Israel’s Prohibition on Money Laundering Law establishes the foundation of its anti-money laundering (AML) regime and provides mechanisms for enforcing FATF Recommendations, including those underpinning the WTR and the Travel Rule. The law imposes legal duties on financial institutions, service providers and designated non-financial businesses and professions (DNFBPs) to identify customers, retain transaction records, and report suspicious activity.

Customer Identification & Data Collection Obligations

Under Section 7 of the law, financial institutions are prohibited from executing property transactions unless they possess the full identification data of the service recipient. This definition includes beneficiaries and controlling persons, reflecting the WTR's requirement for end-to-end traceability of funds. Identification data must be collected in advance and retained in a format prescribed by the Governor of the Bank of Israel or the relevant supervisory authority.

Wire Transfer Record-Keeping & Reporting

The Law mandates that financial institutions report designated transactions—whether fully or partially executed—and retain records for a period defined in the regulatory orders. These obligations encompass both originator and beneficiary data and apply to wire transfers in both domestic and cross-border contexts. Reports are submitted to a centralised database managed by the Israel Money Laundering and Terror Financing Prohibition Authority (IMPA), which acts as the financial intelligence unit (FIU) under FATF definitions.

Responsibilities of Money Service Businesses

Chapter 4A establishes specific registration, licensing, and record-keeping duties for money service businesses (MSBs). These include currency exchange, cross-border value transfer, and cheque-based services. MSBs must register with the Registrar, submit regular updates, and meet “fit and proper” standards, including criminal background checks. These frameworks closely align with WTR protocols governing money or value transfer service (MVTS) providers.

MSBs are further obliged to document all transactions and customer relationships, ensuring originator and beneficiary information is available for supervisory or enforcement action. The regulator may suspend or revoke registration for non-compliance or violations of AML obligations, thereby maintaining the integrity of wire transfer ecosystems.

Enforcement, Sanctions & Supervisory Oversight

The law grants broad investigatory powers to supervisors, inspectors, and enforcement authorities, including access to records, search and seizure capabilities, and the authority to impose administrative sanctions for breaches of reporting and registration duties. Non-compliance with identification, record-keeping or STR obligations may result in criminal prosecution or substantial fines.

The supervisor also issues detailed instructions governing implementation by regulated entities, many of which reflect FATF-compliant WTR practices, such as transaction monitoring, data validation, and escalation of anomalous transactions.

International Information Sharing

Israel’s law facilitates mutual legal assistance and the cross-border exchange of financial intelligence. Information can be shared with foreign counterparts where property is suspected of being linked to predicate offences or terrorist financing. This supports WTR principles by enabling regulatory continuity across jurisdictions and combatting cross-border illicit finance through information exchange.

Reporting of Cash Movements

The Law includes requirements for declaring the import or export of currency above NIS 50,000 (or lower thresholds at land crossings). Failure to report these movements is a criminal offence and may result in seizure. Although distinct from the wire transfer regime, these provisions reinforce financial transparency at national borders and contribute to a broader framework of value transfer oversight.

Conclusion: WTR Compliance Integration

Israel’s Prohibition on Money Laundering Law forms a robust legal basis for implementing the Wire Transfer Regulations, especially as they relate to customer identification, record-keeping, transaction monitoring and the prevention of anonymity in cross-border fund transfers. Through its obligations for financial institutions, MSBs, and DNFBPs, the Law ensures that all actors in the value transfer chain are subject to AML controls. Its centralised intelligence functions, strong supervisory powers and international cooperation mechanisms further integrate WTR compliance into Israel’s financial security infrastructure, positioning the jurisdiction as fully committed to FATF-aligned practices in wire transfer regulation.