IAI’s Harop drone, which was sold to Azerbaijan
Israel Aerospace Industries Signs a $ 1.6 Billion Contract with Baku in 2012
Israel Aerospace Industries, Israel’s largest and state-owned aerospace producer, which signed a $ 1.6 billion contract with Azerbaijan, transferred at least $ 155 million to two companies used as secret funds for Azerbaijan’s elite. The companies were identified in 2017 as part of Azerbaijan’s laundering scheme, a secret money laundering scheme that resulted in $ 2.9 billion flowing abroad between 2012 and 2014.
The news of the payment to the company was revealed by the opaque Age of Israel, which uses the reporting of two local journalists who are part of an international consortium investigating a large collection of financial documents that leaked to BuzzFeed over the weekend.
The bank documents relating to Israel Aerospace Industries consist of more than a dozen reports of suspicious activity, known as SAR, filed by Deutsche Bank with the Financial Crime Enforcement Network of the United States Department of the Treasury (FinCEN) from 2012 to 2014.
The Deutsche Bank SAR report is centered on two companies – Jetfield Networks and Larkstone Ltd. – as recipient of an IAI payment of $ 155 million.
Jetfield Networks was founded in 2009 in New Zealand and was founded in 2012 in the Marshall Islands, months after AIA announced a $ 1.6 billion contract with Azerbaijan. The documents show that payments to Jetfield began in June 2012 with transfers approaching $ 30 million. In October, an additional $ 6 million was sent to Jetfield, followed by additional transfers in the following months.
Under a $ 1.6 billion deal with IAI, Baku received Harop drones, the company’s anti-aircraft and missile defense systems. In 2019, IAI opened a manufacturing branch in Baku aimed at servicing and producing spare parts for drones.
Jetfield and Larkstone were exposed in a 2017 exposure by the Organized Crime and Corruption Reporting Project (OCCRP) to be a central element in what is known as The Azerbaijan Laundromat.
The OCCRP revealed that Jetfield and Larkstone paid money to companies used as illicit funds by Azeri elites and government officials to buy luxury goods and to buy good PR for the regime.
For example, more than 2 million euros leaving Azerbaijan, partly via Jetfield, reportedly ended in 2012 in the bank account of Italian politician Luca Volontè, Rome’s representative to the Parliamentary Assembly of the Council of Europe (PACE). Italian police suspect that in return for the payment, Volontè is trying to soften the Council of Europe’s criticism of human rights abuses in Azerbaijan. The OCCRP investigation also revealed that several European parliamentarians had received payments from Azerbaijan.
The Azerbaijan Laundromat scheme is also used pay hush money to Hungarian officials ahead of Hungarian extradition of ax killer Ramil Safarov.
“Israel Aerospace Industries is a government company that operates in strict compliance with legal requirements. As a defense company, and in accordance with company policy, it does not discuss or respond to information about its business activities other than those required by law, ”IAI said in response to the investigation, according to the Times of Israel report.