bank, and ensure that there

are no responsibilities that may involve a conflict of interest. • Provide the AML CTF department with the sufficient human resources to enable it to perform its tasks and responsibilities

efficiently.

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3. The Tasks and Responsibilities of the AML CTF Department• Submit at least semi-annual reports to the Compliance and Internal Auditing Committee emanating from the Board of

Directors covering all the department’s achievements and activities.• Set written policies and procedures to combat money-laundering and terrorism-financing to the National Bank and

have it approved by the Bank’s management, reviewing and updating it periodically in coordination with the parties concerned.

• Accept or reject financial operations with incomplete information regarding the amount in terms of the sources or documentation that prove the source of the money, the purpose from it, and the end and ultimate beneficiary from these transactions, based on the estimation of the risk levels.

• Accept or refuse to open incomplete accounts as far as the “Know Your Client” documents are concerned based on risk levels related to the type of accounts or the incomplete documents.

• Accept or refuse any banking movement for high risk clients preemptively and before implementing the transaction.• Accept or refuse any incoming transfer that is missing any of the basic information in the SWIFT letter, after communicating

with the correspondent and completing the missing information. • Receive all reports and correspondence incoming from the Bank’s branches and departments that include a suspicion

or a suspicious process, and study it with all transparency and objectivity.• Contact any employee at the Bank and examine files and records freely and transparently and access any necessary

information that facilitates their work. • Daily verification of all financial transactions that are equal to or exceed $5,000 or its equivalent in other currencies. • Verify all new transactions to inactive, stagnant, and other accounts that require observation and control due to their

inactive nature, ensuring that movements that took place based on special approvals are compatible with their nature.• Observe accounts of minors and deceased persons.• Monitor and observe movements and transactions that are not compatible with the volume and nature of the client’s

activity.• A weekly inspection of random samples of new clients whose accounts were opened at all the Bank’s offices and

branches.• Contact the Financial Follow-up Unit regarding reporting suspicion of money-laundering and terrorism-financing case,

and monitor responses on the Unit’s requests in this respect, and any advice within the context of AML CTF.• Monitor the “Safe Watch” system regarding testing banking transactions and ensuring that none of its parties is listed

in the international sanctions lists approved and adopted by the National Bank according to the “Know Your Client” policy.

• Request the necessary investigations for reasons behind violations, and requesting assistance from specialists (the Legal Department, Internal Audit Department, Compliance Department) or any foreign party, with the approval of the General Director without violating the banking secrecy provisions stipulated in the Banks’ Law.

• Take the suitable decision regarding submitting suspicion reports to the Financial Follow-up Unit established in

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accordance with the provisions of the Money-Laundering and Terrorism Financing Law of 2015 and the operations affiliated with it.

• Inform the Board of Directors and the General Manager of any violations or financial or reputation loss that the Bank was exposed to.

• Implement the Risk-Based Approach in the methodology of the AML CTF work.• Spread the culture of complying with AML CTF laws using all available means in cooperation with all relevant

departments of the Bank.

Fifth: Policy of Accepting Clients According to Expected Risk LevelWhen establishing a banking relationship with a client, every administration and other official shall ensure that sufficient information was collected about clients and the potential use of their products and services, including the nature and level of expected client transactions, which permits developing a perspective of the client’s expected activities, the number of transactions expected to be concluded by the client, and the average amount involved each month for each product and service. This represents the basis for identifying the unusual activities and transactions, particularly those with high risk which may indicate a money-laundering or terrorism-financing process. Furthermore, information must be obtained and prepared for all accounts. The extent of detail and nature of this information depends on different client classifications (individuals, corporations, etc.); particularly giving special attention to those accounts and transactions classified as high risk. Information must also be updated on continuous basis while monitoring the activities and transactions throughout the dealing period to ensure that the activity or transaction was concluded in accordance with what the Bank knows about the client. Client information must be reviewed and updated consistently in accordance with the “Know Your Client” policy.Due diligence must also be done towards clients working with the Bank on the basis of the relative importance and risk, making the necessary due diligence arrangements towards its relations with these clients during the following times:• When concluding transaction with large amounts (over $5000 or its equivalent in other currencies) or using banking

instruments in an unusual way. • When a substantial change takes place in the mechanism for documenting client information.• When there is a noticeable change in the manner in which the account is managed.• When the Bank realizes that it does not have sufficient information about a client.

