The Jerusalem Post reports that Israeli companies signed memorandums of understanding with blacklisted COMAC without informing the Defense Ministry.
Earlier this year, Commercial Aircraft Corporation of China (Comac) was blacklisted by the Trump administration for its alleged ties to the Chinese Communist Party military.
An Israeli company working on civil aviation projects signed a memorandum of understanding with a Chinese state-owned company blacklisted by the U.S. for sensitive public projects without notifying the Defense Ministry, Haaretz reported Tuesday.
In 2019, Israeli company Airpark signed a contract with the Defense Ministry to build a civilian aircraft manufacturing facility near the Air Force’s Ovda base in southern Israel, but Airpark later signed a memorandum of understanding with China’s state-owned Commercial Aircraft Corporation (Comac, or COMAC).
Earlier this year, COMAC was blacklisted by the Trump Administration for its alleged ties to the Communist Party’s military. According to Bloomberg, U.S. investors are barred from buying securities of the listed companies and are required to divest their holdings by November.
Aviation Industry Corp. of China, a shareholder in COMAC, is also on the list and was later targeted for tougher sanctions, including restrictions on access to U.S. technology, which could affect COMAC because it relies on U.S. imports for some of its aircraft parts.
Israeli Defense Ministry sources told Haaretz that they were not aware of the signing of the MOU and that the Prime Minister’s Office and the National Security Council were not informed of the agreement.
The Defense Ministry’s agreement with Airpark allows the company access to air force bases and provides assistance and services for the establishment of civilian facilities. The agreement also includes cooperation with the IAF in operations and infrastructure. The MOU between Airpark and COMAC was signed seven months after the agreement was signed with the Ministry of Defense.
According to the MOU, in exchange for substantial remuneration, COMAC will receive cooperation in the aviation sector, and the two companies will share information to advance technology and innovative projects that the Israeli company can offer.
According to Haaretz, Airpark told the Israel Securities Authority that the MOU is intended to “promote the common goals of the local and international aviation industry” and will be valid for five years from the date of signing.
In March 2020, Israel Aerospace Industries joined the civil facilities project and signed a memorandum of understanding with AES Airways, which owns Airpark, to form a joint company to operate Airpark.
According to Haaretz, no security checks were conducted on COMAC, although other Chinese companies involved in other public infrastructure projects, such as the Haifa port expansion and the Tel Aviv light rail line, were required to undergo security checks.
The Defense Ministry told Haaretz, “This is a civilian project that is fully authorized by all relevant agencies …… It should be noted that the project has not yet been launched. A review of the requirements presented will be conducted.”
A security official told Haaretz that in addition to the potential security risks posed by the involvement of Chinese commercial aircraft in civilian facilities, their participation could damage Israel’s relations with the United States.
U.S. officials have expressed opposition in recent years to Israeli economic ties with Chinese companies.
A U.S. official familiar with the matter said last May that the United States is asking its allies, including Israel, to cut ties with Chinese (communist) countries in areas where there are security risks.
One U.S. official warned last year that “the Israeli government is trying to play both sides of us. It wants to get approval for mergers and continue to have beneficial economic, diplomatic and security ties, while leaving the door open to China (Communist Party) on key infrastructure projects [such as] 5G and light rail.”
China is Israel’s third-largest trading partner, with trade between the two countries growing by 402 percent over the past decade, reaching about $14 billion in 2018.
Last year, a RAND Research report for the U.S. Department of Defense warned that the Chinese Communist Party has close ties to Iran and that “the Chinese [Communist] government may require Chinese companies doing business in Israel to share insights with the Iranian government in order to win friends and influence in Tehran.”
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