Israel enforced a ban on personal cash transactions over $4,400 between private citizens, and a limit of $1,700 on business transactions, according to local media reports.
The rule, which came into effect on August 1, was a part of the Israeli tax authority’s way of fighting organized crime, money laundering, and tax evasion, i24 News reported.
Previously, individuals could transfer up to $14,700 in cash and up to $3,200 for business deals, i24 News reported, citing Israeli outlet Globes.
“The goal is to reduce cash fluidity in the market, mainly because crime organizations tend to rely on cash. By limiting the use of it, criminal activity is much harder to carry out,” a tax authority official Tamara Bracha was quoted as saying by The Media Line.
Attorney Uri Goldman, reportedly an expert in tax civil and criminal law, and money laundering according to The Media Line, was quoted in the report as saying: “When the bill passed there were over a million citizens without bank accounts in Israel. The law would prevent them from conducting any business and would, practically, turn 10 percent of the population into criminals.”
The Media Line report clarified that there would be exemptions to the new law including charitable institutions and trade with Palestinians from the West Bank who are not Israeli citizens.
For Israeli-Palestinian trade, large cash deals will reportedly be allowed provided that a detailed report is presented to Israel’s Tax Authority, The Media Line reported.