Rich enough to own a jet? Israel wants to make your life even easier

Israel has plenty of laws and regulations, but if you are rich enough – enough to own a private jet – you can bypass these nuisances and park your private jet that is registered in a foreign country or tax shelter for as long as you like, contrary to the country’s aviation regulations.

Private jets that are parked in Israel are often registered in the name of shadowy companies, making it impossible to know who their actual owners are. But even when the owners’ names are known, these wealthy businesspeople receive exemptions from the regulations. Sometimes these planes are leased from international companies, without any transparency as to who is using them. But don’t worry – in this case too, the planes are exempt from the regulations.

The Aviation Law includes a regulation stipulating that no foreign aircraft – a plane or helicopter registered in another country, like many of the private planes used by Israeli businesspeople – shall be operated in Israel on an ongoing basis. Specifically, a foreign aircraft may not stay in Israel for more than a combined 45 days during any continuous period of 270 days. A foreign aircraft may therefore stay in Israel for a maximum of 45 days out of nine months.

This seemingly arbitrary rule is really due to safety considerations. “If a foreign aircraft resides permanently in Israel, that means it is not getting to its country of registration/operation, raising the concern that its safety inspection is subpar,” says a Civil Aviation Authority document.

However, in this same document, the authority outlines possible exemptions from this regulation, such as a plane that comes to Israel for lengthy maintenance operations that last longer than 45 days, or for a plane operated by an Israeli airline, which are commonly leased from foreign carriers and remain registered in other countries.

There is also a bypass route to obtain exemptions from this regulation, with it being a bit hazy as to who has the authority to enforce it. Currently, more than 90 exemptions from the regulation are on record, including for planes operated by Israeli companies like Israir, and for planes owned by wealthy Israelis clearly listed by their full name, such as Morris Kahn.

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But in the large majority of instances, the aircraft that received the exemption are registered in the name of foreign companies in locations like the Isle of Man or the British Virgin Islands – places known as tax shelters – and it is difficult to find specific information about their owners. In other cases, such as for the plane used by the billionaire Shari Arison, the aircraft is registered in the United States and can be connected to companies that she owns.

The formula for the exemption is identical in all these cases. All that changes is the company name, the aircraft model, its registration and the contact people responsible for its maintenance. Thus, without having to do any further registration, the plane’s operators can fly it exclusively for the use of its owners, their family and their guests. Those who receive an exemption must pledge to conduct appropriate maintenance while the plane is in Israel, and to submit a monthly report to the Civil Aviation Authority detailing the flights and passenger manifests.

The authority to grant an exemption rests with the director of the Civil Aviation Authority, Joel Feldschuh. The conditions and rules under which an exemption is granted are murky, and not open to public examination. For example, one may request that information about the applicant not appear on the exemption certificate, which is published on the authority’s website, and which in most cases only provides the name of the company that owns the plane – which is often registered in a tax shelter. In this way, someone can register a private aircraft in a tax shelter and then, for a few hundred shekels, use it from Israel as much as they want.

The aviation authority is authorized to grant an exemption from safety regulations if it believes that “in the particular circumstances, the regulation over which the exemption is requested is not reasonable or appropriate,” the law says. The authority can decide on its own whether the regulations that were instituted for safety purposes are superfluous. But it must also be “convinced” that the proper safety level is maintained.

There are also limits to the Civil Aviation Authority’s actual authority. An exemption may not be granted for the purpose of commercial operation. This means that an airline that offers private planes for rent cannot register them in foreign countries if it wants to operate them from Israel on a regular basis. Someone who is not renting the plane out, but only using it themselves or for their family or associates, can apply for an exemption.

There are also three reasons given to justify the exemption. The first is a temporary need due to the COVID pandemic, which has now become less relevant. The second is a temporary administrative need, such as the transfer of an aircraft’s registration from a foreign country to Israel, an understandable reason.

The third reason gives the Civil Aviation Authority nearly unlimited power to grant an exemption, requiring“proof of another need for the operation of a foreign aircraft in Israel, or other special circumstances.” In other words, the authority essentially has carte blanche to grant an exemption to whomever it chooses.
The authority’s website contains a list of dozens of exemptions – some for airlines, and some for Israeli businesspeople who make use of the vague law to bypass the regulations. Among the exemptions that were approved and in which the applicant’s name appears are a number of names that are very familiar to the Israeli reader, including tycoons Eytan Stibbe, Avi Nakash, David Sapir, Ehud Angel, and David Fattal; and the companies Rapyd, Playtika, and Israel Aerospace Industries.

The companies that own the planes are often registered in tax shelters and not required to pay registration fees or taxes to Israel thanks to clever tax planning, but they are still authorized to operate the private planes that serve the tycoons almost completely freely.

Authority for granting these exemptions lies with the Civil Aviation Authority, without due oversight over the identity of those receiving the exemptions. At the same time, commercial entities are not eligible to operate in the same manner. And thus a path to bypassing the law is officially created, one that serves the interests of the tycoons.

The Civil Aviation Authority said in response to this article: “The Civil Aviation Authority operates in accordance with the Aviation Law (Section 165) with regard to granting parking permission at Ben-Gurion Airport for private aircraft registered in foreign countries. Exemptions to the regulations for operating a foreign aircraft in Israel (Regulation 42A) are granted without bias and without examining the applicant’s financial status. The intention of the regulation is to maintain the safety of Israel’s controlled airspace in the event of an absence of effective safety oversight of the aircraft and its operation due to its registration in a foreign country.”