Knesset lowers Gaza cash reporting requirements
By YONAH JEREMY BOB
Reporting requirements for physical money transfers to the Strip is lowered in order to crack down on money laundering.
The Constitution, Law and Justice Committee on Tuesday unanimously agreed to
lower the reporting requirements for physical transfers of cash from Israel to
Gaza from NIS 100,000 to NIS 12,000.
The decision was made in order to
crack down on money laundering; the reporting requirement for cash transfers
between Israel and most other international locations remains NIS
The change was made by amending the order applicable to
defending against money laundering, meaning only the Law Committee needed to
approve it. The Knesset as a whole must approve new laws, but amending orders –
as in this case – which have a lower legal status, can often be done by mere
approval of the relevant committee and ministers.
Finance Minister Yuval
Steinitz approved the amended order after consultation with Justice Minister
Yaakov Neeman and Public Security Minister Yitzhak Aharonovitch, making the Law
Committee’s approval the last necessary step.
The change was originally
requested in August 2011 by Shin Bet (Israel Security Agency) head Yoram Cohen,
who requested that Steinitz extend the reporting requirements to much smaller
amount of cash transfers.
The new cut-off level for reporting
requirements will now be identical to the stricter level until now only in force
for transfers of cash between Israel and the West Bank. Whereas the Gaza
crossing has been governed by a 2000 money-laundering law that applies to most
international crossings, the West Bank has been governed by a special 2003
military order issued by the IDF commander with responsibility for the West
In his letter to Steinitz, Cohen said that the stricter
requirements would “serve Israel’s security needs.” He added that, according to
intelligence, those crossing between Israel and Gaza are “legally transferring
large amounts of funds, without oversight,” by making many transfers, but
keeping each one under the current NIS 100,000 level.
“These funds are
used, for among other things, strengthening terrorist organizations,” he
A Shin Bet representative at the Knesset hearing said that
sometimes terrorists are transferring funds for themselves under the guise of
humanitarian aid, but are not being checked since they make sure the individual
transfers stay below the current cut-off level for reporting.
director of the Legal Center for Freedom of Movement, said that she hoped the
new “reporting requirements would not be used to restrict the ability of
merchants to do legitimate business.”
She stated that for the past few
years “Israel has forbade many financial transactions via banks with Gaza,
making it very difficult to purchase goods from Israel and the West Bank, to pay
salaries and to run a legitimate economy.”
As a result, she said that the
“ability to transfer cash is necessary for ordinary commercial transactions” to
be able to occur.
Bashi said there was “nothing wrong with asking
merchants to report the cash they are carrying as long as they can use the cash
for legitimate business purposes.” She added that her understanding was that
most of the money going to terrorists was “coming through the tunnels and not
through the Erez Crossing,” which this legislation was addressing, and hoped
that the authorities would be “sensitive in their enforcement” of the new