Israel

New Documents

The Israel Ministry of Foreign Affairs announced the signing of the first protocol of understanding on cooperation in banking and financial services with the United Arab Emirates. The agreement covers anti-money laundering and counterterrorist financing concerns.

The Israel Securities Authority published a statement concerning efforts to develop a technologically advanced and innovative capital market that is attractive for both companies and investors.

Enforcement Actions

According to the regulator, the Banking Corporations Sanctions Committee on anti-money laundering and counterterrorist financing issues fined the Tel Aviv, Israel-based bank for its failure to report unusual transactions to the Israel Money Laundering and Terror Financing Prohibition Authority.

The Banking Corporations Sanctions Committee of the Bank of Israel imposed a monetary penalty against the credit card company based in Tel-Aviv, Israel for violating multiple requirements of the Prohibition on Money Laundering Law, 5760-2000.


Important Facts

  • The U.S. State Department labels Israel as a jurisdiction of primary concern. Israel is not regarded as a regional financial center. The country primarily conducts financial activity with the markets of the United States, Europe and to an increasing extent Asia. Criminal groups in Israel, either home-grown or with ties to the former Soviet Union, United States or European Union often utilize a maze of offshore shell companies and bearer shares to obscure ownership. Israel’s illicit drug trade is regionally focused; Israel serves more as a transit country than a market destination. The majority of money laundered originates from criminal activities abroad, including “carousel fraud,” which involves taking advantage of international value-added tax loopholes. Proceeds from domestic criminal activity also continue to contribute to money laundering activity. Officials are still concerned about money laundering in the diamond industry, illegal online gaming rings, retail businesses suspected as money laundering enterprises and public corruption. The Director General of the Prime Minister’s Office recently formed a committee to explore the possibility of reducing the overall supply of Israeli currency in circulation as part of an effort to combat both counterfeiting and money laundering activity.
  • KYC Covered Entities: Banking corporations, credit card companies, trust companies, stock exchange members, portfolio managers, the Postal Bank, money service businesses (MSBs), dealers in precious stones, lawyers and accountants, and trading floors (foreign exchange dealers)
  • STR Covered Entities: Banking corporations, credit card companies, trust companies, members of the stock exchange, portfolio managers, insurers and insurance agents, provident funds and the companies who manage them, providers of currency services, MSBs, the Postal Bank, dealers in precious stones, and trading floors
  • Enhanced Due Diligence Procedures for PEPs: Foreign: Yes; Domestic: No
  • Money Laundering Criminal Prosecutions/Convictions: Prosecutions: 121 (Jan. 1, 2015 – Oct. 25, 2015); Convictions: 27 (Jan. 1, 2015 – Oct. 25, 2015)
-Source: 2016 International Narcotics Control Strategy Report (INCSR)

Rankings

FATF i | 2013 Methodology

Technical Effectiveness
Compliant : 17 High : 3
Largely Compliant : 17 Substantial : 5
Partially Compliant : 5 Moderate : 3
Non-Compliant : 0 Low : 0

BASEL i

Rank : 130/141
Score : 3.62/10

TRANSPARENCY INTERNATIONAL i

Rank : 35/180
Score : 60/100

Tax Justice Network i

Rank : 38/133
Score : 59/100