US embassy cable - 05TELAVIV4145

S E C R E T SECTION 01 OF 02 TEL AVIV 004145 
 
SIPDIS 
 
E.O. 12958: DECL: 06/30/2015 
TAGS: PREL, PTER, EFIN, COUNTERTERRORISM 
SUBJECT: U.S. TREASURY RECEIVES GOI BRIEF ON MONEY 
LAUNDERING AND TERROR FINANCE 
 
REF: A. TEL AVIV 1637 
     B. TEL AVIV 3223 
 
Classified By: Ambassador Daniel C. Kurtzer for reasons 1.4 (b) and (d) 
. 
 
1. (C) SUMMARY:  Israeli officials briefed U.S. Treasury 
advisor Szubin and Econoff on GOI efforts against money 
laundering and terror finance.  The police officials cited 
successes in fighting money launderers, seizing millions of 
dollars, but also noted difficulties in cooperation and 
information sharing between the police and the Israel Money 
Laundering Prohibition Authority (IMPA), which monitors 
financial institutions.  At the Ministry of Justice, IMPA 
officials responsible for fighting money laundering gave a 
presentation on the overall structure and mission of their 
organization and how this organization turns raw financial 
data into intelligence to combat money laundering.  At the 
MFA, counterterrorism officials talked about GOI lobbying 
efforts in European capitals to have Hizbollah designated a 
terrorist organization and to seek greater cooperation with 
the Europeans against Islamic charities involved in funding 
terror groups.  END SUMMARY. 
 
---------------------- 
Israel National Police 
---------------------- 
 
2. (C) On June 28, Adam Szubin, senior advisor in the Office 
of Terrorism and Financial Intelligence in the Department of 
Treasury accompanied by Econoff, met with Israel National 
Police (INP) officials Yehuda Twersky and On Tobi from the 
Special Operations Department (SOD) to discuss INP efforts in 
combating money laundering and organized crime.  Twersky told 
Szubin that the SOD falls under the intelligence branch which 
deals mainly in collecting information allowing law 
enforcement officials to go after individuals who break the 
law.  Twersky said efforts to fight money laundering have 
been successful, citing the March 2005 case against Bank 
Hapoalim (Ref A) and other ongoing cases.  He touted the 
recent seizure of NIS 35 million against Bank Hapoalim 
clients.  In Hapoalim and other cases, Twersky noted that the 
most promising strategies involved pursuing financial 
institutions for failure to comply with reporting 
requirements. 
 
3. (S) With  respect to IMPA, Twersky said that the INP has 
relied more on its own investigative techniques, primarily 
human intelligence, to uncover money laundering offenses.  He 
touched on sentencing against those involved in money 
laundering, indicating that Israeli sentences do not mirror 
sentencing patterns in the U.S. which are much more stringent 
(Ref B).  He next talked about allocation of assets forfeited 
from money-laundering offenses, which are divided among the 
Ministry of Justice, the INP and the prosecutor's office.  He 
said law enforcement authorities focus on going after the 
institutions rather then individuals, and this "sets the 
example." 
 
4. (S) Twersky shifted his focus to the IMPA, which collects 
information from financial institutions in order to locate 
suspicious or "irregular" account activities.  He said the 
working dynamics between the INP and the IMPA are not very 
productive.  There is a question of the added value that IMPA 
brings to the overall law enforcement picture.  The IMPA does 
not have any law enforcement capabilities and provides only 
researched data and analysis.  Twersky also cited conflicts 
between IMPA's pursuit of administration fines against 
targets and criminal and civil forfeiture. 
 
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Israel Money Laundering Prohibition Authority 
--------------------------------------------- 
 
5. (C) On June 29, Szubin and Econoff met with IMPA 
officials, Zefanya Barzilay and Gil Bareket.  These officials 
gave a brief on the mission and structure of the IMPA, which 
is the Israeli Financial Intelligence Unit (FIU).  The IMPA 
mission is to support law enforcement investigative efforts 
and foster inter-agency and global cooperation against 
domestic and international money laundering and terror 
finance related crimes.  The GOI law which provides the 
mandate for fighting money-laundering is called the 
Prohibition on Money Laundering Law (PMLL), 5760-2000. 
 
