Israel is now a full member of the Financial Action Task Force because of its help in tracking down money laundering and terrorist financing networks, the organization announced.
The country was admitted to the task force Dec. 10 because it was found to be “successfully co-operating and using financial intelligence and other information to pursue money laundering and terrorist financing investigations and prosecutions,” the FATF said.
Israel’s accession to the 38-member international anti-money laundering body marks a notable turnaround from 2002, when it was still on the FATF’s blacklist of tax havens.
“Israel has undergone a rigorous assessment of its measures to combat money laundering and terrorist financing,” FATF President Marshall Billingslea said in a statement.
“During this demanding process, the country demonstrated its commitment to protect the integrity of the financial system. Israel has established a robust anti-money laundering and counter-terrorist financing framework that is achieving good results in identifying and responding to the risks the country is facing,” Billingslea said.
More work remains to be done, the FATF said. Israel “must improve its coordination on preventing the misuse of non-profit organisations for terrorist financing, in particular by increasing its resources to register and supervise these organisations,” and introducing “major improvements to strengthen supervision and implementation of preventive measures,” it said.
Anti-money laundering legislation also needs to be extended to real estate agents, precious metals dealers and service providers to companies and trusts, FATF said. Reporting duties should also be imposed on suspicious actions of lawyers and accountants, as required by international standards, it said.
Tax Evasion Laws
Israeli officials welcomed the decision, which follows a series of changes in the country’s laws on tax evasion, money laundering and the use of cash.
Membership “contributes to Israel’s ability to fight the financing of terror in the international arena and strengthens the Israeli economy,” Israeli Justice Minister Ayelet Shaked said in a press release Dec. 10.
Israel is engaged in “relentless efforts to combat money laundering,” Eran Yaacov, director-general of the Israel Tax Authority, said in a press release Dec. 10. “The forfeiture data and the conduct of money-laundering investigations were rated by the audit team as one of the highest in the world.”
The FATF report places Israel among the three leading countries in the world in terms of the regime’s effectiveness, and awards rare excellence marks on three central issues: the struggle against terrorist financing, the effectiveness of the Israel Anti-Money Laundering and Terror Financing Prohibition Authority, Israel’s Justice Ministry said in a press release Dec. 10.
Membership will improve Israel’s global stature, improve the financial sector’s ability to operate internationally and contribute to strengthening the economy and business sector, the ministry said. It will also improve cooperation with other countries in financial, intelligence and economic cooperation, the ministry said.