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As shown by DNA studies, all Jewish communities come from the Middle East originally. Later, during the Middle Ages the Sephardim were the Jewish communities in the Mediterranean area (Spain, North Africa) and points east of it, while the Ashkenazim were to the north in France, Germany, Russia and Eastern Europe. This variety of locales has led to some differences in customs, but not in the Torah-laws themselves.
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Sephardic Jews are Jewish people that originated in the Iberian peninsula (Spain and Portugal) but have lived all over the world.