French bank, Credit Lyonnais, has decided to stop accepting checks from correspondent banks in Israel and other companies on the blacklist of the Financial Action Task Force on Money Laundering (FATF).
Earlier this week, another French bank, Soci?t? G?n?rale, announced that it was suspending the processing of checks from correspondent Israeli banks until the investigation into a Franco-Israeli money laundering affair was cleared up. Banking industry sources believe that other French banks may follow suit, leading to possible difficulties in bilateral trade. Israel is on the blacklist of 19 countries and territories considered particularly problematic when it comes to the supervision of money-laundering activities.
The money-laundering affair has caused a storm in France and two senior executives at Soci?t? G?n?rale have been arrested. Several Israeli banks are involved, including Leumi, Israel Discount Bank and the First International Bank of Israel.
Yehuda Sheffer, the head of Israel's anti money-laundering authority, was in France this week. He surely could not have chosen a worse time to try and persuade France's FATF representative that Israel is making an effort to stamp out money laundering. Sheffer was in Paris with the director-general of the Justice Ministry as part of a tour that also included visits to Britain and the U.S. Sheffer studied their actions against money laundering and reported on Israel's progress .
During the last year, Israel has enacted a number of laws to fight money laundering, which has been defined as a criminal offense punishable by up to 10 years in jail.
