Prime Minister Benjamin Netanyahu maintained an offshore bank account in the Channel Islands after his first term as prime minister and while he was a government minister, the Israeli newspaper Globes revealed on Wednesday. The islands are regarded as an international tax haven.
The account was active between 1999 and 2003. During the latter part of that period, he was a government minister and was meant to have put all his assets in a blind trust.
The reporting obligations and restrictions that apply to ministers and MKs did not apply to Netanyahu when he was out of politics, between 1999 and 2002. But from November 2002, when he was appointed foreign minister in Ariel Sharon’s first government, all the rules regarding ethics and preventing conflicts of interest did apply, and he was required to put all his assets into a blind trust except for a sum of 180,000 shekels (around $38,300 at 2002 exchange rates).
From February 2003, he served as finance minister and as such was responsible for the Israel Tax Authority.
Netanyahu was required to submit a declaration of wealth to the Knesset speaker when he was an MK (2006-2009) and to the State Comptroller when he was in government (2002-2005 and from 2009 onwards.) Such declarations of wealth are not publicized.
In August 2012 TheMarker revealed that Netanyahu had asked the State Comptroller’s Office for permission to amend the instructions he’d issued in 2009, upon becoming prime minister, regarding the makeup his investment portfolios in Israel and abroad, but in end he withdrew his request.
Globes reported that it was in possession of documents showing that Netanyahu transferred funds to an account in his name at a branch of the Royal Bank of Scotland on the Isle of Jersey, which is part of the Channel Islands.
The economy of the islands is based on the financial sector, due to their liberal tax regimes. Jersey is rated as the world's top tax haven, with a tax rate of zero percent..
Netanyahu personally signed all the bank documents, Globes reported.
Israeli law permits the holding of bank accounts in tax havens, provided that the account owner notifies the Israel Tax Authority about them. However, the Tax Authority, an agency that was answerable to Netanyahu when he was finance minister, is trying to reduce Israelis' use of tax havens.
The Prime Minister's Office said in response to the report, "This time too your attempts to discredit Prime Minister Benjamin Netanyahu do not fit in with the facts. We are talking about an account that has not been active since 2003. In 1999 after Netanyahu's first term as prime minister he made an investment via the account that had no tax advantage over Israel. The accounts and deposits were fully reported to the authorities in Israel including the Israel Tax Authority and were also included in the declaration of wealth filed by Netanyahu with the Israeli authorities."
The statement added, “The investment in the Jersey account was not made for tax considerations, since until 2003 all interest earned abroad was exempt from tax; it was made [to achieve higher] yields.”
The Globes report provides details of transactions conducted from Netanyahu's account, many of them to people with whom he was connected politically, both before and after his first term as prime minister. Among those who were paid from the account were Yitzhak Molho, Netanyahu's long-time diplomatic emissary, attorney David Shimron, who twice represented Netanyahu, and Yehuar Gal, who was Netanyahu's chief of staff in 2000.
The documents show that on February 2, 2002, Netanyahu instructed the manager of his Jersey bank account to transfer $145,000 to Lehman Brothers in New York. He returned to politics in 2002 as foreign minister and was appointed finance minister the following year.
In September 2012, Forbes reported that Netanyahu’s assets were worth 41 million shekels ($10.3 million.) Netanyahu owns a villa in Caesarea that he bought in 2002 at a below-market price and that was valued in 2012 as being worth between 10-15 million shekels. He also owns a roof apartment on Gaza Street in Jerusalem, estimated to be worth 7-8 million shekels.
Netanyahu accumulated most of his wealth from lectures and business deals he made during the years he was out of politics. He was very much in demand as a speaker abroad after his first term as prime minister and would receive thousands of dollars per speech. He also served as a senior consultant to communications equipment developer BATM for two years.
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