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Israel’s Tech Firms Do Business in Saudi Arabia Quietly

204 points by gavman 10y ago

ysavir 10y ago
Hopefully Saudi Arabia doesn't read Bloomberg.
- glbrew 10y ago
  The people who read it don't care and the people who care don't read it.
- Lanthanide 10y ago
  We do; their coverage of our stock market is often better than the domestic coverage! On that note, I have a feeling Mobily's stock is about to dip a bit after this article...
  - thekid314 10y ago
    Yeah, I wonder if this will affect who gets the next exclusive interviews with the prince.
dharmon 10y ago
I worked with an Israeli company that had to do something like this. While in the country I was going to visit their office, but I couldn't find the address anywhere on the website, only their NY satellite office. I was later told this was because they have manufacturing customers in Pakistan and Bangladesh, from which they hide their true identity.
- akoster 10y ago
  Unfortunately this is not a uniquely Israeli problem. Likely a similar effect can be achieved in the states with something like LLC "shell" companies.
tw04 10y ago
>If it’s a country which is not hostile to Israel that we can help, we’ll do it To say Saudi Arabia isn't hostile towards Israel takes one heck of a lot of mental gymnastics, or a burying of your head in the sand. Wahhabism isn't exactly known to be pro-Judaism.
- TeMPOraL 10y ago
  Money does that to your head. It quickly clarifies your actual beliefs.
  - kafkaesq 10y ago
    Yup. That, and access to military technology and intelligence on issues of mutual concern.
- travmatt 10y ago
  To boil down Saudi Arabia to Wahhabism is a gross simplification, especially considering strategic interests they both share wrt Iran.
  - tw04 10y ago
    I didn't boil it down to that. I simply pointed out it's RIDICULOUS to say the country isn't hostile towards Israel. "I'm not going to kill you until I kill that other guy who you also happen to not like" doesn't make you my friend.
    - jpatokal 10y ago
      No, it really isn't. More specifically, just because the Saudi regime maintains a facade of visceral hatred for domestic consumption does not mean that they are actually hostile towards (as in, would ever consider using military force against) Israel, because both have shared enemies that are potential existential threats: Iran, Islamic State, etc. Of course, this doesn't mean they're BFFs either, but (despite the best efforts of IS...) 200m Shias aren't about to disappear anytime soon. Complicated? Welcome to the Middle East. Also, obligatory: http://www.slate.com/features/2014/07/middle_east/graphics/graphical_version.png http://www.slate.com/features/2014/07/middle_east/graphics/g...
marginalcodex 10y ago
As someone with direct experience with this, it's nice (and important) to see this reality get more recognition. Something unmentioned in the article is that the military/intelligence relations are far stronger and better integrated than the tech relationships. The article correctly points out that the Arab states involved (this doesn't seem to apply to the non-arab muslim states) will not normalize formal relationships, without movement on the Palestinian front. However, despite this, these dynamics have made Arab countries much more susceptible to pressuring the Palestinians, and not putting diplomatic pressure on Israel on the things they care about (ie Operation Protective Edge). An important point to note is that as all of the Arab countries becoming friendly to Israel are non-democratic, and their citizens don't view Israel along the same lines as their governments.
- zionism_answers 10y ago
  >it's nice (and important) to see this reality get more recognition It's nice and important that the fascist occupation regime in Palestine is friends with the medieval dictatorship in Saudi Arabia? Not nice in the slightest.
  - sctb 10y ago
    Hacker News is not a battleground for ideological warfare, and we ban accounts that were created to behave as though it is. We also ban the main account if it continues, so please stop.
    - wallace_f 10y ago
      Meanwhile similar comments criticizing Trump on ideological grounds are fine...
      - metaphorm 10y ago
        people are allowed to have political positions. what got banned there was a gimmick/troll account.
Fiahil 10y ago
> Moreover, common sense tells us that in order for Saudi Arabia to get any weapon systems, they have to be bought under trade agreements made with friendly countries that manufacture those systems with official and approved export trade certificates from their governments. It is also certain that Israel is not among the countries that have commercial relations with the Kingdom. I thought software sales were exempt from trade certificates ?
avip 10y ago
This has nothing to do with tech. There are unofficial trade relations between Israel and (almost?) any country in the world.
