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At least 20 Israeli arms dealers have been arrested by Israel’s secret police over several months, in what is now being revealed as one of Israel’s biggest arms-industry scandals in history. 

The story is under a gag-order in Israel, and only a few scant facts have been printed by Israeli newspapers. Even the destination country for the arms remains unnamed.

Even so, there have been enough details coming out for the Israeli public to pick up the pieces and foreign platforms to publish what everyone already knew: suicide drones appear to have been developed in Israel to be sold to China.

Richard Silverstein, a Middle East Eye contributor, was one of the first to name Beijing in his blog, in a post published on 11 February. He noted that this was not the country’s first scandal involving the sale of attack drones, and it came as no surprise considering the lack of oversight by the Israeli defence ministry.

“There have been numerous similar problematic sales to China in the past, many of which have angered the US. Israel plays a dangerous game of both cultivating trade with China while trying to maintain the close relationship with the US,” Silverstein told MEE.

“In this case, the aerospace engineer who coordinated the ring of military technology thieves may have been acting for his own enrichment, but he also created a potentially damaging scandal just as the US changes administrations, welcoming a president who is far more reluctant to look the other way regarding Israel stepping over the line than his predecessor.”

Antony Loewenstein, an independent journalist, filmmaker and author, said that the recent scandal is just the latest example of Israel’s defence sector going rogue.

“Israel has a largely unregulated defence industry, allowing the Israeli government and its private companies to sell weapons, surveillance equipment and hi-tech to some of the most despotic regimes in the world from Uganda to the Philippines,” he told MEE.

“It’s time for the Israeli state to be held accountable for this decades-long practice.”

Despite the lack of regulations on the Israeli arms industry, this time Israel’s secret police (ISA) conducted an investigation and stopped the arms-dealing ring, indicating that the diplomatic cost of the deal in terms of the relationship with Washington would be too heavy to bear.

The sale marks the second time that China has purchased “loitering” munitions from Israeli manufacturers. The first time was in 1998.

These weapons, nicknamed “suicide drones,” have become a trademark of two Israeli arms companies: Israeli Aerospace Industries (IAI) and Aeronautics Ltd, which was bought by Rafael.

Suicide drones, a hybrid between a drone and a missile, hover in the air for hours before the operator directs them to explode on a target. They are expensive, carry less firepower than artillery, and are as indiscriminate and inaccurate as other drones, so what is their strategic value?

Terror factor

Newcastle University scholar Jamie Allinson pointed to the psychological value of suicide drones to commanders of powerful military forces who covet the only weapon that they do not have in their arsenal: the suicide bomber.

Human soldiers are reluctant to perform suicide missions, but suicide drones can take their place.

The deciding factor is terror: just as populations are terrorised by the thought that a stranger may turn out to be a suicide bomber and kill without warning, so can they be terrorised by a suicide drone that can drop from the sky without warning.

Israeli-made suicide drones were used extensively by Azerbaijan in its recent conflict with Armenia over the disputed area of Nagorno-Karabakh.

By turning loitering munitions into an Israeli trademark weapon, although other countries produce them as well, Israeli arms companies have capitalised on the assumption that Israelis are familiar with suicide bombings.

While it is unlikely that Chinese generals suffer from suicide-bomber envy, China could however gain valuable intelligence from these drones, which are being increasingly employed by Nato forces.

A new database on Israeli exports launched by the American Friends Service Committee, a Quaker organisation, lists three arms-export deals between Israel and China between 1998 and 2008: they involved missiles, loitering munitions and a satellite for the Beijing Olympics.

“The Israeli military export law from 2007 does not include human rights-related monitoring, consideration and restrictions because it was not legislated with that in mind,” researcher and anti-militarist activist Sahar Vardi told Middle East Eye.

“It was legislated for one reason only: to allow the state, and its foreign affairs interests, to restrict sales in situations in which it is not in Israel’s political interest.”

Vardi said that this policy meant that arms sales to countries like Myanmar, which has committed ethnic cleansing against Rohingya people, have been allowed to take place, which she describes as not surprising.

“Israel tests, develops, and more importantly markets its weapons as ‘battle proven’ – that ‘battlefield’ is Palestinian cities and villages under Israeli occupation.”

According to the Israeli newspaper Yedioth Ahronot, the value of the loitering munitions illegally sold to China was a few tens of millions of dollars.

Under $1m was confiscated from the account of the ringleader, indicating that the payment to the arms dealers was meagre.

Why would over 20 Israeli arms dealers take such a tremendous risk for such a small payoff?

Conditional US aid

Considering the long-term decline in Israeli defence spending; the 2015 urgent appeal of Israeli arms companies to the government warning of a crisis in arms sales; the Memorandum of Understanding signed by then-president Barack Obama in 2016 revoking the special privilege of Israeli arms companies to receive a piece of US military aid; and the new political movement by ex-generals aimed at ousting Prime Minister Benjamin Netanyahu as he faces corruption charges, a picture emerges that the Israeli security elite has been losing its hegemonic position in the Israeli economy.

This deep crisis of the Israeli security elite offers an explanation as to why these arms dealers chose to ignore the risks and sell suicide drones to China.