Israel made progress in addressing some of its technical deficiencies - 'minor deficiencies' remain

In the latest FATF follow-up report, Israel has made progress in addressing some of the previously identified technical deficiencies.

In its most recent report, released Tuesday, the Financial Action Task Force revised the ratings of two of its recommendations.


Recommendation 16 relating to wire transfers has been re-rated from partially compliant to largely compliant, and Recommendation 15 relating to new technologies has been deemed largely compliant.


FATF says Israel has taken "a number of actions to strengthen its framework" since its 2018 mutual evaluation assessment.


Israel has "made progress in addressing some of the technical compliance deficiencies" identified in the 2018 MER, according to the watchdog.

Israel has been re-rated as largely compliant on Recommendation 15 because it has met many of the new requirements for VASPs, though the FATF notes that "minor deficiencies remain."


Israel received a partial compliance rating on Recommendation 16 as part of its MER because it "relied on general CDD obligations instead of providing specific originator and beneficiary requirements for wire transfers."


The FATF also found deficiencies in verification requirements, but the country was re-rated as largely compliant on Recommendation 16 after the country largely addressed the deficiencies identified.


FATF has amended two Recommendations (R.2 and R.15) since its previous MER: Recommendation 2 on Data Protection and Privacy, in which Israel has maintained its compliant rating, and Recommendation 15 on Virtual Assets and Virtual Asset Service Providers.


New requirements include identifying, assessing, and comprehending the money laundering and terrorist financing risks associated with VA or VASPs, as well as licensing or registration requirements for VASPs.


Israel was rated compliant in its MER, but after considering risks to financial service providers and advance payment methods, it has been re-rated as largely compliant.


Israel has now complied with 16 of the Recommendations, with 16 being mostly complied with and four remaining partially complied with.

By fLEXI tEAM