projectramo 10y ago
I wonder if these machinations are necessary. I mean what if the company didn't try to hide its affiliations (for instance, on the website or when customers visited). They assume that the customer would react negatively, but do we know this or is it just an untested assumption?
Cyph0n 10y ago
I'm a Muslim Arab American and I am against Israel's more aggressive policies and actions. But I definitely respect Israel as a state, and especially the Israeli tech sector. Israel has consistently produced world-class companies in almost every field you can think of. It's quite impressive once you consider all of the factors. The author of "Startup Nation" argued that one key reason behind this success is how the military ties back into civilian companies, especially with the mandatory service. I'm not sure how important that is, given how many other countries have a similar model yet they've achieved nothing close to what Israel has. There are a few that have, such as Singapore and South Korea. I'm hoping that my home country Tunisia can replicate (at least somewhat) the Israeli success story. We have a lot of talented people both inside the country and overseas. The biggest thing we're lacking right now is a functioning economy (yep, tough times)... but I hope we can get there in the near future!
- DrHurtyio 10y ago
  If you have a country like the US giving you lots of money every year, then you can do fine. No problem is there are homeless and starving americans. Lets keep on sending that load of money to Israel. No problem is they use the occupied Golan heights to send arms over to Al queda in Syria. Top of the line marvel country. Bravo
  - TheGuyWhoCodes 10y ago
    I'm pretty sure even if you canceled all the US foreign aid it will change nothing for homeless Americans. Giving foreign aid is the US investing they get a lot of it back too, for example most of the aid money to Israel is strictly for buying military equipment from US companies not to mention that it is part of the peace agreement between Israel and Egypt. If you think Israel sends military equipment to Al qaeda your nuts.
    - dogma1138 10y ago
      >If you think Israel sends military equipment to Al qaeda your nuts. I'm pretty sure that Israel does sends military equipment to AQ from time to time, tho the equipment undergoes rapid unscheduled disassembly upon delivery.
Animats 10y ago
The "binary options" scam industry, which is mostly run from a suburb of Tel Aviv, has been targeting the Arab world recently. Mostly by default. The industry isn't allowed to scam Israelis, but the rest of the world's suckers are fair game under Israel law. They've been kicked out of the US, and recently, most of the EU. So they're telemarketing into the Arab countries now. This requires hiring Arabic speakers, who are available in Israel. Greed apparently overrides Arab-Israeli differences in this area. (Big 15-part expose in the Times of Israel: "The Wolves of Tel Aviv".[1] Summary: binary options are bets against the house, not against other speculators. Binary options "brokers" are not really brokers, they're shills for the house. Worse, the house cheats, tweaking the prices to make customers lose. Even if customers win, the house won't pay up. 80% of investors lose all their money. This brings in over 0.7% of Israel's GDP, and that's just the part that pays taxes.) [1] http://www.timesofisrael.com/the-wolves-of-tel-aviv-israels-vast-amoral-binary-options-scam-exposed/ http://www.timesofisrael.com/the-wolves-of-tel-aviv-israels-...
- oDot 10y ago
  Greed can be found to "overrides differences" in every area.
- staticautomatic 10y ago
  I'm looking forward to reading this, but my first impression is that calling a scam "amoral" is bizarre.
  - hasenj 10y ago
    "Amoral" is used by sociopaths to justify their immoral behavior; "morality doesn't apply to me".
  - edanm 10y ago
    I wouldn't take the word "amoral" in the title too seriously. This website has been working very hard (and somewhat successfully, I think) to take down the industry over the last few months. And the subtitle of the report is: "An industry turning over hundreds of millions of dollars, employing thousands of people, is cynically cheating naive would-be investors worldwide via a range of corrupt practices. It is doing terrible harm to its victims, and it risks doing the same to Israel’s reputation" I don't think they're particularly ambivalent about this industry being a bad thing.
gcb0 10y ago
can't say which side paid who for this piece.
Waterluvian 10y ago
Is there any relevance to this taking place in Israel? Does it happen elsewhere?
- johncolanduoni 10y ago
  Uh, the fact that you're doing business with companies from a country which doesn't have any formal diplomatic relations with you?
am185 10y ago
they are buyer's of ISIS cheap oil. http://www.timesofisrael.com/arab-paper-claims-israel-biggest-buyer-of-islamic-state-oil/ http://www.timesofisrael.com/arab-paper-claims-israel-bigges...
