The Bank of Israel has fined Israel Credit Cards-Cal Ltd. (ICC-Cal) (Visa) NIS 6 million and Leumi Card Ltd. NIS 1.2 million for violating the Prohibition of Money Laundering Order. The two credit card companies have the right to appeal the fine to a magistrates court with 30 days.

The Bank of Israel said that the fines took into account the company's actions to correct the flaws, and that in the case of ICC-Cal, the replacement of its CEO at the time of the incidents, Boaz Chechik, and other executives, as well.

The fine for ICC-Cal is based on a report by the Banking Supervision Department, which found numerous breaches of the Prohibition of Money Laundering Order in 2007-08. The Bank of Israel's Sanctions Committee for Banks, chaired by Supervisor of Banks David Zaken, said that most of the violations were due to the company's disregard of the prohibition of money laundering regime, and not due to non-implementation of the provisions of the Order, including flaws in demanding identification documents, not verifying identification documents with the Population Registry for bank credit cardholders, declarations about beneficiaries which were inconsistent with the wording in Appendix A of the Prohibition of Money Laundering Order, non-reporting of mandatory actions about the type and size of transactions, non-reporting of unusually large transactions, and errors and missing information in reports to the Money Laundering Prohibition Authority.

Most of Leumicard's breaches of the Prohibition of Money Laundering Order occurred in 2008-09. The Bank of Israel says that most of the violations involved insufficient verification of identification documents, declarations about beneficiaries which were inconsistent with the wording in Appendix A of the Prohibition of Money Laundering Order, non-reporting of unusually large transactions, and errors and missing information in reports to the Money Laundering Prohibition Authority.

Published by Globes [online], Israel business news - www.globes-online.com - on October 10, 2013

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