On May 5, 2015, the Banking Corporations Sanctions Committee regarding the prohibition on money laundering and terror financing decided to impose a financial sanction of NIS 1.15 million on First International Bank of Israel, Ltd. (hereinafter, “the Bank”) for infringements of directives issued under the force of the Prohibition on Money Laundering Law, 5760–2000 (hereinafter, “the Law”). The Bank has the right to appeal to a Magistrates Court within 30 days of the decision.

 
The infringements and deficiencies are based on the findings of a Banking Supervision Department examination report conducted in 2013 of activities at the Bank. The findings of the examination report indicated several infringements of the Prohibition on Money Laundering (the Banking Corporations' Requirements Regarding Identification, Reporting, and Record-Keeping to Prevent Money Laundering and the Financing of Terrorism) Order, 5761–2001, (hereinafter, "the Order") which led, as noted, to financial sanctions which totaled NIS 1.15 million.
 
The infringements derived from the Bank’s failure to report unusual transactions by customers to the Israel Money Laundering and Terror Financing Prohibition Authority; in this regard, the Committee wishes to emphasize the several indicators—“red flags”—that could be viewed as unusual activity:
  1. Managing a customer’s business activity in accounts opened as private accounts.
     
  2. Loans backed by related parties’ deposits (Back to back).
     
  3. Managing business activity—including international transfers—that has no connection to Israel, by nonresidents
 
In its decision, the Committee took into account the Bank’s actions to rectify the deficiencies. The Committee finds it proper to emphasize its impression of the improvement in the bank’s handling of the issue of the prohibition on money laundering and terror financing, and by the steps taken by the Bank since 2008, when a financial sanction was imposed on it.
 
The Banking Corporations Sanctions Committee is a statutory committee, and is authorized, as part of the means of enforcing the prohibition on money laundering and terror financing, to impose financial sanctions (fines) on banking corporations (of up to approximately NIS 2 million per infringement) for infringements of the Law or related orders and regulations. The Committee is headed by Supervisor of Banks David Zaken, and members include the Head of the Israel Money Laundering and Terror Financing Prohibition Authority, advocate Paul Landes, and advocate Dror Goldstein from the Banking Supervision Department.