The Bank of Israel has fined Mizrahi Tefahot Bank (TASE:MZTF) NIS 3.8 million for infringing the Prohibition on Money Laundering Law (5760-2000). The infringements and faults are based on the findings Banking Supervision Department examination of activities carried out in 2007-10
Mizrahi Tefahot Bank has the right to appeal to a magistrates court within 30 days of receipt of the decision. However, sources doubt that the bank, run by CEO Eli Yones, will not appeal the decision, because the Bank of Israel originally planned to levy a larger fine, before settling with Mizrahi Tefahot Bank, after it fixed the faults.
The Bank of Israel found the following faults at Mizrahi Tefahot Bank: management of accounts for lawyers without obtaining an appropriate declaration on the beneficiary; failure to report unusual transactions; deficiencies and faults in information transferred to the Israel Money Laundering and Terror Financing Prohibition Authority; failure to take adequate actions to obtain declarations on beneficiaries in accounts opened, and the bank did not make carrying out a transaction contingent on obtaining the declaration on beneficiaries, despite the fact that the customer was in the branch; and notably late submission of reports to the Money Laundering Prohibition Authority.
The Bank of Israel said, "The Banking Corporations Sanctions Committee emphasizes the importance it attributes to a culture of full compliance with directives and regulations and uncompromising enforcement of an anti-money laundering regime. In addition to setting policies and regulations, the bank must confirm that adequate resources have been allocated to implementing and enforcing the compliance policy."
In recent years, the Bank of Israel has taken an aggressive policy of fines for infringements of the Prohibition on Money Laundering Law. The fine levied against Mizrahi Tefahot Bank is the second largest fine for such infringements. The largest fine of NIS 7.5 million was levied against Bank Hapoalim (TASE: POLI) over the money laundering affair at its Hayarkon branch in 2004.
Published by Globes [online], Israel business news - www.globes-online.com - on September 20, 2012
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