Financial Crime World

Israel Scores Well on Anti-Money Laundering and Terrorist Financing Efforts, But Supervision Remains a Concern

A joint assessment by the Financial Action Task Force (FATF) and MONEYVAL has praised Israel’s efforts to combat money laundering and terrorist financing, highlighting both strengths and areas for improvement.

Successes in Combatting Money Laundering and Terrorist Financing

  • Israel has successfully identified and understood its money laundering and terrorist financing risks, which are particularly high due to its geographic location.
  • The country has demonstrated its ability to identify, investigate, and disrupt terrorist financing activity at an early stage using a range of effective instruments and mechanisms.
  • Israel’s financial intelligence unit and law enforcement agencies have shown strong cooperation in pursuing money laundering and terrorist financing investigations and prosecutions.
  • The country actively requests and responds to international cooperation.

Challenges and Areas for Improvement

Understanding Risks

  • Israel’s understanding of money laundering and terrorist financing risks is weaker in the money service business sector, although there has been an increase in reporting of unusual activity.

Supervision

  • Financial supervisors in Israel have not yet developed a full risk-based anti-money laundering (AML) and counter-terrorist financing (CFT) supervision model.
  • Some sectors, such as real estate agents, dealers in precious metals, and trust and company service providers, are not included in the AML/CFT system.
  • Lawyers and accountants are also not required to report suspicious transactions.

Non-Profit Organizations

  • Israel needs to improve its supervision of non-profit organizations for terrorist financing, including increasing resources to register and supervise these entities.

Conclusion

Despite areas for improvement, Israel’s AML/CFT system has been found to be sound and effective in many areas, achieving good results in tackling money laundering and terrorist financing. The country’s membership in FATF is now official following the publication of this assessment.