Israel’s Financial Intelligence Unit, IMPA: Tackling Money Laundering and Terror Financing in the “Start-Up Nation”

Israel’s journey towards combating money laundering and terror financing:

• Once labeled as a “non-cooperative” jurisdiction by FATF in 2000
• Strengthened regulations since then, becoming a full FATF member in 2018
• Annual confiscation of over US $25 million in illicit funds

The Israel Money Laundering and Terror Financing Prohibition Authority (IMPA)

Established in 2002, IMPA is key:

• Monitors and analyzes financial intelligence
• Identifies suspicious entities
• Collaborates with law enforcement and international counterparts

Role of IMPA as Israel’s Financial Intelligence Unit (FIU)

• Non-investigative, administrative organization
• Intermediary between financial institutions and law enforcement agencies
• Protects privacy while maintaining transparency and information exchange

Regulations against Money Laundering and Terror Financing

Prohibition of Money Laundering Act (2000)

Robust requirements for financial institutions:

• Customer due diligence
• Record maintenance
• Suspicious transaction reporting

Prohibitions:

• Opening accounts for unidentified third parties
• Conducting transactions involving doubtful sources

Prohibition of Terrorist Financing Act (2005)

Penalties for associated offenses:

• Enhanced legislative capabilities against terror financing

Addressing Virtual Assets

Israel’s stance on virtual assets:

• AMLO law enacted on November 20, 2018
• Requires suppliers to identify, register, and report transactions
• Adherence to strict KYC and AML/CFT regulations
• Global forerunner in regulating virtual assets