The transferring of funds by using a country’s border is one of the well-known ways in the field of money laundering.
Israel has recognized the necessity to fight money laundering as part of its strategy of fighting organized crime, terrorism and drug cartels, by accepting recommendation 9 of the FATF (Financial Action Task Force), which led to the stipulation and legislation of the ways reporting the transferring of money in and out of Israel.
| a) | Declaration system: The key characteristics of a declaration system are as follows. All persons making a physical cross-border transportation of currency or bearer negotiable instruments, which are of a value exceeding a pre-set, maximum threshold of EUR/USD 15,000, are required to submit a truthful declaration to the designated competent authorities. Countries that implement a declaration system should ensure that the pre-set threshold is sufficiently low to meet the objectives of Special Recommendation IX. | |
| b) | Disclosure system: The key characteristics of a disclosure system are as follows. All persons making a physical cross-border transportation of currency or bearer negotiable instruments are required to make a truthful disclosure to the designated competent authorities upon request. Countries that implement a disclosure system should ensure that the designated competent authorities can make their inquiries on a targeted basis, based on intelligence or suspicion, or on a random basis.” | |
“9. Countries may meet their obligations under Special Recommendation IX and this Interpretative Note by implementing one of the following types of systems; however, countries do not have to use the same type of system for incoming and outgoing cross-border transportation of currency or bearer negotiable instrument:
According to the anti money laundering law – 2000 chapter 4, (hereinafter: “the law”), there are strict rules regarding the transferring of funds in and out of Israel. Those restrictions apply to cash; cashier’s check and traveler’s checks whose value exceeds 100,000 NIS. (the duty also applies to anyone transferring that amount via post or any other methods. The body which is in charge of enforcing the law is the costumes administration.
Article 9, sub paragraph 4(1) to the law stipulates that the reporting duty shall not apply to the following:
- Bank of Israel
- A Banking Corporation
- A person which brings money in or out of Israel via banking corporation or via entity that the minister of finance consulting with the minister of public security, has authorized it in a directive.
It should be stated that in case of an individual withdrawing 100,000 NIS from his bank and wishes to carry it with him outside of Israel that action should be reported twice, once by the Bank according to article 7 to the law and once more by the individual who is required to do so according to article 9 to the law.
The penalty for failing to report according to the law will result in imprisonment of 6 months or a fine according to article 61(a)(4) to the penal code or 10 times the unreported amount according to the higher amount.
Ways to report – the way one should report is by using Customs form 84.