FATF grants Israel observer status

Dr. Shlomit Wagman-Ratner
Dr. Shlomit Wagman-Ratner

Money Laundering Authority chief Shlomit Wagman-Ratner: This reflects Israel's contribution to the fight against money laundering and terror financing.

The Financial Action Task Force (FATF) on money laundering has announced that Israel will join the organization as an observer starting June 2016.

The admission marks a significant step in the application process for joining the prestigious group, which sets the global rules for combating money laundering and terror financing.

Joining the organization will allow Israel to participate in shaping global policy and position it as one of the leading countries in the international fight against money laundering and terror financing. The announcement will also support the Israeli economy by providing the country an unofficial stamp of approval for its financial sector - which will improve ties between Israel and other countries involved in the financial and legal battle.

Israel’s Money Laundering and Terror Financing Prohibition Authority chief Dr. Shlomit Wagman-Ratner represented the country at the hearings ahead of its admission as an observer. On Sunday, she said: "The decision to accept Israel into the FATF - an important, prestigious, and influential group - reflects the contribution of Israel to the global fight against money laundering and terror financing and signals that Israel is a leading country with expertise in the sector.

"The decision testifies to the immense efforts undertaken by a wide variety of bodies and officials in Israel - enforcement officials, financial regulators, the Ministry of Justice, and the Money Laundering and Terror Financing Prohibition Authority - in order to bolster the anti-money laundering system and match it to international recommendations and regulations.

"At the same time, Israel must quickly address the remaining deficits in governance in order to pass the international inspection - part of the conditions for obtaining full admission to the organization."

The FATF is an international taskforce established in 1989 by the G7 countries. It leads the fight against money laundering and terror financing on a national and international level by setting standards for countries. The countries that do not meet the standards are included in a "blacklist". The organization comprises 34 countries and two regional groups.

Israel has been conducting a diplomatic campaign since 2012 to join the group - first under then anti-money laundering chief Paul Landes and later under Dr. Wagman-Ratner, in close cooperation with the Ministry of Foreign Affairs and Ministry of Finance.

In 2014, the organization decided - in an unusual step - to allow a limited number of countries into its ranks; after an intense selection process, it agreed to consider Israel as a candidate.

The announcement of Israel joining as an observer followed a visit by an FATF delegation in November of last year. The high-powered delegation was led by FATF president Je-Yoon Shin from South Korea, executive secretary David Lewis from the UK, and senior representatives from a number of the organization's member countries, including the UK, Spain, and Italy.

Last week, the organization discussed Israel at a plenary meeting during which Israel was praised for its intense commitment to fighting money laundering and terror financing as well as its membership in other relevant international bodies like the Council of Europe’s Moneyval and the Egmont Group.

The delegation members told the plenary meeting of their positive impression of the approach of Minister of Justice Ayelet Shaked, who said Israel had prioritized its activities in this area because it was vital to the security of the state.

However, the organization also made clear that, in order to be accepted as a full member, Israel needed to pass a comprehensive international inspection; to that end, it needed to fix significant governance shortcomings, including improving identification requirements at financial institutions and expanding regulation to additional sectors.

At the end of the session, the organization unanimously accepted Israel as an observer.

Published by Globes [online], Israel business news - www.globes-online.com - on February 22, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

Dr. Shlomit Wagman-Ratner
Dr. Shlomit Wagman-Ratner
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