Banks are required to obtain from any person seeking to open a bank account or to change ownership of a bank account (or to conduct any transactions not recorded in any client account) information, which was mostly required even prior to the Law (name, ID, passport, address, other beneficiaries in the account, persons authorized to act in the account).
Clients are also required to certify whether the account is opened for them or for another person, in order to verify the true beneficiary of the account. For accounts opened for corporations, clients are also required to provide the names of controlling shareholders of the corporation.
Automatic reporting, with no discretion exercised by the bank, of certain transaction types whose value exceeds a specified threshold. These are not transactions which raise concern of being related to money laundering, but in view of accumulated experience in other countries, the legislative body has decided that these should be reviewed by the Israel Money Laundering and Terror Financing Prohibition Authority.
Here are some examples:
Banks are required to report to the Authority regarding other client actions which the bank deems to be unusual, in view of information in its possession, that is to say, transactions that deviate from normal action patterns for such accounts.
A decision to report an action as "unusual" is not taken lightly and is made by qualified persons at the bank. The Law requires the bank to appoint an officer in charge of compliance with the Law, whose roles include formulating testing and inquiry procedures for making a decision on any required reporting of unusual actions.
The Prohibition on Money Laundering Law requires banks, among other things, to obtain a declaration from all account holders (individuals and corporations) as to whether they manage the account for themselves or for others (beneficiary/beneficiaries*).
In order to comply with the provisions of the Law, the "Beneficiary Declaration" form must be completed and signed in original form. Corporations are also required to declare who their controlling shareholders** are, if any, and to list their names and ID numbers.