Israeli firm signed MOU with blacklist Chinese company without telling DM
Comac was blacklisted by the Trump administration earlier this year for allegedly being tied to the Chinese military.
An Israeli company working on a civil aviation project signed a
memorandum of understanding for a sensitive public project with a
Chinese state-owned corporation that is blacklisted by the US, without informing the Defense Ministry, Haaretz reported on Tuesday.
The
Israeli firm Airpark was contracted by the ministry to build a civilian
aircraft manufacturing facility in 2019 near the Israeli Air Force's
Ovda base in southern Israel, but later signed an MoU with the Chinese
state-owned Commercial Aircraft Corporation of China (Comac)
corporation.
Comac
was blacklisted by the Trump administration earlier this year for
allegedly being tied to the Chinese military. American investors are
prohibited from buying securities of companies on the list and will need
to divest their holdings by November, according to Bloomberg magazine.
Aviation
Industry Corp. of China, a Comac shareholder, which was also on the
list, was later targeted by more severe sanctions, including limits on
access to American technology which could impact Comac as it relies on
American imports for some aircraft parts.
Sources in Israel's Defense Ministry told Haaretz
that they were unaware of the signing of the MoU and that the Prime
Minister's Office and National Security Council were also not informed
about the deal.
The
agreement between the Defense Ministry and Airpark allows the company
to access the air base and provides assistance and services to set up
the civilian facility. The agreement also includes cooperation with the
IAF in operations and infrastructure. The MoU with Comac was signed
seven months after the agreement with the Defense Ministry was signed.
ACCORDING
TO the MoU, in exchange for extensive remuneration, Comac will receive
cooperation in the aviation sector and the two companies will share
information and advance technological and innovative projects that
Israeli firms can offer.
Airpark told the Israeli Securities Authority that the MoU was
meant to "promote the shared goals of local and international aviation"
and would be valid for five years from the date it was signed, according
to Haaretz.
In
March 2020, Israel Aerospace Industries joined the civilian facility
project and signed an MoU with AES Aviation, the company that owns
Airpark, to work together to form a joint company to operate Airpark.
No security check has been carried out on Comac, according to the Haaretz
report, despite other Chinese companies which were involved in other
public infrastructure projects, like the expansion of the Haifa port and
the Tel Aviv light rail, being required to undergo such checks.
The
Defense Ministry told the newspaper that "This is a completely civilian
project authorized by all the relevant bodies... It should be noted
that the project has not yet been launched. The claims raised will be
examined."
A security official told Haaretz
that, besides the possible security risk posed by Comac's involvement
in the civilian facility, their involvement could also damage Israel's
ties with the US.
US officials have expressed opposition to Israel's economic ties with Chinese companies in recent years.
The
US is asking its allies, including Israel, to sever ties with China in
areas with security risks, a US official with knowledge of talks on the
matter said in May of last year.
A US official warned last year
that “the Israeli government is trying to have it both ways with us. It
wants approval for annexation and the continuation of beneficial
economic, diplomatic and security ties, while opening the door to China
in critical infrastructure projects [such as] 5G and the light rail.”
China
is Israel’s third-largest trading partner, and trade between the
countries grew by 402% in the past decade, reaching about $14 billion in
2018.
A report by
the RAND research institute for the US Department of Defense published
last year warned that China has close ties with Iran, and that “the
Chinese government might require Chinese companies doing business in
Israel to share insights with the Iranian government in order to win
friends and influence in Tehran.”
China and Iran signed a 25-year cooperation agreement on Saturday.
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