Transparency International, which combats corruption worldwide, has, for the second successive year, ranked Israel in its top category for enforcement against corruption in international transactions. Together with Israel, the US, the UK, and Switzerland are also given top rankings. The survey covers 47 countries.
Transparency International operates in over 100 countries. The Israeli branch is headed by ex-judge Nili Arad, formerly president of the National Labor Court. Together with the Counseling and Legislation Department in the Ministry of Justice, it presented to the compilers of the rankings the steps taken by Israel to combat bribery of foreign public officials.
Transparency International's report recognizes the efforts invested by Israel in enforcing laws designed to eliminate corruption from international deals. Between 2016 and 2019, ten investigations were opened in Israel in this area. During this period, one criminal indictment was filed, and three cases ended with the imposition of sanctions.
The precedent-setting criminal indictment was filed in December 2016 against IT company NIP Global Ltd. The case involved bribes of over $500,000 paid to promote a deal in Lesotho. It was the first criminal case prosecuted under an amendment passed in 2008 to Israel's Penal Law making bribery of a foreign official a criminal offence in Israel. In a plea bargain, the company admitted the offence and paid a fine of NIS 4.5 million.
One of the main cases currently being pursued is that of Shikun & Binui Holdings Ltd. (TASE: SKBN), which until 2018 was controlled by Shari Arison. The investigation uncovered suspicions of bribery of foreign officials over many years by employees of Shikun & Binui and its subsidiaries. The Tel Aviv District Court recently ordered the extension of the seizure of NIS 250 million and found that there was prima facie evidence supporting the accusations. The State Attorney is expected to file an indictment in the case, subject to a hearing.
Another case mentioned in Transparency International's report involves Shapir Civil and Marine Engineering Ltd., which was investigated on suspicions of bribery and money laundering in connection with construction projects in Romania. In 2019, Shapir reported to the Tel Aviv Stock Exchange that the case had been closed. A civil settlement was reached amounting to NIS 4.3 million.
Mention is also made of Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA), which was suspected of having made corrupt payments to public officials in Russia, Ukraine and Mexico. The case was closed, and Teva paid a financial sanction of NIS 75 million in Israel and a penalty amounting to some NIS 500 million in the US.
The affair of Bank Hapoalim's (TASE: POLI) involvement in suspected bribery of senior figures in FIFA is also mentioned. The bank paid NIS 30 million to settle this case, and it paid a penalty of $874 million in the US to settle the affair of its involvement in tax evasion by US customers.
Bribery of foreign officials is dealt with under the direction of the Attorney General and coordinated by an inter-ministerial team headed by the Deputy State Attorney for Economic Enforcement, with the participation of the State Attorney's Office, the Ministry of Justice Counselling and Legislation Department, Israel Police, the Israel Tax Authority, and the Israel Money Laundering and Terror Financing Prohibition Authority.
The report mentions favorably the directives of the State Attorney of October 2019 setting out policy in considering indictments of corporations and the stance of the State Attorney's Office on penalties for corporations. Investigations of foreign bribery cases are carried out by a special department in the national fraud unit of Lahav 433, the Israel Police criminal investigation branch, some of them in cooperation with the Israel Securities Authority. Prosecutions are handled by the State Attorney's Office Economic Department.
The Ministry of Justice said in a statement, "Israel sees effective enforcement of the prohibition against bribery of a foreign official as an important element in the campaign to create an international climate free of corruption that also contributes to the strengthening of the maintenance of honest practices within Israel."
The suspects in the Shikun & Binui affair have not been convicted of any crime and are entitled to the presumption of innocence
Published by Globes, Israel business news - en.globes.co.il - on October 13, 2020
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