New Anti-Money Laundering Provisions Come Into Effect In Israel

by Robert Lee, Tax-News.com, London

18 February 2002

The Israeli Government announced over the weekend that a new ordinance to combat money laundering came into effect on Sunday, marking a significant step in the nation's campaign to secure removal from the Financial Action Task Force's blacklist.

The ordinance, which was issued by the Governor of the Bank of Israel, requires banks to verify the identity of account holders and authorized signatories, and to hold documentation regarding accounts for seven years after they are closed.

The FATF earlier this year expressed 'particular satisfaction' with the country's progress in the fight against money laundering and terrorist financing, but the process of enacting new legislation and regulatory measures is not yet complete, so it came as no surprise to the authorities when Israel was not removed from the list of 'non-cooperative' countries and territories in January.

Speaking prior to the FATF's plenary meeting, the Minister for Economic Affairs, Boaz Raday was realistic about the region's prospects for early removal:

'There's hardly any chance it will happen at the next meeting in January,' he said at the time. 'If we do everything that needs to be done, there's a possibility of Israel being removed from the list at the June session.' He added that: 'If this doesn't happen, the likelihood is high we'll be removed from the list at the October session.'

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