Anti Money-Laundering
"Money Laundering" (in its classical definition), is the result of activity in property and equity originating from crime, that were disguised and implanted, inter alia, into the economic financial system, and thus became apparently "legal". A person wishing to launder money does it to disguise the source of the property or the identity of its owner, in order to sever the alleged link between these funds, and the prohibited activity from which they were obtained.
Due to the technological advances of the global financial system, and the ease of transferring funds in international markets, it is now easier for people trying to launder capital or those who wish to deliberately avoid reporting them to the authorities, and disguise the source of the funds. In this way, money obtained from illegal activities such as drug trafficking, illegal arms trading, human trafficking, gambling offenses and others, can make their way into bank accounts scattered around the world.
The authorities fighting crime in Israel and worldwide have concluded that the attempt to block the possibility of criminals "laundering" and "cleaning" their money is important in the fight against terrorist organizations, drug offenders and organized crime of all kinds. In addition, to succeed in this, many countries worldwide agreed that international standards and legislation are needed to allow cooperation between governments, law enforcement authorities, tax authorities, and financial institutions.
The first international convention for cooperation against money laundering (FATF) was signed in the late '80s. Under the convention, an international task force was established in Paristo coordinate cooperation on the issue. In recent years, Israel also joined fully the global fight against terrorism and money laundering.
There are many ways to launder money, and its prevention is not easy. Given the risks that this activity entails, such as destabilization of political, economic, and social systems in democratic countries, and even endangering human life, there is great importance in continuing the fight against this phenomenon with all the means at our disposal. Accordingly, financial institutions, including banking institutions, have to check the source of their customers’ funds and examine the nature of account activity on a regular basis.
Clarification:
The information on this site is presented for explanatory purposes only and should not be considered as a legal opinion and / or utilized in legal proceedings.
For further information on the various issues in the area of prohibition of money laundering, click the following links: