March 13, 2018 / 10:18 AM / in 9 days

Israel passes law to limit cash deals to fight economic crimes

JERUSALEM, March 13 (Reuters) - Israel’s parliament passed a law that limits the amount of cash in the economy in an effort to fight against dirty money, economic crime and money laundering.

Israel’s government loses “billions of shekels in revenue every year” because of under-the-table cash transactions, the Tax Authority said on Tuesday.

The World Bank in 2010 said Israel’s so-called shadow economy was equal to 22 percent of economic output. Israel produced about $366 billion in 2017, which would mean the economy loses out some $80 billion.

The new law imposes a limit of 11,000 shekels ($3,197) on cash transactions made to businesses, which could be further reduced by the finance minister 6,000 shekels in 2020. Cash deals between private individuals, such as buying a used car, will be limited to 50,000 shekels, a level that may be lowered to 15,000 shekels.

Violators will receive warnings until the law goes into full effect in 2019, the Tax Authority said.

The law also states that cheques will be limited to 10,000 shekels. Tourists will be limited to paying no more than 55,000 shekels to buy services or assets, although they can do so up to five times.

$1 = 3.4406 shekels Reporting by Steven Scheer, Editing by William Maclean

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