Section 2A (a) of the order further states that:
"A banking corporation shall not open an account and perform an action that is not registered in the account, without identifying the recipient of the service and without carrying out a 'know-you-who procedure' in respect of him according to his degree of risk of money laundering and terrorist financing; In this regard, a "process of knowing the customer" - inter alia, clarification of the source of the funds, his occupation, the purpose of opening the account or carrying out the action, the planned activity in the account, and if the service applicant was refused to provide services in a banking corporation for reasons related to the prohibition of money laundering and terrorist financing; regarding a foreign resident, also clarifying his connection to Israel and whether he is a foreign public figure; Regarding someone who is a business owner - also the type of his business; A banking corporation will make records of these details."
In addition, Section 2a(b) stipulates that the customer's records must be updated during the ongoing inspection, and that, if doubt arises as to the identity of the service recipient or the authenticity of the identification documents, the customer recognition process must be carried out once again.
These actions are intended to obtain as many details as possible about the Client and the nature of his activity, in a way that will enable the identification of "red lights" that can lead to the classification of the Client as a Client at Risk and an assessment of the inherent risk involved in the Client and his activity.
- The order, which establishes the obligation to know the customer, refers to the rules as set out by the Supervisor of Banks in Procedure 411, and this, in accordance with the wording of this directive published in November 2016, comes into effect on October 7, 2016 of Amendment 14 to the Prohibition of Money Laundering Law, and in the framework of which additional tax offenses were added and defined as source offenses (in parentheses, I will note that this provision was amended on January 1, 2018, however, Since the events that are the subject of the claim precede the date of this amendment, I will refer below to the provision prior to its amendment).
As part of the 411 procedure, it was determined that the banking corporation is required to establish a policy for classifying groups of high-risk customers, and that factors such as: "clarification about the purpose of opening the account, the circumstances of opening the account and the planned activity therein, the customer's occupation, and whether he holds a senior public position, the source of his wealth/income and the source of the funds that are supposed to be deposited in the account, his connection to the location of the banking corporation's branch, Whether the customer was refused services at a banking corporation for reasons related to the prohibition of money laundering and terrorist financing, inquiring about accounts related to the client's account, as well as any other details necessary to understand the nature of the account holder's actions;"