| 1.8.07 |
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| Banking Corporations Sanctions Committee fines Bank Leumi NIS 425,000
for Infringement of Money Laundering Directive
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| On 31 July 2007 the Banking Corporations Sanctions Committee regarding the prohibition on money laundering decided to impose financial sanctions of NIS 425,000 on Bank Leumi (hereafter, the bank) for infringing the banking directives issued by virtue of the power vested by the Prohibition on Money Laundering Law, 5760-2000. The bank may appeal to a magistrates court against the committee's decisions within thirty days of receipt of the decision. |
| The major infringements and faults discovered at the bank related to the process of identification and verification of particulars at the stage of new accounts being opened, and the carrying out of activities, including receipt of the declaration regarding beneficiaries and controllers of holding interest, and retaining identification documents. Faults were also discovered in the process of submitting reports to the Prohibition of Money Laundering and Financing of Terrorism Authority (IMPA). However the Committee took into account that most of these infringements were first-time offences, were neither persistent nor grave, that their scope was minor relative to the size of the bank and complexity of its activities, and that the bank acted swiftly to correct the faults revealed during the inspections. |
| It should be stressed that in order to comply with the legislation, and given the increasing exposure of the exploitation of banks in laundering money and financing terrorism, banks are required to improve their system of managing such risks and to take steps to identify and assess potential centers of risk of money laundering and financing of terror, both regarding customers and their activities. Furthermore, banks must pursue enhanced due diligence procedures for higher risk customers, and monitor their activities, in order to reduce or minimize inherent risk. |
| The Sanctions Committee of the banking corporations is a statutory committee set up under the Prohibition on Money Laundering Law, 5760–2000, which, as part of the means of enforcing the prohibition on money laundering, is empowered to impose financial sanctions (fines) on banking corporations (up to NIS 2 million per infringement) for infringements of the law, or related orders or regulations. The Committee is headed by the Supervisor of Banks, Mr. Rony Hizkiyahu, and includes the Head of the Prohibition of Money Laundering and Financing of Terrorism Authority, attorney Yehuda Shaffer. |
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