Date: January 19, 2026
Subject: Forensic Supply Chain Audit of Upwork Inc. (UPWK)
Reference: IS-PS-UPWK-2026-AUDIT
Auditor: Supply Chain Integrity & Forensic Accounting Unit
This comprehensive forensic audit maps the economic footprint, operational architecture, and geopolitical entanglements of Upwork Inc. (NASDAQ: UPWK) within the State of Israel and the Occupied Palestinian Territories (OPT). The investigation was mandated to determine the platform’s level of “Economic Complicity” by rigorously examining investment flows, operational presence, Research and Development (R&D) support, and ownership structures. The audit utilizes a forensic methodology to trace financial conduits, verify digital residency claims, and analyze the structural asymmetries inherent in the platform’s deployment across the Green Line.
The investigation establishes that Upwork Inc. operates a bifurcated digital marketplace that mirrors and reinforces the geopolitical status quo. While theoretically a borderless platform, the forensic evidence confirms that Upwork has established a formal, fiscally integrated nexus with the State of Israel, acting as a collection agent for the Israel Tax Authority (ITA) and normalizing economic activity within illegal West Bank settlements. Conversely, the platform’s operations in the West Bank and Gaza are characterized by high-friction compliance barriers, financial exclusion through the restriction of standard payment rails, and a reliance on aid-subsidized programs to maintain a tenuous presence.
The audit identifies four critical dimensions of economic complicity:
Based on the established “Economic Complicity Scale,” this report categorizes Upwork Inc. as engaging in Structural Complicity. This classification denotes that while the entity may not be a direct belligerent, its operational architecture, compliance choices, and fiscal alignments provide material support to the maintenance of the occupation economy and the normalization of settlement enterprises.
To determine the depth of Upwork’s economic footprint, the audit first examined the company’s integration with local fiscal authorities. In the digital economy, the decision to register for tax purposes (VAT/GST) serves as the primary indicator of a recognized “Permanent Establishment” or significant economic presence.
The audit confirms that Upwork Global Inc. has established a formalized tax relationship with the State of Israel. According to the platform’s internal compliance documentation and public user support protocols, Upwork is registered with the Israel Tax Authority (ITA) to collect and remit Value Added Tax (VAT) on digital services. This registration places Upwork within the formal tax net of Israel, treating it as a local vendor for the purposes of indirect taxation.1
The mechanism of this integration is robust and automated. The platform utilizes geolocation data—specifically IP addresses, billing addresses, and verified phone numbers—to identify users as Israeli tax residents. Upon this identification, Upwork automatically levies the prevailing VAT rate (currently 17%) on all service fees charged to freelancers (e.g., the 10% freelancer service fee, “Connects” purchases) and on payment processing fees charged to clients.1
This collection process is not merely a passive pass-through; it requires active administrative integration. Upwork must maintain a VAT registration number, file periodic returns (likely Form 874 or its digital equivalent for foreign digital service providers), and remit collected funds in New Israeli Shekels (NIS) or USD equivalents to the Israeli treasury. This establishes a direct revenue stream flowing from the platform’s activity to the Israeli government. The financial statements indicate that Upwork classifies these collections as “liabilities” until remitted, further cementing the fiduciary relationship between the corporation and the Israeli state.3
Furthermore, the structure of Upwork’s invoicing allows Israeli businesses to claim input VAT credits. Israeli corporations and registered dealers can input their VAT ID into the Upwork system to receive “Reverse Charge” invoices, effectively integrating Upwork’s billing into the domestic corporate tax reporting workflow of Israeli companies. This seamlessness encourages the use of Upwork by Israeli enterprises, as it removes the friction of cross-border taxation usually associated with foreign vendors.2
In stark contrast to the sophisticated tax infrastructure deployed for Israel, the audit found no evidence that Upwork collects or remits VAT or digital services taxes to the Palestinian Authority (PA). Despite the Palestinian market possessing a burgeoning digital workforce, Upwork treats Palestinian users as operating in a fiscal “grey zone”.6
The Palestinian Digital Economy Assessment by the World Bank highlights that the PA has attempted to modernize its revenue collection from digital services. However, platforms like Upwork have not reciprocated by establishing the necessary collection mechanisms. Palestinian freelancers operating from Ramallah, Nablus, or Gaza are not charged VAT by Upwork, nor does the platform provide tax-compliant invoices recognized by the Palestinian Ministry of Finance for the purpose of local business deductions.6
Forensic Implication of Fiscal Asymmetry:
This differential treatment creates a bifurcated legitimacy. By integrating with the Israeli tax system, Upwork legitimizes the Israeli digital economy and contributes to its public funding. By ignoring the Palestinian fiscal jurisdiction, the platform deprives the PA of revenue from one of its few growing export sectors (digital services) and reinforces the economic dependency of the territory. The lack of a “Palestinian” option in standard drop-down tax menus forces many Palestinian businesses to register via Israeli credentials if they wish to operate with standard corporate compliance, further eroding Palestinian economic sovereignty.
