As part of a wide-ranging criminal case involving tax offenses and money laundering, the Israel Tax Authority has frozen the bank of accounts of an Israeli at the HSBC bank in Hong Kong. The Tax Authority plans to confiscate the money in the account at a later stage. The accounts contains NIS 7 million in euros, sources inform "Globes."
No use has been made of such a measure in the framework of economic investigations in Israel until recently. The investigative authorities previously confined themselves to issuing freeze orders for property and money of Israeli suspects in Israel.
The order freezing the bank account in the Far East was part of an investigation that began three years ago. At the beginning of the affair, the suspects' bank accounts in Israel were frozen, but no effort was made until now to freeze overseas bank accounts. The Tax Authority recently decided to extend its seizures of the suspects' property for confiscation purposes, located overseas bank accounts of one of the suspects in the affair, and petitioned the Rishon Lezion Magistrates Court for a freeze order.
Judge Guy Avnon granted the petition. The State Attorney's Office (economics department) then contacted the authorities in Hong Kong and requested that the order be carried out. The authorities there approved the freezing of the Israeli suspect's bank account (enforcement of an order by one country within the borders of another country requires approval by the courts there, and this was granted in this case).
The unexpected measure caught the suspect by surprise, particularly in view of the fact that the investigative case had ended a long time ago, and he currently faces an indictment in the affair. A senior Tax Authority investigative source said, "It is true that the case was sent to the State Attorney's Office a long time ago and is being heard in court, but it is not definite that the investigation has ended, because more new things are turning up all the time, and supplementary actions are being carried out in the investigation, and this is true of the freezing of the Hong Kong account, which following the discovery of more money, and was done with the consent of and in coordination with the State Attorney's Office."
Trend towards global cooperation
Freezing an Israeli's overseas bank account in order to confiscate the money in a criminal proceeding constitutes another step in economic law enforcement and the struggle against unreported capital and tax offenses. In the name of this campaign, the trend towards global cooperation and information transfers between countries has strengthened in recent years, and information sharing between financial concerns and banks around the world and the Tax Authority has grown. As part of this sharing of information, lists of Israelis with accounts at Swiss bank HSBC and other banks (e.g. UBS), including personal information, bank statements, and other particulars were delivered to the Tax Authority. This information has led to criminal investigations and indictments against Israelis holding millions of shekels in foreign bank accounts who have not reported the money to the Tax Authority in Israel.
Published by Globes [online], Israel Business News - www.globes-online.com - on May 18, 2017
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