Undocumented foreign workers transfer black money estimated at NIS 1 billion a year through the financial system, which includes bankers and currency exchanges, according to an examination by foreign manpower corporations in the construction sector.
Following this, Hila Ben Itzhak, CEO of the Foreign Manpower Corporations Association, appealed to regulatory authorities and the Bank of Israel to investigate how banks earn commissions from black money without taking action to stop it.
There are currently 53,000 undocumented foreign workers in Israel, including 14,000 employed in the construction sector, 17,000 workers who enter from the West Bank, and 22,000 tourists working in Israel without a valid work permit. Undocumented workers transfer an estimated NIS 450 million in unreported money abroad every month.
Those who employ undocumented workers avoid reporting about NIS 1 billion a year in income to tax authorities, thereby preventing the collection of income tax, National Insurance contributions, foreign worker levies, and health taxes.
As a result, foreign manpower corporations appealed to the Supervisor of Banks to instruct banks to enter foreign workers' valid stay permits into the system to close the breach of transferring black money through the banking system.
"Banks and money exchanges have the greatest power to stop the phenomenon, but they are playing dumb and avoiding action because every financial transfer by a foreign worker is income for the banking system, and they have no incentive to stop the phenomenon," Ben Izhak told Maariv.
"While any Israeli citizen who deposits an unusual sum of money in a bank is required to provide an explanation, document it, and undergo comprehensive checks, foreign workers staying in Israel illegally can transfer money abroad with almost no oversight," she said. She also clarified that "banks and money exchanges not only fail to stop the phenomenon, but they actually have a financial interest to continue enabling these money transfers for the commission paid to them."
The issue of employing foreign workers was recently referred to the Special Knesset Committee on Foreign Workers. During a hearing on the matter, a systemic failure was revealed on the part of the banking system and currency exchanges, which do not bother to perform simple checks, such as whether the person transferring the funds holds a valid work permit in Israel.