A leading European arms dealer became unable to complete significant arms deal between a leading governmental arms manufacturer from Israel and the customer of that equipment, a Western European country. The reason was a governmental restriction in Israel against the maximum brokerage fee that the manufacturer was allowed to pay brokers and dealers, whereas the purchaser of the equipment had consented to purchase from that dealer the equipment at a high sum, resulting in the brokerage fee exceeding the permitted rate.
In such a situation, it is possible either to force the dealer to purchase the equipment and sell it to the purchaser or establish a dedicated escrow account at a bank. The banking system, which is familiar with the option of creating escrow accounts, could not provide the service owing to various restrictions applying to it in that field.
Accordingly, a legal and business structure simulating such an escrow account was formed, all the regulatory approvals were obtained and the deal went ahead.