Regarding high-risk clients (according to client classification based on the level of risk in the “Know Your Client” policy), prior approval must be obtained by the AML CTF department before implementing their banking transactions, in order to provide the highest levels of due diligence in such transactions.

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Sixth: Accepting Financial Transactions PolicyThe AML CTF Department should review all financial transactions on daily basis to verify the integrity of these transactions against suspicion, because the type of financial transactions used or that may be used in money-laundering and terrorism-financing are varied and unspecified, and are difficult to verify and ensure that they are money-laundering or terrorism-financing operations. There are, however, certain indications that may indicate suspicion, such as being different from the client’s personal and/or commercial nature and activity. There are also transactions that, though they contrast the client’s nature or activity, they do not necessarily represent a suspicious transaction. Based on this, and for the sake of the importance of taking all verification and due diligence procedures required by the AML CTF Law and instructions issued by the PMA and the Financial Follow-up Unit, and emanating from the National Bank’s keenness to commit to the content of these instructions, adherence to the general framework for accepting financial transactions must be observed according to the following:

1. Cash Transactions (Cash Deposits, Check Deposit, Cash Withdrawals)• Cash and checks deposited in client accounts must be identified in terms of their sources or purpose of deposit,

provided the source of the money deposited is compatible with the nature of the client’s activity.• Financial transactions’ performers “depositing in client accounts or beneficiaries from checks” must be identified

through obtaining ID card information, address, and telephone numbers. The relationship between them and account-owners must also be identified. A copy of their identity card must also be obtained.

• Clients must submit a written disclosure indicating the source of cash or checks deposited if their amount exceeds $5,000 or its equivalent in other currencies on the same day, in addition to supporting documents and evidence.

• Documents proving sources of money must be placed in client files.• Due diligence must be done for foreign checks (issued by foreign banks outside Palestine) deposited in client accounts.• In case a client repeatedly refused to submit the necessary disclosure required regarding the source of funds, the

AML CTF officer must be notified of the case, which is to be studied for evaluating potential risk. In case there are suspicions, a suspicion report is submitted to the Financial Follow-up Unit and a recommendation is submitted to close the account.

• In case the client subdivided a large amount and deposited it in more than one account for more than one client, a clear justification must be obtained for these transactions and their sources according to official documents. Reasons behind this subdivision must be investigated and the case must be studied by the Communication Officer.

• Reasons for an abrupt withdrawal of large amounts in an unusual manner for the client must be investigated.• Financial transactions implemented by ATM machines by clients must be investigated to ensure that they are ordinary

and unsuspicious withdrawals.• The Financial Follow-up Unit must be notified in case there are many cash transactions for the same beneficial owner

for large amounts without a clear justification supported by official documents. • It is necessary to ensure that transactions implemented are compatible with the nature of the client’s activities. In

case of any suspicions related to money-laundering or terrorism financing, they should be immediately reported in accordance with article 8 of this policy

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2. Transfer from One Client to Another in the Same Bank• The purpose behind the transfer, together with the necessary documents must be obtained, indicating the reason

behind the transfer , especially when the transfer amounts is more than $5,000 or its equivalent in other currencies. • The relationship between the sender and the beneficiary must be clarified.

• It is necessary to ensure that transactions implemented are compatible with the nature of the client’s activities. In case of any suspicions related to money-laundering or terrorism financing, they should be immediately reported in accordance with article 8 of this policy

3. Transfers and Issued Checks• Transfers / Bank checks may not be issued without obtaining a minimum level of data as follows:

• Full beneficiary’s name without acronyms or abbreviations.• Full beneficiary address • Account or IBAN number and the beneficiary bank’s code (SWIFT).• Purpose of transfer / issue in addition to documents indicating that.• The nature of relationship between the sender and the beneficiary, together with documents proving this

relationship.• No transfer / check may be issued at the request of a person who is not a customer at the National Bank.• No transfer / check may be issued if the beneficiary’s name is mentioned on one of the international sanctions lists

approved by the National Bank, in accordance with the “Know Your Client” policy.• No transfer / check may be issued from high-risk accounts without the prior approval of the AML CTF Department.• No commercial transfers may be issued from personal accounts. The party issuing a commercial transfer should

have a commercial establishment account.• No commercial transfers may be issued without submitting documents showing the nature of the commercial

relationship between the sender and the beneficiary. All available means of verifying the ultimate beneficiary must be utilized.

