Court orders bank to transfer Abramovich’s ZAKA donation

The Tel Aviv District Court today accepted the request by Roman Abramovich and the ZAKA search and rescue organization, and ordered Mizrahi Tefahot Bank to transfer NIS 8 million that the Israel-Russian billionaire wants to donate to the search and rescue organization. The instruction was given despite the opposition of the Attorney General, Bank of Israel and Supervisor of Banks, which supported the bank’s refusal to transfer the funds. Mizrahi Tefahot Bank said it will appeal the decision and consequently the ruling has been put on hold for 72 hours.

Abramovich is subject to sanctions from the EU and UK and although Israel has not adopted these sanctions, Mizrahi Tefahot Bank blocked Abramovich’s bank account in Israel.

After the atrocities of October 7, Abramovich agreed to donate NIS 8 million to ZAKA but the bank refused to transfer the money. Mizrahi Tefahot argued that the bank’s risk management policy, which the regulator’s instructions oblige it to implement, prohibits it from allowing ongoing banking and business activity with entities that are included in sanctions lists published by some entities abroad, including the EU and UK. Since Abramovich appears on these lists, the bank insisted it would only be able to transfer the funds if Abramovich received a license to do so.

Abramovich and ZAKA filed a lawsuit against the bank in the Tel Aviv District Court through Advs. Shmuel Cassouto and Bella Feld asking that an injunction be issued to Mizrahi Tefahot instructing it to transfer the donation to ZAKA. Earlier this week Attorney General Gali Baharav-Miara supported the view of the Bank of Israel and Supervisor of Banks that transferring the funds would put the bank at risk by violating EU and UK sanctions.

However, today Tel Aviv District Court Judge Yardena Seroussi dismissed the Attorney General’s ruling and issued a temporary injunction for the transfer of the funds. She said that no concrete evidence was given to support the concerns pointed out by the bank, regarding the economic damages that could arise as a result of violating EU sanctions. She said, “The bank did not examine on the merits of the matter and on the basis of individual data, whether it is appropriate to exclude the transfer of a donation from an Israeli account to an Israeli account, while examining the benefit that will arise from this against the potential damage.” She added that the bank”copy-pasted” the foreign sanctions, without exercising independent judgment”.

The judge accepted Abramovich and ZAKA’s argument that the sanctions do not include a prohibition on the transfer of the donation, since they do not apply in Israel.

Adv. Shmulik Cassouto said, “We thank the court for its ruling to allow Mr. Abramovich to donate NIS 8 million to ZAKA. The aim of the lawsuit was to allow ZAKA, an organization that receives minimal government funding, to prepare itself for future challenges and be able to continue to perform its sacred work for the Israeli people. ZAKA is an important asset for the State of Israel and Mr. Abramovich is proud to support the organization’s activities.”

Published by Globes, Israel business news – en.globes.co.il – on January 30, 2024.

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