The Bank of Israel has fined First International Bank of Israel (TASE: FTIN1;FTIN5) and its subsidiary Bank Poalei Agudat Israel Ltd. NIS 5.5 million for violating the Prohibition on Money Laundering Law (5760-2000). First International Bank was fined NIS 3.5 million and Bank Poalei Agudat Israel was fined NIS 2 million.
The fine follows the Banking Supervision Department's critical audit of the bank in 2006. The audit found persistent failures by Bank Poalei Agudat Israel relating to money laundering. The audit found flaws in the implementation, monitoring, and training in the regulations of the Prohibition on Money Laundering Law. The audits were given to the banks in June and July 2006.
First International Bank admitted at the time that the flaws were "persistent and ongoing."
The Bank of Israel said, "When the two banks received copies of the draft audit in September 2006, they reviewing the findings and immediately corrected the faults, taking active measures to correct flaws and prevent their recurrence. This was noted by the committee's decision regarding each bank."
Sources believed months ago that the Bank of Israel would exercise its right to impose fines on violators of the Prohibition on Money Laundering Law. Israel Discount Bank (TASE: DSCT) was also mentioned in these reports. Discount Bank's case has not yet been closed.
Published by Globes [online], Israel business news - www.globes-online.com - on January 8, 2008
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