Your Israeli Bank Is Delaying a Transfer Abroad to Buy Property: What They Ask For, How to Prepare a Source of Funds File and What to Do If Refused

The contract is signed, the deposit has to arrive within a few days, and the transfer does not go out. The banker asks for “documents on the source of the money”, and sometimes it is not clear which ones exactly. This is one of the most stressful moments in a deal abroad, and it can usually be prevented by preparing in advance.

This guide explains what the bank relies on when it delays a transfer, what it checks, which documents suit each source of money, what will be requested on the other side, and what to do if the bank refuses.

1Why does a bank in Israel delay a transfer to buy property abroad?

Because the law requires it to know where the money comes from. The Prohibition on Money Laundering Law, 5760-2000, empowers the Governor of the Bank of Israel to set, by order, identification, reporting and record-keeping obligations for banks. Under it applies the Prohibition on Money Laundering (Banking Corporations' Obligations of Identification, Reporting and Record-Keeping for the Prevention of Money Laundering and the Financing of Terrorism) Order, 5761-2001, and alongside it Proper Conduct of Banking Business Directive 411 of the Supervisor of Banks, which deals with managing money laundering and terrorist financing risks.

In practice, banks explain that they must check the source of their customers' funds and keep track, on an ongoing basis, of the nature of the activity in the account. A large deposit, a transfer abroad or a mortgage are among the actions that raise these questions. A customer who refuses to cooperate may find their account restricted. The delay itself is not a finding that something is wrong. It is a sign that the bank needs a documented explanation before it carries out the transaction.

2What does the bank actually check?

• Who you are and who the beneficiary is: identification of the account holders and a declaration of the beneficiary. According to the guidance of the Supervisor of Banks, the Order requires a beneficiary declaration to be obtained from all bank customers.
• Where the money comes from: the source of the amount about to go out, not only the balance in the account.
• Where it is going and why: who the recipient is, in which country, and what transaction stands behind the transfer.
• Consistency: whether the amount, the recipient and the transaction are consistent with the usual activity in the account and with the documents you presented.

3Which documents are requested, by source of funds?

There is no single list that suits every bank and every case, and the bank may ask for more. The table shows the documents that usually explain each source:

4What should the file contain about the transaction itself?

• The contract or reservation agreement, signed, with the name of the seller or developer and the account details for payment.
• The payment request or invoice from the seller, with the amount and the date.
• If buying through a company: its incorporation and ownership documents.
• Details of the lawyer or notary handling the transaction abroad.
• The payment schedule, so that the bank understands that further transfers will follow, and when.

The transfer should go out from an account in the name of the buyer in the contract, and arrive at the account that appears in the contract. Take the account details from the contract and verify them by phone with a known contact, not from an email that arrived at the last minute. On the order of steps in a transfer to Romania, the conversion rate and the cash rules, see the guide transferring money from Israel to buy a property in Romania.

5What will be requested on the other side: the bank, the notary and the lawyer abroad?

The same questions, so it is worth preparing one file that both sides can use. In the European Union, under Directive 2015/849, notaries and independent legal professionals acting for a client in the buying and selling of real property, as well as estate agents, are obliged entities subject to customer due diligence obligations. From 10 July 2027, Regulation 2024/1624 will apply in the European Union, unifying these rules.

In Romania, the bank, the notary, the lawyer and the developer or agent are obliged entities under Law 129/2019, as explained in the guide proving the source of funds when buying property in Romania. Israeli documents presented there may require translation and certification, see apostille and documents for Israeli buyers. A lawyer in Israel handling the transaction is also obliged to carry out similar checks, see what we will ask of you when we open a file.

6In what order should you act so that the transfer does not get stuck?

1. Start gathering documents before you choose a property, especially if the money comes from a sale, an inheritance or a gift.
2. Talk to the banker early: tell them about the expected transaction and ask what the bank will want to see.
3. Send the file before the transfer, not after it has been stopped.
4. Leave a margin: a few business days between the transfer and the date in the contract. If the date is tight, ask the seller in advance for a flexible date.
5. Transfer transparently: do not split the amount into small parts to avoid reporting. Under section 3(b) of the Prohibition on Money Laundering Law, a transaction in property with the aim of avoiding reporting is an offence.
6. Keep the transfer confirmation (SWIFT) and pass it on to the lawyer and the notary abroad.

7The bank refuses or delays: what do you do?

1. Ask in writing what is missing. A defined question gets a defined answer. “More documents are needed” is not enough to complete a file.
2. Complete and document. Send the additional material in writing and keep a copy.
3. Contact the bank's public complaints commissioner. This is a mandatory step before contacting the Supervisor. The commissioner must reply within 45 days, and in certain circumstances within 60 days, after giving notice of this.
4. Contact the Public Enquiries and Consumer Control Unit at the Supervisor of Banks in the Bank of Israel, if the reply is unsatisfactory or was not received on time. The complaint is filed on an online form with identification through the national identification system, attaching the complaint to the bank, its reply and supporting documents.

It is also worth knowing what the law says and what it does not say. The Banking (Customer Service) Law, 5741-1981, prohibits a bank from unreasonably refusing certain services, such as accepting a cash deposit and managing a current account. A transfer abroad is not expressly listed there. On the other hand, according to the guidance of the Supervisor of Banks, a customer's deliberate refusal to sign a beneficiary declaration will be considered a reasonable ground for refusing to manage the account. In other words: the practical way to resolve a delay is almost always to complete the file, not to fight the check itself. Moving to another bank is not a magic solution either, because it will ask for the same file.

8What to do before the first transfer and how we assist

Before the first transfer, build the source of funds file as if you need to explain it to someone who does not know you, in two countries. We assist Israeli buyers in building the file so that it serves both the bank in Israel and the bank, the notary and the lawyer abroad, and in coordinating the contract dates with the review times. The decision to carry out the transfer is the bank's, and tax questions about the source of the money are checked with the accountant.

Read next · 8 min readCurrency in the Contract: Euro, Dollar or Lei, Indexation, and What Happens When the Shekel Moves Between Signing and the Last PaymentThe currency of a contract for property abroad, what an indexation clause is, how the payment schedule creates shekel exposure, and what to put in the contract.Read the guide