To our dear clients and friends,
Operation “Swords of Iron” – The Israel Money Laundering and Terror Financing Prohibition Authority (IMPA) calls on the financial sector and the public to increase their vigilance for attempted terror financing in light of the ongoing the war and the state of emergency (October 11, 2023).
IMPA published instructions regarding the duties of immediate control, monitoring, identification, and reporting on terror financing operations in light of the state of emergency declared in the State of Israel. The reporting entities, by virtue of their role as gatekeepers of the financial system in Israel, are a central axis in this struggle.
- IMPA asks the financial sector to be on guard, and asks reporting financial institutions to demonstrate awareness, in particular, for financial activity aimed at financing and supporting terrorist activity and aiding terrorist organizations such as Hamas and the Islamic Jihad (Palestinian Islamic).
- Past experience shows that activities of this kind will often appear under the guise of fundraising campaigns for humanitarian aid through various associations, non-profits, or private initiatives, published through various media channels in Arabic and English, on crowdfunding websites, instant messaging applications and the various social networks, while utilizing a variety of payment options – credit cards, bank deposits, and electronic transfers, as well as advanced payment methods such as cryptocurrency. These campaigns may refer to the Gaza Strip or to the fighting in Gaza, sometimes with involvement of Hamas or Islamic Jihad organizations.
- The guidelines specify that a report of unusual activity must be reported to IMPA along with a parallel report to the Police. Such reports shall include the client’s details, as well as the details of the transaction or operation, with an emphasis on information relating to the financing activity, the platform used, and any additional details known regarding the client’s geographic location. Such reports will also explicitly mention that this is a report concerning the financing of terror, and a parallel complaint shall be filed with the police, while adding the key phrase “Swords of Iron”.
- IMPA identified possible key words to be for monitoring, reporting, and control, such as “terror”, “terrorist organization”, “Hamas”, “Islamic Jihad”, “non-profit organizations”, “crowdfunding”, “social networks”, “cryptocurrency”, “Gaza Strip”, and “Gaza”.
- In accordance with the Prohibition Against Money Laundering Orders and the sanctions regime preventing the financing of terror, IMPA instructs parties engaging with a new client to check them against the official lists. Such checks shall also be conducted when the lists are updated, or when parties conduct specified activities. In these instances, the supervising entity shall compare the name of the client, the beneficiary, the authorized signatory and the controlling owner of the account, as well as the names of the parties to a money transfer activity. Similarly, IMPA advises conducing such checks against the main official international sanctions lists, such as the lists administered by the United States Office of Foreign Asset Control (OFAC), the sanctions office of the United States Department of Treasury.
- IMPA emphasizes that in accordance with Section 32 of the Law on Combating Terrorism, 2016, if the supervising entity has identified a match with the lists, or if suspicion arises that an activity’s purpose is to assist, promote, or finance a severe terror offense or reward the commission of a terror offense, all activities from that client’s account will immediately be suspended, and will be unable to use their assets.
- Finally, IMPA clarifies that in accordance with the provisions of Section 33 of the Law on Combating Terrorism, the supervising entity will report to the Money Laundering Coordination Unit of the Israel Police and provide it with the client’s details as well as the details of the transaction or operation and wait to receive further instructions from the police regarding continued activity.
IMPA calls upon all parties who have relevant information relating to financial activities aimed at financing and supporting terror or assisting terrorist organizations to relay such information immediately via email at Impaoffice@justice.gov.il.
We are at your service for any questions or clarifications via email or phone at 03-370-5000
With regards,
Regulation Department
Shibolet & Co.
The information in this update is provided solely as general information and may not be relied upon for any individual instances without further legal consultation.
