Israel to set up unit to combat money laundering

JERUSALEM (Reuters) -- Israel, which has been told it faces sanctions unless it clamps down on money laundering, said Wednesday it would set up a financial intelligence unit to fight the practice.

The move follows legislation passed in August making the laundering of the proceeds of lawbreaking a crime punishable by up to 10 years in prison.

"It's a big problem," Shlomo Gur, director general of the Ministry of Justice, told reporters. "It's big enough that all institutions joined hands in asking to pass the legislation."

The 20-strong intelligence unit is required by law to be operating by early 2002.

It will be responsible for coordinating information and processing data from various agencies, such as banks and insurance companies, and providing the results to law enforcers.

In June, the Group of Seven major industrialized countries named Israel as one of 15 states they might take sanctions against unless they made it more difficult for criminals such as drug dealers and car thieves to "cleanse" their ill-gotten wealth.

The black-list also included the Bahamas, the Cayman Islands, the Cook Islands, Dominica, Lebanon, Liechtenstein, the Marshall Islands, Nauru, Panama, the Philippines, Russia, St. Kitts and Nevis, and St. Vincent and the Grenadines.

Lior Horev, the lawyer who heads the team setting up the intelligence unit, said it was difficult to quantify the amount of laundering in Israel since it was not a crime until recently.

"I promise you, I will find them," Horev said. "I will find a system to find them."

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