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Report: Israeli arms manufacturers paid millions to Azeris through Russian bank

15 55 12
27.10.2020

Last month, The Times of Israel reported that Israel’s largest aerospace manufacturer, Israel Aerospace Industries, transferred at least $155 million in 2012-2014 to two companies that were reportedly used as a secret slush fund for Azerbaijan’s kleptocratic elite.

A new report published earlier this month on Russian investigative reporting website Important Stories reveals that a second Israeli state-owned arms manufacturer, Israel Military Industries Ltd (IMI Systems Ltd), transferred close to $5 million in 2017 to one of these two same “slush fund” companies.

In addition, Important Stories has reported, the bank accounts for these two offshore companies were serviced by the Russian bank International Financial Club, which is part owned by the wife of Sergei Chemezov, the CEO of Russia’s state-owned arms manufacturer and exporter, Rostec. In other words, a bank that is partly owned by the wife of a US-sanctioned Putin ally performed a key role in suspicious payments from two state-owned Israeli arms manufacturers to offshore companies reportedly controlled by members of the Azeri elite.

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The Important Stories report is based on a suspicious activity report (or SAR) filed by The Bank of New York with the Financial Crimes Enforcement Network of the United States Department of the Treasury (FinCEN) in December 2017. The SAR became public as part of a leak of FinCEN documents that the BuzzFeed news site shared with the International Consortium of Investigative Journalists (ICIJ) and with 108 other media outlets and some 400 journalists around the world. Important Stories is the ICIJ’s partner in Russia.

The submission of a suspicious activity report to FinCEN does not mean that the individual or company mentioned in the document has done anything illegal. The transactions described in such reports can be part of entirely legitimate business activities that happened to conform to patterns that aroused the suspicion of the financial institution reporting them.

According to the Important Stories report, in December 2017, The Bank of New York filed an SAR concerning a $5 million payment from IMI Systems Ltd. to the British Virgin Islands company Jetfield Network. Sergei Chemezov, the head of the state corporation........

© The Times of Israel


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