General Overview
According to a 2005 Report on the Observance of Standards and Codes (ROSC) by the International Monetary Fund (IMF), overall, current measures in Israel to prevent money laundering/financing of terrorism (ML/FT) are extensive and, for the most part, adequate as a framework for anti money laundering/combating the financing of terrorism (AML/CFT). The report further indicates that Israel complies well with the Financial Action Task Force's (FATF) 40+8 Recommendations. Nonetheless, the IMF assessment did identify a number of areas where the regime for AML/CFT could be strengthened. Moreover, the IMF report indicated that at the time of the assessment (in 2005) the AML provisions in Israel were only two years old and had yet to be fully implemented. (IMF 2005, pp. 7, 11)
Israel has made significant progress in strengthening its regime for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) since 2000. The IMF assessment, nevertheless, identified a number of areas where the regime for AML/CFT could be strengthened, including the need to ensure more consistency among the relevant supervisory authorities in addressing AML/CFT problems, as well as an enhanced information exchange among domestic and overseas supervisors. (IMF 2005, p. 1)
According to a 2007 report by the U.S. Department of State (DoS), Israel is not a regional financial center. It primarily conducts financial activity with the financial markets of the United States and Europe, and to a lesser extent with the Far East. Reportedly, less than a quarter of all Israeli money laundering or terrorist financing seizures are related to narcotics proceeds. The majority of the seizures are related to fraud, theft, embezzlement, and illegal money services providers (MSP). Most financial crime investigations in 2006 were related to the intentional failure to report major financial transactions, or the falsification of transaction reports-particularly property transactions. Israel does not have free trade zones and is not considered an offshore financial center, as offshore banks and other forms of exempt or shell companies are not permitted. Bearer shares, however, are permitted for banks and/or for companies. (U.S. DoS 2007)
The Prohibition on Money Laundering Law (PMLL) was enacted in August 2000, as a comprehensive legislation that addresses money laundering as a criminal offence, as well as customer identification, record-keeping, and reporting requirements. Israel has promulgated numerous regulations to implement the PMLL. With respect to terrorism financing, Israel has long criminalized such activity. The wide array of predicate offenses listed in the PMLL greatly expands Israel's asset forfeiture capabilities. (IMF 2005, pp. 4, 8)
Israel's AML/CFT regime, including the PMLL and associated orders and regulations, as well as the institutional arrangements, are extensive and provide an adequate framework for prevention and detection of ML and FT. The framework permits adjustments to allow for fine tuning of the orders as needs arise, and as experience is gathered. In addition, the newly established IMPA is structured to provide significant value-added analysis to investigations by identifying more relevant CTRs and Unusual Transaction Reports (UTRs). (IMF 2005, p. 5)
In January 2002, the Israel Money Laundering Prohibition Authority (IMPA) became operational as Israel's financial intelligence unit (FIU) and began receiving Unusual Transaction Report (UTR) and Currency Transaction Report (CTR) reports in February 2002. The IMPA joined the Egmont Group of Financial Intelligence Units (FIUs) in June 2002. (IMF 2005, pp. 5, 7)
Israel is a party to the 1988 United Nations (UN) Drug Convention and the UN International Convention for the Suppression of the Financing of Terrorism. In December 2006 Israel ratified the UN Convention against Transnational Organized Crime. Israel has signed but not yet ratified the UN Convention against Corruption. Israel is also in the final stages of domestic approval for its accession to the Second Additional Protocol to the Council of Europe Convention, which is designed to provide more effective and modern means of assisting member states in law enforcement matters. There is a Mutual Legal Assistance Treaty in force between the United States and Israel. (U.S. DoS 2007)
According to the 2007 U.S. DoS report, in 2006 the Government of Israel (GoI) continued to make progress in strengthening its anti-money laundering and terrorist financing regime. The report stressed that Israel should continue the aggressive investigation of money laundering activity associated with organized criminal operations and syndicates. Israel should also continue its efforts to address the misuse of the international diamond trade to launder money. (U.S. DoS 2007)
The Principles
1. Legal Systems and Related Institutional Measures |