6. (S) The IMPA provides case support information to 
requesting customers.  It functions by receiving data from 
banks, insurance companies, portfolio managers, stock 
brokers, currency service providers, customs, Internal 
Revenue Service (IRS) and others dealing with financial 
transactions.  It processes this information and provides 
intelligence to the Israel tax authorities, the INP, and 
other foreign FIU's.  Flow of information and data collection 
is methodical, said Bareket.  Financial institutions also 
have obligatory periodic and random reporting requirements to 
the IMPA, said Bareket, which eases the collection process. 
 
7. (S) The IMPA officials also touched on the administrative 
aspects of their organization.  Barzilay discussed the 
"filtering system, in which IMPA passes along only those 
investigated reports that warrant further investigation." 
This system provides a balance between privacy and the need 
to effectively combat money-laundering and terror finance. 
The IMPA disseminates valuable information to law enforcement 
authorities to add significant value to potential 
investigations.  This system also promotes a "climate of 
trust" between financial institutions and the IMPA. 
 
8. (C) The brief also covered the IMPA, leadership, general 
staff and departments.  The IMPA organization consists of a 
general director with two senior assistants.  The legal and 
information technology offices are under the senior 
administrative assistant.  The collection, research and 
control offices fall under the general director's primary 
assistant.  At the lower echelon, there are 23 employees, 15 
to 30 outside technical experts and a fulltime technology and 
intelligence consultant.  These officials are professionals, 
experienced in the area's of investigation, intelligence, 
economics, criminal justice, and accounting.  There are four 
departments: collection and compliance, research and 
analysis, legal office, and information, technology and 
communication. 
 
9. (S) In the information technology section, the system is 
currently undergoing upgrades, which will refine the 
collection and processing of raw data.  One feature of this 
upgrade is an on-line "real time" secure collection system. 
This will provide the GOI officials the most recent picture 
of account activity.  Another upgrade feature is a secure 
gateway to the INP, and the securities administration.  A 
comprehensive analysts' workbook and research toolbox and a 
multi-lingual free text search with Data Analysis and 
Contextual Processing is also part of the information 
technology upgrade. 
 
10. (C) There are also legal tools in the combat against 
money-laundering, and terror finance.  The Prohibition on 
Money Laundering Law (PMLL), which was passed on August of 
2000, Combating Criminal Organization Law (CCOL), and the 
Prohibition on Financing of Terror Law (PFTL), which was 
passed on January of 2005,  gave GOI authorities power to 
execute their duties. 
 
--------------------------- 
Ministry of Foreign Affairs 
--------------------------- 
 
11. (S) Szubin accompanied by Econoff met with Ministry of 
Foreign Affairs Head of the Counterterrorism Department 
Yehuda Yaakov, and MFA official Benny Sharoni.  Yaakov said 
Islamic charities in Europe remain a major concern for the 
GOI, citing CBSP, Interpal, the Union of the Good and others 
who provide financial support for terror groups such as Hamas 
and Hizbollah.  Yaakov told Szubin he noted a more positive 
attitude of "transparency" in recent meetings with French 
counterparts, and would continue to press requests regarding 
cooperation against Islamic charities who have links to 
terror finance.  He said this was a "surprising step" in the 
historical relationship between the two countries, which has 
not been rosy.  He also noted some operational difficulties 
experienced by CBSP and Interpal, although he did not know 
why. 
 
12. (S) Yaakov said the GOI is also pushing for European 
nations to take legal measures against those who use 
incitement in support of terrorism.  He also expressed 
concerns about the use of the internet by terrorists and 
their supporters.  Finally, he said that further thought by 
the GOI was required to respond both tactically and 
strategically to recent developments in which both Hamas and 
Hizbollah are entering the political stage more forcefully. 
 
13. (U) This cable was cleared by Treasury Advisor Szubin. 
 
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