Israel’s Diamond Controller Warns Traders on Smuggling

Following a series of events in which a number of Israeli diamond traders carrying undeclared polished diamonds have been apprehended by airport custom officials, Israel’s Diamond Controller Shmuel Mordechai has initiated a sharp increase in penalties and is suggesting trading license revocation.

In the past months, several polish diamond traders were caught passing through custom’s green channel at Ben Gurion Airport with diamonds, or declaring only part of the diamonds they were carrying when going through the red channel.

The practice is surprising since there is no tax on such imports, except a minuscule 1.75 pro mille levy, which does not apply to returned exports.

In an open letter to the local diamond trade, Mordechai informed the industry that the fine on unreported imports has been raised from 15.5 percent to 20 percent, with a plan to raise it further to 25 percent.

In addition, diamond trading revocation or non-renewal is considered after a company’s second offense of polished smuggling or after a first offense, in the case of rough diamonds.

Noting that the damage from the practice is mostly a PR one, Mordechai warned that the repeat occurrences are causing customs to target diamantaires. In recent weeks, nine people were caught with goods at the airport in what has become a rash of smuggling incidents.

On Wednesday, Israeli tax authorities announced the capture of a ring of 15 diamond smugglers that operated between Israel, Russia and Belgium.