National Risk Assessment

 
The Israel Money Laundering and Terror Financing Prohibition Authority (IMPA) has published the updated National Risk Assessment (NRA) for 2021. This NRA updates the previous one from 2017.

The purpose of conducting national risk assessments is to identify the primary risks for money laundering and terrorism financing in a particular country, in accordance with the FATF standards. Assessing the primary risks of anti-money laundering and counter terror financing (AML/CFT) enables countries to combat these phenomena in a targeted, efficient, and effective way.
 
The Israeli 2021 NRA includes new and updated information, as well as an assessment of the latest money laundering threats to the Israeli economy, identified vulnerabilities, and various vulnerabilities that criminals take advantage of to launder the proceeds of their crimes. It is divided into two sections, one being an assessment of primary typologies or methods for money laundering, the second being an assessment of predicate offences. 
 
Typologies
 
Threat
Mitigation
Risk
 
2017
2021
2017
2021
2017
2021
MSBs
5
5, 4.5
3
3.5
4.7
5.0, 4.5, 4.0
Cash
5
5
3
4
4.7
4.2
International Crime
4
4
4
3
3.7
3.7
Real Estate
4
4
3
3
3.7
3.7
Legal Arrangements and Entities
4
4
3
3
3.7
3.7
NPOs
4
4
3
3
3.7
3.7
Advanced Payment Methods
3
4
2
3
3
3.7
TBML
3
4
4
3
2.2
3.7
Diamonds
4
3
3
3
3.7
2.7
Business Service Providers
3
3
3
3
2.7
2.7
Border Crossing Transfers
3
3
4
4
2.2
2.2
Precious Metals
2
2
3
3
1.7
1.7
Purchasing Rights
1
1
4
4
0.2
0.2

Predicate Offences
 
Threat
Mitigation
Risk
 
2017
2021
2017
2021
2017
2021
Fraud
4
5
3
2.5
3.7
5
Fictitious Invoices
5
5
4
3
4.2
4.7
Drug Trafficking
4
5
3
3
3.7
4.7
Protection Payments Extortion
-
5
-
3
-
4.7
Criminal Organizations
5
5
4
3.5
4.2
4.5
Tax Evasion
5
5
3
4
4.7
4.2
Illegal Gambling
4
4
3
3
3.7
3.7
Bribery and Corruption
4
4
4
4
3.2
3.2
Human Trafficking
3
3
4
4
2.2
2.2
Property Offences
2
2
3
3
1.7
1.7
Securities Offences
3
3
4
4
2.2
2.2
 

The NRA comes to serve the private sector, law enforcement agencies, security agencies, and regulators in identifying the risks of money laundering in Israel and in understanding the potential risk of these phenomena to the financial system and to national security. In addition, it familiarises these sectors with the measures taken by the Israeli Government to mitigate those risks. Furthermore, the updated NRA is intended to provide a basis for setting policies and priorities related to advancing the Israeli AML/CFT regime, in accordance with the risk-based approach and efficient allocation of resources.
 
IMPA led the validation process of the 2021 NRA, after being appointed to this role by the Israeli Attorney General. The assessment was carried out in cooperation with other government agencies, including the Israel National Police, the Israel Tax Authority, the State Attorney's Office, the Supervisor of Banks at the Bank of Israel, the Israel Securities Authority, the Capital Market, Insurance and Savings Authority, and others.
 
The risk assessment was conducted by three teams:
  • Law Enforcement – led by the Israel National Police and IMPA
  • Financial Regulators – led by the Supervisor of Banks at the Bank of Israel
  • Security Agencies – for the assessment of terror financing risks. This assessment will be produced separately.
 
In addition, an annex has been included in the 2021 NRA that addresses the impact of the Covid-19 pandemic on financial crime.
 
An English version of the published 2021 NRA will be available in the near future.