FATF Status

Jordan  is no longer on the FATF AML Deficiency list.

Latest FATF Statement  -  27 October 2023

The FATF welcomes Jordan’s significant progress in improving its AML/CFT regime. Jordan strengthened the effectiveness of its AML/CFT regime to meet the commitments in its action plan regarding the strategic deficiencies that the FATF identified in October 2021 related to (1) completing and disseminating the ML/TF risk assessments of legal persons and virtual assets; (2) strengthening risk-based supervision and conducting training for FIs and DNFBPs; (3) maintaining comprehensive and updated basic and beneficial ownership information on legal persons; (4) pursuing money laundering investigations and prosecutions for predicate offences in line with its risk profile and strengthening the sanctioning and confiscation regime, including at the border; (5) implementing a legal and institutional framework for TFS; and (6) conducting risk-based monitoring of NPOs without disrupting legitimate NPO activities. Jordan is therefore no longer subject to the FATF’s increased monitoring process.

Jordan should continue to work with MENAFATF to sustain its improvements in its AML/CFT system.

EU List of High Risk Countries

On 7th February 2024, Jordan was removed from the EU List of High Risk Countries.

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Jordan was undertaken in 2022. According to that Evaluation, Jordan was deemed Compliant for 8 and Largely Compliant for 24 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 2 of the Effectiveness  & Technical Compliance ratings.

US Department of State Money Laundering assessment (INCSR)

Jordan was deemed a Jurisdiction of Concern by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR). Key Findings from the report are as follows: -

The Hashemite Kingdom of Jordan is not a regional or offshore financial center, it has a well- developed financial sector with significant banking relationships in the Middle East. Incidents of reported money laundering are rare, but anecdotal reports indicate Jordan’s real estate sector has been used to launder illicit funds.

Jordan’s long and remote desert borders with Iraq, Israel, Saudi Arabia, Syria, and the West Bank make it susceptible to the smuggling of bulk cash, gold, fuel, narcotics, cigarettes, counterfeit goods, and other contraband.  Smuggling endeavors tend to be small scale, and there is no discernible connection between black market goods and large scale crime, such as terrorism. Black market cigarettes are widely available, and there is little government effort to curb sales. Jordan Customs sometimes interdicts drivers smuggling cheaper gasoline from Saudi Arabia in false tanks. Border security is becoming more stringent, however, which may have an impact on smuggling. In 2015, ongoing concerns about spillover violence from areas held by the Islamic State of Iraq and the Levant (ISIL) in Iraq and Syria prompted the closure of Jordan’s land border crossings with Iraq and Syria.

There are six public free trade zones (FTZs) in Jordan:  the Zarqa Free Zone, the Sahab Free Zone, the Queen Alia International Airport Free Zone, the Al-Karak Free Zone, the Al-Karama Free Zone, and the Aqaba Special Economic Zone (ASEZ). With the exception of Aqaba, these FTZs list their activities as trade. There are approximately 70 designated private FTZs, a number of which are related to the aviation or chemical and mining industries. FTZ activities vary from industrial, agricultural, pharmaceutical, or vocational to multi-purpose. With the exception of ASEZ, the Ministry of Finance monitors all FTZs, which are regulated by the Jordan Free Zones Corporation Law. The ASEZ Authority, a ministerial level authority, controls the port city of Aqaba.

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           46

World Governance Indicator – Control of Corruption             58

Corruption is an obstacle for businesses operating or planning to invest in Jordan. A system of wasta (middlemen) is common throughout the country and is considered part of doing business, thus making transactions opaque and hindering competitiveness. Other obstacles to business include high levels of bureaucracy, red tape, and vague regulations. Jordan's Penal Code criminalizes corruption, including abuse of office, bribery, money laundering and extortion, but the government didn't implement the law effectively. Corrupt public officials are not systematically punished, and high-ranking civil servants are rarely prosecuted. Demands of facilitation payments and bribery may be encountered but are less frequent than in other Middle Eastern countries. For further information - GAN Integrity Business Anti-Corruption Portal

Since King Abdullah II’s 1999 ascension to the throne, Jordan has taken steps to encourage foreign investment and to develop an outward-oriented, market-based, and globally competitive economy. Jordan has also positioned itself as a platform to host investments focused on the reconstruction of Iraq and other projects in regional markets.

Jordan’s economic growth has been limited, constrained for over a decade by exogenous shocks, including energy disruptions during the 2011 Arab Spring, the 2015 closure of Jordans borders with Iraq and Syria, the ongoing Syrian civil war, and the COVID-19 pandemic. Although the borders with Iraq fully and Syria fully reopened in 2017 and 2018 respectively, cross-border movements have not recovered to previous levels. Jordan experienced 2.7 percent GDP growth in 2022 and IMF projections estimate growth of 2.7 percent in 2023. Foreign Direct Investment (FDI) dropped slightly by 1.5 percent to JD 509.8 million ($720 million) in 2020 compared to 2019 and reached JD 325 ($459 million in 2021. FDI picked up in 2022 and outperformed 2019 levels standing at JD 629.3 million ($888.8 million).

Jordan is committed to attract investment as a driver of economic growth and job creation, though in practice investment promotion policies are implemented unevenly. Traditionally, foreign investment has been concentrated in the energy (from both conventional sources and renewables), tourism, real estate, manufacturing, and services sectors. In 2022, the Royal Hashemite Court Launched the Economic Modernization Vision aimed at advancing economic growth through an improved investment environment. The vision targets attracting $60 billion in investments and creating one million jobs over the next decade. May 2023, The Ministry of Investment announced its “Investment Promotion Strategy” for 2023-2026 and identified film making, high value added industries, Information and communication technology, health care, tourism, real estate, mining, chemicals, agriculture and logistics as priority areas.

In 2021, Jordan established a dedicated Ministry of Investment, which absorbed the duties of the Jordan Investment Commission and the Public Private Partnerships (PPP) Unit. The Minister of Investment is charged with all issues related to local and foreign investors and setting policies to stimulate investment and enhance competitiveness.

In October 2022, Jordan passed the Investment Environment Law No. 21 of 2022, which came into effect in January 2023, to replace the Investment Law No. 30 of 2014. This law was intended to create an investment‑friendly environment and attract more investment. It reaffirmed that non-Jordanian investors shall be treated like Jordanian investors and expanded the number of sectors able to benefit from incentives, provided the activity met certain criteria.

The new law stipulated three sets of incentives. Incentives are tied to certain criteria such as job creation and women’s employment, export activities and expertise, technology transfer, and/or geographical location. Incentives must be approved by the Council of Ministers based on the Incentives and Exemptions Committee’s recommendations.

The law also liberalized companies’ ability to employ foreign labor. Companies can hire non-Jordanians in administrative and technical jobs that require specialized skills at a rate of no more than 25 percent of the total number of employees, and the percentage may be increased up to 40 percent if qualified Jordanian labor is not available.

Despite these improvements on doing business indicators facilitating investment and business operations in Jordan, operating in Jordan can be more difficult than elsewhere in the region. U.S. investors specifically cite instability in the tax regime and incentive packages as a key challenge, as well as public-private interface issues including the government’s inconsistent interpretation of its policies and regulations.

Anti Money Laundering and Counter Terrorist Financing Unit (AMLU Jordan)

Central Bank of Jordan