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The Jerusalem Post, Internet News Article, June 23rd, 2000: 

Israel named among top money-laundering centers

By Tal Muscal


JERUSALEM (June 23) - Israel is one of the 15 most likely centers for money laundering, the Paris-based Financial Action Task Force on Money Laundering, an international body established by the G-7, said yesterday.

Internal Security Ministry spokesman Moshe Debi stated that the Justice Ministry is already preparing legislation to fight the phenomenon. "We are working together with the Justice Ministry, Bank of Israel, Israel Police and the Customs Authority," he said. "As long as there is no legislation we can't take action."

The listed countries or territories are: Bahamas, the Cayman Islands, Panama, Dominica, St. Kitts and Nevis, Saint Vincent and the Grenadines, the Cook Islands, the Marshall Islands, Nauru, Niue, the Philippines, Russia, Liechtenstein, Israel, and Lebanon.

Six territories and countries have pledged to eliminate their "harmful" tax practices by the end of 2005: Bermuda, the Cayman Islands, Cyprus, Malta, Mauritius, and San Marino.

In December 1999, Cmdr. Yossi Sedbon of the Israel Police Investigations Division warned of Israel turning into an international center for money laundering. "Israel is a promised land for money launderers; it is easy to become a citizen. You need a Jewish mother, but if you don't have one, you can create one," said Sedbon.

He claimed that Israel's strong banking system, high interest rates, rising real estate prices and large diamond exchange offer good channels in which criminal money can be invested.

The list includes countries and territories that fail to comply with task force guidelines for standards of financial regulation, disclosure, enforcement and cooperation to combat crime.

The task force countries, mostly drawn from the 29-member Organization for Economic Cooperation and Development, must now decide on sanctions for the countries on the list.

The release of the list and ensuing action against the identified tax havens is the culmination of a process that started in 1989.

The task force is made up of 26 of the OECD's 29 members, plus the European Commission and the Gulf Cooperation Council.

Three Latin American countries - Argentina, Brazil and Mexico - have observer status.


(Bloomberg contributed to this report.)

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