A Swedish electronic money transfer company which had barred financial transactions with Israel, has removed these restrictions following correspondence from UK Lawyers for Israel (UKLFI).

Intergiro had labelled Israel as a prohibited country, despite Israel not being a high risk jurisdiction, and complying with anti-money laundering measures.

UKLFI had been contacted by an Israeli owned financial services company based in Germany, who were surprised to find that their money transfer was rejected by Intergiro, who had included Israel on its list of prohibited countries on its website . Intergiro told the Israeli owned company: “Consequently, we will not be able to accept or send any further transfers from and to this country”.

A prohibited country is one with which no person can engage in business. UKLFI pointed out that only a governmental body or a regulator, not a private company, can declare a country to be “prohibited” and then only for valid reasons.

Israel was not on the Financial Action Task Force (FATF) “black and grey list” and was not a “high risk” jurisdiction.  Israel is evaluated, jointly with FATF, by the Committee of Experts on the Evaluation of Anti-Money Laundering Measures (“MONEYVAL”). According to MONEYVAL :

• Israel is compliant on 16 Recommendations and largely compliant on 19. It remains partially compliant on 4 Recommendations (one Recommendation is non-applicable to Israel).
• The report concluded that Israel has developed an AML/CFT system that is sound and effective in many areas, and achieves good results in tackling money laundering and terrorist financing. The country has also achieved good results in understanding the risks it is exposed to, investigating and prosecuting money laundering and terrorist financing, including through the effective use of financial intelligence, depriving criminals of the proceeds of crime, and depriving terrorists and terrorist organisations of assets and instrumentalities.

• Israel has been a member of FATF since 2018.

UKLFI also explained to Intergiro that all transactions effected via its systems fall under Swedish regulation and it was not free to pick and choose which laws, rules and regulations it follows, or add countries to a restricted or prohibited list on a whim. UKLFI said that Israel is a democratic nation that is in compliance with FATF and other requirements and is recognised as a leader in the world’s financial markets and regulation. It is not proper to impose prohibitions, blocks or conditions.

Intergiro’s legal team has now responded by saying

“Our risk assessment methodology considers changes published by underlying sources automatically, which our teams can review and configure if and when the resulting risk management settings result in overly restrictive controls. In light of feedback from clients and their representatives, such as yourselves, these recent changes have been reviewed and reconfigured. As of July 23, 2024, the risk level for Israel has been adjusted in our methodology, meaning that there are currently no such restrictions on transactions to Israel.”

Caroline Turner, director of UKLFI commented: “We are very pleased that having highlighted this injustice, Intergiro are now complying with financial regulations and have removed Israel from their restricted list.”