em3rgent0rdr 10y ago
Saudi Arabia govt & Israel govt are friends as a result of being friends of US foreign-policy, and because they share the same major enemy of Iran.
vidoc 10y ago
This makes me think of an interesting experience I had in my first job, almost 20 years ago! I was working for a small company that was at the time pioneering on-demand video systems. We were a software company but did sell our stuff as an appliances as we did need some control on the hardware. I was once flown to Ryad to deliver our best system to our client, a wealthy hotel resort with a cost-no-object kind of attitude in terms of what perks they supplied to their clients. Our marketing strategy was basically not putting too much emphasis on the hardware and we'd typically be very open in terms of what we had assembled and how much the components retailed for. We'd typically give them a 'dossier' (trendy these days uh?) with hardware details and the manuals of all the components we had assembled. Things went well, the engineers I was working with were super cool, first demos went without a hiss, we were just rolling the whole week! The night before I was flying back home, my boss called me from Europe in panic mode: someone had read those damn manuals and found out that our mpeg2 decoding hardware was made by an Israeli company and wanted us to cancel everything. What was interesting was how all engineers I talked to the next day went out of their way to apologize and tell me how completely stupid this whole matter was. Few months later, when the client found out there was basically all alternatives to this card basically sucked, the finally changed their mind :)
- edblarney 10y ago
  "I talked to the next day didn't apologize and tell me how completely stupid this whole matter was" I dare say you should not be so presumptuous to assume that local customs and values are 'stupid'. There can be lot of resentment between two groups of people, and not all of it is unwarranted. Would you buy software from a company that by de-facto policy did not hire Black people? Maybe not. Someone from another part of the world might consider that to be 'stupid' or 'irrelevant to the situation', because of a lack of understanding of the context (i.e. maybe it's a very segregated part of the world and such weird policies are reciprocated) I have no love for anti-Israeli antagonists, at the same time, issues such as very illegal Jewish settlements on land upon which Arabs are basically kicked off of at the point of a gun - are real. Anyhow - I take no sides on the issue, other than to point out how these things are very real problems, locally. It's good to see that 'sound states' such as Israel and Saudi can get along, despite historical antagonisms and despite some pretty big differences in ethos even outside of historical issues ... but I think it's important not to project our own cultural context (or rather dismiss theirs), and try to understand them in their respective situations.
anon2264 10y ago
I always wondered why when Greenwald revealed the proof that Hillary Clinton's #1 foreign policy goal, in partnership with the CIA, was war with Russia.
- WillyOnWheels 10y ago
  Url ?
  - anon2264 10y ago
    On mobile but I remember he was on Tucker Carlsen's show recently talking about it, search for that and I'm positive you will find it.
    - rat87 10y ago
      bullshit nobody wanted war, we just had different goals
      - wallace_f 10y ago
        You do realize that Obama dropped over 100,000 bombs, and the al-Qaeda and ISIS rebels in Syria that the Syrian government is fighting against... You realize they are funded by the US government?(1) And have you been living under a rock to ignore all of the "Russia is the enemy" rhetoric in mainstream politics? Nothing says 'we don't want war' quite like bombing other countries and funding terrorists. 1-https://gabbard.house.gov/news/press-releases/congresswoman-tulsi-gabbard-returns-syria-renewed-calls-end-regime-change-war https://gabbard.house.gov/news/press-releases/congresswoman-...
      - anon2264 10y ago
        What? Anerica has been involved in many wars. Syria is a proxy war with Russia.
    - WillyOnWheels 10y ago
      I'm having a hard time finding a video. Was it in Nov Dec Jan? When I search for terms you have been commenting, I get a lot of links to Zerohedge articles, but not that video. I found an hour long plus Tucker Carlson Tonight video that has Greenwald in there somewhere, but I don't have enough time today to trawl through it.
davidf18 10y ago
Many of the Intel processor chips are designed in Israel as is the Apple iPhone/iPad processor. Intel employs about 10,000 in Israel and I think Apple around 800. There are many, many other US firms represented in Israel -- often for buying up Israeli startups.
godmodus 10y ago
This does not belong on Hackernews tbh

