Banking Supervision Department Issues Guidelines for Financial Institutions

Tel Aviv, Israel - The Banking Supervision Department has issued a supervisory letter to financial institutions in Israel, outlining guidelines for managing anti-money laundering (AML) and countering financing of terrorism (CFT) risks.

Guidelines Emphasize Importance of Robust AML/CFT Policies

The letter emphasizes the importance of implementing robust AML/CFT policies and procedures, including Know Your Customer processes, screening against lists, and controls. Financial institutions are required to identify, assess, and manage the risks associated with their customers, as well as report any suspicious transactions.

Compliance with International Agreements

In addition, the letter highlights the need for financial institutions to comply with international agreements on the exchange of information for tax compliance reasons, such as FATCA. Institutions must also obtain a registration number (GIIN) from the US Internal Revenue Service (IRS).

Sanctions Screening and Reporting

The guidelines also address sanctions imposed by the US Office of Foreign Assets Control (OFAC), EU, and UN against various individuals and entities. Financial institutions are required to screen their customers against these lists and report any matches.

Record Keeping and Updates Required

Financial institutions must maintain detailed records of customer information, including details on types of customers, features of customers, and scope of activity expected at the institution. Institutions must also provide regular updates to the Supervisor of Banks on their AML/CFT policies and procedures.

Key Provisions

• Financial institutions must implement robust AML/CFT policies and procedures, including Know Your Customer processes, screening against lists, and controls.
• Institutions must comply with international agreements on the exchange of information for tax compliance reasons, such as FATCA.
• Financial institutions must obtain a registration number (GIIN) from the US IRS.
• Institutions must screen their customers against sanctions imposed by the US OFAC, EU, and UN.
• Financial institutions must maintain detailed records of customer information.
• Institutions must provide regular updates to the Supervisor of Banks on their AML/CFT policies and procedures.

Contact

For more information, please contact:

Dr. Hedva Ber Supervisor of Banks Bank of Israel