US embassy cable - 05TELAVIV6872

S E C R E T SECTION 01 OF 02 TEL AVIV 006872 
 
SIPDIS 
 
E.O. 12958: DECL: 10/26/2015 
TAGS: PARM, PREL, MNUC, IS, COUNTERTERRORISM 
SUBJECT: ISRAEL ON COMBATING WMD PROLIFERATION VIA 
FINANCIAL INTELLIGENCE UNITS 
 
REF: STATE 158275 
 
Classified By: Political Counselor Norm Olsen.  Reasons: 1.4 (b, d). 
 
1. (C) Responding to reftel demarche, Israeli MFA 
Nonproliferation and Counterterrorism Department Director 
Yehuda Yaakov told poloff December 4 that: 
 
-- Israel continues to be interested in active participation 
in the Proliferation Security Initiative (Proliferation 
Security Initiative) and other means to counter WMD 
proliferation; 
 
-- The MFA held November 9 its first inter-agency 
"brainstorming" session on PSI and using Financial 
Intelligence Units (FIUs) to combat WMD proliferation; 
 
-- The MFA intends to hold more such meetings in the future, 
and will want to take advantage of the results of 
expert-level U.S.-Israel counterproliferation talks scheduled 
to take place in Washington on December 14.  After those 
talks, Yaakov and MFA Arms Control Director Alon Bar intend 
to discuss a number of issues with USG officials on December 
15, including Israel's role in PSI and counterterrorism (CT) 
issues. 
 
2. (C) Regarding Israel's national financial controls, Yaakov 
said "unofficially" that it remains unclear whether current 
Israeli legislation facilitates FIU involvement in the WMD 
area.  The MFA is urging further interagency exploration of 
this issue, but Yaakov cautioned that this will take time and 
might lead to an effort to modify existing CT legislation. 
 
3. (U) The following laws and regulations provide the GOI 
with the legal tools to combat money laundering and terror 
finance: 
 
-- The Prohibition on Money Laundering Law of August 2000, 
which (a) covers money laundering offenses; (b) identifies 
reporting institutions and describes their duties; (c) 
established the Israel Money Laundering and Terror Financing 
Prohibition Authority (IMPA); and (d) defines offenses. 
 
-- The Combating Criminal Organization Law, which (a) defines 
a criminal organization; (b) describes criminal organization 
offenses; and (c) specifies felony and other offenses. 
 
-- The Prohibition on Financing of Terror Law of October 
2005, which (a) defines a terror organization and activist; 
(b) explains how Israel's Ministerial Committee can declare a 
person or organization as a terrorist entity; and (c) defines 
terror finance offenses (to include rewarding the 
perpetrators of terrorist acts, and failing to report 
suspicious transactions). 
 
4. (C) Israel's FIU -- Israel Money Laundering and Terror 
Financing Prohibition Authority (IMPA) -- is responsible for 
countering money laundering and terror finance under the 
Prohibition on Money Laundering Law (5760-2000) passed in 
August 2000.  IMPA supports law enforcement investigative 
efforts and fosters interagency dialogue and international 
cooperation against domestic and international money 
laundering and terror finance-related crimes.  IMPA manages a 
secure database of information provided by banks, insurance 
companies and agents, provident funds, portfolio managers, 
stock brokers currency service providers, customs and 
Israel's tax authority, and other GOI and public open sources 
of information.  The following transactions are required by 
law to be reported to IMPA: 
 
-- cash transactions of 50,000 NIS (app. USD 10,000) or more; 
-- international transfers of 1 million NIS (app. USD 
200,000) or more; 
-- Money service business (MSB) transactions of 50,000 NIS 
(app. USD 10,000) or more; 
-- customs declarations of 80,000 NIS (app. USD 16,000) or 
more; and 
-- any other unusual activity. 
 
5. (C) On its own initiative and in response to requests, 
IMPA shares information and analysis with Israeli law 
enforcement agencies (e.g., the Israeli National Police, 
Israeli Security Agency (Shin Bet) and Israel's tax 
authority) and other FIUs worldwide.  GOI officials say that 
IMPA's investigative and information sharing bodies employ a 
"filtering system" that balances the right to privacy with 
the need for information, and promotes a climate of trust 
between financial institutions and IMPA.  IMPA also provides 
Israeli policy-makers with strategic analyses of domestic and 
international trends in money laundering and terror finance 
crimes. 
 
6. (S) GOI officials say the Palestinian Authority (PA) does 
not have its own equivalent to IMPA, and claim that money 
laundering and terror finance activities occur in the 
PA-controlled West Bank and Gaza Strip.  The GOI monitors 
these activities through the Office of the Coordinator for 
the Occupied Territories (COGAT) and military intelligence 
assets.  The Palestinian Monetary Authority (PMA) has a 
financial follow-up unit (FFU), which it considers the 
equivalent of an FIU.  However, that unit does not yet have 
the legal authority to freeze or confiscate funds, though the 
PMA is drafting a presidential decree to give it such 
authority.  The U.S. Treasury Department, USAID and the 
British government are planning to work jointly with the PMA 
to develop the technical capabilities of its FFU.  GOI 
officials say that they would be willing to work with a PA 
FIU. 
 
7. (U) This cable was cleared with Consulate General 
Jerusalem. 
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