Germany delays submarine deal with Israel over graft

The photo taken on January 12, 2016 shows a German-made INS Rahav Dolphin 2-class submarine, the fifth Israeli Navy submarine, arriving at the military port of Haifa on January 12, 2016. (AFP photo)

Germany has decided to delay the signing of a major military deal with Israel after reports emerged saying officials in the occupied Palestinian territories have been involved in bribery and money laundering around the deal.

A source in Israel's National Security Council said on Tuesday that Berlin had delayed the signing of the deal with Israel advancing the sale of three Dolphin submarines. German and Israeli officials were expected to meet in Berlin next week to sign a memorandum of understanding.

"Germany has put off the MOU signing for the time being,” said the Israeli official who spoke on condition of anonymity. The official would not elaborate on further details.

Israeli newspaper Yediot Aharonot had earlier reported about the delay in the signing of the MoU.

The delay follows the arrest of several high-profile figures in the occupied territories over suspicions that they had acted corruptly in the process to buy the submarines from German industrial giant ThyssenKrupp. Former navy commander Eliezer Marom, former deputy head of Israel's National Security Council Avriel Bar Yosef and the local representative for ThyssenKrupp, Miki Ganor are among those detained in the case. Local media said one of the suspects was close to become a state witness. People close to Prime Minister Benjamin Netanyahu have also been briefly arrested for questioning.

Yediot Aharonot said there was a clause in the contract between Germany and Israel allowing Berlin to withdraw if the deal was found to have been reached through corruption. It said German officials would decide on the issue after an investigation is completed.

There have been numerous reports about the involvement of Israeli officials in graft and financial wrongdoings. Netanyahu himself is being investigated in several cases over corruption. He was once suspected of wrongdoing in the submarine deal although judiciary officials in February exonerated him of the allegations.