The Bank of Israel committee on sanctions against banking corporations regarding the prohibition on money laundering has fined six banks for violating clauses of the Prohibition on Money Laundering Law (5760-2000).
First International Bank of Israel (TASE:FTIN1; FTIN5) was fined NIS 1 million. Its subsidiary, Poale Agudat Israel Bank, was fined NIS 750,000. Bank Leumi (TASE:LUMI) and Discount Mortgage Bank were each fined NIS 350,000, and Israel Discount Bank (TASE:DSCT) was fined NIS 100,000.
The committee warned Mercantile Discount Bank, Union Bank of Israel (TASE:UNON), Arab Israel Bank (of the Bank Leumi group), Bank Otsar Hahayal and Israel Continental Bank (both of the Bank Hapoalim (LSE:BKHD; TASE:POLI) group), and Bank Adanim Mortgages and Loans (of the United Mizrahi Bank (TASE:MZRH) group).
The committee discussed Bank Hapoalim, Mizrahi Bank, Investec Israel (TASE:INSI) and its trusteeship company several months ago. The committee warned these banks, mainly for violations and deficiencies during the first year after the law came into effect.
The fines and warnings were imposed after thorough audits by Banking Supervision Department teams who examined the implementation of the Prohibition on Money Laundering Law during 2003.
The Bank of Israel stated today that in most cases, the committee only warned the bank, rather than imposing a fine, mainly because the violations occurred shortly after the law and regulations came into effect. Bank that procrastinated implementing the law, and where the audits discovered many faults, were fined, even though most of the faults were subsequently rectified.
The banks have the right to appeal the committee's decisions to a magistrates court within 30 days of receiving the decisions on April 4.
Published by Globes [online] - www.globes.co.il - on April 14, 2004