Israel Country Summary
Sanctions
Medium Concern
FATF AML Deficient List
Lower Concern
Terrorism
Medium Concern
Corruption
Lower Concern
US State ML Assessment
Medium Concern
Criminal Markets (GI Index)
Medium Concern
EU Tax Blacklist
Lower Concern
Offshore Finance Center
Lower Concern
Please note that although the below Summary will give a general outline of the AML risks associated with the jurisdiction, if you are a Regulated entity then you may need to demonstrate that your Jurisdictional AML risk assessment has included a full assessment of the risk elements that have been identified as underpinning overall Country AML risk. To satisfy these requirements, we would recommend that you use our Subscription area.
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Anti Money Laundering
FATF Status
Israel is not currently on the FATF list of Countries that have been identified as having strategic AML deficiencies.
Compliance with FATF Recommendations
The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Israel was undertaken in 2022. According to that Evaluation, Israel was deemed Compliant for 16 and Largely Compliant for 19 of the FATF 40 Recommendations. It was deemed Highly Effective for 3 and Substantially Effective for 5 of the Effectiveness & Technical Compliance ratings.
Sanctions
As a UN member, Israel must support sanctions imposed by the United Nations, which are designed to maintain international peace and security. The UN Security Council has established 31 sanctions regimes since 1966, addressing various threats through measures like economic sanctions and arms embargoes. Currently, there are 15 ongoing sanctions regimes aimed at political settlements, nuclear non-proliferation, and counter-terrorism, with a Consolidated List to facilitate enforcement.
Following the invasion by Hamas into Israel, Israel imposed a total siege on Gaza, blocking essential supplies. Additionally, the Arab League has systematically boycotted Israel to isolate it economically, with varying implementation among member states. This boycott includes prohibitions on Israeli goods and services and extends to businesses that engage with Israel.
Criminality
Rating |
0 (bad) - 100 (good) |
|---|---|
| Transparency International Corruption Index | 64 |
| World Bank: Control of Corruption Percentile Rank | 79 |
Corruption in Israel is addressed through various laws and regulations, with the country ranking 33rd in Transparency International's 2023 Corruption Perceptions Index. While the Israeli National Police and other agencies effectively combat corruption, human trafficking and organized crime remain significant issues, particularly affecting vulnerable populations. Additionally, Israel faces challenges in managing illicit markets, including drug trafficking and cybercrime, amidst concerns over political corruption and discrimination against minorities.
Economy
Israel's economy is characterized by a strong entrepreneurial spirit and a highly educated workforce, making it a leader in innovation across various sectors. Despite facing significant challenges due to recent conflicts, including a sharp GDP decline of 20.7% in late 2023, the economy showed signs of recovery with a 3.35% growth in early 2024 and is projected to continue growing in the coming years. The country has transformed from a low-end manufacturing economy to a diverse, high-tech driven economy, supported by substantial foreign investment and a robust relationship with the United States.
Israel's investment climate is characterized by a strong openness to foreign investment, supported by government initiatives like the 'Invest in Israel' program, which facilitates foreign capital inflow and provides guidance on regulations and incentives. The country has a robust high-tech sector and is home to numerous multinational research and development centers, particularly from U.S. firms, reflecting its status as a global leader in innovation. Despite challenges such as trade barriers and monopolies in certain sectors, Israel continues to attract significant foreign direct investment, with a total stock of U.S. FDI reaching USD 42.5 billion in 2022.
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- Risk Analysis
- Corruption
- Economy
- Sanctions
- Narcotics
- Executive Summaries
- Investment Climates
- FATF Status
- Compliance
- Key Findings