On August 14, 2023, the Israel Securities Authority published the draft Money Laundering Prohibition Order (Identification, reporting and records management obligations of a payment company and a basic initiative to prevent money laundering and terrorist financing), the 2023 Law for public comment.
The order will apply to companies that provide non-bank payment services that will receive a license in accordance with the Law on the Regulation of the Practice of Payment Services and Payment Initiation, 2023 (hereinafter: the “Practice Regulation Law”).
The services that are regulated under the Practice Regulation Law are; Issuance of means of payment, Payment transaction clearing, payment account management, and payment initiation service (basic and advanced).
As part of the Securities Authority’s supervisory powers over this sector in accordance with the Business Regulation Law, it was authorized by virtue of the Money Laundering Prohibition Law, 2000 to be the supervisor of this sector in the aspects of the fight against money laundering and terrorist financing.
According to the principles of the order, the license holder has an obligation to perform a procedure of recognizing the recipient of a service, to register the identification details of the recipient of the service and to verify the details provided to him. Also, in the appropriate cases, the license holder is required to perform a face-to-face identification of the recipient of the service and to conduct ongoing control of the actions of the recipient of the service in terms of money laundering risks.
A license holder is obliged to submit various reports to the Authority for the Prohibition of Money Laundering regarding the activity carried out through him as well as to manage and keep records regarding any financial operation carried out through him.
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