עמוד הבית > פרסומים מקצועיים > מאמרים > ISRAELI BANKS HALTED BANK ACCOUNTS BELONGING TO ACCOUNT HOLDERS WITH TIES TO THE U.S.A

ISRAELI BANKS HALTED BANK ACCOUNTS BELONGING TO ACCOUNT HOLDERS WITH TIES TO THE U.S.A

As is commonly known, a number of years ago a draft of legislation was published in the US, which was known by its acronym “FATCA” and which addressed the duty of banks and other financial bodies worldwide to report any bank account belonging to account holders and signatories with ties to the US; in other words, American citizens, green card holders or simply US residents.

Most banks in the Western world agreed to uphold those limitations set out in the American legislation in order to continue working with financial organizations in the US without suffering financial penalties there (which could reach as high as 30% of each money transfer to said banks carried out from the US).

At the same time, in the past two and a half years Israeli banks as well have begun to prepare for the same legislative instructions. This is achieved by requesting that their clients sign forms allowing the bank to report on the clients’ accounts to American tax authorities (the form is called a W-9) or by requesting that the clients withdraw the monies from the bank accounts.

In recent months the Israeli banks have begun to prevent movement in these accounts. In other words, in cases in which the account holder has links to the US, the bank will not allow them to perform transactions apart from payment of debts according to agreements signed previously, payment to suppliers, and so forth. All financial transactions are forbidden! Take, for example, a person who purchased an apartment and wishes to transfer a payment from the money in his bank account; the bank will prevent this, unless the person has signed a W-9 form allowing the bank to send the information to US tax authorities!

The banks are currently authorizing transfers of the account money only to accounts bearing exactly the same name at other banks, within the framework of bank transfers (by computerized SWIFT instruction) which sends a report from the transferring bank to the receiving bank that this is a US PERSON, on order that the bank receiving the monies also refuse receipt unless the same person has signed all W-9 or other forms which will allow the bank to relay the information to US tax authorities.

Given the above, our office was recently asked the following questions repeatedly, which we shall endeavor to answer briefly, in order to serve as a brief guide for those interested:

Q: Is there a solution to withdrawing money from the bank without their approval?

A: Yes in some cases when there is true justification for this, though each case is examined separately!

Q: Does the description above apply to all banks in Israel?

A: In general- yes. These instructions exist for all banks in Israel, though it is likely that there may be branches in which the instruction has not been properly explained or in which not enough emphasis has been provided! In these cases it may be possible to “withdraw” the money with no blocking.

Q: What should someone with dual citizenship do?

A: Many people are unaware, but as we publicized at the beginning of January 2012, the authorities in the US allow people holding dual citizenship and for whom there is a reasonable likelihood that no reports have been made in the US’ for example, they have always been Israeli citizens and residents and never caused any real damage to the federal taxation- in other words, they have no outstanding taxes (if they paid taxes in Israel, where taxes are generally higher)- to emerge unscathed and without having to pay fines. These people are advised to examine their situation and see whether the criteria apply to them.

Q: Is going to the bank and declaring that the money in my account (if I have links to the US) does not belong to me, but rather to someone else (for example a relative) a possible solution?

A: No; this type of statement would imply that all statements given to the bank up until now were incorrect and then the person is in fact declaring that he committed the offence of money laundering in Israel, for which the penalty could include imprisonment. Clearly, this declaration would not lead to the release of the money.

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