The Crime of Money Laundering in Jordanian Law: Penalties, Attachment of Funds and Corporate Liability
A money laundering file usually begins with a bank account that is suddenly frozen, or with a summons to the Public Prosecution to answer questions about the source of transfers the bank reported as suspicious, and the penalty for this crime combines temporary labor with a fine measured by the value of the money itself and the confiscation of that money. In Jordan this crime is governed by Anti-Money Laundering and Counter Terrorist Financing Law No. 20 of 2021, which repealed Law No. 46 of 2007 and made the mere acquisition, possession or use of money, with knowledge of its source, a form of laundering. Because these files are built on bank statements and financial analysis more than on witnesses, it is a review of the file by a lawyer who specializes in criminal cases, before the first statement, that determines how the path of the money will be read before the investigator.
1. What Jordanian Law Treats as Money Laundering
Money laundering under Jordanian law is a person's intentional dealing with funds he knows to be the proceeds of a predicate offense, by transferring them, concealing their source, acquiring them, possessing them or using them, under Article 3 of Anti-Money Laundering and Counter Terrorist Financing Law No. 20 of 2021. A person falls under the provision whether or not he committed the predicate offense, if he commits one of three acts:
- Transferring or moving the funds to disguise or conceal their illegitimate source, or to help a person involved in the predicate offense.
- Concealing the true nature of the funds, or their source, location, movement or ownership, or the rights attached to them.
- Acquiring, using, managing, investing or possessing the funds.
Under item (2) of the same Article, the criminalization extends to attempt, assisting, instigating, facilitating, acting as an accessory, acting as an accomplice, and conspiring to attempt the crime.
The third form has the widest effect in practice: a person who received money into his account, ran a project financed by it, or held it on behalf of a relative or partner may fall within the provision if his knowledge of its source is proven, even if he transferred nothing and concealed nothing. The phrase "whether or not he committed the predicate offense" means that the person who committed the predicate offense may himself be prosecuted for laundering its proceeds alongside it.
The law defines the "predicate offense" in Article 2 as any felony or misdemeanor punishable under the legislation in force. The scope is therefore not limited to drugs or terrorism: property crimes such as fraud, embezzlement and breach of trust, and financial and tax offenses where they are a felony or a misdemeanor, may be the source of proceeds on which a laundering file is built. This is why a laundering file is sometimes connected to a file such as tax evasion under Jordanian law, where the predicate offense is itself the subject of a separate dispute. The law also defines "funds" broadly, to include bank accounts, securities and commercial papers, transfers, and electronic, digital or virtual assets, inside or outside the Kingdom.
2. The Predicate Offense Does Not Require a Conviction
Paragraph (b) of Article 3 provides that, once it is proven that the funds are the proceeds of a crime, it is not required that a person has been convicted of the predicate offense. Paragraph (c) adds proceeds of an act committed outside the Kingdom, where it is a crime both in Jordan and in the state where it occurred, and proceeds of an act criminalized by international conventions ratified by the Kingdom, where it is punishable under Jordanian law.
It follows that saying no one has been convicted of the predicate offense does not, by itself, end the laundering file; in return, the provision requires "proof" that the money is the proceeds of a crime. One of the first things the lawyer examines at this stage is whether the investigation file offers evidence of the criminal source of the money, or relies on general indications such as the size of the sums, the repetition of transfers or the number of accounts. The strength of these indications differs from one file to another, and only a review of the full statements and financial reports settles it.
3. Penalties for Money Laundering and Related Offenses
Article 30 sets the principal penalty without prejudice to any more severe penalty provided in another law, and the law sets separate penalties alongside it for the legal person and for the entities obliged to report. The following table brings these penalties together as stated in the provisions:
| The act | The provision | The penalty |
|---|---|---|
| Committing the crime of money laundering, or attempting it, or acting as an accessory, accomplice, instigator or conspirator in it | Article 30(a) | Temporary labor, a fine of not less than the amount of the funds that are the subject of the crime, and confiscation of its proceeds, revenues and benefits and of the means and instruments used, with regard for the rights of third parties in good faith |
| Terrorist financing | Articles 4 and 30(a) | The same penalty; the Attorney General of the State Security Court names a specialized Public Prosecutor for these cases (Article 28) |
| Commission of the crime by a legal person through those who manage it in fact or hold authority in it | Article 32 | A fine of not less than twice the value of the funds that are the subject of the crime and not more than five hundred thousand Jordanian dinars (JOD), with confiscation; the fine is doubled on repetition, and the court may suspend the legal person's activity wholly or partly for not less than one month and not more than one year |
| A reporting entity's failure to notify the Anti-Money Laundering Unit of a suspicious transaction | Articles 18 and 31(c) | Imprisonment for not more than three years, or a fine of not less than ten thousand dinars and not more than two hundred thousand dinars, or both penalties |
| Disclosing the fact of a notification, or the information provided to the Unit | Articles 13(b), (c), 19 and 31(b) | Imprisonment for not less than six months and a fine of not less than five thousand dinars and not more than ten thousand dinars, or both penalties |
| A reporting entity's breach of due diligence and record-keeping duties, or of an order to suspend a transaction | Articles 10, 15 to 17 and 31(a) | Imprisonment for not more than one year, or a fine of not less than two thousand dinars and not more than twenty thousand dinars, or both penalties |
| Failing to declare cash or bearer negotiable instruments when crossing the border, or making a false declaration | Articles 23(a) and 31(d) | A fine of not less than (10%) of the value of the undeclared cash or instruments, doubled on repetition |
Where no special provision applies, the term of temporary labor is not less than three years and not more than twenty years under paragraph (2) of Article 20 of Penal Code No. 16 of 1960. The fine in Article 30 has no ceiling, because it is measured by the value of the money that is the subject of the crime, so it grows with the size of the sums in the file.
