Here is the rewritten article in Markdown format:
FINCEN Warns Banks: Be Vigilant When Dealing with Israel Due to Money Laundering Deficiencies
In a stark warning, the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has issued an advisory urging banks and financial institutions operating in the United States to exercise extreme caution when dealing with transactions involving Israel. The move comes due to serious deficiencies in Israel’s counter-money laundering systems.
Systemic Problems in Israel’s Counter-Money Laundering Systems
According to FinCEN, Israel’s legal, supervisory, and regulatory systems are plagued by systemic problems that increase the likelihood of money laundering activities. Specifically:
- Money laundering is not a crime under Israeli law
- Financial institutions operating in Israel are not required to report suspicious transactions
- There are no requirements for maintaining complete records of customer transactions
Banking Sector Challenges
Israel’s banking sector is subject to a strong supervisory regime, but its counter-money laundering rules lack teeth, making it difficult for the country to effectively combat money laundering. The Financial Action Task Force on Money Laundering (FATF) has identified Israel as non-cooperative in the fight against money laundering.
Enhanced Scrutiny Required
Despite efforts by Israeli lawmakers to rectify these issues, FinCEN warns that transactions involving Israel will continue to pose a higher risk of being used for illegal purposes. As such, banks and financial institutions operating in the United States are advised to:
- Carefully examine any transactions originating from or routed through Israel
- Conduct enhanced scrutiny on transactions involving entities organized or domiciled in Israel
- Give extra attention to transactions or banking relationships that do not involve established and adequately identified commercial or investment enterprises
Technical Assistance Offered
The FinCEN advisory emphasizes that the issuance of this warning does not mean that US financial institutions should curtail legitimate business with Israel, but rather exercise enhanced vigilance to prevent money laundering activities. The Treasury Department has also pledged to provide technical assistance to Israeli officials as they work to address these deficiencies.
Conclusion
In summary, banks and financial institutions operating in the United States are advised to be vigilant when dealing with transactions involving Israel due to serious deficiencies in Israel’s counter-money laundering systems. Enhanced scrutiny is required to prevent money laundering activities and ensure compliance with applicable laws and regulations.