Israel cracks down on money laundering terrorist funds

The new directive imposes on financial service providers a requirement not to provide service to a service recipient who does not hold a financial services provider license if the license holder believes that the activity requires obtaining an appropriate license.

Tel Aviv [Israel], June 18 (ANI/TPS): Israel's Capital Market Authority strengthened the management of money laundering and terrorist financing risks in financial service providers and adopted international rules in the supervision of virtual assets. The new directive imposes on financial service providers a requirement not to provide service to a service recipient who does not hold a financial services provider license if the license holder believes that the activity requires obtaining an appropriate license.

In such cases, it will also be required to submit appropriate reports to the Capital Market Authority and the Authority for the Prohibition of Money Laundering. The draft directive also states that a provider of financial services may not perform an action if there is a reasonable basis for fearing that the action is related to money laundering and terrorist financing.

The directive is expected to apply for the first time in Israel the international standard for the transfer of the information required in activities in virtual assets (Travel Rule). According to the standard, a provider of financial services in a virtual asset will be required to transfer the relevant information to the recipient of the transfer immediately and securely.

In this way, the anti-money laundering and terrorist financing regime that applies to those engaged in activities in virtual assets will be adjusted to the advanced international standards and the recommendations of the FATF (Financial Action Task Force) organizsation. (ANI/TPS)