The Bank of Israel has ordered Israeli banks to fall in line with sanctions imposed on Russia by the United States and the European Union, Globes reported on Sunday.
“There are international sanctions against certain parties and businesses in Russia. The sanctions regimes are complicated, with different consequences,” the Bank of Israel wrote in a letter circulated several weeks ago. “Since it is possible that the sanctions will also apply to other banks and financial institutions, you are hereby required to keep informed, and obtain legal advice about it.”
The BOI has called for a discussion of the matter to be held by the banks for the purpose of verifying that the banks were adhering to the sanctions regime.
The banks must scan their credit portfolio to be sure they are not working with parties subject to sanctions. They are also required to establish rules for identifying and avoiding new transactions with parties subject to sanctions, and to define work procedures vis-a-vis the relevant parties.
In its letter, the BOI also allows the banks to refuse to carry out new transactions, or to discontinue an existing agreement with parties subject to sanctions. “This will be considered a reasonable refusal to provide a service under the Banking Law,” it said.