The Bank of Israel said on Wednesday it would look into helping immigrants from the former Soviet Union gain access to their funds currently in Russia but stressed it would not allow banks to circumvent international sanctions.
Finance Minister Avigdor Liberman, born in Moldova, on Tuesday held a meeting with the finance ministry, central bank, and banking officials on the issue, asking for regulatory relief that would enable Israeli banks to approve bank transfers from Russia to citizens, not under sanctions.
Sanctions imposed by Western governments on Moscow over the Ukraine conflict have made it difficult for Russians living abroad to obtain funds.
The Bank of Israel said it was aware of the sensitive nature and importance of the issue and was acting within legal and regulatory frameworks.
Still, "neither the Bank of Israel nor the banking system will enable the bypassing of international sanctions in the context of money from Russia or from any other source", the central bank said in statement to Reuters.
It said that "each step that will be examined in order to help citizens who are having difficulty transferring their money to the system, whether pension payments or property for the purposes of immigration, will be subject to meeting and complying with the sanctions imposed on this matter".
A finance ministry source said Liberman, who draws his political support mainly from former Soviet Union immigrants, was not looking to bypass sanctions but rather help those not impacted by them.
"Not all Russian banks are under sanctions, just a few of them. So we asked the Bank of Israel for documents that explain what banks in Russia can transfer money to Israeli citizens," the source said.
The source said that in Israel, home to more than one million immigrants from former Soviet states, there are 57,000 retirees who receive Russian pensions, another 30,000 new immigrants, as well as businessmen unable to transfer funds to Israel - as living costs soar.
Last month the central bank sent a letter to executives of Israeli banks and credit card companies, warning that circumventing sanctions imposed by foreign countries "exposes banks to significant risks", such as compliance, money laundering, terrorist financing, and legal risks.
However, it left the banks to establish policies and procedures regarding international sanctions.