Hapoalim faces money laundering regulations fine

The Bank of Israel emphasized that it is not a case of money laundering found in practice but rather of failures in monitoring and implementing the law.

The Bank of Israel is expected to impose a penalty on Bank Hapoalim for violation of the law prohibiting money laundering. The amount of the penalty will probably be in the hundreds of thousands of shekels, and could amount to millions.

In June, the Banking Supervision Department approached the committee for imposing financial sanctions on banking institutions (the fines committee) and submitted to it two requests to impose a fine on Bank Hapoalim for "alleged violation of the provisions under section 7 of the law". This was in the wake of money laundering audits conducted at the bank in 2007 and 2008, and findings of an examination at Bank Hapoalim in 2004 into activity between the beginning of 2003 and mid-2004, and isolated transactions in 2002.

The CEO of Bank Hapoalim is Zion Kenan.

Another bank is about to be fined is Arab Israel Bank, of the Bank Leumi group. This follows the results of an audit in 2008, pointing to "failures in implementing, monitoring, and training in the provisions of the money laundering law." On June 21, the Bank of Israel asked the sanctions committee to fine Arab Israel Bank.

The Bank of Israel emphasizes that at both banks it is not a case of money laundering being discovered in practice but rather of failures in implementing, monitoring and training in the law. Most of the failures are in the area of KYC (know your customer), such as non-recording or partial recording of identification details of account owners, and non-reporting or late reporting to the Money Laundering Authority of unusual transactions.

Published by Globes [online], Israel business news - www.globes-online.com - on August 30, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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