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Israel Consulate in New York Announces Measures Against Black Market Currency Transfers

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The Israel Government will take all possible measures to stop “black market transfers” of foreign currency to Israel, Gideon Strauss, Consul for Economic Affairs in New York, announced today.

“Some individuals and organizations have been transferring money at illegal rates, a practice which injures Israel’s economy by depreciating its currency,” Mr. Strauss said. “Naturally, it also injures the great majority of persons inside and outside the State who transact their businesses lawfully.” He emphatically denied rumors that there is more than one legal rate of exchange for foreign currency, including dollars. All transfers and investments are approved only at the official rate for the Israel pound – $2.80.

Mr. Strauss also pointed out that no person either in his private capacity or as a member of any organization, philanthropic or otherwise, has ever been authorized to offer investors a special exchange rate. He declared that the full weight of the Israel Government’s legal powers will be exercised against any persons who persist in illegal transactions of this kind. To enforce its foreign currency regulations, the Israel Government will:

1. No longer approve the use of investors’ funds for the purpose of importing commercial goods into the country. In other words, investors may transfer their funds only in the form of cash or equipment and materials for use in their own enterprises.

2. Deny to all investors involved in illegal currency transactions the benefits granted under the new law for the investment of private capital, recently approved by the Parliament, and, in addition, institute legal proceedings against them.

3. Take criminal action against Israel citizens participating in illegal transfers.

Denial of the benefits of the investments law is a very serious matter, Mr. Strauss said, since this law offers new investors such significant advantages as withdrawal of profits, capital, interest and amortization annually in the currency of the original investment, up to 10 percent of the investment; income tax ceilings, for individual investors of no more than 25 percent; double normal amortization rates; elimination of customs duties on imports of machinery, equipment and raw materials; and refund of Israel corporation taxes in excess of credits allowed in the home countries.

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