New guidelines for Israeli and Palestinian bank ties

The Bank of Israel has issued new guidelines for ties between Israeli and Palestinian banks governing money transfers and checks, which will come into effect tomorrow. The guidelines aim to prevent money laundering and financing of terrorism.

The Bank of Israel originally planned to publish the guidelines in November 2007, but postponed them because banks in the Palestinian Authority had not completed their preparations.

The regulations stipulate:

Banks will be obliged to check the opposite party in transfers to high-risk territories and countries (including the Palestinian Authority) against the list of declared terrorist organizations and terrorists and to report such transfers to the Israel Money Laundering and Financing of Terrorism Prohibition Authority.
A banking corporation shall not accept checks for deposit, in shekel or foreign currency, drawn on banks operating in areas under the Palestinian Authority, which do not have the identification particulars of the account holder imprinted on the front in Latin characters and digits as used in Israel.
A banking corporation shall not accept checks for collection, in shekel or foreign currency, presented by banks operating in areas under the Palestinian Authority, without receiving details of the account in which the check is deposited and identification particulars of all the account holders in Latin characters and digits as used in Israel.
A banking corporation shall not accept endorsed checks drawn on banks operating in areas under the Palestinian Authority, and shall not accept endorsed checks for collection presented by banks operating in areas under the Palestinian Authority.
A banking corporation shall not accept a transfer of money in an amount exceeding NIS 5,000 from banks operating in areas under the Palestinian Authority without receiving details of the account of the other party to the transaction and identification particulars of all the account holders in Latin characters and digits as used in Israel.

Published by Globes [online], Israel business news - www.globes-online.com - on February 11, 2008