Israel to work with France against money laundering, terror financing

Paris — On Oct. 20, Israel’s Money Laundering and Terror Financing Prohibition Authority (IMPA) and France’s Intelligence and Action Against Clandestine Financial Circuits (TRACFIN) signed a memorandum of understanding (MOU) for better, deeper cooperation against money laundering.

The two countries signed in 2004 a basic agreement to cooperate in this field, but recent developments encouraged the parties to reach a more detailed MOU that covers technological and other changes in this crime field. Hence, representatives of both agencies will meet regularly to discuss developments concerning money laundering threats and terrorist financing, share information on a case-to-case basis and cooperate on analyzing the techniques used by criminals.

Last August, Israel arrested three suspects as part of an investigation into large-scale fraud against the French treasury and the theft and laundering of millions of euros with cryptocurrencies.

IMPA was established two decades ago. Since then, Israel has signed some 80 agreements with foreign countries to work together to thwart money laundering and terror financing.

In March 2021, for instance, Israel and the United Arab Emirates signed an MOU to promote the exchange of financial intelligence between the relevant authorities. Sources at IMPA explained at the time that Israel considers cooperation with the Emirates to be of paramount importance. The normalization of diplomatic ties between the two countries created tremendous economic opportunities. Thus, both Jerusalem and Abu Dhabi were adamant that these new economic and trade relations won’t open the door to any financial criminal or terror activities. Sources at the Justice Ministry told Al-Monitor this week that Israel is currently advancing similar agreements with other Abraham Accord countries.

Money laundering threats in general, and in Israel in particular, have changed and developed considerably in recent years. The annual report issued by IMPA last September indicates a significant rise in criminal cases involving external financial services. In other words, Israeli criminal organizations increasingly turn to darknet service providers to help them with money laundering. The number of online financial crimes is rising constantly, and so is the number of thefts of virtual assets, including digital coins. Of note, 18.7% of money-laundering activities in Israel in 2021 were international activities; 19% of all money-laundering activities last year were attributed to crime organizations, and 14.6% served to finance terror groups and actions. The report also says that the Israeli delegation to FATF assisted a joint international research project on the financing of ethnically/racist-motivated terrorism.

Thirty years ago, Israel was considered a safe haven for money laundering, especially because of Jews linked with international criminal organizations who used their rights to become Israeli citizens under the Israeli Law of Return. A June 2000 report by the Financial Action Task Force (FATF) listed 15 countries regarded by the organization as uncooperative in the fight against money laundering  — Israel included. 

The establishment of IMPA shortly after the publication of the FATF blacklist proved to be a turning point for Israel. IMPA is a relatively young entity. Still, in the international perspective, it is considered an extremely professional and efficient agency. In fact, in 2018 Israel became the 36th member state to join the FATF, following the successful completion of its mutual evaluation. More so, the FATF mutual evaluation report found that Israel was one of the top three countries with the most effective anti-money laundering and counterterror financing regimes.