Home > Diplomacy, Direct Action > Maariv: Israel a significant importer (and re-exporter) of Iranian goods

Maariv: Israel a significant importer (and re-exporter) of Iranian goods

UPDATE: August 31 2010 — Eli Clifton provides some important context.

This is a fairly wide-raging, if shallow, review. I found the section the section describing a botched attempt by an Israeli company to re-export Iranian marble to the US interesting. Particularly insightful was the justification for an Israeli double standard on this issue, as articulated by Danny Catarivas, head of the Division of Foreign Trade and International Relations in the Manufacturers Association of Israel (emphasis mine):

Catarivas

Economic threats are a mainstay of the Obama agenda and fuel the flames between the two countries after every statement on the issue.

The Israeli order banning trade, on the other hand, is not visible. “There’s an advantage to size in this case,” says Catarivas.”The Americans can afford to do things that others can’t.” Catarivas explains that as a small country dependent on foreign trade, Israel needs to separate politics and economics and refrain from economic boycotts. “In the same way that we are outraged against attempts to boycott us , we’re the last ones that should support boycotts of any kind,” he adds.

So until Israeli floors bring about a peace agreement with our neighbors in Tehran, the decision on whether to buy products manufactured in enemy countries is a private one to make. Alternatively, it is up to the quality of camouflage and the creativity of the importer, since Iranian marble is just one example from among dozens of products manufactured in enemy countries and available in the Israeli market.

—–

The trader from Isfahan

Noa Oron, Maariv Friday Business Supplement [page 8; Hebrew original here], August 27 2010

The exquisite lobby of Bank Leumi’s management building on Yehuda Halevy Street in Tel Aviv accentuates the contrast between the ancient and pastoral nature of the restored Mani House, and the modern pace of life.  Perspiring men in button-down shirts walk quickly past the 1930s-style porch, and conversations on mobile phones reverberate in the impressive space.  Heels click on the gleaming marble, and one after another the senior bank officials enter and go up to their offices, which overlook the Tel Aviv cityscape.

It is interesting to consider what the late judge Malkiel Mani would say, if he knew that the directors of the bank—the shares of which are still held by the state—were scurrying about on marble that was quarried in Iran.

Bank Leumi was among the first in Israel to purchase the Iranian Gohare stone, which is named after the ancient city of Gohar-Tappeh in Iran, and quarried mainly in Isfahan, in central Iran.  The marble stone, the hues of which combine beige and gray, became popular among Israeli architects, and was soon purchased by many traders in Israel, along with other Iranian marble stone.

But how did marble reach Israel from Iran, a state with which trade is barred by law?  Through the ultimate transit station — Turkey.  The stone slabs arrive in containers marked “Made in Turkey,” accompanied by Turkish documents, and easily pass through customs agents at the ports.  This is only one of the methods for camouflaging the country of production, for goods coming from countries with which Israel does not have trade relations.  This does not refer only to marble: Other products also make their way to Israel in a similar fashion, including textile, carpets, candy and of course pistachios.

The order banning trade with the enemy defines Lebanon, Syria and Iran as states with which trade is forbidden.  Nevertheless, trade with them takes place on a regular basis, indirectly, through third parties.  Whether it is because of globalization, the drive to develop the Israeli economy, or just because it sells, certain goods from enemy countries are prevalent in the Israeli market.  How much difference does this make to the Israeli economy, to the Americans or to Ahmadinejad’s pocket?

Means of camouflage

When architect Miri Kaiser presented the directors of Bank Leumi with the plans for the new management building, about ten years ago, importing thousands of square meters of Iranian Gohare stone was a minor detail on the way to the dream office.  Members of the bank’s planning team chose the stone with Kaiser’s assistance and also traveled with her to Greece, where the Gohare slabs were chosen carefully.  At that time, the Gohare blocks were shipped to the city of Drama, Greece, where the cutting and finishing of the marble slabs was done.  From Greece, the marble was transferred to Israel, and it is currently imported through Turkey.  The name “Drama,” incidentally, became a common name for Gohare among the Israeli traders.

