OECD rates six jurisdictions rated satisfactory on EOIR

However, not all legal entities and arrangements are obliged to engage with a bank in Israel subject to AML requirements. Moreover, the definition of beneficial ownership for trusts and other legal arrangements in the AML legislation does not include all natural persons that exercise ultimate effective control over the trust.

Furthermore, banks should insist on getting beneficial ownership information when an account is opened, a new beneficial owner is added to an existing account or a doubt arises about the owners' identities; however, there is no specified frequency for AML-obliged persons to update beneficial ownership information. Up-to-date beneficial ownership information may therefore not be available from the banks.

To remedy this, Israel has also introduced new tax rules requiring legal entities and trusts taxable in Israel to report information on their beneficial ownership to the tax authority. However, these rules do not take effect until January 2025 for legal entities and for Israeli and foreign trusts with Israeli-resident trustees created after 1 January 2025. For such trusts existing prior to 1 January 2025, the deadline is 1 January 2026. Foreign trusts with Israeli-resident trustees that do not derive income from Israel must provide a declaration of beneficial ownership to the tax authority within 90 days of their creation. This obligation applies to these trusts created after 7 April 2024. For such trusts created prior to 7 April 2024, the obligation applies within 120 days from 1 January 2026.

These gaps hinder efforts to ensure that adequate, accurate, and up-to-date information is available for all relevant entities and arrangements', says the Global Forum review. However, it also notes positive developments regarding new immigrants and veteran returning residents who were subject to a reporting exemption on their foreign income. Legislation adopted in April 2024 facilitates EOIR related to their foreign income, including from sources such as trusts and foreign companies. However, this applies only to individuals obtaining this residency status after 1 January 2026. 'Gaps remain for those acquiring such status before that date', says the Global Forum.

The report accordingly calls for improvement in these areas. However, it also recognises Israel's extensive network of exchange relationships and improvements in the timeliness of response to EOIR from partner countries since the last review in 2016. On this basis, the report concludes that Israel is rated overall largely compliant against the standard for EOIR.

Source：

https://www.oecd.org/en/about/news/announcements/2024/07/global-forum-publishes-new-peer-review-reports-on-transparency-and-exchange-of-information-on-request-for-ecuador-israel-lithuania-moldova-sint-maarten-and-sweden.html