Promoted

A case of symbiosis

Gibraltar and Israel have been working together for a while, explain James Lasry and James Levy.

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Gibraltar and Israel have, over many years, pooled their strengths to foster ways in which the two communities can work together and benefit mutually. Israel, the ‘Start-Up Nation’, has developed significant strengths in R&D and in technological innovation. It is said to have more high-tech start-ups and a larger venture capital industry per capita than any other country in the world. Gibraltar, a UK Overseas Territory within the European Union, has established itself as a reputable finance centre that enjoys first class financial regulation and international tax compliance. The relationship between the two territories has been fruitful and in fact long predates the establishment of the State of Israel.

In 1704 during the war of Spanish Succession, an Anglo Dutch fleet captured Gibraltar from Spain. Jewish traders from Morocco were amongst the first civilians to inhabit Gibraltar, thus sowing the seeds of the strong community that survives in Gibraltar to this day. Indeed Jews have played an important part in Gibraltarian history. Don Aaron Nunez Cardozo GMH (1762 – 1834), a friend of Admiral Lord Nelson, was the long-time president of the Hebrew Community and of the Gibraltar Chamber of Commerce. Sir Joshua Hassan GBE KCMG LVO QC, (1915-1997) was the first Chef Minister of Gibraltar for over 20 years and was widely known as the “father of modern Gibraltar.” In the aftermath of WWII and later the establishment of the State of Israel, many Moroccan Jews passed through Gibraltar on their emigration to Israel. Over the generations, Palestine and then Israel supplied Gibraltar with some of its rabbis and scholars. It is no surprise that the Jewish community of Gibraltar established commercial and cultural ties with the community in Israel both before and after the establishment of the Israeli state.

Gibraltar has positioned itself as a gateway into the EU. Unlike the Channel Islands, Gibraltar elected to join the UK in its accession to the EU in 1972. Successive European financial services directives have therefore meant that Gibraltarian financial service firms such as banks, insurance companies, investment funds and investment managers can offer their services throughout the EU on the basis of their Gibraltar regulatory authorisation in what is known as ‘passporting’. Some Israeli firms have indeed established branches in Gibraltar in order to gain access into the EU. Several investment funds such as Granite Alphen Capital Fund Ltd and Alphen Oak Fund Ltd have chosen Gibraltar as their domicile for this reason.

Even where EU access was not integral to their business model, several Israeli businesses have taken advantage of Gibraltar’s effective regulatory and tax regimes. A primary example of this is the online gaming industry. While Israel’s regulatory regime was unfavourable to the industry, the amount of Israeli innovation in the field from game and application developers and other service providers required an outlet to bring its products to market. Gibraltar was able to draw on its experience in implementing the great body of EU regulation into its national law. This allowed it develop its own fit-for-purpose regulatory regime for online gaming, which has been acknowledged as the industry standard. Some of the biggest names in online gaming such as 888, bwin.party digital, Mansion, Nektan Gibraltar Limited and even William Hill have some nexus to Israel whether through research and development or ownership or both. Israel, which has been called the “silicon valley of gaming”, has been able to effectively capitalise on Gibraltar’s ability to serve as the outlet from which that knowhow could access not only Europe but indeed the world.

Much of the infrastructure for these industries was derived from Gibraltar’s long tradition of private client services including tax and succession planning. That industry spawned the growth of banks, trust and fiduciary companies, legal and accounting firms as well as investment management firms. When additional added-value services began to be established in Gibraltar such as funds, insurance companies and online gaming, the existing infrastructure was able to expand to accommodate them.

There are indeed parallels between Gibraltarian and Israeli societies. Both cultures are multi-ethnic and multi-national. Israel is largely a country of immigrants. Gibraltarians too trace their origins to Italy, Spain, England, Malta, Morocco and India. Neither territory has any natural resources to speak of and it is also safe to say that both places long for better relations with their neighbours. There has long been an Israeli consulate in Gibraltar and there are plans for Gibraltarian representation in Israel. Recently a Gibraltar Israeli Chamber of Commerce was established to enhance commercial relations between the jurisdictions. Finally, and importantly, both societies have each managed to create their own brand which their many constituents have been happy to adopt, albeit without having to forget their origins.

As the Jewish community has been fortunate to have positively impacted general Gibraltarian society, so has the symbiotic relationship between Gibraltar and Israel been of benefit to the wider community. Israeli businesses are in fact represented by any number of Gibraltarian professional services firms. Indeed, this is a statement not only of the present status quo, but also of the jurisdiction’s multi-national and multi-ethnic melange which has contributed so positively to its success.

James Lasry is Head of Funds and Partner of Hassans International Law Firm. His great-great grandfather, was a rabbinical judge in Israel who later became Chief Rabbi of Gibraltar.  

James Levy CBE QC is Senior Partner of Hassans International Law Firm and has long been President of the Managing Board of the Jewish Community. His family has lived in Gibraltar for nearly 300 years.