• No transfers may be issued if the purpose behind them is covering the accounts of money exchangers.• It is necessary to ensure that transactions implemented are compatible with the nature of the client’s activities. In

case of any suspicions related to money-laundering or terrorism financing, they should be immediately reported in accordance with article 8 of this policy, and coordination should be undertaken with relevant parties to evaluate the risk involved with this client, taking the suitable decision regarding his accounts in accordance with the risk assessment study resulting from dealing with this client

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4.Incoming Transfers• The approval of the AML CTF Department must be obtained before entering any incoming transfer into high-risk

accounts according to the Client Classification by Risk Base Approach in the “Know Your Client” Policy.• Incoming transfers that are deficient in basic information may not be deposited especially if it was impossible to

identify the sender’s or beneficiary’s details and the relationship between them.• Incoming transfers should be studied on continuous basis to identify the source of funds and verify it with suitable

documentation.• The AML CTF Department, according to the information available to it, shall correspond with the sending bank

requesting additional information (data and clarifications) regarding repeatedly incoming suspicious transfers by sending SWIFT messages and matching data from the sending bank with the information and documents received from the client to take the appropriate decisions.

• All measures must be taken in all available methods to identify the end objective of the transfer and its end beneficiaries.

• It is necessary to ensure that transactions implemented are compatible with the nature of the client’s activities. In case of any suspicions related to money-laundering or terrorism financing, they should be immediately reported in accordance with article 8 of this policy, and coordination should be undertaken with relevant parties to evaluate the risk involved with this client, taking the suitable decision regarding his accounts in accordance with the risk assessment study resulting from dealing with this client.

5. Quick-Transfers Transactions (Western Union): • All data listed on the quick transfers system should be entered correctly to complete “Know Your Client” procedures.• Due diligence must be exerted to identify the client, his activity, and the end among the transfer parties, and verify

this information in the proper manner.• The client must attend in person to cash the transfer. No representation or delegation must be accepted to cash

quick transfers.• No financial transfers may be cashed or dispatched unless official valid identification documents are presented. • Anonymous persons or those with fake or abbreviated names may not be dealt with under any circumstances (as

a minimum, the first and last names should be available without any abbreviations).• The real beneficiary from the financial transfers should be verified and due diligence for clients should be performed.• In case a client requested cashing / issuing more than one transfer, the reason for this partitioned request should be

investigated, and an official document should be requested showing the reason for the transfer if necessary.• The instructions of Western Union as circulated by the Compliance Department regarding any sanctioned countries

or areas where precautionary procedures are specified should be adhered to, depending on risks expected from the client.

• In case there are any sort of suspicion regarding fast transfers for a specific client, it should be notified to article 8 of

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this policy, coordinating with relevant parties for assessing risk of dealing with the client and taking the appropriate decision according to the study for assessing risk.

• Maximum due diligence should be observed when granting a branch agency to companies authorized to provide this service according to local laws, through prior approval of the application, after ensuring that all requirements related to granting the agency according to the PMA in coordination with the Compliance Department and relevant departments have been fulfilled.

• The Bank is the party responsible for all the branch agent’s transactions. The Bank is addressed regarding any transaction that took place through Western Union through the branch agent, and the Bank is responsible for charging what is due on it.

• Agents who provide fast transfers services through the National Bank must be visited periodically to ensure that they implement the procedures and circulars, and reports must be issued on these visits at a minimum of two visits a year.

• A detailed report is to be issued on monthly basis on the control results of the Western Union periodic monitoring of Western Union movements, to include the percentage of identity documents accepted and the percentage of data-entry into the system. The results of testing incoming and outgoing transactions, as well as any suspected cases that were inspected in the Department or that were reported.


6. Electronic Banking Transactions• All procedures related to electronic banking transactions (such as: SMS banking, Mobile Banking, Internet Banking…)

must be studied and reviewed to ensure their integrity and that they include sufficient controls to combat money-laundering and terrorism-financing.