Paragraph (b) of Article 30 requires, in all cases, the confiscation of the proceeds in kind, or the confiscation of funds of equivalent value where the proceeds cannot be seized or enforced against, or have passed to a third party in good faith. Where the proceeds have been mixed with funds from legitimate sources, the mixed funds are subject to confiscation up to the estimated value of the proceeds and their revenues and benefits (paragraph (c)). Article 37 provides that dropping the public-right action, staying the prosecution or exemption from the penalty does not prevent the confiscation of the proceeds by a judicial decision.
4. Attachment of Funds and Travel Bans Before Judgment
Article 26 authorizes the Public Prosecution or the competent court, during the investigation or trial and before judgment, to:
- Identify, trace and attach the proceeds, funds, means and instruments used in the crime.
- Attach property in which the proceeds have been mixed with legitimate funds until the value of the illegitimate proceeds is determined.
- Attach the respondent's funds and ban him from travel until the investigation is completed or the case is decided.
- Attach any funds held by a third party if it appears they were obtained as a result of the crime.
- Request records, documents and data from the entities subject to the law.
Under paragraph (c) of the same Article, and notwithstanding anything in any other legislation, attachment suspends all ongoing procedures and transactions on the attached funds. The Unit may also require the bank or reporting entity to suspend ongoing transactions on a reported operation for a limited period (Article 10). Secrecy, including bank secrecy provided in any other law, does not prevent the application of this law (Article 40).
The law gives a person harmed by an attachment decision the right to challenge it before the competent court within a short period that begins on the date the decision is issued. Because attachment may reach the account of an operating company, or the money of a partner or relative with no connection to the facts, determining whether the attached money is mixed with legitimate money, and how the two are separated, depends on the nature of the accounts and the path of the transfers, and is itself a legal question that merits consultation before the challenge period runs out.
Practical note: The file may begin with a request from the bank to update the account details or to state the purpose of a particular transaction, as part of the due diligence procedures imposed by Article 15, so the matter looks like an ordinary banking step. What is written at this stage, and what is said later before the Public Prosecutor, enters the investigation file and may be relied on to prove knowledge of the source of the money. So do not submit written explanations about the source of the funds, and do not give a statement about them, before the lawyer has reviewed the statements and documents. The legislative framework for combating money laundering is under review and revision, so the lawyer checks the text in force at the time of the facts, and the assessment of the position depends on the facts of each file, or consult a specialist lawyer.
5. Companies and Reporting Entities: Liability Beyond the Person Who Acted
In Article 14 the law obliges a wide category of "reporting entities" to follow anti-money laundering procedures. They include banks, exchange and money transfer companies, insurance companies, entities subject to the Securities Commission, and credit and payment providers, as well as real estate dealers, dealers in precious metals, and lawyers and certified accountants when they carry out financial transactions on behalf of their clients.
These entities must assess the risks of their clients and take due diligence measures, and must notify the Unit immediately of any transaction or attempt they suspect is connected to money laundering, a predicate offense or terrorist financing, whatever its value (Article 18). They, their managers and their employees are prohibited from disclosing the fact of the notification (Article 19). In return, criminal, civil, administrative and disciplinary liability does not attach to anyone who performs the duty of notification in good faith (Article 20).
The company itself becomes liable under Article 32 if the crime was committed through those who manage it in fact or hold authority in it, when they act in its name or use its means, without the natural persons being relieved of their own liability. On repetition, the court may decide to cancel the legal person's registration or liquidate it, and in all cases, after a final judgment of conviction, it orders the judgment published at the legal person's expense in two local daily newspapers. A person whose personal liability is proven is prohibited from contributing to the capital of any legal person or taking part in its management. In addition, under Article 34 the supervisory authorities hold administrative sanctions that begin with a written warning, include a fine not exceeding one hundred thousand dinars where the matter is not referred to court, and extend to cancellation of the license.
