The clandestine bank affair at the Israel Diamond Exchange in Ramat Gan, in which five new indictments were filed last week, again puts the diamond industry in the spotlight as a sector in which a large proportion of trading takes place under the table. The culture of discretion in the sector; the nature of the merchandise, which is light and easy to smuggle and conceal; the aggressive tax planning; the difficulty experienced by the Israel Tax Authority in monitoring the value of the reported inventory; and the widespread forging of invoices, as indicated by the clandestine bank affair; make this sector fertile ground for tax evasion. Nevertheless, many sources in the sector speak of its prolonged decline, and dream of a new career in real estate or high tech.
Three and a half years after the exposure of the clandestine bank at the Diamond Exchange, and four months after the first convictions achieved in the affair that created a storm in the Israel diamond sector, very few realize its true dimensions.