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Israel: How it became a safe haven for Russian oligarchs

By Jemima McEvoy

Igor Bukhman and his brother Dmitri were born and raised in Vologda, Russia. There they also founded Playrix, a mobile game development company, which was to become one of the world’s best and boost Bukhman’s value to $ 16.2 billion. Ten years ago, when the war in Ukraine was not on the horizon, the two brothers began to feel insecure in their homeland. Their dispute with the police over the purchase of a piece of land – on which they were deceived – brought them to their limits and a short time later they decided to leave Russia.

Fortunately for Bukhman, the way out was paved. Due to their Jewish origin, the two brothers could obtain Israeli citizenship through the “Law of Return” of the state of Israel. “It’s quite a simple process, as long as you can prove your Jewish roots,” Igor said. “Since both my parents are Jewish, my case was very easy.” The Bukhman packed their things and moved to Israel in 2016, while in 2020 they settled in London.

Other Russian-born billionaires have benefited from the “Return Act,” also known as “Aliyah,” which automatically gives every Jew or anyone who can prove that at least one of them is an Israeli citizen. his grandparents were Jewish. Yuri Milner, one of the first to invest in Facebook and Twitter and with a personal fortune of up to $ 7.3 billion, acquired Israeli citizenship under the same law in 1999, according to his spokesman Leonid Solovyev. Born to a Ukrainian-Jewish father and a Russian-Jewish mother, the “main reason” Milner wanted the Israeli passport was “his Jewish origins and his strong personal connection to Jewish culture,” Solovyev said. He moved with his family to Israel in 2005 and his first two daughters were born there. Today, Milner is based in San Francisco Bay.

According to a Forbes survey, more than 40% of 111 billionaires of Russian descent have at least one more passport (6% have two and / or more). About half of Russia’s 35 tycoons – who have been sanctioned – have dual citizenship. After the Cypriot passport (15 Russian billionaires took advantage of the now-defunct “golden visa” program, which required an investment of at least 2 million euros, the Israeli passport is the most popular among Russian oligarchs (11), while five Russians British citizenship and 3 are Maltese citizens.

The war in Ukraine has turned interest in the Israeli citizenship program. Three of the most prominent Russian oligarchs who have been sanctioned are also Israeli citizens: Alfa Bank co-founders Mikhail Fridman and German Khan, and Roman Abramovich. The latter, owner of the English football team Chelsea, is the most famous of the three. He became rich thanks to his large stake in oil giant Sibneft, which he sold in 2005 to Russian state-owned Gazprom for $ 13.1 billion. Abramovich, who acquired Israeli citizenship in 2018, was seen in the VIP room at Israel International Airport in March, just days after British sanctions were imposed on him (he has also been sanctioned by the EU, Canada, Australia and Switzerland). Israel has maintained a largely neutral stance on the Russian invasion of Ukraine, although it hosts thousands of Ukrainian refugees.

But it is not just billionaires who are turning to Israel. The country attracts a wide range of the richest people of Russia. Israeli lawyer Eli Gervits, who specializes in the “Law of Return”, told Forbes that the number of cases reaching his office has increased 25-fold compared to the period before the Russian invasion. “It is much more than in the period after the annexation of Crimea by Russia,” he said. “Almost everyone who approaches us is not from Ukraine,” Gervits said. “Nor is he generally from Russia. He is from Moscow,” he stressed.

“I think Russian businessmen will have a very difficult time in the next two years,” agreed David Angel, whose Tel Aviv law firm is helping people from around the world immigrate to Israel. “Of course, those who are Jewish and want to settle in Israel are in an advantageous position.” Angel stressed that the number of his customers has skyrocketed by 500% since the start of the war.

Mikhail Prokhrov, a nickel mining tycoon and until 2019 owner of the Brooklyn Nets basketball team, is eager to get an Israeli passport. Prokhorov allegedly arrived in Israel in April in a private jet and applied for Israeli citizenship through the “Return Law”, according to the Israeli news website Ynet. Prokhorov and the Israeli government have not responded to Forbes’ repeated requests for comment. (Prokhorov is not among the oligarchs who have been sanctioned).

