The French media reported that a number of Israeli banks and bank branches in France may be involved in the Israel-France money laundering affair.
Last week, "Le Monde" reported, "In July 1998, suspicions were raised that 30 French institutions and foreign institutions operating in France were involved in the money laundering affair."
"The investigators' suspicions were aroused by a stream of checks from Israeli banks, including Discount Bank, passing through France. Large amounts of money were withdrawn on the basis of checks received in this manner."
"Le Figaro" cites The First International Bank of Israel as the bank to which the suspicious funds are thought to have been transferred.
A senior Israeli banking source told "Globes" that representatives of the French authorities recently came to Israel to investigate the banking affair. Bank Leumi's French branch will reportedly also be investigated in the context of the affair.
Israeli banking sources note that the suspected involvement of the Israeli banks is confined to the technical collection of deposited checks, not receiving funds from an unknown source.
Spokespersons for Bank Leumi, Discount Bank, and The First International Bank said they were unaware of any investigation in Israel of the banks by French authorities.
A French-Israeli money laundering network is suspected of operating since 1996. The network is suspected of transferring checks back and forth between Israel and France through the opening of bank accounts for charitable institutions and cultural organizations. The funds, obtained through criminal activity, were laundered in this manner.
Involvement of Israeli banks in a money laundering affair of this type, if it exists, is liable to significantly reduce Israel's already slight chances of being removed from the list of money laundering countries. Israel is included in the list compiled by the G-7 and OECD Financial Action Task Force on Money Laundering (FATF).
Several months ago,it was revealed that Leumi Switzerland of the Bank Leumi group and FIBI Switzerland from the First International Bank group were involved in the money laundering affair, which was spearheaded by senior figures in Peru.
Published by Israel's Business Arena on December 26, 2001