Photo Credit: Flash 90
The flags of the US, United Arab Emirates, Israel and Bahrain seen on the side of a road in the city of Netanya.

The Banking Supervision Department at the Bank of Israel published a letter to Israel’s banking system on Wednesday, relating to the advantages in strengthening relations with the United Arab Emirates. The letter emphasizes the risk management involved in this activity, particularly regarding bank transfers.

“We are pleased to be partners in the historic process of advancing peaceful and economic relations between the two countries,” wrote Supervisor of Banks Yair Avidan.

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“These relations carry economic advantages for both countries, and a built-in part of advancing economic relations is promoting banking relations between the countries.

“We must remember that alongside the opportunities, we must be strict about risk management, including understanding the business and banking environment and maintaining proper controls. We believe that the letter will help in advancing these important goals.”

The peace accord signed on September 15 in Washington between Israel and the United Arab Emirates included an appendix that contained a protocol signed on September 1 regarding the advancement of economic relations between the two countries, including regarding banking services.

The protocol contained the recognition that for the purpose of that economic cooperation, infrastructure is needed that will enable bank transfers to be made directly between the Israeli banking system and banks operating in the UAE, for both trade and investments.

“This must take into account the international standards regarding the prohibition of money laundering and the prohibition of terrorism financing, for the purpose of cooperation between the relevant authorities in both countries with the aim of reducing risks in this area,” the Bank of Israel noted.

The United Arab Emirates is an international trade and financial center through which there is widespread economic activity, and in which investments are made in various fields.

“Our assessment therefore is that significant economic cooperation is expected between the two countries,” the Bank of Israel said.

The letter outlines a number of measures to create an operating environment with less risk in activity vis-à-vis the UAE, particularly activity alongside the trade that is expected between the countries, such as making bank transfers and providing guarantees and credit statements.

The aim is to enable the advancement of banking activity that will support economic activity and trade between the countries, with stringent risk management that will require the allocation of adequate resources to learn the business environment, get acquainted with the relevant financial institutions, and carry out on-going controls.

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Hana Levi Julian is a Middle East news analyst with a degree in Mass Communication and Journalism from Southern Connecticut State University. A past columnist with The Jewish Press and senior editor at Arutz 7, Ms. Julian has written for Babble.com, Chabad.org and other media outlets, in addition to her years working in broadcast journalism.