Bank Leumi sources said that none of the current bank employees had any knowledge of the fact that the origin of the stone was in Iran.  Moreover, the paperwork related to the construction of the management building states explicitly that the stone is Greek stone, without any mention or hint of the fact that the stone is of different origin.  An explanation for such registration could be the cutting stage in the marble production process, so that at times the country in which the marble is cut is ultimately registered as its country of origin. The explanation could be that the country where the stone was cut is sometimes labeled as the country of origin. Another possibility is that Greek containers were used to import the stone, prompting Israeli Customs to mark the the marble as originating in Greece, which is what happens today with Gohare imported through Turkey. In any case, according to informed sources, the architect and importer both knew that the the Gohare had been quarried in Iran. But who has time for patriotism when a multi-million project is at stake?

Bank Leumi is not alone.  Hundreds of public buildings and residential buildings in Israel shine thanks to Iranian marble.  In the Avenue conference room of the Airport City project, you can see 2,000 square meters of Gohare; several luxury buildings in northern Tel Aviv boast lobbies courtesy of Khamenei; and even the Pivko building in Tel Aviv, the huge spaceship that can be seen from the Ayalon Highway, displays several hundred square meters of marble from Iran.

The Gohare is also not alone in the fray.  Graphite, onyx and other types of marble are imported from Iran.  However, the Gohare is quarried only in Iran and is unique for its relatively low price and popularity among Israeli architects—a winning formula for marble importers and traders.

“I call the Iranians from here and speak to them directly on their mobile phones,” a salesman explains in a north Tel Aviv flooring shop.  Most sales personnel are not embarrassed to say that this is stone that originates in Iran, sometimes immediately when it is shown to you, and sometimes after you ask.  “I am not always eager to say where everything came from,” the salesman qualifies, “but it doesn’t matter.  People also have a problem with Turkey.  You simply can’t mix politics with this.”

Since it is indeed preferable to avoid a political debate — after all, we are talking about floors — the marble marketers will use a variety of “means of camouflage.” In order to leave the stones nameless (and mainly so that we will not be able to compare prices), the marble companies give the stones original names that are the fruit of their imagination.  “Gray Steel” is one of the names given to the Gohare, for example.  Other traders will say that this is Turkish stone or “imported from Persia.”  If you catch the salesman in a friendly moment, you may be able to extract the information from him.  “I’ll tell you a secret,” one saleswoman whispers, “the Turks import from the Iranians, but let’s not make a big deal of it.”

Statistics provided by the Federation of Israeli Chambers of Commerce show that marble imports to Israel have increased over the past three years, and marble imported from Turkey constitute over 60% of the imports.  The scope of marble imports from Turkey in these years stood at over USD 22 million per year, on the average.  It is impossible to know what percentage of marble originated in Iran, but in light of the popularity of the Gohare stone and other Iranian stones, we can presume that it is a considerable share.  But the most troubling fact was supplied by a senior source in the marble sector: 90% of Gohare stone in Iran is owned by the Iranian government — meaning that the Iranian government is clipping the coupon from the trade with Israel.

“The question is what economic damage is being caused to the Israeli industry,” explains Danny Catarivas, head of the Division of Foreign Trade and International Relations in the Manufacturers Association of Israel.  “In any case, I don’t think that the Iranian economy depends on its marble exports, and if they don’t sell the marble to Israel they will sell it to someone else.”  Catarivas says that in order to continue to maintain a stable economy that is part of the globalization trend, [Israel] has to balance between bureaucracy and regulation to the free market: “I hope that the Israeli government can find the balance.  All in all, I don’t see the Israeli market being flooded by goods from enemy countries.”

“Whoever imports from Iran is a traitor and the State of Israel should make every effort to track down and stop these imports,” Oded Tira, former president of the Manufacturers Association of Israel, says angrily.  Tira is opposed to the approach that the business end justifies the means, and says that globalization serves as an excuse for trade relations with enemy countries.  “Even if the imports help us improve our own economy, I would sacrifice this in favor of pressure on the economy of the enemy states,” he explains.  “There should be a moral demand from people not to try to deceive the state, thereby strengthening the enemy.”  He says that giving up solidarity for the sake of business is dangerous, even if the sums involved are small: “Perhaps the tax that the Israeli trader pays will enable the Iranian government to buy the last fuse that it needs to complete the nuclear bomb.  This is an outrage.”

