Israeli Government Clamps Down On Cash

In its ongoing war on the black market and money laundering, the Israeli government has moved to impose new restrictions on the use of cash.

Cash transactions will initially be limited to 10,000 shekels, and a year later to 5,000. Cash transactions between private individuals will be limited to NIS 15,000; NIS 50,000 in used car purchases.

Transactions exceeding these amounts will become a criminal offense.

Endorsement of checks will be treated as cash, and so checks will be transferable only up to the amounts permitted for cash transactions. The maximum amount of a transaction payable by check will be set by the Bank of Israel.

The committee also wants to promote the use of debit cards and identifiable cash cards, or electronic wallets. Debit cards are seen as an effective way of combatting black capital, and of reducing the commissions paid by businesses to credit card companies.

The recommendations, submitted by the committee on cash in the economy headed by director of the Prime Minister’s Office Harel Locker, were approved unanimously by the cabinet.

The committee estimates the extent of the black economy at 20% of GDP, leading to a loss of state revenue of NIS 40-50 billion annually.

This article appeared in print on page 9 of the October 27th, 2014 edition of Hamodia.