"Globes" has obtained a copy of the draft bill, which proposes that institutions which do not comply with the reporting requirements about their customers will be considered as criminal offenders and will be penalized accordingly. The bill proposes levying fines against banks, insurance companies and investment houses that not provide the necessary reports about their American customers and declarations that the assets managed have been reported to the
In cases in which it is proved that an employee of the financial institution knowingly helped a customer, and did not demand the declarations, the penalty could be up to seven years in jail. Seven years imprisonment is the maximum penalty for a person violating Article 220 of the Income Tax Code. The bill proposes adding FATCA violations to the list of violations under this article.
However, legal sources are critical of the pending legislation. "The bill far exceeds the FATCA rules, and in practice requires Israeli banks to gather information about all their foreign resident customers with accounts at a bank in
"The way the bill is written now in effect proposes not just giving authority to the seeker of information, but apparently sets sweeping and binding provisions for gathering and delivery of information, against harsh sanctions," he adds, and warns, "Economically,
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