Anti Money-Laundering

 Prohibition on Money Laundering Law
In August 2000, the Prohibition on Money Laundering Law (the "Law") was enacted in Israel, in order to combat money laundering and activity in "illegal property". Banks and other financial institutions may often be used to perform transactions aimed at money laundering and / or transferring funds to terrorist organizations, so the banking system plays an important role in the war on these issues.

For the purpose of enforcing the law, the Bank of Israel published the Prohibition on Money Laundering Order Prohibition on Money Laundering Order (the "Order"), which came into effect in February 2002, and applies to the entire banking system and banking credit card companies. The Order was amended and published in its new format on 2.2.14. 

The law is a criminal law including penal sanctions such as imprisonment and fines. Meticulous compliance with the provisions of the law is very important, so that the bank and its customers will not fail by performing actions that are against the law.

 Prohibition on Terrorist Financing Law
In August 2005,  the Prohibition on Terrorist Financing Law came into force, and was intended to establish the struggle of the economic system against terrorism, by preventing actions that might promote, enable, finance, or reward terrorist acts. The purpose of the law is, among other things, to help identify and disclose activities designed to finance terrorism through the banking system, which turned out to be a reality after the events of September 11, 2001.

Like the Prohibition on Money Laundering Law, the Prohibition on Terrorist Financing Law is also a criminal law, imposing penal sanctions that include heavy fines and even imprisonment. Any person performing a transaction in property for terrorist purposes, or a transaction in property that finances or allows the execution of an act of terrorism, and any transferor of property to terrorist organizations or terrorists, commits a criminal offense and is subject to the penalties prescribed by the law.

The provisions of the legislation include, inter alia, also the types of transactions in which the Bank is required to check the personal details of the parties to a transaction against a list of organizations and persons declared to be involved in terrorist activities.

In addition, the provisions include instructions concerning checks drawn on banks in the Palestinian Authority:

 Identifying information required on the the check
When depositing checks drawn on a bank in the Palestinian Authority, the Bank has to ensure that on each check (regardless of the sum specified on the check),there will appear identifying information of the account holders in the Latin alphabet, and in numerals prevailing in the country. Checks not displaying all the information listed below will not be accepted for collection to the credit of the customer's account:

• For an individual - name, surname and identity number.
• For a corporation - corporate name and number.

 Non-acceptance and non-payment of endorsed checks
Endorsed checks (on the back of which there is more than one signature), drawn on abank in the Palestinian Authority, will not be accepted for deposit to the credit of a customer's account. A check drawn on a bank in the Palestinian Authority will be deposited to the credit of the customer's account, only if the customer is the beneficiary whose name is duly recorded on the face of the check, and who is the only one endorsing the check, for depositing in his account.

Similarly, the condition for the payment of a check drawn on Bank Leumi presented by a bank in the Palestinian Authority is that it must be depositedonly in the account in the name of the payee of the check, and these checks cannot be endorsed.
 

 Postponement of dates of credit and debit
Please note: with regard to a check drawn on a bank in the Palestinian Authority, for which the deposit or payment date falls, for example, on 1.1.2014, the credit to the Leumi customer’s account and the debit of the Palestinian bank in respect of it, will be postponed by one business day, i.e. to 2.1.2014.

The full article can be viewed with Adobe Acrobat Reader software. To download Adobe Acrobat Reader click here.

File not opening? Please disable pop-up blocking for this site.