"20. Alongside the aforementioned obligation of banking corporations to provide banking services, they are subject to obligations by virtue of the legislation regarding the prohibition of money laundering, which provides significant tools and places banking corporations at the forefront of the fight against money laundering and terrorist financing on the one hand, and establishes sanctions that will be imposed on them in the event of non-compliance with these obligations on the other hand. These obligations derive, inter alia, from the sections of the Prohibition of Money Laundering Law, 5760-2000 ... Details of them can be found in the Prohibition of Money Laundering Order (Obligations to Identify, Report, and Maintain Records of Banking Corporations for the Prevention of Money Laundering and Terrorist Financing), 5761-2001 ... Thus, Sections 2 and 2A of the Order require a bank to conduct procedures of registration, identification and acquaintance with a customer, while the bank must ascertain, among other things, the source of the funds expected to enter the customer's account, what is the planned activity in the account, and whether it has been refused services in a banking corporation in the past for reasons related to the prohibition of money laundering and terrorist financing. Sections 8 and 9 of the order require the bank to report to the competent authorities an activity in the account that may raise suspicions of improper activity.
- Another source of duties imposed on banking corporations in this context are the directives of the Supervisor of Banks... Relevant to our case is the proper banking management procedure (prevention of money laundering and terrorist financing and identification of customers) ... (hereinafter: Procedure 411), which requires the creation of policies and procedures for getting to know and identifying the customer (sections 4-6, 9), and ongoing monitoring of activity in the customer's account (section 14). Among other things, the procedure requires banks to take increased measures to identify high-risk customers (section 15)."
(For a detailed review of the banks' debts in this context, including the tension between them, and judicial review of the banks' decisions, see, for example, Civil Case (Tel Aviv District) 262-04-17 Toiga Online in a Tax Appeal v. Mizrahi Tefahot Bank in a Tax Appeal (December 6, 2018), paragraphs 13-31 (hereinafter: "The Toiga Online Case"); Opening Stimulus (Tel Aviv District) 24089-02-17 If. Don't. G. A. Financing and Investments in a Tax Appeal v. Bank Hapoalim in a Tax Appeal (December 9, 2020) paragraphs 67-87 and more)
- In light of what is necessary for our case, I would like to mention a number of additional specific provisions that appear in the aforementioned Procedure 411.
- Section 30 of Procedure 411 states:
- Section 47(a) of Procedure 411 states as follows:
- Section 50 of Procedure 411 states as follows:
- Appendix C to Procedure 411 is a letter from the Supervisor of Banks dated March 16, 2015, entitled "Risk Management Arising from Cross-Border Activity of Customers", and this is stated in sections 5-10 of this letter:
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