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Israeli Arms Maker Sent Equipment to Myanmar, Despite U.S. Embargo

May 16, 2023

Bill of lading shows $5 million shipment from Israel's CAA to sanctioned Myanmar broker. Photos show its gun-parts on Myanmar rifles. Two U.S. citizens were on the firm's board ■ CAA: We only sell to approved countries

An Israeli arms producer has provided Myanmar with equipment to manufacture arms despite the genocide being conducted against the Rohingya people in the country and the arms embargo imposed by the United States and European Union on Myanmar.

Documents revealing the shipments were published Thursday by the Justice for Myanmar organization and Israeli human rights attorney Eitay Mack.

A bill of lading from July 2019 shows that Israeli arms producer CAA Industries shipped equipment to a known supplier of the Myanmar military, including molds for injecting plastic polymers and tools for computer-controlled machines (CNC), which are likely intended to manufacture rifle parts including grips, handles and stocks. The shipment, weighing roughly two tons, departed from Ben-Gurion International Airport near Tel Aviv on August 10, 2019 for Bangkok, and continued on another flight to Yangon, the former capital of Myanmar.

According to its website, CAA Industries designs, develops and produces firearms and "modern tactical accessories, optics, tools and upgrades" for weapons such as the Roni, a conversion kit that fits on top of pistols and enables them to be used like submachine guns. The company, per its website, is the official Israeli representative of the Russian national arms conglomerate Rostec, which has faced American sanctions since the Russian annexation of Crimea in 2014, and is licensed to produce assault rifles based on the Kalashnikov AK series.

The Star Sapphire Group, which bought the equipment and is the consignee on the bill of lading, served as the broker in a long series of arms deals with the Myanmar army. Sanctions were recently imposed on the company – registered in Myanmar and Singapore – by the U.S. Treasury Department. The company's managing director, Tun Min Latt, is close to the ruling military junta and was arrested last year in Thailand for his involvement in drug trafficking and money laundering.

Internal company documents published in Haaretz revealed the Star Sapphire Group has presented itself as the exclusive representative of Israeli defense firms Israel Aerospace Industries, Elbit Systems and Israel Shipyards in Myanmar, and acted with the approval of Israel's Defense Ministry when it marketed advanced Israeli weapons systems to senior military leaders in Myanmar.

Mack sent a letter of complaint to Attorney General Gali Baharav-Miara demanding to open an investigation against CAA and senior officials in the defense and foreign ministries "who approved the sale to Myanmar". The equipment sent from Israel seemingly serves to manufacture components and accessories for the Myanmar army's MA series of assault rifles, some of which are based on the Israeli Galil model, said Mack. "CNC machining and plastic injection molding are both commonly used and cost-effective ways to produce parts for small arms and other weapons".

Activists at Justice for Myanmar - which has exposed several arms deals that violated the international sanctions imposed on the military junta - have gathered pictures of rifles manufactured by the junta's arms industries, including assault rifles, sniper rifles and light machine guns, and have identified on many of them grips and stocks with the identical design that CAA sells.

In spite of the arms embargo on Myanmar, Israel refused to stop selling it weapons during the period of the military junta, which ended in 2011. The contacts and exports continued afterward too, during the period of the Rohingya genocide, which commenced in 2016. Only at the beginning of 2018, after a petition to the High Court of Justice - whose ruling remains secret - and extensive protests in Israel and overseas, did Israel say officially it was stopping defense exports to Myanmar.

But the shipment revealed in this report shows equipment for manufacturing arms was sent from Israel to Myanmar even after the alleged decision to stop arms sales. According to information obtained by Haaretz, the value of the deal was about $5 million. Haaretz also revealed that a year later, the Israeli company Cognyte participated in and even won a tender by a Myanmar state-owned company to provide an advanced mass cyber-surveillance system.

Since the 2021 coup that brought it back to power, the junta has continued to import arms and equipment from a number of countries – including from Russia, China, Singapore, India and Thailand – worth about $1 billion, a report from the UN Human Rights Council special rapporteur on the situation of rights in Myanmar said.

"What makes this deal particularly problematic is that it provides the Myanmar military with the tools to upgrade their small arms and this know-how will remain. It is not a one-off shipment of weapons, but products and tools that can be kept and used for a lot of things," wrote Mack in his letter of complaint to the attorney general.

Israel's Ministry of Defense and Foreign Affairs Ministry declined to respond to Haaretz's query, about whether they had approved the sale to Myanmar. CAA said in response that "most of the company's products are for civilian use. When dealing with defense related products, CAA operates according to the law and according to Israeli Defense Ministry permits and regulation. CAA has never conducted defense related deals with countries not approved for defense exports. The company does not share details on its deals with the press, and the information attributed to us in your report is wrong". The firm did not respond to additional requests for clarification. Following publication of this report, CAA sent an update: "The firm's plastic products are exempt from defense export controls".

According to Mack, the equipment sent to Myanmar is defined as dual use - meaning it could serve both civilian and military purposes. Such equipment is regulated by The Wassenaar Arrangement - an international export control regime. Israel is not a signatory, but claims it does adhere to its guidelines and conducts proper regulation.

Even if the deal was approved by the Israeli arms export regulator, it did defy the U.S. imposed arms embargo on Myanmar. According to the Registrar of Companies, at the time of the arms deal in 2019, two shareholders split ownership of CAA: Moshe Oz, an Israeli citizen (49%), and a British Virgin Islands registered entity (51%). During that period, two of the company's four directors were U.S. citizens. In April 2020, following a legal dispute with his partners, the remaining shares were transferred to Oz, and he became the sole owner and director at the firm.

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Yadanar Maung, JFM spokesperson, said in response: "CAA Industries’ support for the Myanmar military's arms industry is unconscionable, and amounts to aiding and abetting the military's war crimes and crimes against humanity, which are continuing on a daily basis. The fact that this transfer took place after the Israeli government claimed to have stopped selling arms to Myanmar raises serious questions that should be urgently addressed through a criminal investigation. CAA Industries has helped boost the military's arms production capabilities, which has lasting consequences for the people of Myanmar who are subject to daily acts of terror at the hands of the illegal junta, which is committing mass murder, torture, property destruction and forced displacement. CAA and Israeli officials must be held accountable".