Israel Finally Moving to Define National Policy on Iran

When it comes to preventing companies from doing business with Iran, Israel continues to drag its feet.

Yossi Melman head
Yossi Melman
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Yossi Melman head
Yossi Melman

After much delay, the Israeli government is finally trying to advance a bill that will define national policy on Iran. The ministries' legal advisers are working to put legislation together. The goal is to adhere to UN resolutions that impose sanctions on Iran, and to work with Western countries that already have laws prohibiting or restricting trade with the Islamic Republic. Israel is apparently the only country in the West whose laws don't address this issue.

Basically, Israel doesn't need a new law. It has enough legal and administrative tools such as the order on trade with the enemy, which bars business with Iran, and a 2008 law that prohibits investments in a foreign company that trades with Iran. The problem is that Israel doesn't enforce these laws and doesn't use the tools at its disposal.

The purported launching of a Shahin missile during war games in Iran in 2011.Credit: AP

All the government needs to do is to take vigorous action. Israel's hypocrisy on this issue has already been exposed in this column several times. While it preaches a good game and calls on the international community to intensify sanctions on Iran, Israeli companies and even state-owned firms continue to do business with international corporations that trade with Iran. In so doing, these multinationals are strengthening the ayatollahs' regime, helping it ignore the sanctions and indirectly enabling it to advance its nuclear program.

Take, for example, a deal between the Israel Electric Corporation and the Danish company Haldor Topsoe. The IEC awarded it a franchise of some $200 million to build receptors (air filters ) for coal-fired power plants. The problem is that Haldor Topsoe is building two methanol refineries in Iran that help it produce missile fuel.

After the report in Haaretz, MK Miri Regev (Likud ) asked the government to halt its contacts with the Danish company. The IEC promised to look into the matter, as did National Infrastructure Minister Uzi Landau, who is known for his tough stance on Iran.

But this was essentially lip service. Landau and the IEC, including its new chairman, Maj. Gen. (res. ) Yiftah Ron-Tal, turned out to be eager to uphold the contract with the Danish company. So they sufficed with a lukewarm letter stating that the company was working in accordance with resolutions made by the United Nations and the European Union.

This is true. The UN or EU sanctions don't prohibit investment in Iran's energy industry, its most important source of income. But shouldn't we expect that Israel would be more aggressive than the international community on this issue?

A similar case involves engineering conglomerate Siemens, Iran's largest German trading partner. Germany, meanwhile, is Iran's largest trading partner in the European Union; last year, its exports to Iran totaled 4.7 billion euros. Siemens is the target of international organizations such as Stop the Bomb, which is campaigning to reduce the scale of Europe's trade with Iran.

Despite this, Siemens has a strong position in the Israeli market; several years ago, it won a large tender by the Israel Airports Authority. I contacted the national security adviser at the time, Uzi Arad, and Prime Minister Benjamin Netanyahu's office about the matter. But they ignored the calls and did nothing.

After the fact one could say that the close ties with Siemens are repayment by Israel. The German company apparently cooperated with the intelligence agencies of Germany, the United States and Israel to program the Stuxnet worm that attacked the Siemens control and command systems installed in Iran's computers. This equipment oversees nuclear sites such as the reactor in Bushehr and the uranium enrichment plant in Natanz.

A nuclear bank in Germany

Recently, activists in the United States and Germany, especially Stop the Bomb, have increased pressure on Angela Merkel's government to close the Hamburg-based European-Iranian trade bank EIH. The bank, founded in 1971 during the shah's rule, has for years functioned as Iran's main financial arm in Europe to fund its undercover activities. It is considered a German bank and is supervised by Germany's central bank, but it is owned by four large banks, all of them owned by the Iranian government.

EIH's importance for the Iranian economy and especially the nuclear and missile programs has intensified in recent years because most banks in Germany, as in the other Western countries, aren't eager to do business with Iran and are hindering the granting of credit lines for deals with the country. These banks fear they will become the target of a public protest and sanctions by the U.S. administration.

Specifically, EIH is providing credit lines for Iranian purchasing networks that act secretly all over the world to acquire equipment and materials for Iran's nuclear and missile programs. According to reports, which of course it was not possible to verify, the bank has also transferred funds to key people in Mideast terror organizations.

The U.S. government is boycotting the bank, and American companies have been barred from maintaining any contact with it. EIH is Iran's key financial lifeline and one of Iran's few entry points to Europe's financial network, the U.S. Treasury recently said in a statement. Eleven U.S. senators have asked the German foreign minister to halt the bank's operations, to no avail.

The German government is ignoring the requests, and its spokesmen made clear in background talks that they will not agree to the requests to close or restrict the bank just because it appears on the U.S. government's blacklist. On second thought, maybe the German government is right. Why should it be more stringent about restricting ties with Iran when the Israeli government isn't doing so at all?



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