On December 30, 2014, the Banking Corporations Sanctions Committee regarding the prohibition on money laundering and terror financing decided to impose a financial sanction of NIS 2.3 million on Poaley Agudat Israel Bank 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 decisions.
The infringements and deficiencies are based on the findings of a Banking Supervision Department examination report conducted in 2012–13 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 2.3 million. The infringements derived from the Bank’s failure to report unusual transactions; in this regard, the Committee wishes to emphasize the following points:
1. In addition to understanding the use of funds, the banking corporation must clarify what the source of the money in an account is, including requiring documentation.
2. When a banking corporation attached appendices to a report on unusual transactions, it must detail the main points of the appendices in the report itself. Thus, for example, a report that includes an appendix which details the transfers in a customer’s accounts must include the total amount of the transfers and other notable issues in accordance with the circumstances.
In its decision, the Committee took into account the Bank’s actions to rectify the above faults. The Committee finds it proper to emphasize its impression of the seriousness of 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.