Banks required to report PA transactions
Credit companies, banks will be required to report transfer of any sums reaching over NIS 5,000 (USD 1,800) to and from residents, businesses in Gaza Strip
The banks are also required to halt any transaction made by "suspicious" parties (in accordance with information provided by the Shin Bet and international officials).
In exchange for adhering to this procedure the government will offer banks immunity for their organization and its directors from criminal offense charges pertaining to the transfer or laundering of money financing terror.
The proposal will be brought before the Knesset Committee for Constitution, Law and Justice next week (Oct. 18).
Several months ago Hapoalim and Discount banks announced that they were both severing their business ties to Palestinian and other Arab banks. The reason: The drafting of laws which, if passed, would turn virtually any financial activity into a potential criminal lawsuit.
The two banks are essentially the sole channels through which Palestinian and Arab banks conduct all of their NIS transactions.
The government feared that such a unilateral move would collapse the Palestinian economy, where the Israeli shekel is the most common currency (along with the Jordanian Dinar, which is used much less frequently in business deals).
The new law would set a new legal system, designed to ease the dealings of banks and credit companies with Palestinian and Arab banks.
If the banks do indeed examine every transaction against the information provided to them by the security agencies and report any transactions of over NIS 5,000 – they will be considered as having operated in accordance with the law.
The law applies not only to Palestinian outfits but also those in bordering countries, including Egypt and Jordan.
The law was drafted by the Bank of Israel with the consent of the Justice, Finance and Internal Affairs Ministries.
The law suggests that the ban on transactions to the Palestinian Authority would only be in effect so long as it was under Hamas rule (Fatah is not defined as a terror organization).
