Reports of money laundering on the rise in Israel

Money laundering - the practice of concealing the origins of illegally-obtained money - helps finance terrorist and criminal groups.

August 29, 2017 16:16
1 minute read.

Shekel money bills. (photo credit: REUTERS)


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Reports of fraudulent monetary transactions in Israel and abroad have skyrocketed in the past five years, the Justice Ministry said Tuesday in its annual report for 2016.

According to the ministry, the number of “unusual reports” by banks and financial institutions is up 75% since 2012.

Money laundering – the practice of concealing the origins of illegally obtained money – helps finance terrorist and criminal groups. Some 11% of detected unusual activity in Israel and abroad pertains to financing terrorist organizations, according to data compiled by the Israel Securities Authority.

The ISA , the primary national investigator of financial fraud, said 30% of money laundering activity in 2016 consisted of fraud and forgery, while another 20% of criminal transactions related to bribery and embezzling of public funds.

Currency providers detected a 150% increase in fraud in the past year, while other reports of irregular activity came from insurance and credit card companies.

Dr. Shlomit Wagman, head of the Israel Money Laundering and Terror Financing Prohibition Authority, attributed the increase in reported fraud as a sign of better law enforcement.

In the past year, international securities regulators have made about 25% more requests for information from the ISA , which also has expanded its online reporting system, making it easier for people to submit claims as to suspicious financial activity.

“In the past year, the authority has made a significant leap forward in cooperation with security and enforcement agencies in Israel and around the world, initiating and accompanying an unprecedented number of economic investigations, including organized crime, sophisticated and cross-border economic crime, financing of terrorism and government corruption,” she said.

“The effectiveness of the authority’s activity this year also received significant international recognition, which is reflected in winning first place in an international competition and the inclusion of Israel as an observer to the prestigious Financial Action Task Force organization [an intergovernmental group fighting money laundering through an extensive blacklist],” she added.

Money laundering most commonly occurs via cash payments, though other methods include currency service providers, international bank transfers, companies and straw people, and the parking of funds in real estate.

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