The impact of Jordanian anti-money laundering laws on banks

Author:Ahmad Mohammad Abdalla Abu Olaim, Aspalella A. Rahman
Position:Universiti Utara Malaysia, Sintok, Malaysia; School of Law, Universiti Utara Malaysia, Sintok, Malaysia
Pages:70-78
SUMMARY

Purpose - The purpose of this paper is to examine the impact of the Jordanian anti-money laundering law and its instructions on the Jordanian banking industry. The anti-money laundering law in Jordan is newly enacted, but there are new developments not covered by the law. For instance, the revolutionary wave known as the Arab Spring surrounding Jordan has increased the crime rates in Jordan, and it has also reduced international coordination and cooperation to encounter money laundering operations. ... (see full summary)

 
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The impact of Jordanian
anti-money laundering laws on
banks
Ahmad Mohammad Abdalla Abu Olaim and
Aspalella A. Rahman
Universiti Utara Malaysia, Sintok, Kedah Darul Aman, Malaysia
Abstract
Purpose – The purpose of this paper is to examine the impact of the Jordanian anti-money laundering
law and its instructions on the Jordanian banking industry. The anti-money laundering law in Jordan is
newly enacted, but there are new developments not covered by the law. For instance, the revolutionary
wave known as the Arab Spring surrounding Jordan has increased the crime rates in Jordan, and it has
also reduced international coordination and cooperation to encounter money laundering operations.
The emergence of new means for money transfer is affecting the efciency and speed of bank transfers.
Subsequently, the impact of the law on Jordanian banks is unknown.
Design/methodology/approach – This paper relies on the Jordanian Anti-Money Laundering and
Counter Terrorist Financing Law 2007 as a primary source of information. The relevant Jordanian
anti-money laundering instructions that have directly been affecting banks include the Jordanian Anti
Money Laundering and Counter Terrorist Financing Instructions Number (51) 2010. These instructions
were considered the most important legislation for the purpose of this paper.
Findings While the Jordanian anti-money laundering law is based on certain principles, the
effectiveness of the law is unknown. The Arab Spring, particularly the Syrian revolution, has negatively
increased the crime rates and money laundering activities in Jordan. To make matters worse, the
international cooperation and coordination between countries in combating money laundering are not
at the required level, and this has encouraged money laundering groups to exploit the situation. Only
time will tell whether the banks will be able to cope sufciently with the increased anti-money
laundering obligations. Obviously, it is critical at this stage to establish effective coordination between
legislators, regulators and the banking industry to minimize problems encountered by the banks,
thereby to ensure effective implementation of the law.
Originality/value – This paper provides an examination of the impact of the Jordanian anti-money
laundering law that has directly affected banks. It is hoped that this paper would provide some insight
into this particular area for academics, practitioners, the legal advisers, banks and policy-makers not
only in Jordan but also elsewhere. In view of the international nature of money laundering and banking,
there will be signicant interest in how the anti-money laundering law affects banks operation in
Jordan.
Keywords Jordan, Arab spring, Anti-money laundering law
Paper type Research paper
Introduction
The idea of money laundering is simple: a criminal who acquires illegal funds will seek
to ensure that he can use the money without the authorities’ realizing that the funds are
derived from criminal activities. The simplest denition of money laundering given by
previous researchers is “washing of dirty money to make it appear legitimate”
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1368-5201.htm
JMLC
19,1
70
Journalof Money Laundering
Control
Vol.19 No. 1, 2016
pp.70-78
©Emerald Group Publishing Limited
1368-5201
DOI 10.1108/JMLC-07-2014-0023

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