(k) The Bank's ability to scan and identify transactions that may be related to terrorist financing and proliferation and the manner in which lists of terrorist organizations and operatives declared by other entities will be used, such as the United Nations Sanctions Committee (UNSCR) or the U.S. Department of the Treasury (OFAC);". [emphasis in underline is not in the original]
- In other words, the banks were required to establish policies and procedures in relation to entities that were sanctioned by international bodies.
- In May 2022, the plaintiff contacted the Supervisor of Banks and complained about the bank's refusal to transfer the two transfers to his account. The Supervisor of Banks examined the matter and determined that there was no defect in the Bank's conduct, as stated (hereinafter: "the Supervisor of Banks' Response"):
"In accordance with the provisions of Proper Conduct of Banking 411 and as part of the management of compliance risks, the banking corporations were required to establish a policy in the field of prohibiting money laundering and prohibiting the financing of terrorism, which would include, among other things, reference to the use of lists of entities declared by the Sanctions Committee of certain entities outside of Israel.
Accordingly, Mizrahi-Tefahot Bank has established a policy on the prohibition of money laundering and the prohibition of terrorist financing, which also includes an absolute prohibition on allowing ongoing banking and business activity with entities that are included in sanctions lists published by certain entities outside of Israel, including the United Nations Sanctions Committee (UNSCCR), the United States Department of the Treasury (OFAC), the European Union (EU), and the United Kingdom (UK) government.
An inquiry we conducted with Mizrahi-Tefahot Bank indicates that at the time of the transfer of the funds, the transferring banks, ALFA-BANK and SBERBANK, had already entered the British sanctions lists as early as 01.03.2022, but since the transfer passed through an American correspondent, it was approved for transfer by the transferring bank. At the same time, in accordance with the guidelines of the various sanctions lists that the bank is adopting, which include, inter alia, the freezing of assets, the bank is unable at this stage to return the funds to the sender on the one hand and/or to credit your account on the other hand, and the receipts are in a designated transfer account of the bank.