Financial Crime Prevention in Banking: Israel’s Strong Efforts Pay Off
A Success Story in Combating Money Laundering and Terror Financing
TEL AVIV - Since being listed among 15 “non-cooperative” nations in the global fight against money laundering by the OECD Financial Action Task Force (FATF) in 2000, Israel has made significant strides in tightening its regulations and enforcement of anti-money laundering legislation. The country’s efforts have resulted in confiscating over $25 million annually.
The Israel Money Laundering and Terror Financing Prohibition Authority (IMPA)
At the forefront of this effort is IMPA, Israel’s Financial Intelligence Unit. Established in 2002, IMPA monitors and analyzes financial intelligence data from reporting institutions, government agencies, and international Financial Intelligence Units to identify suspect entities involved in money laundering or terrorist financing.
Collaboration with National Law Enforcement Authorities
IMPA works closely with national law enforcement authorities, including:
- Israel Police
- Israeli Tax Authority
- State Attorney’s Office
- Banking sector regulators
to combat money laundering and terror financing. The authority also collaborates with international FIUs worldwide to tackle cross-border criminal activities.
Stringent Anti-Money Laundering (AML) Regulations
Israel’s AML regulations are stringent, requiring financial institutions to:
- Implement policies and processes for customer due diligence
- Monitor client transactions
- Detect suspicious behavior
The Prohibition of Money Laundering Act of 2000 and the Prohibition of Terrorist Financing Law of 2005 have been instrumental in combating these crimes.
Regulations on Virtual Assets
In recent years, Israel has introduced regulations governing virtual assets, defining them as:
- “Digital value units that may be traded or transferred digitally and utilized for payment or investment purposes.”
Suppliers of financial services involving virtual currency are required to register with the Supervising Authority and report regular and occasional activity.
A Full Member of FATF
Israel’s efforts have paid off, with the country becoming a full member of the FATF in December 2018. The government’s strict AML regulations and enforcement have led to significant confiscations, demonstrating Israel’s commitment to financial crime prevention in banking.