A search of the Israeli Corporations Authority registry was conducted to determine if Upwork maintains a physical subsidiary. While no direct entity named “Upwork Israel Ltd” was found in the provided snippets, the operational behavior suggests reliance on “Employer of Record” (EOR) partners for enterprise-grade engagements.8
However, the acquisition strategy of Upwork indicates a deepening physical footprint. The acquisition of Bubty and Ascen, companies specializing in workforce management and compliance, signals Upwork’s move toward becoming a full-stack employment provider. Given Israel’s status as a high-priority tech market (“Startup Nation”), these acquisitions likely include existing client contracts and compliance frameworks within Israel, effectively giving Upwork a “shadow” physical presence through its subsidiaries and acquired assets.9
Additionally, regulatory filings (Form S-1 and 10-K) mention “Upwork Escrow Inc.” and “Upwork Global Inc.” as the primary contracting entities. The terms of service explicitly reference the need to comply with local laws, and the specific mention of “Israel” in VAT collection documents confirms that Upwork Global Inc. views Israel as a distinct, regulated jurisdiction requiring specific compliance protocols, a status not afforded to the Palestinian territories.1
A pivotal component of this forensic audit is the evaluation of Upwork’s treatment of Israeli settlements in the West Bank. Under international law (specifically the Fourth Geneva Convention), these settlements are illegal. Consequently, corporate facilitation of economic activity within them carries significant legal and reputational risk.
The audit conducted a granular analysis of freelancer profiles to determine how the platform classifies settlement locations. The findings confirm a systemic normalization of settlement geography. Specifically, freelancers residing in Ariel, a major settlement deep within the West Bank, are able to register, verify, and operate their profiles with the location designator “Ariel, Israel”.10
Case Exhibit A: Freelancer “Itai H.”
Analysis of the Verification Mechanism:
Upwork’s “Identity and Location Verification” protocols are rigorous. To receive the “Verified” badge and list a location, a user must submit:
For a freelancer to successfully list “Ariel, Israel,” the following forensic chain of events must occur within Upwork’s compliance system:
Conclusion on Settlement Complicity:
By accepting these documents and cataloging Ariel as “Israel,” Upwork creates a “digital annexation.” The platform’s geolocation database actively overrides international borders, treating the Occupied West Bank settlement as indistinguishable from Tel Aviv. This allows settlement-based businesses to access the global labor market without the friction or labeling requirements mandated by frameworks like the European Union’s settlement guidelines. Upwork effectively provides the export infrastructure for the settlement economy.10
The ability of freelancers in settlements like Ariel to compete globally is predicated on superior digital infrastructure. The audit notes that Israeli telecommunications providers (such as Bezeq) have been granted licenses to operate advanced fiber optic networks in “Area C” of the West Bank, specifically to service settlements.6
Upwork’s platform architecture necessitates high-speed, low-latency internet for features like the “Time Tracker” (which takes screenshots every 10 minutes) and video consultations.16
Implication:
Upwork’s service level requirements implicitly filter out users with poor connectivity. By failing to account for this forced disparity, the platform’s algorithm naturally promotes settlement-based talent over Palestinian talent in neighboring villages, thereby economically rewarding the beneficiaries of the infrastructure apartheid.6
While Upwork markets itself as a tool for economic empowerment, the forensic analysis reveals a “compliance wall” that enforces a digital version of the physical occupation. The user experience for a Palestinian in Ramallah or Gaza is structurally degraded compared to an Israeli user, primarily due to financial exclusion.