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According to a 2005 Report on the Observance of Standards and Codes (ROSC) by the International Monetary Fund (IMF), overall, current measures in Israel to prevent money laundering/financing of terrorism (ML/FT) are extensive and, for the most part, adequate as a framework for anti money laundering/combating the financing of terrorism (AML/CFT). The report further indicates that Israel complies well with the Financial Action Task Force's (FATF) 40+8 Recommendations. Nonetheless, the IMF assessment did identify a number of areas where the regime for AML/CFT could be strengthened. Moreover, the IMF report indicated that at the time of the assessment (in 2005) the AML provisions in Israel were only two years old and had yet to be fully implemented. (IMF 2005, pp. 7, 11)
The Prohibition on Money Laundering Law (PMLL) was enacted in August 2000, as comprehensive legislation that addresses money laundering as a criminal offence, as well as customer identification, record-keeping, and reporting requirements. Israel has promulgated numerous regulations to implement the PMLL. With respect to terrorism financing, Israel has long criminalized such activity. The wide array of predicate offenses listed in the PMLL greatly expands Israel's asset forfeiture capabilities. (IMF 2005, pp. 4, 8)
In December 2004, the Israeli Parliament adopted the prohibition on terrorist financing law 5765-2004, which is geared to further modernize and enhance Israel's ability to combat terrorist financing and to cooperate with other countries on such matters. The Law went into effect in August 2005. Therefore, as of 2007, the Israeli legislative regime criminalizing the financing of terrorism includes provisions of the Defense Regulations State of Emergency/1945, the Prevention of Terrorism Ordinance/1948, the Penal Law/1977, and the PMLL. (U.S. DoS 2007)
Israel's AML/CFT regime, including the PMLL and associated orders and regulations, as well as the institutional arrangements, are extensive and provide an adequate framework for prevention and detection of ML and FT. The framework permits adjustments to allow for fine tuning of the orders as needs arise, and as experience is gathered. In addition, the newly established IMPA is structured to provide significant value-added analysis to investigations by identifying more relevant CTRs and Unusual Transaction Reports (UTRs). (IMF 2005, p. 5)
Israel has ratified and implemented the Vienna Convention and implemented United Nations (UN) Security Council Resolution 1373. In February 2003 Israel's ratification of the United Nations Convention on the Suppression of the Financing of Terrorism came into force, which had earlier been signed in July 2000. The authorities believe this Convention may be fully implemented based upon current law, as Israeli laws dating from 1945 and 1948 already criminalize the financing of terrorism. Amendments to the PMLL were also planned that would provide additional criminal provisions prohibiting the financing of terrorism. These provisions address more directly the obligation to report regarding terrorist property. Obligations to report for financial institutions that are direct and explicit, and have greater permanence than current provisions that are linked to the state of emergency within Israel, will be a welcome addition to the legal framework for CFT. (IMF 2005, pp. 5-6)
In October 2006, the Knesset Committee on Constitution, Law and Justice approved an amendment to the Banking Order and the Regulations on the Prohibition on Financing Terrorism. The Order and Regulations were additional steps in the legislation intended to combat the financing of terrorism while maintaining correspondent and other types of banking relationships between Israeli and Palestinian commercial banks. Although the amendment to the Order and the Regulations impose serious obligations on banks to examine clients and file transaction reports, banks are still exempted from criminal liability if, inter alia, they fulfill all of their obligations under the order. (U.S. DoS 2007)
Money laundering is criminalized, but one of the two major money-laundering criminal offenses contains a substantial monetary threshold. Although acquisition, possession, and use of criminal proceeds without a showing of concealment are a criminal offense under Section 4 of the PMLL, there is a substantial monetary minimum for the conduct to be criminal. With conduct criminalized under Section 3 of PMLL without a threshold, a threshold in Section 4, although not preferred, is acceptable. However, the level (for monies at about $80,000 over a three-month period) is high, and is likely to invite conduct just under this substantial amount for which there would be no criminal penalty. In addition, the use of two thresholds, one for monetary and another for other assets, should be reevaluated. The 2006 amendment to the Banking Order and the Regulations on the Prohibition on Financing Terrorism sets the minimum size of a transaction that must be reported at NIS 5,000 (approximately $1,180) for transactions with a high-risk country or territory. The order also includes examples for unusual financial activity suspected to be related to terrorism, such as transfers from countries with no anti-money laundering or counterterrorist finance (AML/CTF) regime to nonprofit organizations (NGOs) within Israel and the occupied territories. (IMF 2005, p. 6; U.S. DoS 2007)