• The AML CTF Department should study transactions whose amount exceeds $3000or its equivalent in other currencies to ensure that they are clear from money-laundering and terrorism-financing suspicions, such as:• Accounts receiving many small transactions electronically and then large transactions are done in the same way

to another country.• Large amounts are regularly deposited I different ways including electronically, or large payments are received

regularly from high risk countries • It is necessary to ensure that transactions implemented are compatible with the nature of the client’s activities. In case

of any suspicions related to money-laundering or terrorism-financing, a report must be established in accordance with article 7 of this policy.

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7. Trade Financing Transactions• It is strictly forbidden to issue any letter of credit / guarantee / commercial policy based on the request of a person

who does not maintain an account at the Bank.• It is strictly forbidden to issue any letter of credit / guarantee / commercial policy from personal accounts. The

beneficiary or issuer of the letter of credit / guarantee / commercial policy should have a commercial establishment account.

• It is strictly forbidden to issue any letter of credit / guarantee / commercial policy without submitting documents that indicate the nature of the commercial relationship between the issuer and the beneficiary. The final and ultimate beneficiaries of the letter of credit / guarantee / commercial policy must be verified in all possible ways.

• It must be verified that all the parties mentioned in the letter of credit / guarantee / policy (such as: shipping agency, clearance agency, port…) are not listed on the international sanctions lists approved by the Bank.

• It is prohibited to issue a letter of credit / guarantee / policy the purpose of which is to cover money exchangers’ accounts except in permitted cases according to the instructions of the PMA and the approval of the AML CTF Department. Hence, all the necessary precautions must be taken in all available ways to identify the final purpose and end beneficiary of the transfer.


8. Financial Institutions• It is prohibited to enter into any banking relationship with any financial institution without the General Director’s

approval or the approval of anyone he delegates, that of the AML/CTF department, and the Compliance Department.• It is prohibited to deal with financial institutions operating in countries that implement the FATF criteria.• It is necessary to ensure that the financial institution (company name, partners, authorized signatories, real

beneficiaries, and executive managers) is not listed on one of the international sanctions lists adopted in the “Know Your Client” policy. In case it was discovered at the time of establishing a relationship or updating data, dealing with the financial institution must be ended and the party that listed it must be verified by requesting additional information to ensure the required search. In case the name was matched, the banking relationship is to be ended totally with all parties concerned with the Bank.

• It is necessary to study the potential dangers of dealing with financial institutions according to their place, branches, and nature of their activities, and to study it according to the classification of the FATF group. Special attention should be given to studying applications by financial institutions that are located in a country that does not sufficiently implement the recommendations of the FATF group.

• Incoming and outgoing transactions must be monitored through financial institutions to ensure that all recommendations and best practices circulated by the FATF group, and the laws and legislations issued by the

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PMA and the Financial Monitoring Unit in this respect are implemented, in accordance with the recommendations of the Wolfsburg principles for correspondent banks.

• Financial institutions must be contacted in case there are some enquiries regarding some implemented transactions in favor of an account at the National Bank or through the Bank, in case there is doubt or questions about the nature of the implemented transactions. This can happen through sending a SWIFT message or writing to the Compliance Department / AML CTF Department in the financial institution directly.

• In case there are suspicions regarding any financial transaction implemented by a financial institution, coordination is done with the AML CTF Department and the Compliance Department to monitor data and documents that need to be completed to study the incoming case. The necessary measure is to be taken regarding the transaction. As a result, the commitment of the financial institution to the AML CTF instructions is assessed, to ensure that the banking relationship with that financial institution does not expose the Bank to any risk or loss.

• It is necessary to cooperate with financial institutions in case an enquiry is received regarding implemented transactions through them, by responding to all their enquiries and questions transparently and credibly. They should also be provided with the documents required provided the banking secrecy instructions circulated by the PMA are not violated.

• It is necessary to stop dealing with financial institutions about which news is received on its being investigated by official parties in any AML and CTF cases, provided such news is verified by reliable and neutral sources. In case the crime was verified against the financial institution, the risk resulting from dealing with it is studied and discussed with the parties concerned to make a decision regarding closing this institution.


9. Credit Facilities• Settlement of irregular facilities to begin with, with larger than expected amounts.• Request loans against mortgaging assets owned by a third party in such a way that the source of these assets is

unknown to the Bank, or that the size of these assets is not compatible with the client’s financial position.

