preface

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FOREIGN EXCHANGE CONTROL AND PREVENTION OF MONEY LAUNDERING
9.2. THE PREVENTION OF MONEY LAUNDERING
Alongside the globalization of nations and information networks, there have
been cases of “money laundering”. The international effort against money
laundering has taken a more aggressive course in the past decade.
In 1989, an international force called FTAF - Force Task Action Financial -
was established in Paris under the patronage of the G-7 industrial nations.
Israel officially joined this fight in 2000, with the enactment of the Prohibition
of Money Laundering Law in the Knesset. This Law enables Israel to take an
active role in the international fight against money laundering.
The Prohibition of Money Laundering Law imposes certain identification and
reporting obligations on financial institutions, including banks, stock exchange
members and money changers. These institutions are required to identify
anyone, either a person or a corporation, requesting services such as opening of
an account, change of ownership of an account, or execution of certain
transactions. The aforementioned institutions are also required to report certain
transactions to the authority for the prevention of money laundering. These
transactions fall into two categories:
� Transactions whose size exceeds defined amounts.
� Unusual transactions – transactions which appear to be unusual in light of
the information the institution possess - for example, a transaction whose
aim seems to be avoidance of the size reporting requirements; an account
whose holder seems to be operating on behalf of someone else, etc.
BDO Israel