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Wednesday, July 24, 2013

Bank of China affair: China tried to cover up counterterrorism meetings with Israelis officials


The Chinese government tried to cover up counterterroism meetings it held with Israeli officials in wake of allegations that Islamic Jihad funds were laundered via the Bank of China, it emerged last week.

Leaked documents shed new light on a lawsuit filed by the family of Daniel Wultz, an American Jewish teenager who was killed in a terrorist attack in Tel Aviv in 2006, against  the Bank of China for damages in a U.S. court. 

They claim that the money transferred in one of the bank's branches, via accounts held by Palestinians from the Gaza Strip, were used to finance Hamas and Islamic Jihad terrorist cells in the territory.

One of those groups dispatched the suicide bomber that carried out the attack at a shawarma restaurant in south Tel Aviv in which Wultz was killed. The family has already won $320 million in damages in a similar federal lawsuit against the Iranian and Syrian governments for their support of Palestinian militant groups. 

In that case, an affidavit from an Israeli official said Islamic Jihad and Hamas in the Gaza Strip received extensive economic aid via labyrinthine routes, in which the Bank of China played a central role.

Israel, which approached the Wultz family and suggested filing the suits, also promised to support them with evidence and affidavits from former senior defense establishment officials. 

These include former intelligence official Uzi Shaya, who was supposed to testify that the Chinese were warned – a year before the attack – about the use of those bank accounts. At the same time, however, the Chinese government put serious pressure on Prime Minister Benjamin Netanyahu not to cooperate with the proceedings. 

About two weeks ago, Israeli daily Yedioth Ahronoth reported that, against the backdrop of Netanyahu's visit to China about two months ago, Israel backpedaled on providing witnesses for the case in New York.

The discussion last Friday in the U.S. District Court in New York focused on the plaintiffs' request for discovery (pretrial disclosure of pertinent facts or documents by one or both parties) and for a litigation hold (which asks the parties to preserve their data) in light of the pressure from the Chinese government. 

The Wultz family's representatives presented to the court minutes from a 2010 discussion between the Bank of China and Chinese government officials, in which the latter admitted that there had in fact been meetings between Chinese and Israeli antiterrorism officials in 2005 and 2007. The minutes of the meeting reveal the Chinese intended to deny meetings with the Israelis took place.

"We [the Chinese Foreign Ministry] recommend that these authorities issue a written statement of 'no meeting took place' to the Bank of China," it said in the minutes.

The minutes also noted that the Chinese assumed the Israelis would also deny the meetings took place.

"As for the antiterrorism meetings between China and Israel, the question is whether it is necessary to immediately notify Israel of the status of this case, and our position, in hopes of maintaining a consistent front," it said in the minutes.

"As it stands now, it should not be necessary to communicate, in any way, with Israel in regards to this case. Cooperation and exchange of information between the two governments is based on mutual trust. And the Israeli government would not provide the contents of meetings between the two countries to courts."

In the course of last week's discussion in court, the Chinese tried to convince the court that Israeli had apparently decided not to allow Uzi Shaya to testify because he is not supported by the Israeli government.

"Let's assume that the claims of Mr. [Uzi] Shaya are not supported by his government," said a representative of the Bank of China in court, in a claim that the presiding judge didn’t buy.

"It's hard for me to accept that assumption," Judge Shira Scheindlin said.

During the proceedings, the judge also criticized Israel conduct in deciding whether to allow Shaya to testify.

Referring to a letter she received from Yitzhak Blum, deputy head of the international department in the State Prosecutor's Office, which said Israel intends to decide on the issue of Shaya's testimony, Judge Scheindlin said:

"I'm troubled that the letter does not suggest any time frame for hearing again from Mr. Blum. It leaves me in the dark. Maybe they don't feel like writing me a letter… That would not be helpful."

During the discussion, representatives of the Bank of China claimed that, even if there were meetings in 2005 and 2007, specific information about the bank accounts belonging to a Palestinian by the name of Said al Shurafa and several members of his family who lived with him in China did not come up. 

According to an Israeli official, Shurafa's accounts were allegedly used by Hamas and Islamic Jihad to transfer funds to their operatives in the West Bank and Gaza.

At the end of the proceedings, the judge decided to turn once again to the international department of Israel's State Prosecutor's Office and request clarifications regarding Shaya's testimony, which the judge felt was key to moving the legal proceedings forward.

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