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Seventh: Internal Arrangements◊BankingSecrecyProvisions• The PMA specifies the instructions governing the secrecy of bank accounts, exchange of information, and information

related to client indebtedness among banks and specialized lending agencies to guarantee their secrecy and the provision of the necessary information for the safety of granting credit and managing risk.

• All current and former Bank Board of Directors’ members, main officials, employees, auditors, consultants, and external contractors in banks and special lending agencies are required to maintain the secrecy of information and documents related to clients and which they acquire due to the nature of their work. None of them is permitted to reveal this information or permit anyone from outside the bank or the specialized lending agency to examine it. This prohibition applies to anyone who, by virtue of their profession, job, or work, directly or indirectly, is privy to this information, unless examining it is based on:1. The client’s written approval.2. A court order issued by a Palestinian court.

• The following cases shall be exempted from the secrecy requirements provisions mentioned in paragraph (2) of this article. These parties are committed to the secrecy requirements regarding the information acquired.1. Disclosure to perform legal duties specified to the external auditor in accordance with this law.2. Disclosure of information and documents requested by the PMA or it employees performing their duties.3. Issue of a certificate or statement indicating the reasons for refusing to cash a check based on a request from

the right owner.4. Specific disclosure of information in accordance with the provisions of the AML Law and the instructions issued

therein.5. Disclosure and exchange of information relating to clients and borrowers and their guarantors for the use of the

Credit Information Bureau at the PMA and any other companies or parties approved by the PMA to facilitate the exchange of this information.

6. Disclosure of information related to the client for Palestine Deposit Insurance Corporation and other related institutions connected to its missions in accordance with information issued by the PMA.

7. Disclosure by the Bank of some or all information related to the client dealings to provide judicial evidence in litigation related to these dealings.

8. Members of the boards of directors of banks that wish to merge or purchase in accordance with the provisions of this Law or those they specifically delegate for this purpose may exchange among them the necessary information related to the work of their banks to complete the merging or purchase study provided they obtain the written prior approval of the PMA. These individuals are considered personally responsible for maintaining the secrecy of the information they examine in this respect, subject to legal proceedings.

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◊DueDiligenceTowardsClientsBanks are required to identify and verify their clients in the following cases:

• When establishing a relationship with the client. Special attention should be given when establishing a relationship with a high or medium-risk client according to the client classification level stated in the Know Your Client policy.

• When any individual expresses an occasional interest in implementing a financial transaction or financial transfers equal to or exceeding the assigned amount of $5,000.

• When leasing safe-deposit boxes. Special attention must be given when establishing a special relationship with a high or medium-risk client according to the client classification level stated in the Know Your Client policy.

• When requesting facilities against deposits.• When cashing unknown third party checks from outside.• When requesting the implementation of financial transactions or large and complicated deals.• Depositing large amounts or repeated deposits of amounts the total of which represents a large amount that is not

compatible with the nature of the client’s virtual activity and the normal volume of operations.• Operating the account basically to transfer large amounts of money to foreign countries or receiving large transfers

from these countries in a way that this client’s activity does not justify such operations.• Cashing checks issued to their holder from outside, or cashier checks with amounts that are not compatible with

the client’s normal nature of volume and activity.• Large or repeated transactions related to an external activity seen by the bank as incompatible with the volume of

this activity.

◊Record-Keeping• The National Bank is committed to maintain all records and documents for a minimum period of 10 years from the date

of completing the financial transaction or the end of the work relationship, or after the end of the casual transaction, according to the instructions of the PMA number 105/2016. In case of closing the account due to the presence of investigation cases related to money-laundering or terrorism-financing crimes, information and documents must be kept until the investigation is completed, provided the maintenance mechanism is in accordance with what is acceptable in Palestinian courts of law and/or applicable laws in Palestine. The maintained documents shall include:

1. Information related to due diligence as stipulated in article 5 of these instructions.2. Information related to clarification of financial transactions and commercial and cash deals whether local or external.3. Accounts files and commercial correspondence.4. Copies of ID cards or registration certificates.5. Maintain records, studies, and information on all data related to all suspicious or unusual transactions in accordance

with the legal period stipulated above.