Recently, Israeli citizenship has attracted more applicants as it has become difficult to obtain a passport from other Western countries. For years, the rich and well-to-do could, in essence, buy European citizenship through the so-called “golden visa” schemes, which offered this privilege to anyone willing to invest a certain amount. Since the beginning of the Russian invasion, three countries have abolished these passports under pressure from the Commission. In particular, the Bulgarian parliament voted to end the program, which required someone to invest at least 500,000 euros in the country to obtain a European passport. Malta has abolished the “golden visa” (which required a minimum investment of 750,000 euros) for Russians and Belarusians and is reportedly considering abolishing it altogether. Cyprus has revoked the passports of 8 Russian oligarchs and their dependents.

Unlike other passports – which can take years to issue – the process of obtaining Israeli citizenship takes weeks to months, although Gervits says that timetable varies due to the war in Ukraine. As soon as the applicant proves his or her Jewish origin at the Israeli Ministry of the Interior, he or she is immediately granted a visa. The passport is delivered to this person as soon as he manages to go to Israel (if he has a private jet, he can speed up his passage). It is worth noting that the country does not reject requests for political reasons. The only cases in which a person who uses the “Law of Return” can be denied entry is if he or she has a criminal record, a communicable disease or is involved in terrorism cases.

“The law does not prohibit oligarchs of Jewish descent from acquiring Israeli citizenship,” Gervits said, noting that the “Law of Return” was enacted more than 70 years ago, after the Holocaust. “Nobody had in mind then the oligarchs or the war between Russia and Ukraine.”

In addition to the passport, Israeli citizenship is accompanied by other privileges. Those who relocate to Israel are exempt from paying income tax abroad for 10 years. In addition, Israel does not have sanctions legislation, so it is not legally bound to enforce sanctions imposed by other countries. However, Israeli leaders have stressed that their country will not be used as a haven for oligarchs to avoid sanctions, and that it has a task force to “deal with the effects of sanctions”. “Israeli citizenship is not a way to escape sanctions,” Gervits said.

Other countries, such as Spain and Austria, have similar procedures for people of Jewish descent. Portuguese law, from 2015, gives the descendants of Sephardic Jews, who were expelled from the Iberian Peninsula in the late 15th century, the right to apply for Portuguese citizenship. Using this law, Abramovich added another European passport to his possession in April 2021. However, doubts about Abramovich’s Sephardic ties (Abramovich is a common surname for the Ashkenazi, not the Sephardim) provoked outrage. in Portugal, which led to a government internal investigation into the Russian oligarch’s request, the arrest of a rabbi who “facilitated” Abramovich’s naturalization, and a change in the law on which he acquired Portuguese citizenship. The Porto municipal authority, headed by Abramovic’s rabbi in the Jewish community, has announced that it is suspending co-operation with the central government in certifying naturalization applications.

“Roman Abramovich has ruined our business,” said Michael Decker, an Israeli immigration law expert at Decker Pex Ofir & Co. “Because of him, all cases of Portuguese citizenship have been frozen. Because of him – as well as other oligarchs – the Israeli authorities are worried and trying to make the process of obtaining citizenship more difficult.”

Decker said Israel was now pressuring applicants – using the Return Act – to prove they would actually relocate to the country. However, this is difficult to prove.

The ability of Russian billionaires under sanctions to seek refuge in countries such as Israel has provoked many reactions. While acknowledging that there are “legal reasons to want a second passport”, Eka Rostomashavili of the anti-corruption organization Transparency International claims that some of the billionaires who have been sanctioned for their links to the Kremlin “They have EU passports because they probably do not want to live in the chaos they themselves have created.”

“Even if the shackles are tightened for the Russian oligarchs, ‘they are practically not in danger of being completely excluded from Israel,'” Decker said. The Government of Israel may take some measures to make it difficult to obtain a passport: e.g. to place more emphasis on the condition of residence in the country, but will not reject people for their political connections or past. “On the contrary. For Jews around the world who may be in the midst of a political crisis, Israel can be a safe haven,” Decker said. “It would be unconstitutional for Israel not to save a Jewish refugee. It is our duty to do so.”

Russian billionaires of Israeli nationality

Roman Abramovich
Dmitri Bukhman
Igor Bukhman
Mikhail Fridman
Viatcheslav Kantor
German Khan
Alexander Mamut
Alexander Nesis
Yuri Milner
Yuri Shefler
Gavril Yushvaev

Source: Capital

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