The legal framework for seizure and forfeiture is complex. Statutory provisions exist in a number of laws and apply in various circumstances. In criminal matters, seizure and forfeiture are generally fully available, but as Israeli officials recognize, secondary issues need to be addressed, including a 90-day limitation for provisional freezing before indictment and procedures, and standards for restraint-order hearings. According to the IMF, the PMLL's provisions for civil forfeiture are narrowly drawn, making civil forfeiture largely unavailable. A comprehensive civil forfeiture scheme, as that under consideration through amendments to the PMLL, would go a long way to support an AML/CFT program that is effective in practice in reaching criminal proceeds. (IMF 2005, p. 6)
In January 2002, the Israel Money Laundering Prohibition Authority (IMPA) became operational as Israel's financial intelligence unit (FIU) and began receiving Unusual Transaction Report (UTR) and Currency Transaction Report (CTR) reports in February 2002. The IMPA joined the Egmont Group of Financial Intelligence Units (FIUs) in June 2002. The IMPA collects CTR and UTR information, maintains that information, and proactively analyzes information to identify targets, and new ML or FT typologies. The IMPA acts as an effective privacy filter of collected financial information and can pass to law enforcement or intelligence agencies only financial information likely associated with criminal activity. However, law enforcement investigators cannot review CTR and UTR information themselves and must rely upon the IMPA's ability to provide them with competent analysis of suspicious financial information in a timely manner. The IMPA appears to be well funded, and has a very professional and qualified staff. (IMF 2005, pp. 5, 7)
The Israel National Police (INP) reports no indications of an overall increase in financial crime relative to previous years. In 2006, IMPA reported 77 arrests and five prosecutions relating to money laundering and/or terrorist financing. In one of this year's major AML operations, the INP arrested three senior employees of the Mercantile Discount Bank branch in Ramleh, as well as 23 customers, under suspicion of conspiring to launder tens of millions of shekels earned from extortion and gambling. Another extensive investigation revealed an organized criminal operation that had gained control over several gas stations in the greater Jerusalem area, and was diluting gasoline with other liquids in order to increase profits. The investigation resulted in 12 arrests, property seizures, and an indictment against 28 defendants for filing fictitious invoices amounting to NIS 350 million, and money laundering among other offenses. IMPA reported six other large criminal cases in 2006 totaling over NIS 160 million (approximately $37,749,310) in laundered money. (U.S. DoS 2007)
The Israeli legal framework (PMLL and associated orders) contains provisions prohibiting financial institutions from tipping-off customers when information is being reported to IMPA. However, in some instances these provisions are limited in scope, and though the authorities believe its interpretations of the provisions would address the issue, the provisions nonetheless merit review for effectiveness. (IMF 2005, p. 7)
The Police and the Customs Service are authorized to investigate ML cases, with the Customs Service investigating only customs-related ML offenses. The Israel Security Agency (ISA) has the primary responsibility for financing of terrorism intelligence gathering. All these agencies have created and implemented comprehensive AML/ CFT enforcement programs by dedicating full-time personnel and resources to these issues. The Police and the Security Agency share intelligence information. The Police's AML unit is a headquarters unit that coordinates all AML investigations, organizes and conducts AML training, and liaises with other AML/ CFT governmental components. (IMF 2005, pp. 7-8)
2. Preventive Measures - Financial Institutions |
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According to a 2005 Report on the Observance of Standards and Codes (ROSC) by the International Monetary Fund (IMF), overall, current measures in Israel to prevent money laundering/financing of terrorism (ML/FT) are extensive and, for the most part, adequate as a framework for anti money laundering/combating the financing of terrorism (AML/CFT). The report further indicates that Israel complies well with the Financial Action Task Force's (FATF) 40+8 Recommendations. The shortfalls identified in the report are not significant and are largely in the process of being addressed by the authorities. (IMF 2005, p. 11) However, there is no information publicly available as to Israel's compliance with the FATF recommendations relating to this Principle.
