Despite an ongoing “visa crisis,” (see below) the US and Israel have taken the final step before finalizing Israel as a participant in the E-2 Non-Immigrant Investor Visa program, designed to allow foreign nationals to invest in the US economy, and vice versa, through reciprocal treaties of commerce. The E-2 Visa will allow Israeli citizens, along with any essential employees and family, to live and work in the US so they can oversee their investments.

In 2012, President Obama signed legislation that would add Israel to the list of countries eligible for E-2 nonimmigrant investor visas to the United States. However, the law’s implementation was on hold for over two years because Israel had not yet ratified the Treaty. The visa program can only take effect once both countries agree to all terms and conditions.[1]

Over 2 years after the U.S. government approved the legislation, in what has been described as a “sudden turnaround,” the Israeli Knesset finally approved the visa legislation on August 13, 2014. According to Interior Minister Gideon Sa'ar, “The investor visa approval is expected to contribute to Israel's economy and create jobs for the citizens of Israel in the future.” He added that the agreement will open “new avenues for investment in the joint Israeli-American economy." In addition to granting investor visas, the E-2 program also allows citizens of Israel and the United States to make joint investments.[2]

The Knesset’s decision to grant reciprocal visas to American investors in Israel took place amidst an ongoing “visa crisis,” which played out over the course of 2014. In February, 2014, State Department visa figures revealed that many Israelis were being barred from entering the US, including investors, as well as tourists[3] and Israeli defense officials.[4] Following accusations that the US was rejecting Israeli visa applications for political reasons, the US Secretary of State John Kerry launched an internal review on April 13th, 2014 to look into these claims. An initial investigation found that the rejection rate of visa applications for young Israeli tourists had indeed doubled, from 16% in 2009 to 32% in 2014.[5] These findings are part of a rising trend of Israeli visa rejections that has taken place over several years.[6]

The high rate of Israeli visa rejections has profound implications, as it caused Israel to lose its place on the "white list," the list of countries whose citizens can visit the US without a visa. Only nations with a visa rejection rate of less than 3% are allowed on the list.[7]

Following these initial revelations, US Ambassador to Israel Dan Shapiro announced that the State Department would “take immediate steps to increase the number of young Israelis that can travel to the US according to our immigration laws.” He also assured Israel that it “is one of the US's closest allies” and that the US welcomes “all networking between Israelis and Americans, including visits to the United States."[8]

Though the State Department’s investigation is not yet complete, the United States’ recent re-commitment to improving relations with Israel by increasing the number of visas granted to Israeli nationals may explain the Knesset’s sudden turnaround this past August. In addition, Israel needed time to iron out some details of the legislation and how it would be implemented, particularly because Israeli immigration law did not have a visa category that parallels the US’s E-2 visa. Moreover, historically, Israeli immigration law has not granted visas to an investor’s accompanying spouse as does the E-2’s Employment Authorization Document (EAD).[9] There are additional politically-driven concerns on the Israeli side which temper the resistance. However, notwithstanding the reason for Israel’s turnaround, ratifying the US-Israel bilateral E-2 visa will no doubt encourage economic growth in both countries and strengthen their political relations.

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