Strict Anti-Money Laundering Regulations in Israel - One of the World's Toughest Enforcement Regimes
Money Laundering in Israel: A Complex Landscape of Terror Financing, Regulatory Evolutions, and International Cooperation
Israel, a country that faces a high risk of terrorist financing, has been actively combating money laundering through stringent regulations and international cooperation. The Prohibition on Money Laundering Law, 5760-2000 serves as the key Anti-Money Laundering (AML) law in Israel.
Online identification of applicants can be carried out through remote face-to-face identification and authentication or by presenting an ID card and an additional identifying document issued by the State of Israel. Companies in Israel are required to conduct transaction monitoring, reporting on transactions, sanctions and PEP screening, ongoing monitoring, record-keeping, and appoint a Money Laundering Officer. For corporations not registered in Israel, certain documents are required, including a document attesting to their registration or a certified copy of the said document.
Recent trends and notable cases of money laundering in Israel show a complex landscape involving terror financing, NGO scrutiny, and international corruption investigations. A notable case linked to terror financing involves the US Department of Justice targeting Hamas-associated entities. In July 2025, the DOJ pursued a $2 million civil forfeiture against BuyCash Exchange, linked to Gaza-based money laundering networks masking funds for Hamas and other terrorist organizations. This case highlights the use of digital assets and blockchain transparency for laundering and the broad governmental collaboration to disrupt such networks.
Another significant money laundering-related conviction occurred in Israel itself: Mohammed El-Halabi, who managed Gaza operations for the aid group World Vision, was convicted in 2022 for diverting around $30 million of humanitarian aid to Hamas under the cover of fictitious projects. This case attracted international attention and criticism from groups like Amnesty International, which alleges politicization of the Israeli justice system, but the conviction stands as a high-profile example of laundering aid funds for terror.
On the regulatory side, recent global regulatory updates emphasize heightened AML/CFT (Anti-Money Laundering/Countering the Financing of Terrorism) measures. These stress the importance of customer due diligence, beneficial ownership transparency, and enhanced monitoring of suspicious transactions which are relevant to Israel’s financial and regulatory framework given its exposure to regional risks.
There are also international corruption investigations tangentially connected to Israeli businesspersons, as in a July 2025 Mexican probe alleging Israeli businessmen’s involvement in bribery linked to former Mexican President Enrique Peña Nieto; while not exclusively money laundering, this case reflects the cross-border complexity involving Israeli-related financial crimes.
In sum, recent developments in Israel’s money laundering landscape are dominated by terrorism-linked financing cases, rigorous regulatory evolutions stressing transparency and risk management, and international law enforcement cooperation targeting illicit financial flows connected with or passing through Israeli entities. Israel, as a FATF member since 2018, continues to follow its Recommendations to combat money laundering effectively.
[1] US Department of Justice, "Justice Department Announces $2 Million Civil Forfeiture in Connection with Gaza-Based Money Laundering Networks Masking Funds for Hamas and Other Terrorist Organizations," Press Release, July 15, 2025. [2] Associated Press, "Israeli court convicts World Vision official in Hamas funding case," The Washington Post, February 28, 2022. [3] Financial Action Task Force, "Israel - Mutual Evaluation Report," October 2020. [4] Reuters, "Exclusive: Israeli businessmen in Mexican probe over bribes linked to former president - sources," July 15, 2025. [5] Financial Crimes Enforcement Network (FinCEN), "Advisory: Terrorist Financing Risks Associated with Digital Currency," May 18, 2021.
- Israel's Prohibition on Money Laundering Law, enacted in 2000, serves as the cornerstone of its Anti-Money Laundering regulations.
- The Israeli legal system requires companies to perform diligent transaction monitoring, sanction and PEP screening, and maintain proper record-keeping.
- Digital assets and blockchain technology have increasingly been used in money laundering cases, such as the $2 million civil forfeiture pursued by the US Department of Justice against BuyCash Exchange in 2025.
- In 2022, Mohammed El-Halabi, a World Vision official, was convicted for diverting $30 million of humanitarian aid to Hamas in Israel.
- Current global regulations are emphasizing enhanced transparency and rigorous AML/CFT measures, particularly in customer due diligence and monitoring of suspicious transactions.
- International corruption investigations have linked Israeli businessmen, like those implicated in the Mexican bribery probe in 2025, to illicit financial activities beyond money laundering.
- Recent developments in Israel's money laundering landscape include high-profile terror financing cases, regulatory evolutions, and international cooperation aimed at combating money laundering.
- Israel remains committed to following the Financial Action Task Force's recommendations to combat money laundering effectively, as evidenced by its continued membership since 2018.
