Israel’s AML/CTF supervisors
IMPA is a financial intelligence unit that was established in 2002 and is supervised in Israel by MONEYVAL, the Council of Europe's monitoring agency. It functions in compliance with the FATF's international rules for combating money laundering. IMPA is a stand-alone intelligence organisation with only administrative responsibilities and no investigation authority. IMPA serves as a barrier between the financial industry and the law enforcement agencies conducting investigations as a result. The IMPA only provides information to law enforcement agencies where it is deemed pertinent to potential money laundering or terrorism financing schemes, as required by law.
How do you comply with AML/CTF regulations in Israel?
Businesses are required to set up a system that assesses their clients' identities, sources of wealth, and nature of their businesses with the aim of identifying and verifying (where possible) their ultimate beneficial owners, the nature and patterns of transactions anticipated for such clients, their political exposure, or their state ownership, and determining the level of customer due diligence required using a risk-based approach.
The law is divided into four categories.
Prevention
The Law and Orders have placed an anti-money laundering system on the Israeli financial sector. The corporate compliance officer, who oversees making sure the financial institution's duties are satisfied, must be appointed by financial institutions in accordance with the legislation. Identification of customers, ongoing due diligence, record keeping, and reporting of cash transactions and odd activity to the IMPA are all required.
Punishment
Money laundering leads a prison sentence of 7 to 10 years. The severity of the sentence reflects the moral viewpoint of the legislator that money laundering should be denounced and punished severely since it gives criminals a strong incentive to commit crimes by allowing them to benefit from them.
Recovering assets
The law permits the State of Israel to seize "prohibited property," which is not a substitute for the serious offender's punishment (imprisonment or fine) but is imposed in addition to it. Confiscation is based on the principle that assets derived from crime or used in its commission should be returned to the state.
Global cooperation
The statute allows the IMPA the right to cooperate and exchange information with corresponding FIUs. In cases of significant transnational crimes and organised crime networks, this type of collaboration helps law enforcement authorities by supplying extra information using safe international intelligence gathering techniques.
The Suspicious Activity Report under Israel Anti Money Laundering Law
This is a formal filing that has been forwarded to the IMPA by the gatekeepers and financial institutions, and it contains information regarding a dubious transaction. Additionally, the Anti-Money Laundering Law of Israel mandates it since it helps to outlaw the primary offences of money laundering.