Well-governed financial institutions are key building blocks of a transparent banking sector in compliance with best international practice. This was highlighted by a workshop about anti-money laundering (AML) and combating the financing of terrorism (CFT) hosted by the EBRD and the Palestinian Monetary Authority (PMA) in Ramallah.
Developing, strengthening and maintaining robust controls against money laundering and terrorism financing, as well as managing sanctions risk are key to ensure that financial institutions and the sector operate in line with international best practice. They are also central to the development of a well-governed, resilient and competitive banking sector.
Pierre Heilbronn, the EBRD Vice President for Policy and Partnerships, said: “We are proud to partner with the PMA to help develop and strengthen compliance standards in the local financial sector. This is key to attract investment and to protect and foster local businesses.”
Addressing the workshop, the Governor of the PMA, Azzam al Shawwa, stressed that the Palestinian banking system is stable. The PMA had worked to develop the banking system and to protect the financial sector and have a sound policy to combat money laundering and terrorist financing. “In preparation for the assessment of Palestine by the Middle East and North Africa Financial Action Task Force in 2020, important steps have been taken to deliver our own report on money-laundering and terrorism-financing risks on the local economy”, he added.
In six sessions and over two days, more than 90 participants from 14 local financial institutions completed a number of case studies developed by an international expert, focusing on the internal control framework used to identify, rate, assess and mitigate risk.
Participants and international experts explored the challenges of developing and strengthening risk-based AML and CFT controls, covering topics including monitoring and analysing the customer base, creating a methodology to identify money laundering and terrorist financing risk, and defining the systems needed to capture this risk. By focusing on these topics, EBRD and PMA hope to support the local financial sector in preparing for the upcoming assessment of the West Bank and Gaza by the Middle East and North Africa Financial Action Task Force, in 2020.
In 2017, the EBRD started investing in the West Bank and Gaza. To date, three projects have been signed for a total amount of €14 million.