The Times of Israel on 12th July reported that a finance ministry official has told the Knesset that tThe secretary-general of the OECD has sent personal letters to the finance minister and the prime minister saying that Israel is not complying with commitments under the Common Reporting Standard (CRS) and could be subject to sanctions by the OECD. The main sticking point preventing passage of the regulations is said to be gemachim, or ultra Orthodox free-loan societies run by volunteers that allows members of the community to deposit money and others to receive loans interest-free. There are thousands of such free-loan societies in Israel’s one-million strong ultra-Orthodox, or Haredi, community. The Finance Committee chairman refuses to pass the CRS regulations without a promise that the activity of gemachim will be largely exempt from oversight. Israel’s AML authority has warned that gemachim must be regulated because many are being used to evade taxes and for money laundering. It says that, under FATCA rules, Israeli banks have been demanding information about American depositors into gemachim that the gemachim cannot or will not provide, and many Israeli gemachim have had their bank accounts closed. It mentions a 2009 case, where 44 people in the US were arrested, including 5 rabbis, where an international money laundering scheme involved accepting tax-deductible donations to a gemach in the US. It said that, rather being used for laundering, gemachim more likely function as banks for the Haredi cash economy – if you are not declaring income to the tax authorities, you might prefer to put it in a gemach than a bank. A 2014 study is said to have found that found that 80% of Haredi families in terms of income were consistently spending more than they earned, month after month.