'Follow the money,' says Israel's anti-money laundering chief, as all transactions leave footprints.

Israel's anti-money laundering chief has described her agency's fight against organized crime and terror financing.

Shlomit Wagman, Director General of the Israel Money Laundering and Terrorist Financing Prohibition Authority (IMPA), explained how "follow the money" is her and her unit's simple strategy.


Ms. Wagman went on to say that the IMPA "uses artificial intelligence, algorithms and machine learning to find us the next appropriate investigation"


She also stated that "money has a smell and it leaves the financial equivalent of footprints" regardless of how complicated an investigation may be.


Her agency has made significant progress in transforming Israel from a FATF "blacklisted" country to a leading member of the Task Force.



"“Economic enforcement against them creates an astonishing phenomenon. They are worrying more that we will take their money than they are about sitting in jail, " said Ms Wagman.


In December 2018, halfway through Ms Wagman’s tenure, Israel was admitted to FATF. "This shows a paradigm shift which Israel went through, a transformation," she says.


In an interview with the Jerusalem Post, she added, "Israel is enforcing the laws and getting results."


The two-and-a-half-year process included three-week visits during which they were interviewed by "full range of key officials in the Israeli economy."


Ms Wagman describes how, after working with the police, Shin Bet (Israel's domestic intelligence agency), the Attorney General, the Tax Authority, and other security agencies, "we closed the circle from blacklists to a very high level of effectiveness," she says.


Ms Wagman's agency received Egmont Group of Financial Intelligence Units awards in 2016 and 2021, which she refers to as "the Olympics" for over 160 national financial enforcement agencies.


"if you look at the list of top organised (crime) groups in Israel from a decade ago… we broke them," Ms Wagman said when discussing IMPA's progress in the fight against organized crime.


Ms. Wagman praised IMPA's efforts to combat the recent "Israeli-Arab crime wave." "We went out of the box and started to focus on the special characteristics of Arab criminal organisations" she said.


"In the coming months, tthe conditions for striking will ripen, the police will seize dozens of organized crime organisations," she said, hinting at an upcoming announcement.


Separately, the Israeli anti-money laundering chief explains how terror groups use "extremely difficult to detect" Trade-Based Terrorism Financing (TBTF) as a major method for moving funds.


Ms Wagman highlighted that “all money leaves traces”.


Several police officers would have been needed to snare some of the terrorists' assets for funding, whereas one of Ms Wagman's financial analysts could have done it in an hour.


On November 14th, the authority issued new regulations for cryptocurrencies, Bitcoin, fintech, and other digital financial products.


Israel has joined the group of countries implementing the new FATF standards for digital transactions, according to Ms Wagman.


On October 25th, the authority requested that the private sector collaborate with it so that RegTech (Regulation Technology) is more easily accessible to assist the public and private sectors in dealing with new cyber challenges.


On December 28th, the Ministerial Committee on Legislation approved a bill directing the national asset collection agency to send information to IMPA.


When asked about the future, she mentioned "a second stage: How to use technology to identify and prevent crimes even before they happen."

By fLEXI tEAM