Arab Bank’s Compliance Practices

“Arab Bank has been active in anti-money laundering (AML) efforts inside its bank, and is the leader among Jordanian banks for AML and countering the financing of terrorism (CFT).”

– Report on the Bank to State Department Headquarters from U.S. Ambassador to Jordan, David Hale, July 1, 2008

Since its founding, Arab Bank has been committed to the highest levels of integrity and compliance across its businesses. The Bank’s Group Regulatory Compliance Division (GRC) reporting to the CEO and having direct access to the Board of Directors and its Audit Committee, ensures compliance with applicable laws, rules and regulations. Arab Bank has independent compliance departments duly managed by dedicated compliance officers in each of its operating branches. In order to ensure the proper compliance risk management governance, Country Compliance Managers report directly to Group Regulatory Compliance–Head Office and are active members of key steering committees such as the Country Management Committee as well as the AML and CTF Steering Committee.

From the top down, the Bank mandates training on its Code of Conduct for all of its employees globally. This training covers a wide range of subjects, including compliance with anti-money laundering, counter-terrorism financing, fraud, and corruption, as well as privacy and confidentiality, conflict of interest, insider information, trading in securities and information security.

The Bank complies with the banking laws and is subject to regulatory oversight in each jurisdiction where it operates. The Bank has traditionally received the highest ratings from the regulatory bodies and agencies that oversee its operations.

The Arab Bank Group Regulatory Compliance division, led by Executive Vice President Michael Matossian, has worked to maintain Arab Bank’s leadership for compliance across the MENA region. Matossian was named Chief Compliance Officer of the Year at the 2009 Compliance Awards, a highly acclaimed international recognition.

Evolving Compliance with the Times

As the banking industry has evolved, so have requirements for regulatory compliance, both in the U.S. and internationally. And, with these changes, the Bank has adapted its policies in each of the countries in which it operates. In fact, Arab Bank has remained a compliance leader in the MENA region, often instituting new policies, processes and technologies before they are required.

As early as 1998, Arab Bank issued AML & KYC Policies and Procedures that are updated regularly to account for any changes or developments.

For its non-U.S. operations, Arab Bank was one of the first banks in the Middle East to acquire and implement an automated screening system incorporating the U.S. OFAC and the United Nations’ sanctions list.

In addition to strengthening its internal practices, the Bank remains committed to working with others in the industry to bolster defenses against terrorist financing and money laundering. The Bank is a prominent participant at International Anti-Money Laundering/Combating Financing Terrorism forums. For example, Arab Bank spoke on compliance related matters including AML/CTF at a number of conferences hosted by the Union of Arab Banks in the MENA region; as well as speaking at Public/Private Sector Dialogue supported by the U.S. Department of Treasury. In addition, it participated as a speaker in the 5th MENA Financial Action Task Force Plenary Session in 2007 at the Dead Sea where it delivered a presentation entitled “Strengthening Anti-Money Laundering/Countering the Financing of Terrorism.”

The Bank holds periodic regulatory compliance summits with guest speakers from across the international banking community. In 2008, at the request of the Association of Banks in Jordan, Arab Bank hosted a compliance workshop attended by compliance professionals from banks throughout the country. Participants included representatives from the Central Bank of Jordan. In addition, the Bank actively partakes in banking forums enhancing compliance awareness across the region. By way of example, the Bank participated in the Compliance Seminar hosted in 2009 by the Association of Banks in Lebanon delivering a presentation entitled “How a Financial Institution Effectively Assesses and Manages Compliance Risk.” During the same year, the Bank delivered a presentation to banks in the Palestinian Territories on how to develop an effective AML/CTF Compliance Program. The Compliance Manager in the Palestinian Territories also participated in the development of a Palestinian AML Certification student booklet.

Arab Bank has developed Know Your Customer, Anti-Money Laundering and Combating Terrorist Financing manuals, which are followed by its worldwide branches. These manuals set forth the Bank’s policies and standards with regard to the standards for accepting customers, verifying the identity and legitimacy of customers, screening accounts and transactions against blacklists promulgated by governments and regulators, and the training of employees in Know Your Customer, Anti-Money Laundering and Countering the Financing of Terrorism procedures. The Bank also employs experienced Certified Anti-Money Laundering Specialists to monitor and investigate unusual activity utilizing an advanced AML monitoring system. The Bank continuously adopts additional measures, where necessary, to comply with differing  and evolving regulations and laws applicable to branches operating in certain countries.