A company questioned over a transaction it did not report therefore faces two questions at once: whether grounds for suspicion existed at the time of the transaction, and whether its internal procedures complied with the instructions. The answer depends on the entity's due diligence records, and the lawyer weighs its effect on the company, on its managers and on its compliance officer separately, because their interests in the file may not coincide.
6. Knowledge of the Source of the Money: The Question the File Turns On
The mental element (mens rea) of the laundering crime rests on two things set out in item (1) of Article 3: that the person knows the money is the proceeds of a predicate offense, and that he commits the act intentionally. A person who received money into his account without knowing its source is in a different position from one who received it knowing. This often intersects with files of online fraud under Jordanian law, where a person's account is used to receive victims' money and then transfer it to others.
Knowledge is an inner matter, so it is usually inferred from the surrounding circumstances: the nature of the relationship between the parties, whether the sums are proportionate to the declared activity, the timing of the transfers, and what was said in correspondence and statements. Among the points the lawyer examines on this element is whether these circumstances amount to evidence of knowledge, or are indications open to a legitimate explanation supported by documents. There is no general answer to this question, because the same facts may be read in two directions depending on what is submitted in the file and when.
In Article 33 the law contains a special rule on a person who reports the crime: a participant who informs the competent authorities before they learn of the crime, where his report leads to the arrest of those who took part in it or the seizure of the proceeds, is exempted from the penalty, and the court may exempt him if the report came after the authorities learned of the crime and led to the same result. The exemption does not, however, prevent confiscation of the proceeds and their means. The decision to go to the authorities, its timing and the content of what is submitted is an irreversible step whose effect the lawyer assesses with the client before it is taken.
7. Frequently Asked Questions
What is the penalty for money laundering in Jordan?
Article 30 of Anti-Money Laundering and Counter Terrorist Financing Law No. 20 of 2021 punishes it with temporary labor and a fine of not less than the amount of the funds that are the subject of the crime, with confiscation of the proceeds, their revenues and the means used. Temporary labor ranges from three years to twenty years unless a special provision applies.
Can a person be prosecuted for money laundering if no one has been convicted of the predicate offense?
Yes. Paragraph (b) of Article 3 provides that a conviction of anyone for the predicate offense is not required once it is proven that the funds are the proceeds of a crime. Proof of the criminal source of the money remains a necessary element of the file.
May the respondent's funds be attached and a travel ban imposed before judgment?
Yes. Article 26 allows the Public Prosecution or the court to attach the respondent's funds and ban him from travel until the investigation is completed or the case is decided, and attachment suspends all transactions on the attached funds. The person harmed has the right to challenge the attachment decision before the competent court.
Can a company be held liable for money laundering?
Yes, if the crime was committed through those who manage it in fact or hold authority in it. The penalty is a fine of not less than twice the value of the funds that are the subject of the crime and not more than five hundred thousand dinars, with confiscation, in addition to the liability of the natural persons themselves (Article 32).
Who investigates money laundering cases?
The Anti-Money Laundering and Counter Terrorist Financing Unit refers the results of its analysis to the competent Public Prosecutor where there is suspicion (Article 9), and the President of the Judicial Council names one or more specialized Public Prosecutors for money laundering cases, while the Attorney General of the State Security Court names a specialized Public Prosecutor for terrorist financing cases (Article 28).
Does bank secrecy prevent an investigation into the account?
No. Article 40 provides that provisions on secrecy, including bank secrecy provided in any other law, do not prevent the application of the provisions of the Anti-Money Laundering Law.
Is a person who reports the laundering crime exempted from the penalty?
Article 33 exempts a participant who reports to the authorities before they learn of the crime, where his report leads to the arrest of those who took part or the seizure of the proceeds, and the court may grant the exemption if the report came after they learned of it. The exemption does not prevent confiscation of the proceeds, and the effect of the report depends on its timing and content, which is a matter the lawyer assesses after studying the file.
Legal Consultation
Money laundering files are among the most delicate criminal cases: on the respondent's side, financial indications may be enough to attach his funds and ban him from travel before any judgment, and on the side of the company or reporting entity, a mistake in notification or disclosure may turn into criminal liability for the entity and its managers. Explanations and documents submitted in the first statement are hard to withdraw later, and the fine is measured by the value of the money that is the subject of the crime itself. For specialist legal consultation in criminal cases, or to see how this file connects with other property crimes such as the crime of fraud under Jordanian law and the crime of embezzlement and its penalty, you can contact Alabwini Law Firm & Legal Consultancy.
