the Knesset Constitution, Law and Justice Committee will discuss expanding the Prohibition of Money Laundering Ordinance to impose numerous responsibilities and obligations on money changers, or “currency trading providers” as they are officially called…
The new ordinance requires money changers to fill out the details of customers making large transactions and to make a more thorough process for regular customers. Money changers with a turnover larger than NIS 3 million will have to set up a computer database to keep customers’ details. The directive defines a regular customer as someone who makes at least NIS 200,000 in cumulative transactions over a six-month period, or in a single deal.
A money changer will have to carry out an in-depth review of such a regular customer, depending on his risk. The customer will fill out forms stating his personal details and state why he chose to convert money at this money changer, among other financial questions. The customer will also be asked if he has a public function, whether he is acting on another person’s behalf, whether a bank refused to offer his service for reasons relating to money laundering, the transaction he wishes to make, and the source of the money. He must also declare that he has provided correct information and will be liable to criminal proceedings if he has not done so.
Customers who are not classified as regular customers will also have to provide identification for transactions larger than NIS 10,000 or a non-cash transaction larger than NIS 50,000. If more than NIS 5,000 is being transferred overseas, the identification process will include the identities both the sender and the recipient.
The ordinance places considerable responsibilities on the money changer. “He must verify the identity of the customer by reasonable means to obtain relevant information or data from a reliable source,” states the ordinance. In addition, at least once a year, a money changer must review his information about regular customers to verify that it is current and that the customers’ transactions conform to their routine activity under the relationship.
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