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◊Safe-DepositBoxesThe Bank should practice care and diligence when a safe-deposit box takes any of the following forms:

• A client making frequent and unusual visits to his safe-deposit box.• Non-resident clients maintaining safe-deposit boxes in an unusual way without a clear justification in case this

service is available in banks operating in the area where they reside.• Clients who rent many boxes.

◊ Investment-RelatedTransactions• Purchase of financial securities for safe-keeping at safe-deposit boxes in banks, when this is not compatible with

the virtual status of the individual. • Perform borrowing deals against blocking the deposits of an affiliated company or companies abroad, especially if

they are in countries that produce or market narcotics. • Bring in large amounts of money from abroad for investment purposes in foreign transactions or financial instruments

when the volume of investment is not compatible with the client’s financial position.• Repeated purchase or sale of financial securities in virtually unusual circumstances. • Purchase of financial securities to keep them in safe-deposit boxes at banks, with no compatibility between the

client’s activities and his financial position.• The client liquidates a large financial position through a series of small cash transactions.• Lack of attention on behalf of the client towards the normal decisions that have to be taken regarding investment

accounts, such as fees or adequate investment methods.• The client depositing amounts of cash, traveler’s checks, payment orders, or counter checks for amounts less than

the limit stated in the instructions to fiancé an investment account. • A client’s use of investment accounts as a tool for transferring money to foreign parties, especially offshore accounts.• Introduce large amounts of money from outside to invest in foreign currencies or financial securities when the

volume of investment is not compatible with the client’s financial position.

Eighth: Suspicion, Analysis, and Reporting• All Bank employees at various administrative levels shall correspond with the AML CTF Department regarding any

suspicion in funds related to a predicate offense or a suspicious activity, to be studied and analyzed, and to take the appropriate decision.

• The AML CTF Department completes the information and documents available at the Bank for suspicious cases revealed by the Compliance Department or by different branches and departments at the National Bank in order to study the case.

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• Suspicious cases must be studied objectively and transparently by the AML CTF Department in order to confirm the suspicion or negate it.

• In case the suspicious case was confirmed, a suspicion report is submitted to the Financial Monitoring Unit, which is the party authorized by the Palestinian law.

• The AML CTF Department reports to the Financial Monitoring Unit according to the approved procedure in the PMA Circular number 105/2016, provided it includes all the forms and documents required. Cooperation with the Financial Monitoring Unit is required in case there are additional requests.

• Complete professional secrecy shall be strictly observed regarding suspicion reports submitted. • The suspicion case is studied thoroughly and continuously whether it was submitted to the Financial Monitoring Unit

or not, in order to evaluate the risks resulting from dealing with the client, in order to take the suitable decision to submit a suspicion report or coordinate with the General Director to close the client’s account if need be.

Ninth: Training and Spreading the AML CTF Culture• There should be a continuous search for meetings, conferences, and courses in the various fields of AML and CTF.• The annual training plan must be adopted and approved, the groups to be trained identified, and the training

subjects presented in a clear timetable within the annual plan of the AML CTF Department. The plan should be approved by the General Director.

• It should be verified that the culture of AML CTF is spread throughout the Bank in all available methods (workshops, educational publications, circulars and correspondence, etc.)

• The training material related to AML should be continuously developed in accordance with the latest policies, procedures, and best practices, in such a way that the training method is clear and understandable.

• It is necessary to coordinate with the Human Resources Department to arrange with the AML CTF Department to prepare a training program that includes all Bank employees at all levels, including new staff, to coordinate involving them in periodic workshops on AML and CTF.

• It is necessary to coordinate to hold the adequate training regarding any amendments to the policies and procedure involving combating money-laundering and terrorism-financing.

• It is necessary to coordinate with the parties concerned to hold training sessions for the beneficiary companies from Sub-Agents for the quick-transfers services (western union sub-agent companies), on periodic and continuous basis covering all employees of these companies.

• It is necessary to maintain records of the courses and workshops of the AML CTF Department, and to preserve the training material and register of attendees.

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Tenth: General Principles and Guidelines• Every administration staff member at the Bank shall adhere to the Bank’s policies and work procedures as well as

the rules, regulations, and instructions regarding combating AML and CTF, each according to his field of work.• No administrative staff member at the Bank may manage any accounts by delegation for any client with the

exception of spouse and first degree relatives after obtaining the approval of the General Director through the Human Resources Department.

