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Germany delays Israel submarine deal over graft probe

Israel's Prime Minister Benjamin Netanyahu speaks during a ceremony following the arrival of the INS Tanin, a Dolphin AIP class submarine, to a naval base in the northern city of Haifa, Israel, Tuesday, September 23, 2014
AP images/AMIR COHEN
ThyssenKrupp says internal examination of deal finds 'no concrete indications of corruption'

The German government put on hold a submarine deal with the Israeli government due to an ongoing corruption probe involving members of Israeli Prime Minister Benjamin Netanyahu's inner circle, an Israeli official said Tuesday following reports in Hebrew media outlets.

A source in Israel's National Security Council said on condition of anonymity Tuesday that "Germany has put off the MOU signing for the time being," without providing further details.

The move freezes the solidifying of a deal that includes Israel's purchase of three submarines from the German company ThyssenKrupp, which was slated for next week. Israel's ambassador to Germany was set to sign the deal in Germany, but has been notified that the signing has been postponed with no alternate date provided.

The so-called submarine affair centers on allegations that Netanyahu's personal lawyer, David Shimron, pushed for multi-billion shekel deals in favor of German conglomerate ThyssenKrupp, which is his client in Israel.

Daily newspaper Yediot Aharonot, which first reported that the MOU signing had been delayed, said Germany had added a clause allowing it to back out of the deal if it was found to have been reached through corruption.

Israeli officials said Germany had not backed out of the deal but was waiting to see the outcome of the investigation, Yediot reported. German officials had no immediate comment.

Roland Weihrauch (DPA/AFP/File)

ThyssenKrupp said in a statement Tuesday that an internal probe of the deal found "no concrete indications of corruption."

"Based on the investigative measures we were able to carry out, we found no concrete indications of corruption – neither with regard to submarine projects, nor in connection with the procurement of corvettes," the shipbuilders said ThyssenKrupp said in a statement reported by Reuters.

It added that the results of it's probe are "explicitly provisional," and that its own investigative powers were limited by its inability to conduct an investigation in Israel and its relative lack of investigatory power compared to those of legal authorities.

Six suspects have been taken in for questioning by Israeli police for their alleged involvement in the ongoing scandal.

Those detained include former navy commander Eliezer Marom, the local representative for ThyssenKrupp, Miki Ganor, and former deputy head of Israel's National Security Council, Avriel Bar Yosef, who Netanyahu nominated to serve as Israeli national security adviser but declined after he was suspected of bribery, money laundering, fraud and breach of trust by Israeli police.

AP Photo/Ariel Schalit

The detained are suspected of several crimes including taking bribes, tax offenses, money laundering and corruption.

On Monday, Israeli media reported that Ganor, who along with Bar Yosef is still in custody, was close to becoming a state witness

The prime minister is also expected to be asked to testify in the case.

Netanyahu himself is currently not suspected of any crime in relation to the affair but one of the detained allegedly has close ties to the prime minister while another is reportedly a high ranking security official.

According to a previous report in Israeli daily Haaretz, Moshe Ya'alon, Israel's former defense minister, told police Netanyahu helped ThyssenKrupp – the German conglomerate making deals with Israel to the tune of billions of dollars – circumvent the regular procurement process.

Ya'alon had earlier claimed that he "vociferously objected” to Israel purchasing the submarines, and that reports that reports that an Israeli attorney known for close ties to Netanyahu was appointed to the director's board of a subsidiary firm linked to the ThyssenKrupp, were 'very disturbing'."

(Staff with agencies)

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