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Americans barred from holding securities' accounts in Israel
Washington steps up fight against tax evasion by US citizens living overseas. Checking, saving accounts to remain unaffected; experts say directive detrimental to local capital market
Israeli banks will no longer be able to provide US citizens living in Israel with securities' account services, Ynet learned Thursday.
No limitations were placed on checking or savings accounts; but the Washington directive, meant to battle tax evasion, will force the banks' American clients – most of whom have dual citizenship – to either liquidate their assets or transfer them to other financial institutions.
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Bank compliance with the directive is an internal decision, but Ynet sources say Bank Hapoalim has already complied with the order, giving all relevant clients three months to find a solution.
A Bank Leumi statement said that "the bank's business decisions, as pertaining to its clients, comply with legal standards, which are subjected to the occasional, various legislative and regulatory changes."
Discount Bank is said to still be reviewing the order.
Senior sources in the banking system told Ynet all major banks are expected to follow in Hapolaim's footsteps, since failure to implement the IRS directive may hinder their dealings with US banks.
Nevertheless, capital market sources believe implementing the order may rattle the market in general and particularly the banking system: Securities accounts held in Israel are believed to amount to billions of dollars, and taking them out of the banks means significant losses, which may impact stocks, bonds and dollar trading.
The US Internal Revenue Service issued similar orders to several countries worldwide. The Bank of Israel, Tel Aviv Stock Exchange and Banking Association of Israel refused comment.
The directive stems from an IRS crackdown on tax evasion and money laundering, especially by American citizens living outside of the US.
