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OpEdNews Op Eds    H3'ed 4/9/13

Israeli Authorities drop a major fraud investigation to protect the Israeli Diamond Industry

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Describing it as an "outstanding accomplishment" Sahar said the police told them they had never before "agreed to listen to the point of view of an industry while that very industry was being investigated". He said he felt their words had "penetrated the hearts of the police officers" who were surprised by the industry's "high level of vulnerability".   As a result, the police authority agreed to suspend the investigation for a month.   

Following the meeting with police commanders a delegation from the diamond industry, headed by Yair Sahar, met with the head of the investigation Unit of the Tax Authority and made the same case, outlining the importance of the diamond industry to the Israeli economy and its vulnerability. Sahar said " The Tax Authority were convinced of the might and the importance of the industry, and they told us that they have no interest in harming the Israeli diamond industry." Consequently, the Tax Authority "promised there would be no more investigations and raids on the diamond offices".

In Western countries blighted by financial scandals the term "too big to fail" has been applied to banks that have been bailed out and saved from bankruptcy by governments. In Israel, the diamond industry is of such critical importance to the Israeli economy, and arguably to the entire Zionist project in Palestine, that authorities believe it is too important to allow a criminal investigation to undermine its status and confidence in industry.


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Israel's Top 30 Exports 2008 by Sean Clinton

The Israeli diamond industry accounts for about 30% of Israel's manufacturing exports, worth $21 billion in 2011, adding $11 billion NET to the Israeli economy. If confidence in the Israeli diamond industry is damaged the economic, social and political fallout would be significant as would be the impact on Israel's ability to fund the illegal occupations of Palestinian and Syrian territories.

As a result of the fraud investigation Israel's diamond exports declined by 23% in 2012. In January this year it was reported that Israel would have to cut defense spending in order to stay within a targeted budget deficit of 3% of economic output. When Israel's diamond exports are damaged the financial burden of the occupation is increased proportionately.  

Leaders of the Israeli diamond industry are clearly able to wield significant influence with the police and taxation authorities in Israel. They persuaded the authorities to suspend the fraud investigation and manage the situation in a way that would minimise impact on their industry.   They did so without having to use what Yair Sahar described as "the direct close contacts that the industry management has with the most highly-ranked politicians."  

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While the leaders of the Israeli diamond industry wield considerable influence in Israel they do not have the same power to influence consumer confidence in the ethical provenance of the Israeli diamonds. The fact that revenue from their industry provides about $1 billion annually for the Israeli military and security industry - a military which stands accused of war crimes by the UN Human Rights Council, Amnesty International and Human Rights Watch - means their diamonds are funding war crimes and should, therefore, be regarded as blood diamonds. 

These facts have largely been concealed from the diamond-buying public. Israel's influence in the global diamond industry, alluded to by Sahar, ensured that cut and polished diamonds which fund human rights violations by government forces evade the human rights standards applied to rough diamonds by the Kimberley Process (KP). The KP is supposed to prevent the trade in blood diamonds, but, despite the spin from the diamond industry and vested governments, including the EU, it has spectacularly failed to do so. Instead, the KP is a major marketing tool for cut and polished blood diamonds which jewellers deceitfully claim are conflict-free.

The Israeli diamond industry is clearly a very important component of the Israeli economy. The industry has demonstrated that it has significant influence in the upper echelons of Israeli society - with decision makers and with leading politicians.

If they can use that influence to curtail a major fraud investigation they can also use their influence with Israel's political elite and speak out against Israeli government policy which supports the illegal occupations and facilitates gross human rights violations by the Israeli military.

In this respect the global diamond industry and jewellers worldwide also have a role to play in persuading the Israeli diamond industry to impress upon political leaders in Israel the potentially devastating impact of a consumer backlash against diamonds that fund the Israeli military regime.

In the last year leading diamond companies, including De Beers and Sotheby's, have been targeted by human rights activists who have exposed links between their diamonds and Israeli war crimes in Gaza.

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In recent months, over 50 Palestinian organisations, representing a cross-section of Palestinian civil society, including women's groups and trade unions, and international organisations in solidarity with the Palestinian struggle for equality, justice and an end to the Israeli occupation of Palestine, have issued an appeal to women and men of conscience and jewellers worldwide to reject diamonds processed in Israel.

With South Africa chairing the Kimberley Process in 2013 and the African National Congress having given their support for the international BDS (boycott, divestment and sanctions) campaign against Israel until it respects Palestinian rights and international laws, there is considerable scope for South African to use it's influence to increase pressure on Israel.

By supporting calls for cut and polished blood diamonds to be banned by the KP and by ending the export of South African rough diamonds to Israel, South Africa can play an important role in helping to rid the world of an apartheid regime which many prominent South Africans have described as worse than anything they endured during the apartheid era in South Africa.

The group with the most influence are diamond-purchasers. They can send a message to jewellers and the global diamond industry by refusing to purchase diamonds until the industry ends the trade in diamonds that fund rogue regimes guilty of gross human rights violations.

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A human rights activists from Ireland with a particular interest in the Israeli/Palestinian conflict and the global trade in diamonds which are a major source of funding for the Israeli military regime.
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