The laws forbidding money-laundering and financing terror
Prohibition on Money-Laundering Law
In August 2000, 
the Prohibition on Money-Laundering Law (hereinafter: “the law”) was legislated in Israel with the purpose of combating money-laundering and transactions in “forbidden property”. Banks and other financial bodies could be exploited for executing transactions intended for money-laundering and/or transferring money to terror organizations, and therefore the banking system plays an important role in the war against these matters.
For the purposes of enforcing the law, the Bank of Israel (BoI) published the Prohibition on Money-Laundering Order (hereinafter:” the Order”), which came into force in February 2002 and which applies to the banking system including the banking credit card companies.
This law is a criminal code that includes sanctions such as imprisonment and fines. Strict compliance with the provisions in the law is most important in order for the bank and its clients not to fault by executing illegal transactions.
Prohibition on Terrorist Financing Law
In August 2005, the Prohibition on Terrorist Financing Law, which was intended to entrench the economic system’s struggle against terror by preventing the transactions that could promote, enable, finance or reward terror operations, came into force. Inter alia, this law’s purpose is to assist tracing and exposing transactions intended to finance terror through the banking system, which became a reality after the September 11, 2001 events.
Similarly to the Prohibition on Money Laundering Law, Prohibition on Terrorist Financing Law is a criminal code, which imposes sanctions that include heavy fines and imprisonment. Anyone who performs a transaction in property for the purpose of enabling, furthering or financing the preparation of an act of terrorism and anyone who transfers property to a terrorist organization or terror activists commits an offence and is liable to the punishment prescribed in the law.
The law enables enforcement authorities in the State of Israel to seize the property of bodies and/or individuals who have been convicted of an offense in pursuance of this law and, under special circumstances, to seize property even in the absence of a prior conviction.
The full article can be viewed with Adobe Acrobat Reader software. To download Adobe Acrobat Reader click here.
