Authorities in Israel have agreed to suspend investigations into alleged tax evasion and money laundering activity taking place in the Israel Diamond Exchange (IDE), members of the exchange said.
”There was a meeting this morning with the head of the investigation and it was agreed that the enquiries will be suspended for one month,” Avraham Traub, the president of the Israel Diamond Manufacturers Association (IsDMA), told Rapaport News.
A member of the IDE managing committee, who requested anonymity, added that a professional team will be established in the coming days to negotiate a suitable solution to the affair and to represent the industry in negotiating a long term solution to future dealings with the tax authorities.
Authorities launched the investigation in early January focusing on 16 suspects who were systematically laundering money in large sums without reporting the transactions to the relevant authorities in Israel or abroad. They were also reportedly converting foreign exchange and providing unlawful loans, allegedly gaining tens of millions of shekels in profits from these illegal activities.
The ongoing presence of the authorities in the bourse has affected trading levels during January and February with the country’s polished exports falling 9 percent year on year to $566.3 million in January, according to data published by the Central Bureau of Statistics (CBS). Total diamond imports, including rough and polished, fell 24 percent to $514.9 million during the month.
Dealers noted that trade within the bourse fell more sharply due to the investigations. Traub said he was confident Thursday’s agreement would help restore confidence in the bourse and that trade would soon return to normal levels.