Frozen money on Israeli Bank accounts

 

The Israel bank is required to report non-resident bank accounts to US legislation FATCA,  also known as Foreign account compliance law, to eliminate money laundering, black capital, tax evasion or any other illegal activity.

More about FATCA (Foreign account tax compliance act)

The legislation is adopted by many states under US authority. It is created for people who hold massive amounts of funds in Israeli bank accounts as foreign or non-residents. The act has everything to do about a condition. They cannot withdraw the money in the Israeli bank account unless they give proof or a clear statement about the source of money.

The draft issued by the Bank of Israel relies on OCED guidelines. The banks are required to report their foreign customers to declare the frozen money and the tax on these funds that had already been issued.

What do non-residents or foreign people have to sign?

To declare authority on the frozen money in Israeli bank accounts, the non-residents and foreign have to report with a statement and be clear about the source of money in their Israeli bank accounts.

In addition to that, is necessary for the client to sign a confidentiality waiver so that it becomes easy for the Israeli bank to transfer the information to overseas authorities to clear frozen money.

Customers or bank account holders who refuse to sign the document of confidentiality are labeled as ‘under risk’. Their bank accounts and the money in it will remain frozen until they provide a clear statement about the source of money.

What type of funds are frozen in Israeli bank accounts?

Banks are exposed to a lot of fines, penalties, and lawsuits under various regulations, treaties, and laws. Some bank account holders can also be the victims of criminal proceedings if they do not provide proof of the source of money in their Israeli bank accounts.

Therefore, blocking accounts and freezing money is carried out by banks discriminately until the bank holder provides a firm statement regarding the source of money.

If the account holder is foreign and the money has not been withdrawn for 20 years, this puts the bank at risk and they freeze the account until various tax documentation by the client is provided. Inherited money, gifts, pension payments, family transfers, deposits and bank balances can all be frozen indiscriminately.

How are the guidelines about frozen money in Israeli bank accounts differ from each other?

Various Israeli banks have different procedures for freezing the money. Due to hard and fast regulations, many banks avoid liability and cause their clients to draw out money. As mentioned earlier, freezing the money in a non-resident’s account causes huge damage to the account holder as they get deprived of using or withdrawing the money.

How is the information about frozen money transferred overseas?

All the countries, such as the EU, Israel, and the USA that follow the FATCA have signed treaties with each other. These treaties allow them to transfer data automatically without any advanced or initial requirements. Sharing of information can cause a lot of damage to your reputation as a foreigner. Therefore, it is recommended to consult a lawyer if you have a frozen account in Israel.

 

When the account holder is not in Israel, it can be really difficult for him to deal with higher authorities and huge bureaucratic bodies. Legal representation by a knowledgeable and experienced lawyer in Israel can help address the issue to the account holder very clearly while helping him out in criminal proceedings (if any). To retain your account in an Israeli bank, you must consult a good lawyer before it's too late.