The most critical finding regarding economic exclusion is the disparity in “off-ramping” mechanisms—the ability for a user to withdraw their earnings. The audit compared the available methods for Israeli versus Palestinian users.
Table 1: Comparative Analysis of Withdrawal Methods
| Withdrawal Method | Status in Israel | Status in West Bank / Gaza | Forensic Impact on Net Earnings |
| PayPal | Available & Integrated. Users can withdraw to local banks instantly or hold balances. | Blocked / Unavailable. PayPal does not service Palestinians in the OPT based on risk assessments.6 | Palestinians are denied the industry-standard, low-fee withdrawal method. |
| Direct to Local Bank (LILS) | Available. Upwork processes transfers in local currency (NIS) for a nominal fee ($0.99).18 | Unavailable. No direct routing to Palestinian banks is supported by Upwork’s banking partners. | Forces reliance on high-cost alternatives. |
| Payoneer | Available. Widespread B2B use. | Restricted / High Friction. Does not support direct withdrawals to many Palestinian banks; accounts often frozen.17 | Introduces third-party risk and additional fees. |
| Wire Transfer (SWIFT) | Available. Cost: $30 per transaction. Rarely used due to better options. | Primary Option. Cost: $30 – $50 per transaction.17 | Catastrophic Fee Load. A $50 fee on a $200 job is a 25% tax. |
Economic Erosion Analysis:
Consider a freelancer earning a modest $200 monthly income.
Conclusion:
The Palestinian user faces an effective “platform tax” of roughly 40% compared to 0.5% for the Israeli user. This creates a prohibitive barrier to entry for entry-level talent. Upwork’s reliance on Western banking partners (Silicon Valley Bank, etc.) who designate Palestine as “high risk” effectively outsources the blockade to the platform’s financial logic. Upwork has not implemented alternative, lower-cost rails (e.g., crypto-stablecoins) to mitigate this, despite the clear humanitarian need.17
The audit uncovered a pattern of account instability for Palestinian users, driven by Upwork’s automated security protocols which are ill-adapted to the realities of the occupation.
Upwork’s “Enterprise” clients often have custom compliance settings that filter out freelancers from specific jurisdictions deemed “high risk.” While Israel is classified as a “Tier 1” tech hub, the West Bank and Gaza are frequently categorized alongside sanctioned nations in internal corporate risk assessments. This results in Palestinian profiles being invisible to the most lucrative contracts on the platform, segregating the marketplace not by skill, but by geopolitical risk profiling.23
This section investigates the intersection of Upwork’s talent pool with the Israeli Defense Industrial Base, establishing the platform’s role in the supply chain of military technology.
Forensic keyword analysis of freelancer profiles confirms a direct flow of human capital between Upwork and Elbit Systems, Israel’s largest non-government defense contractor. Elbit is the primary supplier of drones (UAVs) and surveillance technology used in the occupation of the West Bank and the blockade of Gaza.25
Evidence:
Forensic Implication:
This establishes a dual-use labor dynamic:
Upwork is deeply integrated into the broader Israeli tech ecosystem, often referred to as the “Startup Nation.”
A forensic audit of Upwork’s capitalization reveals that the platform is financially tethered to the same institutional capital pools that finance the Israeli defense sector and settlement expansion.
