Israeli Finance Minister Avigdor Lieberman attends a news conference at the Finance Ministry in Jerusalem June 12, 2022. REUTERS/Ronen Zvulun/File Photo

JERUSALEM, July 20 (Reuters) – The Bank of Israel said on Wednesday it would seek to help immigrants from the former Soviet Union access their funds currently in Russia, but stressed it would not allow banks to circumvent international sanctions.

Moldovan-born Finance Minister Avigdor Lieberman held a meeting on Tuesday with the Finance Ministry, central bank and banking officials on the issue, calling for regulatory relaxation that would allow Israeli banks to approve bank transfers from the Russia to citizens not subject to sanctions. Read more

Sanctions imposed by Western governments on Moscow over the Ukraine conflict have made it difficult to obtain funds for Russians living abroad.

The Bank of Israel said it was aware of the sensitive nature and importance of the issue and was acting within legal and regulatory frameworks.

Still, “neither the Bank of Israel nor the banking system will allow circumvention of international sanctions in the context of money from Russia or any other source,” the central bank said in a statement to Reuters.

He clarified that “every step that will be reviewed in order to help citizens who are having difficulty transferring their money through the system, whether it is pension payments or property for immigration purposes, will be subject to respect and compliance with the sanctions imposed on this issue”.

A finance ministry source said Lieberman, who draws his political support mainly from former immigrants from the Soviet Union, was not seeking to circumvent the sanctions but rather to help those unaffected by them.

“Not all Russian banks are under sanctions, only a few of them. So we asked the Bank of Israel for documents explaining which banks in Russia can transfer money to Israeli citizens,” he said. The source.

The source said that in Israel, home to more than a million immigrants from former Soviet states, there are 57,000 pensioners who receive Russian pensions, another 30,000 new immigrants, as well as incapacitated businessmen to transfer funds to Israel – while the cost of living is skyrocketing.

Last month, the central bank sent a letter to heads of Israeli banks and credit card companies, warning that circumventing sanctions imposed by foreign countries “exposes banks to significant risks,” such as compliance, money laundering, terrorist financing and legal risks.

However, it left it to the banks to establish policies and procedures regarding international sanctions.

Reporting by Steven Scheer Additional reporting by Maayan Lubell Editing by Nick Macfie

Our standards: The Thomson Reuters Trust Principles.