The Banking Corporations Sanctions Committee decision regarding infringements by the Bank of Jerusalem of directives under the Prohibition on Money Laundering Law

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On March 25, 2014, the Banking Corporations Sanctions Committee regarding the prohibition on money laundering and terror financing decided to impose a financial sanction of NIS 800,000 on the Bank of Jerusalem (hereinafter, “the Bank”) for infringements of directives issued under the force of the Prohibition on Money Laundering Law, 5760–2000 (hereinafter, “the Law”). The Bank has the right to appeal to a Magistrates Court within 30 days of the decisions.
 
The infringements and deficiencies are based on the findings of a Banking Supervision Department examination report of activities conducted in 2008–11.
 
The findings of the examination report indicated several infringements of the Prohibition on Money Laundering (the Banking Corporations' Requirements Regarding Identification, Reporting, and Record-Keeping to Prevent Money Laundering and the Financing of Terrorism) Order, 5761–2001, (hereinafter, "the Order") which led, as noted, to financial sanctions which totaled NIS 800,000. The infringements derived primarily from the Bank’s inadequate preparedness related to the following types of infringements:
 
  1. Failure to report unusual transactions.
  2. Deficiencies and faults in information transferred to the Israel Money Laundering and Terror Financing Prohibition Authority.
  3. Reports transferred markedly late to the Israel Money Laundering and Terror Financing Prohibition Authority.
 
In its decision, the Committee took into account the Bank’s actions to rectify the above faults.
 
The 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. The Committee also clarifies that a banking corporation that plans to expand its operations must prepare in a timely manner in order to deal with the increased activity.
 
The Banking Corporations Sanctions Committee is a statutory committee, and is authorized, as part of the means of enforcing the prohibition on money laundering and terror financing, to impose financial sanctions (fines) on banking corporations (of up to NIS 2.2 million per infringement) for infringements of the law or related orders and regulations. The Committee is headed by Supervisor of Banks David Zaken, and members include the Head of the Israel Money Laundering and Terror Financing Prohibition Authority, advocate Paul Landes.