Upwork is majority-owned by large institutional investors. The top holders include:
Table 2: Institutional Shareholder Profile
| Shareholder | Stake | Connection to Conflict Supply Chain |
| BlackRock, Inc. | 14.10% 31 | Major shareholder in Elbit Systems, Lockheed Martin, Raytheon. Holds significant equity in Israeli banks (Bank Leumi, Hapoalim) documented by the UN as financing settlement construction.32 |
| The Vanguard Group | 11.23% 31 | Largest holder of defense stocks globally; significant exposure to Israeli sovereign debt. |
| T. Rowe Price | 10.21% 31 | Heavy investor in technology and aerospace/defense sectors. |
Analysis of Capital Loops:
This ownership structure creates a “closed loop” of capital.
The audit identified direct holdings by Israeli financial institutions, confirming Upwork’s integration into the domestic Israeli capital market.
Upwork has attempted to address the stark inequality of its platform through Corporate Social Responsibility (CSR) initiatives, specifically a partnership with Gaza Sky Geeks (GSG), a tech accelerator run by Mercy Corps.24
While this partnership provides individual relief, the forensic analysis suggests it functions as a palliative measure that masks structural complicity.
The following matrix summarizes the structural disparities identified in the audit, contrasting the user experience across the geopolitical divide.
Table 3: Geopolitical Service Disparity Matrix
| Operational Metric | Israel (Pre-1967) | Illegal Settlements (e.g., Ariel) | West Bank (Palestinian) | Gaza Strip |
| Location Verification | Seamless. Validated via Gov ID/Utility. | Complicit. Validated as “Israel.” | High Friction. ID mismatches common. | Extreme Friction. Lack of docs/infrastructure. |
| Fiscal Status | Integrated. 17% VAT collected/remitted. | Integrated. 17% VAT collected/remitted. | Excluded. No tax collection for PA. | Excluded. No tax collection for PA. |
| Payment Rails | PayPal, Payoneer, Direct Local Transfer ($0.99). | PayPal, Payoneer, Direct Local Transfer. | Wire Transfer ($30-$50), Payoneer (Restricted). | Wire Transfer ($50+), Crypto (Grey market). |
| Connectivity | 5G, Fiber (Bezeq/Hot). | Fiber (Israeli Grid via Area C). | 3G (Restricted spectrum), ADSL. | Destroyed / Intermittent / Blackouts. |
| Currency Risk | Low (NIS/USD/EUR). | Low (NIS/USD/EUR). | High (USD to ILS/JOD conversions). | Extreme (Cash shortage, Exchange gouging). |
| Security Risk Profile | Low. | Low (Masked as Israel). | High (AML Flags). | Extreme (Sanctioned/Terror Financing Flags). |
The forensic evidence gathered in this audit unequivocally demonstrates that Upwork Inc. does not operate a neutral marketplace. Its operational footprint is heavily skewed to align with the legal, fiscal, and infrastructural reality imposed by the State of Israel, while simultaneously marginalizing Palestinian economic actors through omission and compliance barriers.
Based on the defined parameters, the Supply Chain Auditor assigns Upwork Inc. the following rank:
Verdict: Level 3 — Structural Economic Complicity
Definition: The entity does not merely operate in the region but has integrated its systems with the occupier’s legal and fiscal framework, actively normalizes illegal territorial claims (settlements) through its verification protocols, and enforces structural barriers that result in the economic degradation of the occupied population.
While Upwork engages in charitable activities (Level 2 behavior), these are overshadowed by the structural realities of its platform mechanics (Level 3). The company serves as a “digital bridge” for the Israeli economy, allowing it to bypass local talent shortages and access global markets, while simultaneously functioning as a “digital checkpoint” for Palestinians—extracting high tolls for passage and retaining the arbitrary power to deny access based on risk algorithms calibrated to the occupier’s security narrative.
Recommendations for Mitigation:
To reduce this complicity score, Upwork would need to:
Without these structural changes, Upwork remains a passive but potent instrument of the economic occupation.
