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Israeli textile firms exploit trade deal for duty-free goods

Israeli textile firms AEDKT Tel Aviv, IL Fabrics, CNR Textiles, and MLA Zippers are investigated for exploiting the QIZ trade deal, allegedly smuggling NIS 27.

Israel Tax AuthorityPolitics

The Tax Authority, through the Jerusalem Customs and VAT investigations, has been conducting a covert investigation for some time into a complex and extensive affair, at the center of which are several Israeli companies in the textile field: AEDKT Tel Aviv, IL Fabrics, CNR Textiles, and MLA Zippers.

The companies are listed on the export quota within the QIZ (Qualified Industrial Zone) agreement, which is jointly held by Israel, the United States, and Egypt. This agreement grants duty exemption in the US on goods arriving from Egypt that have undergone a certain processing in Israel, all with the aim of encouraging Israeli-Egyptian relations in return for extensive economic benefits from the US.

According to suspicion, the Israeli companies carried out dozens of smuggling operations of fabrics and threads in exports to Egypt without undergoing any change or processing in Israel as stated in the agreement, all under a false guise and by exploiting the agreement and submitting false export declarations to the tax authorities in Israel. The scope of the offenses is estimated at NIS 27 million.

Due to the actions, there is suspicion of offenses under the Customs Ordinance, the Import and Export Ordinance, the VAT Law, the Prohibition of Money Laundering Law, and the Penal Law. In addition, the offenses may constitute severe damage to competition in the industry in Israel and abroad, and even cast a shadow over Israel’s international relations.

Today, the investigation became public – when the owners of the companies, Avihai Hamiel, and their manager, Meir Kaiserman – were detained for investigation. In addition, extensive searches were conducted at several sites, including the companies’ factories, and a large amount of material was seized. Subsequently, the owner and manager were brought before a Magistrate’s Court judge and released under restrictive conditions. The investigation is ongoing, and many witnesses are expected to be questioned as part of it.  
 

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Israel Tax Authority
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