Israel's AML legislation applies to banking corporations; members of the stock exchange; portfolio managers; insurers; and insurance agents; provident funds and companies managing provident funds; the postal bank; and providers of currency service. Seven orders were issued to each of the financial sectors that require customer identification, record keeping, and submission of Unusual Transaction Reports (UTRs) and and Currency Transaction Reports (CTRs). In January 2002, the Israel Money Laundering Prohibition Authority (IMPA) became operational as Israel's financial intelligence unit (FIU) and began receiving UTR and CTR reports in February 2002. (IMF 2005, pp. 5, 8)
Israel's institutional arrangements for AML/CFT involve numerous institutions. The IMPA has the responsibility for receiving and disseminating reports based upon CTRs and UTRs. The Bank of Israel (BOI) has responsibility for the AML oversight of banks; the Israel Securities Authority for the securities industry; the Ministry of Finance (MoF) for insurance, currency service providers, and provident funds; and the Ministry of Communication for the postal bank. Offices within the Ministry of Justice have responsibility for ML/FT prosecutions. The police and customs service investigate ML cases, initiate seizures, and address cross-border transfers. Several interagency groups or task forces also have responsibility for various aspects of AML/CFT. (IMF 2005, p. 5)
The supervisors for each financial sector are granted sufficient power to take actions against financial institutions who fail to fulfill their AML/CFT obligations under the Prohibition on Money Laundering Law (PMLL) and the associated orders as well as the various supervisory acts. They also have been enhancing their supervisory oversight to ensure financial institutions' compliance with PMLL by issuing regulations, circulars, and letters that require more details to comply with PMLL. The BOI, MoF, and Israel Securities Authority have initiated onsite inspections focusing on AML/CFT compliance using inspections manuals that were developed for AML/CFT compliance. (IMF 2005, pp. 8-9)
In 2001, Israel adopted the Banking Corporations Requirement Regarding Identification, Reporting, and Record Keeping Order. The Order establishes specific procedures for banks with respect to customer identification, record keeping, and the reporting of irregular and suspicious transactions. The PMLL requires the declaration of currency transferred (including cash, travelers' checks, and banker checks) into or out of Israel for sums above 80,000 new Israeli shekels (NIS) (approximately $17,200). This applies to any person entering or leaving Israel, and to any person bringing or taking money into or out of Israel by mail or any other methods, including cash couriers. This offense is punishable by up to six months imprisonment or a fine of NIS 202,000 (approximately $43,400), or ten times the amount that was not declared, whichever is higher. Alternatively, an administrative sanction of NIS 101,000 (approximately $21,700), or five times the amount that was not declared, may be imposed. In 2003, the Government of Israel (GOI) lowered the threshold for reporting cash transaction reports (CTRs) to NIS 50,000 (approximately $10,500), lowered the document retention threshold to NIS 10,000 (approximately $2,100), and imposed more stringent reporting requirements. (U.S. DoS 2007)
In 2002, Israel enacted several new amendments to the PMLL that resulted in the addition of the money services businesses (MSB) to the list of entities required to file cash transaction reports (CTRs) and suspicious transaction reports (STRs), the establishment of a mechanism for customs officials to input into the IMPA database, the creation of regulations stipulating the time and method of bank reporting, and the creation of rules on safeguarding the IMPA database and rules for requesting and transmitting information between IMPA, the Israeli National Police (INP) and the Israel Security Agency (Shin Bet). The PMLL also authorized the issuance of regulations requiring financial service providers to identify, report, and keep records for specified transactions for seven years. (U.S. DoS 2007)
In December 2004, the Israeli Parliament adopted the prohibition on terrorist financing law 5765-2004, which is geared to further modernize and enhance Israel's ability to combat terrorist financing and to cooperate with other countries on such matters. The Law went into effect in August 2005. The Israeli legislative regime criminalizing the financing of terrorism includes provisions of the Defense Regulations State of Emergency/1945, the Prevention of Terrorism Ordinance/1948, the Penal Law/1977, and the PMLL. Under the International Legal Assistance Law of 1998, Israeli courts are empowered to enforce forfeiture orders executed in foreign courts for crimes committed outside Israel. Israeli authorities regularly distribute the names of individuals and entities on the UNSCR 1267 Sanctions Committee consolidated list. (U.S. DoS 2007)
