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Suspect in arms sale to Asian country was previously entangled in similar case

Both attempts — which involved munitions that loiter near, search for and then attack their target — expose holes in Israel’s defense export oversight mechanism

A photo said to depict illegal missile development for an unnamed Asian country, released February 11, 2020. (Shin Bet)
A photo said to depict illegal missile development for an unnamed Asian country, released February 11, 2020. (Shin Bet)

A suspect who allegedly illegally made and sold missiles to an Asian country was involved in a similar affair more than a decade ago, The Times of Israel has learned.

On Thursday, the Shin Bet and police announced that 20 suspects were being investigated for allegedly illegally developing, manufacturing, testing, and selling loitering munitions, or kamikaze drones, to an unnamed country somewhere in Asia.

In a statement, the Shin Bet said that they included former defense industry employees and the alleged crimes included offenses against the security of the state, violations of the law on the supervision of security exports, money laundering, and additional economic offenses.

Most of the details of the case, including those obtained by The Times of Israel, remain under a gag order issued by the Rishon Lezion Magistrate’s Court. However, the case has shed some light on a loophole in the Defense Ministry mechanism meant to oversee exports of arms or military-grade material, managed by the Defense Export Control Agency (DECA).

The earlier affair revolved around an attempt to smuggle a similar type of weaponry to a country in Asia. The munitions allegedly developed in the current affair use a more advanced version of the technology at the center of the older case, according to information obtained by The Times of Israel.

Loitering munitions, also known as kamikaze drones, are a highly-sought type of missile that lingers in the air until it identifies a target, which it then attacks. A video released by authorities showed an illegal test of the weapon carried out in daylight in central Israel in 2019. Police said the munition was fired not far from residential neighborhoods.

“This affair underscores the potential damage to the security of the state inherent in illegal transactions carried out by Israeli citizens with foreign elements, including the concern that such technology could reach countries hostile to Israel,” the Shin Bet said in a statement.

According to sources familiar with details of the case, the court allowed publication of the bare facts of the investigation once it became clear that the size and import of the case would make keeping the gag order impossible. However, the timing of the release has raised some questions, given that no media outlet had asked for the gag to be removed, and that the police and Shin Bet actively released the details to the public.

On the defensive

From 2015 to 2019, Israel was the eighth largest arms exporter in the world, according to a report by the Stockholm International Peace Research Institute, with over $4.3 billion in sales around the world.

The report noted that Israel’s arms sales made up three percent of the global arms trade over that period, with its three top buyers India, Azerbaijan, and Vietnam. According to SIPRI, the top arms importers during the same period were Saudi Arabia, India, Egypt, Australia, and China, in descending order.

Israel is home to some 1,600 licensed arms exporters, which employ 150,000 to 200,000 people. In addition, there is a large supply chain of subcontractors who supply software, hardware, raw materials, and other goods necessary for arms production.

Watching over this massive system is supposed to be DECA, which is guided by strict rules governing Israel’s arms export industry. The body, which operates with nearly no transparency, is supposed to vet arms deals to ensure that they do not go to enemy countries, endanger Israel in any way, include classified technology, or stand to harm Israel’s international standing.

However, holes in the oversight apparatus exist and were apparently exploited by the suspect in both cases. One way to try to get around DECA is to never apply for an export license, thus staying off the body’s radar.

An exporter can also try to bypass DECA by exporting arms to a middleman country where sales are allowed, and while in that country, transferring know-how or technology to the forbidden actor.

Neither the Defense Ministry or DECA replied to requests for comment.

The DECA mechanism was created in 2007, years after an Israeli fighter jet deal got tangled up in US-China tensions.

In the late 1990s and early 2000s, the US demanded Israel Aerospace Industries cancel separate deals with China for Phalcon airborne early detection radar systems and Harpy drones. Israel complied both times, after numerous threats from the US, and agreed to stop selling military hardware to China, drawing anger from Beijing and damaging ties.

Since then, Israel will not export security products to China without Washington’s okay.

During the Trump administration, Israel came under pressure to cancel non-security deals with China as the US attempted to squeeze Beijing.

At the urging of former US secretary of state Mike Pompeo, Israel agreed to set up a mechanism to look into deals with China that may have national security implications, which can include anything from the sale of a port to 5G infrastructure.

The Biden administration is widely expected to maintain pressure on China and maintain demands for tight oversight of deals involving major infrastructure works, defense or telecommunications.

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