Fri, Mar 21th, 2014

http://failedmessiah.typepad.com/failed_messiahcom/2014/03/haredim-opposed-new-anti-money-laundering-regulations-567.html

Israeli money changers will soon face tougher reporting requirements despite haredi opposition, Ha’aretz reported.

The Knesset’s Constitution and Law Committee approved regulations yesterday that are meant to prevent money changers from being used  to launder money.

Haredi Members of Knesset opposed the changes and objected to the committee’s vote on procedural grounds, which forced the committee to take a revote two hours later. The result of the second vote was the same as the first: 5 MKs voted for the new regulations; 4 MKs voted against.

Starting in nine months, money changers will be required to:

• Report large transactions to the government’s Anti-Money Laundering Authority, including the name and other significant details of the customers making them.

• Implement a know your customer policy meant to ensure that customers are not connected to loan sharks or terrorist groups.

• Report all international transactions in excess of 5,000 shekels ($1,445) without being required reporting the identity of the customer.

• Report all transactions in excess of 10,000 shekels ($2,890) in cash or 50,000 shekels ($14,450) in any form.

• Identify all customers or beneficiaries of foreign currency transactions whose total business exceeds 200,000 shekels ($57,800) in any six-month period, along with identifying the source of the funds being changed. 

• Report any suspicious transactions.

Until now, similar regulations only applied to banks, leaving a tremendous hole in enforcement which was exploited by criminal organizations, terror groups – and by haredim, “many of whose members engage heavily in off-the-books transactions to avoid taxes,” Ha’aretz reported.

Combined with changes that are planned for tax regulations, the new money changing regulations will “strike a blow” at the haredi community, the paper added.
 
Experts reportedly say money changers are important conduits for organized crime to launder money. They also reportedly say many money changers are actually owned by criminal groups.

Money changers opposed the changes.

“The problem today is not about collecting information on customers. The problem is the lack of enforcement of existing regulations. The authority knows very well that side by side with regulated money changers, a big industry of unsupervised changers is operating,” Adi Barkai, an attorney who represents money changers, said.

Fifteen US haredim, most of whom are rabbis, were arrested in 2009 and on money laundering and related charges. The rabbis used their charities to launder money, which was changed to cash in Israel and then kicked back to the original ‘donor’ minus a service fee for the rabbis. Most pleaded guilty.