In October 2006, the Knesset Committee on Constitution, Law and Justice approved an amendment to the Banking Order and the Regulations on the Prohibition on Financing Terrorism. The Order and Regulations were additional steps in the legislation intended to combat the financing of terrorism while maintaining correspondent and other types of banking relationships between Israeli and Palestinian commercial banks. Although the amendment to the Order and the Regulations impose serious obligations on banks to examine clients and file transaction reports, banks are still exempted from criminal liability if, inter alia, they fulfill all of their obligations under the order. The Banking Order was expanded to cover the prohibition on financing terrorism to include obligations to check the identification of parties to a transaction against declared terrorists and terrorist organizations, as well as obligations of reporting by size and type of transaction. The Banking Order sets the minimum size of a transaction that must be reported at NIS 5,000 (approximately $1,180) for transactions with a high-risk country or territory. The order also includes examples for unusual financial activity suspected to be related to terrorism, such as transfers from countries with no anti-money laundering or counterterrorist finance (AML/CTF) regime to nonprofit organizations (NGOs) within Israel and the occupied territories. (U.S. DoS 2007)
In December 2004, the Israeli Parliament adopted the prohibition on terrorist financing law 5765-2004, which is geared to further modernize and enhance Israel's ability to combat terrorist financing and to cooperate with other countries on such matters. The Law went into effect in August 2005. The Israeli legislative regime criminalizing the financing of terrorism includes provisions of the Defense Regulations State of Emergency/1945, the Prevention of Terrorism Ordinance/1948, the Penal Law/1977, and the PMLL. Under the International Legal Assistance Law of 1998, Israeli courts are empowered to enforce forfeiture orders executed in foreign courts for crimes committed outside Israel. Israeli authorities regularly distribute the names of individuals and entities on the UNSCR 1267 Sanctions Committee consolidated list. (U.S. DoS 2007)
A weakness for the AML/CFT regime across all financial sectors is related to monetary thresholds. First, many of the unusual transactions listed by way of example in orders applicable in the various sectors are limited by monetary thresholds. For instance, for banking, atypical transactions and wire transfers lacking appropriate information are deemed suspicious only if in excess of NIS 200,000 (approximately $43,000). These thresholds signal to financial institutions that transactions that are unusual in and of themselves need not be reported, and are not appropriate in these lists. The BOI indicated post-mission that such thresholds are being reconsidered. (IMF 2005, p. 9)
The Israel National Police (INP) reports no indications of an overall increase in financial crime relative to previous years. In 2006, IMPA reported 77 arrests and five prosecutions relating to money laundering and/or terrorist financing. The INP arrested three senior employees of the Mercantile Discount Bank branch in Ramleh, as well as 23 customers, under suspicion of conspiring to launder tens of millions of shekels earned from extortion and gambling. Another extensive investigation revealed an organized criminal operation that had gained control over several gas stations in the greater Jerusalem area, and was diluting gasoline with other liquids in order to increase profits. The investigation resulted in 12 arrests, property seizures, and an indictment against 28 defendants for filing fictitious invoices amounting to NIS 350 million, and money laundering among other offenses. IMPA reported six other large criminal cases in 2006 totaling over NIS 160 million (approximately $37,749,310) in laundered money. (U.S. DoS 2007)
3. Preventive Measures - Designated non-Financial Business and Professions |
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According to a 2005 Report on the Observance of Standards and Codes (ROSC) by the International Monetary Fund (IMF), overall, current measures in Israel to prevent money laundering/financing of terrorism (ML/FT) are extensive and, for the most part, adequate as a framework for anti money laundering/combating the financing of terrorism (AML/CFT). The report further indicates that Israel complies well with the Financial Action Task Force's (FATF) 40+8 Recommendations. The shortfalls identified in the report are not significant and are largely in the process of being addressed by the authorities. (IMF 2005, p. 11) However, there is no information publicly available as to Israel's compliance with the FATF recommendations relating to this Principle.
