"I have received many inquiries from American citizens in Israel who are worried about the new law (FATCA) calling for supplying financial information to the U.S. according to the new agreement signed by the two countries. This new law will obligate many people, including average people who do not represent any financial bodies, to take various steps officially reporting financial status so as not to be in violation of the law." These were the words of MK Rabbi Moshe Gafni, chairman of the Knesset Finance Committee, in yet another discussion which took place on the subject of the implementation of the new agreement.
In previous discussions, the Knesset committee dealt with the problem of gemachim that manage money but are not really financial institutions in a classical sense. Rabbi Gafni toiled to find a suitable solution to help them continue to operate. The solution worked out was to define their status as public welfare institutions and not financial institutions, making the burden much less onerous. This is acceptable to the U.S. law. Now, he said, it is up to the Ministries of Justice and Treasury to find ways to protect individual American citizens living in Israel from being considered criminals or for damaging their integrity in their daily life.
The chairman of the Tax Committee of the government comptroller office, Jack Blanga, said, "There are many U.S. citizens living here in Israel who do not report to the IRA and are evading their obligation to do so by American law. Now, according to the new law cementing the agreement, they will be considered criminals."
A representative of the Treasury Ministry noted that the U.S. has allowed a very small margin of flexibility in this new agreement, and asked the members of the committee to complete the formulation of the law as soon as possible since Israeli is already behind the designated time schedule. "This is to prevent the imposing of heavy sanctions and the proscribing of the Israeli financial network."
American authorities have imposed these reporting requirements around the world.