Finance Ministry officials said that no permit had been given to import stones from Iran.  Therefore, if imports were carried out, these importers risk breaking Israeli law.  Moreover, due to the international sensitivity and the sanctions on Iran, there is serious concern that additional laws were broken.

From Israel with love

Us sanctions on Iran have caused increased vigilance in imposing a ban on Iranian imports. As tension mounted between the two countries, our friend in the West banned all commercial ties with Iran in 1997, but the phenomenon of indirect imports via third countries is evident.  US Customs is strict and assertive on this issue, but also faces the same difficulty as Israeli Customs in identifying goods that are not labeled as made in Iran.

The office of the US Trade Attaché told Maariv Business that import from Iran to the Us have been in decline since 2007. Imports decreased by 41% between 2007 and 2008 and by 34% between 2008 and 2009. To date, about $35 million of Iranian goods have been transferred to the US in 201o, a a decrease of 48% compared to the previous year, but the year has still not ended.

In any case, when Israel is the one exporting Iranian marble to the Americans it becomes an embarrassing story. About two years ago, the Israeli company Bastones [spelling uncertain] sold two containers of Iranian Gohare marble to the US company Ann Sacks , which specializes in high-end interior design. Bastones promised that the stone was Turkish, in the same way that many traders in Israeli promise their local clients. The two containers full of Gohare made their way from the Mediterranean to the Western giant, but on the way they encountered a “storm” of a type one does not usually encounter at sea.

Ann Sacks’s management became suspicious that the marble was Iranian and started questioning Bastones’ exporters.After a few interrogations and a lot of stuttering Bastones confessed to the Americans that marble was indeed quarried in the Iranian mountains. Ann Sacks immediately cancelled the the deal and the containers made a rapid u-turn back to Israel. Bastones suffered losses, but it appears that it sold the stone in Israel. The Kohler corporation, Ann Sacks’s owner, refused to comment for this story.

Economic threats are a mainstay of the Obama agenda and fuel the flames between the two countries after every statement on the issue. The Israeli order banning trade, on the other hand, is not visible. “There’s an advantage to size in this case,” says Catarivas.

“The Americans can afford to do things that other can’t.” Catarivas explains that as a small country dependent on foreign trade, Israel needs to separate politics and economics and refrain from economic boycotts. “In the same way that we are outraged against attempts to boycott us , we’re the last ones that should support boycotts of any kind,” he adds.

So until Israeli floors bring about a peace agreement with our neighbors in Tehran, the decision on whether to buy products manufactured in enemy countries is a private one to make. Alternatively, it is up to the quality of camouflage and the creativity of the importer, since Iranian marble is just one example from among dozens of products manufactured in enemy countries and available in the Israeli market.

Cracking the origin

The term “Persian carpet” is quite revealing of the product’s country of origin. Most traders don’t even try to hide this fact from their customers. Even though the term also refers to a style of weaving — Persian carpets are also made in India and China — when a seller told us that the country of manufacture was “a secret”, we had no difficulty in understanding what he meant. If carpets of the “Qom” or “Isfahan” types sound familiar, it may be because you’ve already heard of  of the nuclear center near these cities.

Iranian carpets are imported mainly through Germany or Turkey and most importers remove the labels so that nothing is left to reveal their origin. According to data provided by the Israeli Federation of Chambers of Commerce, carpet imports from these two countries comprised some 40% of all Israeli imports of handmade carpets — on average $425,000 from Germany and $30,000 from Turkey. As with marble, its impossible to ascertain how many of these carpets were manufactured in Iran. However, it’s important to remember that imports of handmade carpets have declined in recent years as consumers have come to prefer more modern carpets.

The Tax Authority sayst that Customs does not have the professional tools to deal with the phenomenon of label removal. It is also hampered by the fact that most Israeli specialists are themselves carpet importers and unwilling to provide expert opinions. This was not the case when an opinion was needed regarding another consumer product: A number of “nut PhDs” starred in the “pistachio import affair”, when they managed to identify the source of pistachios imported to Israel from Turkey. Based on the taste, shape and color of the pistachios the experts knew that they originated in Iran, even without seeing the labels.