Suspicious transaction reporting is required of members of the stock exchange, portfolio managers, insurers or insurance agents, provident funds and companies managing a provident fund, providers of currency services, and the Postal Bank.. The Prohibition on Money Laundering Law (PMLL) does not apply to intermediaries like lawyers and accountants. (U.S. DoS 2007)
To implement PMLL in April 2002, the Ministry of Finance (MoF) issued an order requiring that currency service providers register with the MoF and that they conduct customer identification, record keeping, and Cash Transaction Report (CTR) and Unusual Transaction Report (UTR) reporting to Israel Money Laundering Prohibition Authority (IMPA). The registrar at the MOF conducts the oversight of currency service providers to ensure compliance with PMLL through offsite monitoring and onsite inspections, but not for prudential purposes. Although supervision of currency service providers is not for prudential purposes, currency service providers are subject to the same AML(Anti-Money Laundering)/CFT (Combating the Financing of Terrorism) regime that is applied to prudentially-regulated financial institutions. (IMF 2005, p. 10)
In April 2006, the Justice Ministry proposed an amendment to the PMLL that extends Israel's Anti-Money Laundering (AML) regime to cover its substantial diamond trading industry. The amendment defines "dealers in precious stones" as those merchants whose annual transactions reach NIS 50,000 (approximately $11,800). It places significant obligations on dealers to verify the identity of their clients, report all transactions above a designated threshold (and all unusual client activity) to IMPA, as well as maintain all transaction records and client identification for at least five years. This proposal has not yet been passed into legislation by the Knesset. (U.S. DoS 2007)
4. Legal Person and Arrangements & Non-Profit Organizations |
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According to a 2005 Report on the Observance of Standards and Codes (ROSC) by the International Monetary Fund (IMF), overall, current measures in Israel to prevent money laundering/financing of terrorism (ML/FT) are extensive and, for the most part, adequate as a framework for anti money laundering/combating the financing of terrorism (AML/CFT). The report further indicates that Israel complies well with the Financial Action Task Force's (FATF) 40+8 Recommendations. The shortfalls identified in the report are not significant and are largely in the process of being addressed by the authorities. (IMF 2005, p. 11) However, there is no information publicly available as to Israel's compliance with the FATF recommendations relating to this Principle.
5. National and International Co-operation |
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According to a 2005 Report on the Observance of Standards and Codes (ROSC) by the International Monetary Fund (IMF), overall, current measures in Israel to prevent money laundering/financing of terrorism (ML/FT) are extensive and, for the most part, adequate as a framework for anti money laundering/combating the financing of terrorism (AML/CFT). The report further indicates that Israel complies well with the Financial Action Task Force's (FATF) 40+8 Recommendations. The shortfalls identified in the report are not significant and are largely in the process of being addressed by the authorities. (IMF 2005, p. 11) However, there is no information publicly available as to Israel's compliance with the FATF recommendations relating to this Principle.