• It is not permissible under any circumstances whatsoever to accept the task of managing accounts, perform transactions, or perform commercial activities with any current or potential client suspected of being involved, or understood from his behavior, in attempts to participate in money-laundering or terrorism-financing activities.

• Subject to disciplinary measures, no employee is permitted to disclose to a client or the actual beneficiary, directly, indirectly, or through any other means whatsoever, any notification measure or measures taken or related to persons or legal entities listed, or information related to it.

• It is not permitted to interrogate any client based on a suspicion of a money-laundering transaction. The role of the Bank in this field is restricted to gathering and analyzing data and information related to the transaction and reporting it.

• Entry into a financial dealing with and/or in favor of any person who does not have a current account with the Bank is prohibited, with the exception of Western Union transfers and casual client transactions within the special conditions and instructions issued in this respect.

• It is prohibited to enter into a banking relationship with any person previously without obtaining all the necessary information related to the person to be dealt with, ensuring the presence and integrity of the documents and data leading to this information from neutral and reliable sources that permit the Bank to: • Verify the ID card / nature of activity / sources and uses of money.• Identify and verify the real beneficiary of the account.• Verify the legality of the sources of money through a written affidavit from the client or by submitting official

documents indicating the source of funds.• Monitor the type and flow of transactions and their compatibility with the client’s nature of work.

• All documents must be kept using means that protect them against damage or fire, and in a manner that facilitates retrieving them at any point in time for a minimum period of 10 years according to the local law.

• It is imperative to abide by the laws issued by the committee for implementing the resolutions of the International Security Council, and to coordinate with the relevant departments to provide the necessary electronic systems to ensure the implementation of the resolutions effectively.

• Dealings with clients who refuse to submit clear information about the nature of their activities and the transactions implemented, and the real and end beneficiaries from the transactions, must be stopped.

• It is necessary to ensure that the financial transactions implemented from and to money-exchangers accounts are compliant with the instructions of the PMA circulated in this respect (Instructions on the Management of Money-Exchangers Accounts).

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• Due diligence must be practiced when performing banking transactions by inspecting all parties mentioned in the transaction and ensuring that they are not listed on the international sanctions lists approved and adopted by the Bank.

• The Financial Follow-up Unit must be informed about a banking transaction in which a party is listed on the international sanctions lists approved and adopted by the Bank.

• It is necessary to inform the Financial Follow-up Unit in case there are many cash transactions for the same actual beneficiary with large amounts without a clear justification that is supported by official documents.

• In case a client cancelled a banking transaction after being briefed about the Know Your Client policy or the disclosure of money sources requirements, the AML and CTF Department must be notified to study the transaction and submit a suspicion report (SAR) if necessary.

• It is prohibited to open accounts or deal with shell banks, and hence, the utmost due diligence must be expressed when entering into banking relationships with the financial institutions to ensure their presence, reputation, policies, and the real beneficiaries from them.

• The AML and CTF department is subject to internal and external auditing in accordance with the Bank’s internal policies.

• Branch employees are required to provide special care to all Bank clients who have safe-deposit boxes, especially in cases like: • A client making frequent and unusual visits to his safe-deposit box.• Non-resident clients unusually having safe-deposit boxes without a clear justification in case this service is

available in the area where they reside.• Clients who rent more than one box.

References:1. Palestinian Monetary Authority and the Financial Monitoring Unit’s instructions 2. Decision by Law number (20) for the Year 2015 regarding AML and CTF, State of Palestine.

• PMA circular number (105/2016), instructions for AML and CTF for banks, and the manual guide for AML and CTF.

• AML Circular number (110/2016) “Amendment to the Decision with Law number (20) for the year 2015 regarding AML and CTF.

3. Recommendations of the FATF Group 2012.4. Guidance for a Risk-Based Approach for Money or Value Transfer Services Feb.2016 5. Recommendations of the Wolfsburg Group

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All National Bank managers, officers and employees at various levels are required to work according to this policy and all procedures and circulars issued thereof as of the date it is ratified. Hence, each administration staff member at the Bank shall ensure the implementation of this policy in all possible ways.

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