Task force on money laundering grants Israel observer status
The Financial Action Task Force (FATF) on money laundering has announced that Israel will join the organization as an observer starting this June.
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 financing terrorism.
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 financing terrorism. It will also support the local economy by providing an unofficial stamp of approval for the financial sector, which will improve ties between Israel and other countries involved in the financial and legal battle.
Shlomit Wagman-Ratner, the head of the Justice Ministry’s Money Laundering and Terrorism Financing Prohibition Authority, represented the country at the hearings ahead of its admission as an observer.
“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 financing terrorism and signals that Israel is a leading country with expertise in the sector,” she said Sunday. “The decision testifies to the immense efforts undertaken by a wide variety of bodies and officials in Israel – enforcement officials, financial regulators, the Justice Ministry and the Money Laundering and Terrorism Financing Prohibition Authority – 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 to pass the international inspection, [which is] part of the conditions for obtaining full admission to the organization,” Wagman-Ratner said.
The FATF is an international task force established in 1989 by the Group of Seven countries. It leads the fight against money laundering and financing terrorism 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 anti-money-laundering head Paul Landes and later under Wagman-Ratner, in close cooperation with the Foreign Ministry and the Finance Ministry.
In 2014, the organization decided to allow a limited number of countries into its ranks, and it agreed to consider Israel as a candidate.
The announcement of Israel joining as an observer followed a visit by an FATF delegation last November. The 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. Israel was praised for its intense commitment to fighting money laundering and financing terrorism as well as its membership in other relevant international bodies, including 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 Justice Minister 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 to be accepted as a full member, Israel needs to pass a comprehensive international inspection. To that end, it needs 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.