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January 29, 2024

Bank finds Abramovich’s $2.2M donation refusal fair and sound.

TLDR: Attorney General Gali Baharav-Miara has supported Bank Mizrahi Tefahot in its refusal to transfer a $2.2 million donation from Roman Abramovich to the ZAKA search and rescue organization due to EU and UK sanctions against Abramovich. The Attorney General concluded that the bank’s refusal is “reasonable” and aims to reinforce the bank’s autonomy and compliance with international sanctions. The bank’s refusal will be further assessed in an ongoing court case at Tel Aviv District Court.

– Attorney General supports Bank Mizrahi Tefahot’s refusal to transfer donations from Roman Abramovich due to international sanctions
– The refusal is considered “reasonable” to comply with sanctions and protect the bank from various risks

In the ongoing lawsuit filed by Roman Abramovich and ZAKA against Bank Mizrahi Tefahot, Attorney General Gali Baharav-Miara has intervened to support the bank’s decision not to transfer Abramovich’s donation to the ZAKA search and rescue organization. The bank has refused to approve the transfer of funds due to Abramovich’s inclusion on EU and UK sanctions lists. The attorney general has sided with the bank, stating that the refusal is “reasonable” and aims to protect the bank from compliance risks, money laundering risks, legal risks, terrorism risks, and reputational risks.

The Attorney General’s intervention came after a preliminary hearing in which Judge Yardena Seroussi deemed the bank’s refusal as “unreasonable.” The Attorney General stepped in due to the broad public interest in ensuring proper bank management and potential economic implications if the lawsuit succeeded. The Attorney General emphasized the importance of banks’ compliance with international sanctions and stated that if there is concern about activities conflicting with sanctions, banks should adopt the sanctions regime themselves.

In conclusion, the Attorney General stated that the bank’s refusal to transfer Abramovich’s donation is reasonable and in compliance with the bank’s risk management policy and legal obligations. The consequences of intervening in the bank’s risk management could impact the entire Israeli economy and expose the entire banking system to multiple risks. Roman Abramovich and ZAKA’s legal counsel expressed disappointment with the decision, arguing that the State Attorney’s Office relied solely on the opinion of the Supervisor of Banks and not on the stances of government ministers and the government of Israel, which decided not to participate in the sanctions regimes. They also highlighted that the donation is a philanthropic act on Israeli territory during a difficult time for the state during wartime.

The ongoing court case will further assess the bank’s refusal to transfer Abramovich’s donation and its compliance with international sanctions.