Israeli Finance Minister Seeks To Exempt Russian Immigrants’ Pensions From Sanctions
Russian-Israeli World War II veterans wear their uniforms with medals during a march in the Jerusalem to mark Victory Day, May 9, 2017. (Menahem Kahana/AFP via Getty Images)

Israeli Finance Minister Seeks To Exempt Russian Immigrants’ Pensions From Sanctions

Avidgor Liberman hopes to avoid West’s ire by presenting it as a humanitarian matter

Israeli Finance Minister Avigdor Liberman met on Tuesday with representatives of the Bank of Israel and CEOs of the country’s banks, to ask them to scale down the impact of the sanctions against Russia in Israel.

Liberman’s effort mainly concerns the elderly Russian immigrants in Israel who are entitled to receive pensions from the Russian Federation.

Before the war in Ukraine and the application of sanctions on Russia, some 57,000 Israeli senior citizens received an average monthly pension of 300 shekels (about $87) from Russia, according to the Finance Ministry.

A few days after Russia invaded Ukraine in February, a large group of states banned Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system, which cut off the flow of pension payments to the retirees living in Israel.

Although Israel hasn’t officially joined the sanctions against Russia, Israeli banks have followed them.

Liberman is trying to find a solution together with the banking authorities for these senior citizens. Additionally, the minister aims to help Israeli businessmen who were involved in the Russian market and have lost access to their money due to the sanctions.

“The supervisor of banks will meet today on this issue with the finance minister and the heads of the banking system, and will present the supervisory position on the issue,” the Bank of Israel told The Media Line.

Prof. Moshe Hellinger, from the Department of Political Studies at Bar-Ilan University in Ramat Gan, near Tel Aviv, told The Media Line it is uncertain whether the international community would condemn such a move, if approved, concerning the pensions.

On the one hand, “Israel can present the issue as humanitarian because it responds to the needs of elderly people from Russia,” he said.

On the other hand, continued Hellinger, it could be seen as Israeli cooperation with Russia, and the West will be reluctant to accept that.

“You are working with Russia. [US President Joe] Biden is very strongly against any collaboration with Russia. Israel needs to act in order to not be seen as taking a side. That is very important for Israel,” Hellinger said.

Eytan Sheshinski, the Sir Isaac Wolfson Professor of Public Finance Emeritus at the Hebrew University in Jerusalem, told The Media Line that because it concerns the needs of elderly people, it is doubtful that the international community would raise any complaints.

However, Sheshinski added that this is absolutely the only matter in which Israel could ease sanctions on Russia without raising criticism from the international community.

But as for other issues that affect Israeli businessmen who worked in Russia, and who weren’t able to get their money back because of the sanctions, “I think it would be a mistake if the Israeli banks were to break the sanctions now and enable the transfer of funds from and to Russia,” Sheshinski said.

Hellinger said that from the Western point of view, “Israel is not in the place where it should be because it doesn’t help Ukraine enough.”

He added, however, that the West understands that Israel cannot send weapons, because of its need not to have Russia against it in Syria.

Sheshinski described the Israeli position on the Ukraine conflict as a very complicated one.

“Israel has until now walked on a very thin rope and stayed neutral in this conflict between Russia and Ukraine backed by the West. I think this is a wise policy and we should not deviate from the policy in any way,” he said, while making an exception for the pension issue.

Sheshinski added that retirees’ money is not a matter that affects the Israeli economy as a whole but just the individuals involved.

He added that Liberman’s motivation for this fight is related to domestic politics.

The Russian pensioners, Sheshinski said, “tens of thousands of them, are the base of Liberman’s [Yisrael Beitenu] party and he wants to represent their interest. We have elections and he wants to indicate to these people that he defends their interests.”

Hellinger agrees. He also believes that protecting his base of voters, elderly Russians, is probably Liberman’s main objective with the move, adding that the minister has significant links to Russia.

“Liberman was always connected to what happens in Russia and he has good relations with many people there,” he said.

Hellinger added that as Israel has changed prime ministers, a transition has taken place in the country’s stance.

While former Prime Minister Naftali Bennett tried to maintain good relations with President Vladimir Putin, the interim prime minister, Yair Laipid, has been more distant, Hellinger noted. “I can say that it looks in the last month that Israel is more supportive of Ukraine,” he said.

Regardless, Sheshinski believes that Lapid will probably not be opposed to freeing up the pension payments.

“I don’t think Lapid will allow the breaking of the sanctions in a broad way. But on the transfer of pensions to Russians, I think Lapid will not object,” the professor said.

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