In early 2009, the Tax Authority estimated that an absolute majority of pistachios imported to Israel from Turkey — 90% of total pistachio imports in 2008 — originated in Iran. This lead to an October 2009 Treasury decision to raise tariffs on Turkish pistachios to 23%. The decision mad a significant impact on the pistachio market and resulted in a rise in imports from the US, to the satisfaction of the Western exporters [sic]. To date, he Israeli Federation of Chambers of Commerce, 93% of pistachio imports in 2010 have come from the US and only 4% from Turkey.

Sometimes, especially when the camouflage is unsuccessful, goods are seized by Customs in port, usually confiscated and the importer fined. The Tax Authority reports that in the recent past it has confiscated chocolate candies from Lebanon, labeled as manufactured in Turky, and destroyed sweets that it discovered were manufactured in Syria. The mode of camouflage was relatively primitive: The sticker emblazoned with “Made in Syria” had been covered by another, labeled “Made in Jordan.” The importer was made to pay the cost of destroying the goods and paid a fine of tens of thousands of NIS. Customs also routinely confiscates commercial quantities of Syrian-made cosmetics from travelers at the border crossings. Candies and cosmetics that make it through can be found in the markets of Acre and East Jerusalem.

We can’t get through the summer without chilled Lemon-Arak. Some of the bottled Zahlawi Arak comes from the Lebanese town of Zahle and is transferred to Israel via Cyprus, without a country of origin label. An if that’s not enough it looks like next Tu B’Shvat we’ll be eating dried fruits from Turkey that were actually picked and dried in Iran or Syria. If you take a peek at the label on your shirt, under your nargila table or at the manual that came with your coffeemaker, you might find that they too were manufactured in Syria. Nargila tables supposedly made in Jordan and textile imported through Turkey were recently stopped as they entered Israel.

Importers and wholesalers take stickers off products, change packages and label them unclearly — without a specific indication of country of origin — all in order to foil attempts by customs to determine where the goods were made. The Customs Authority has systems, such as profiling, to spot suspicious signs and shares information with other Israeli law enforcement agencies. But in many cases providing solid proof is difficult, so that even when Customs agents suspect that the goods were manufactured in an enemy country, the Tax Authority is still forced to release them to the importer.

Are there other solutions to the enforcement problem? Catarivas suggests increasing cooperation between the Israeli and Turkish customs authorities, based on the longstanding economic cooperation agreement between the two countries and irrespective of the diplomatic situation. Tira proposes the establishment of a special police force under the Ministry of Industry, Commerce and Labor, that will identify connections between Israeli traders and merchants in enemy countries, in the same way that the Police established a task force to fight organized crime.  “This is as grave as organized crime,” Tira adds. “Organized crime is only interested in money, but these trade connections can strengthen our enemies and destroy the State of Israel.”

The Finance Ministry stated that under the Enemy Trade Order, the Minister of Finance is authorized to permit trade (import or export) with enemy countries. All trade with these countries must be licensed individually. These licenses are granted rarely and limited in in their scope and time period, providing localized solutions to the requested need.

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Categories: Diplomacy, Direct Action
  1. Shraga Elam
    August 30, 2010 at 18:06

    There is a long history of Israeli trade with the Mullahs-Iran:

    http://shraga-elam.blogspot.com/2008/04/israel-buys-iranian-oil.html

  2. Hanna Braun
    August 30, 2010 at 20:13

    Not all thar surprising. Greed and money come before any kind of patriotism or boycott. In the words of the German Jewish poet Heinrich Heine:
    “Und es will mich schier beduenken
    “Dass sie alle beide stinken”.
    (Roughly: “And I cannot help but think
    That the both of them do stink”).

  3. John Doe
    September 19, 2010 at 16:24

    Don’t be ridiculous… Stuff like oil and agricultural products are fungible… Without some very expensive analysis it’s impossible to determine where they come from… In fact, if they’re “blended” with similar products from other sources even expensive analysis can’t pinpoint the origin…

    What happens is that Israeli business’ are quite likely being lied to by their suppliers… Not unlike with Israeli goods ending up in Arab markets that boycott all Israeli products… International trade is full of people who seek a good deal and either lack the capability to ascertain the source or, are being lied to by their counterparts…

  4. Dofspioguigue
    February 15, 2011 at 14:09

    Sierra trough had Play chinese poker online land forms which it. Mountains

  1. August 30, 2010 at 17:17
  2. August 30, 2010 at 20:54
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  6. December 10, 2010 at 02:41

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