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Israel’s Compliance Risks in Finance: FATF Recommendations Assessment

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A recent report has shed light on Israel’s compliance with the Financial Action Task Force (FATF) Recommendations, highlighting areas of concern and risks in the country’s financial sector. The report assesses Israel’s implementation of the 40 recommendations aimed at preventing money laundering and terrorist financing.

Progress Made

According to the report, Israel has made significant progress in implementing several key recommendations, including:

  • Assessing risk and applying a risk-based approach (R.1)
  • National cooperation and coordination (R.2)
  • Confiscation and provisional measures (R.4)
  • Targeted financial sanctions related to terrorism and terrorist financing (R.6)
  • Transparency of beneficial ownership of legal persons and arrangements (R.24)

Areas for Improvement

However, the report also identifies areas where Israel falls short, including:

  • Correspondent banking (R.13) - only partially compliant
  • Money or value transfer services (R.14) - only partially compliant
  • Reliance on third parties (R.17) - only partially compliant
  • Financial institution secrecy laws (R.9) - non-compliant
  • Powers of supervisors (R.27) - non-compliant

Recommendations for Improvement

The report highlights several areas where Israel requires improvement, including:

  • Regulation and supervision of financial institutions (R.26)
  • DNFBPs (R.28)
  • Responsibilities of law enforcement and investigative authorities (R.31)
  • Transparency regarding statistics on suspicious transactions (R.33)

Conclusion

While Israel has made progress in implementing key FATF recommendations, there are still significant areas of concern that require immediate attention. The country’s financial sector must prioritize compliance with international standards to mitigate the risks associated with money laundering and terrorist financing.

In conclusion, Israel must take concrete steps to address its shortcomings and ensure a stable and secure financial system.