Israel's institutional arrangements for Anti Money Laundering (AML) and Combating the Financing of Terrorism (CFT) involve numerous institutions. The Israel Money Laundering Prohibition Authority (IMPA) has the responsibility for receiving and disseminating reports based upon receiving Currency Transaction Reports (CTRs) and Unusual Transaction Reports (UTRs). The Bank of Israel (BOI) has responsibility for the AML oversight of banks; the Israel Securities Authority for the securities industry; the Ministry of Finance (MOF) for insurance, currency service providers, and provident funds; and the Ministry of Communication for the postal bank. Offices within the Ministry of Justice have responsibility for ML (Money Laundering)/FT (Financing of Terrorism) prosecutions. The police and customs service investigate ML cases, initiate seizures, and address cross-border transfers. Several interagency groups or task forces also have responsibility for various aspects of AML/CFT. (IMF 2005, p. 5)
In spite of the multiplicity of institutions that are responsible for AML/CFT, there appears to be a strategic level of coordination and effective implementation in the initial stages of AML/CFT enforcement. However, cooperation with supervisors in Israel, as well as with overseas supervisors, is currently constrained for BOI and MOF. Under current sector-specific laws, the governor of BOI and the Commissioner of Insurance of MOF may share only criminal information. The BOI, however, may share information with foreign supervisors with a letter of consent from banks and, in addition, plan amendments to legislation that will permit this same kind of cooperation with foreign supervisors. The chairperson of Israel Securities Authority may share information with supervisory and other authorities, both domestic and foreign, within his/her discretion. Consideration should be given to amendments to laws to widen the possibilities for sharing and cooperating with both domestic and foreign supervisory authorities regarding individual matters. (IMF 2005, p. 9)
Police and the Customs Service are authorized to investigate ML cases, with the Customs Service investigating only customs-related ML offenses. The Israel Security Agency has the primary responsibility for FT intelligence gathering. All these agencies have created and implemented comprehensive AML/ CFT enforcement programs by dedicating full-time personnel and resources to these issues. The Police and the Security Agency share intelligence information. The Police's AML unit is a headquarters unit that coordinates all AML investigations, organizes and conducts AML training, and liaises with other AML/ CFT governmental components. (IMF 2005, p. 7-8)
Israel's Legal Assistance Law permits Israeli authorities to provide a full range of legal assistance even in the absence of dual criminality or a treaty to international counterparties. Laws and procedures in place for extradition for ML and FT offences meet international standards. With respect to foreign forfeiture orders, the Israeli courts are empowered to enforce such orders in drug and money-laundering matters; in late January 2003, this was extended to include terrorism and terrorism-financing crimes. The availability of effective means to enforce foreign forfeiture orders is critical in the fight against terrorism. Legislation permitting this should be a priority. In addition, while Israeli authorities may order the sharing of property forfeited at foreign request, sharing in domestic cases has not been addressed, although orders in such cases may be based in part upon information or assistance from a foreign authority. The authorities should consider an extension to permit sharing in domestic matters. (IMF 2005, p. 8)
Israel has ratified and implemented the Vienna Convention and implemented United Nations (UN) Security Council Resolution 1373. In February 2003 Israel's ratification of the United Nations Convention on the Suppression of the Financing of Terrorism came into force, which had earlier been signed in July 2000. The authorities believe this Convention may be fully implemented based upon current law, as Israeli laws dating from 1945 and 1948 already criminalize the financing of terrorism. These provisions address more directly the obligation to report regarding terrorist property. Planned provisions for the PMLL would also make application to terrorist acts directed at non-Israeli interests explicit. Obligations to report for financial institutions that are direct and explicit, and have greater permanence than current provisions that are linked to the state of emergency within Israel, will be a welcome addition to the legal framework for CFT. (IMF 2005, pp. 5-6)
Israel is a party to the 1988 UN Drug Convention and the UN International Convention for the Suppression of the Financing of Terrorism. In December 2006 Israel ratified the UN Convention against Transnational Organized Crime. Israel has signed but not yet ratified the UN Convention against Corruption. Israel is also in the final stages of domestic approval for its accession to the Second Additional Protocol to the Council of Europe Convention, which is designed to provide more effective and modern means of assisting member states in law enforcement matters. There is a Mutual Legal Assistance Treaty in force between the United States and Israel. (U.S. DoS 2007)
The Government of Israel continues to make progress in strengthening its anti-money laundering and terrorist financing regime in 2006. Israel should continue the aggressive investigation of money laundering activity associated with organized criminal operations and syndicates. Israel should also continue its efforts to address the misuse of the international diamond trade to launder money. (U.S. DoS 2007)
Israel