Israel Warns Arms Dealers of Crackdown on Bribery

Reminder issued in advance of OECD report on anti-corruption in Israel's weapons trade

A visitor holds an Israeli-made rifle during the 8th International Land and Naval Defense system exhibition, in New Delhi, India, on February 6, 2014.
Anindito Mukherjee/Reuters

Israel’s arms exporters received their annual letter from the director general of the Defense Ministry in late April, reminding them that paying bribes to foreign officials in order to lock in weapons deals is a grave offense.

The ministry notes that while it sends this letter each year to companies involved in such dealings, enforcement of the relevant laws has been stepped up in recent years.

“Israel is a member of the OECD treaty to fight corruption by foreign public officials in international deals, and of the UN treaty against corruption,” wrote ministry director general Udi Adam in the letter, which was sent to thousands of Israelis involved in weapons sales. “Also, the crime of bribing a foreign pubic employee has been enshrined in Israeli penal law since 2008.”

Since then, but especially of late, Israel has been cracking down on illegal payola in arms deals, Adam noted.

In June the OECD is expected to release a report on Israel’s activity to thwart corruption in this realm. The last such report was in 2015, at which time the international organization complained that Israel does not do enough to locate and foil instances of corruption in weapons deals, and is lax at taking legal steps when suspicions do arise.

The OECD recommends that the Defense Ministry take formal measures at the outset of such transactions – when issuing licenses to those involved – should there be any suspicion of possible illegal conduct.

Indeed, in recent years, the ministry has demanded that arms companies sign statements to the effect that they have not in the past and do not at present make any illicit payments to foreign officials with whom they do business. Licensing documentation now contains a new clause prohibiting bribery: Violation of that provision can be grounds for revoking the license, say ministry officials.

However, in essence the real responsibility for thwarting corruption falls to the arms dealers themselves; the finance minister and his staff aren’t required to supervise the transactions. The ministry only recommends what the firm's activities should include, such as: drafting clear policies; appointment of a specific individual responsible for overseeing the actions of and instructing other employees at the company as to proper conduct; laying down specific rules about gifts, donations and invitations offered by employees; and taking disciplinary measures against those who break the rules.

Adam called on companies that haven’t done so yet to show that they have the means in place to prevent corrupt practices, noting the importance of complying with international rules, Israeli law and the terms of their licensing.

The Defense Ministry reports that about 95 percent of the Israelis involved in the export of weapons and defense-related equipment have committed to the anti-corruption program.

At present, the Israeli Police are looking into the conduct of a company called Defensive Shield for alleged money-laundering and bribery involving the former Soviet state of Georgia. Defensive Shield advises on defense and internal security, and possesses an arms export license. Last year its executives were questioned on suspicion of winning a bid for a project in Georgia by illicit means.