FATF AML Deficiency List
US Dept of State Money Laundering assessment
Non - Compliance with FATF MERRecommendations
Weakness in Government Legislation to combat Money Laundering
Corruption Index (Transparency International & W.G.I.)
World Governance Indicators (Average Score)
Jordan is on the FATF List of Countries that have been identified as having strategic AML deficiencies.
FATF Statement re AML Strategic Deficiencies: 21 October 2021
In October 2021, Jordan made a high-level political commitment to work with the FATF and MENAFATF to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its MER in November 2019, Jordan has made progress on a number of the MER’s recommended actions to improve its system, including by finalising their National Risk Assessment (NRA). Jordan will work to implement its FATF action plan by: (1) completing and disseminating the ML/TF risk assessments of NPOs, legal persons and virtual assets; (2) improving risk based supervision and applying effective, proportionate, and dissuasive sanctions for noncompliance; (3) conducting training and awareness raising programmes for DNFBPs on their AML/CFT obligations, particularly with regard to filing and submitting STRs; (4) maintaining comprehensive and updated basic and beneficial ownership information on legal persons and legal arrangements; (5) pursuing money laundering investigations and prosecutions, including through parallel financial investigations, for predicate offences in line with the risk identified in the NRA; (6) creating a legal obligation for confiscating instrumentalities used or intended to be used in ML crimes; (7) developing and implementing a legal and institutional framework for targeted financial sanctions; and (8) developing and implementing a risk-based approach for supervision of the NPO sector to prevent abuse for TF purposes.
Compliance with FATF Recommendations
The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Jordan was undertaken in 2019. According to that Evaluation, Jordan was deemed Compliant for 4 and Largely Compliant for 15 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.
There are no international sanctions currently in force against this country.
The Arab League (comprising 22 Arab member states), of which this country is a member, has approved imposing sanctions on Syria. These include: -
Cutting off transactions with the Syrian central bank
Halting funding by Arab governments for projects in Syria
A ban on senior Syrian officials travelling to other Arab countries
A freeze on assets related to President Bashar al-Assad's government
The declaration also calls on Arab central banks to monitor transfers to Syria, with the exception of remittances from Syrians abroad.
The Arab League has also boycotted Israel in a systematic effort to isolate Israel economically in support of the Palestinians, however, the implementation of the boycott has varied over time among member states. There are three tiers to the boycott. The primary boycott prohibits the importation of Israeli-origin goods and services into boycotting countries. The secondary boycott prohibits individuals, as well as private and public sector firms and organizations, in member countries from engaging in business with any entity that does business in Israel. The Arab League maintains a blacklist of such firms. The tertiary boycott prohibits any entity in a member country from doing business with a company or individual that has business dealings with U.S. or other firms on the Arab League blacklist.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 49
World Governance Indicator – Control of Corruption 61
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
Jordan's economy is among the smallest in the Middle East, with insufficient supplies of water, oil, and other natural resources, underlying the government's heavy reliance on foreign assistance. Other economic challenges for the government include chronic high rates of poverty, unemployment and underemployment, budget and current account deficits, and government debt.
King ABDALLAH, during the first decade of the 2000s, implemented significant economic reforms, such as expanding foreign trade and privatizing state-owned companies that attracted foreign investment and contributed to average annual economic growth of 8% for 2004 through 2008. The global economic slowdown and regional turmoil contributed to slower growth from 2010 to 2014 - with growth averaging 2.8% per year - and hurt export-oriented sectors, construction, and tourism. Through 2014, Jordan's finances were strained by a series of natural gas pipeline attacks in Egypt, disrupting natural gas exports to Jordan, and led Jordan to rely on more expensive diesel imports, primarily from Saudi Arabia, to generate electricity.
To diversify its energy mix, Jordan has secured several contracts for liquefied natural gas and is currently exploring nuclear power generation, exploitation of abundant oil shale reserves and renewable technologies, as well as the import of Israeli offshore gas. In August 2015, Jordan completed a $2.1 billion, three-year IMF Stand-By Arrangement, which the government had entered to help correct budgetary and balance of payments imbalances. Jordan plans to expand on its fiscal reform measures enacted over the previous few years with a follow-on IMF agreement in 2016 to boost government revenues, reduce the budget deficit, and manage its burgeoning debt, brought on in part by an influx of over 650,000 Syrian refugees since 2011, which put additional pressure on expenditures.
Agriculture - products:
citrus, tomatoes, cucumbers, olives, strawberries, stone fruits; sheep, poultry, dairy
tourism, information technology, clothing, fertilizers, potash, phosphate mining, pharmaceuticals, petroleum refining, cement, inorganic chemicals, light manufacturing
Exports - commodities:
textiles, fertilizers, potash, phosphates, vegetables, pharmaceuticals
Exports - partners:
US 21%, Saudi Arabia 16.5%, Iraq 10.3%, India 8.7%, UAE 4.8%, Kuwait 4.4% (2015)
Imports - commodities:
crude oil, refined petroleum products, machinery, transport equipment, iron, cereals
Imports - partners:
Saudi Arabia 15.4%, China 12.8%, US 6.2%, Germany 4.7%, UAE 4.2% (2015)
Investment Climate - US State Department
Jordan is a Middle East country located on desert plateaus in southwest Asia. 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. In particular, banking, information and communication technology, pharmaceuticals, tourism, and services sectors have all experienced key reforms in recent years. Foreign and domestic investment laws grant specific incentives to industry, agriculture, tourism, hospitals, transportation, energy, and water distribution. Jordan is also uniquely poised geopolitically to host large scale investment focused on the reconstruction of Iraq, Syria and other regional markets.
Jordan’s economy improved in 2015, despite ongoing challenges both domestically and in the region. The government pursued economic reform measures as part of its International Monetary Fund (IMF) Stand-by Arrangement program, which concluded in July. Central Bank foreign reserves, remained stable in at the end of 2015 around USD 14 billion compared to year end 2014, a 15 percent increase from its USD 12 billion level at the end of 2013. GDP grew at a rate of 2.5percent, slightly lower than the 3.1 percent growth rate in 2014. Jordan’s fiscal position was burdened 2011-2014 by the loss of Egyptian natural gas, resulting in the import of costlier fuels and significant debt. However, helped with lower international oil prices and contracted liquefied natural gas deliveries that begin in July 2015, the government was able to close its near-term financing gap with savings from reform measures, loans, and foreign assistance.
Despite cabinet changes, the prime minister has remained in place since the fall of 2012, helping guide the country through difficult economic reform efforts. In 2014, Jordan moved forward on a number of legislative reforms, including the new Income Tax Law, Public Private Partnership Law and Investment Law. Yet economic growth has been slow due to the regional security environment, the 2015 closure of Jordan's borders with Iraq and Syria, and the influx of refugees, particularly from Syria. Notwithstanding the regional environment, the general investment outlook for Jordan remains favorable and in several sectors, advantageous.
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