204 points by gavman 10y ago

ysavir 10y ago

Hopefully Saudi Arabia doesn't read Bloomberg.

glbrew 10y ago
The people who read it don't care and the people who care don't read it.
Lanthanide 10y ago
We do; their coverage of our stock market is often better than the domestic coverage! On that note, I have a feeling Mobily's stock is about to dip a bit after this article...
- thekid314 10y ago
  Yeah, I wonder if this will affect who gets the next exclusive interviews with the prince.

dharmon 10y ago

I worked with an Israeli company that had to do something like this. While in the country I was going to visit their office, but I couldn't find the address anywhere on the website, only their NY satellite office. I was later told this was because they have manufacturing customers in Pakistan and Bangladesh, from which they hide their true identity.

akoster 10y ago
Unfortunately this is not a uniquely Israeli problem. Likely a similar effect can be achieved in the states with something like LLC "shell" companies.

tw04 10y ago

>If it’s a country which is not hostile to Israel that we can help, we’ll do it To say Saudi Arabia isn't hostile towards Israel takes one heck of a lot of mental gymnastics, or a burying of your head in the sand. Wahhabism isn't exactly known to be pro-Judaism.

TeMPOraL 10y ago
Money does that to your head. It quickly clarifies your actual beliefs.
- kafkaesq 10y ago
  Yup. That, and access to military technology and intelligence on issues of mutual concern.
travmatt 10y ago
To boil down Saudi Arabia to Wahhabism is a gross simplification, especially considering strategic interests they both share wrt Iran.
- tw04 10y ago
  I didn't boil it down to that. I simply pointed out it's RIDICULOUS to say the country isn't hostile towards Israel. "I'm not going to kill you until I kill that other guy who you also happen to not like" doesn't make you my friend.
  - jpatokal 10y ago
    No, it really isn't. More specifically, just because the Saudi regime maintains a facade of visceral hatred for domestic consumption does not mean that they are actually hostile towards (as in, would ever consider using military force against) Israel, because both have shared enemies that are potential existential threats: Iran, Islamic State, etc. Of course, this doesn't mean they're BFFs either, but (despite the best efforts of IS...) 200m Shias aren't about to disappear anytime soon. Complicated? Welcome to the Middle East. Also, obligatory: http://www.slate.com/features/2014/07/middle_east/graphics/graphical_version.png http://www.slate.com/features/2014/07/middle_east/graphics/g...

marginalcodex 10y ago

As someone with direct experience with this, it's nice (and important) to see this reality get more recognition. Something unmentioned in the article is that the military/intelligence relations are far stronger and better integrated than the tech relationships. The article correctly points out that the Arab states involved (this doesn't seem to apply to the non-arab muslim states) will not normalize formal relationships, without movement on the Palestinian front. However, despite this, these dynamics have made Arab countries much more susceptible to pressuring the Palestinians, and not putting diplomatic pressure on Israel on the things they care about (ie Operation Protective Edge). An important point to note is that as all of the Arab countries becoming friendly to Israel are non-democratic, and their citizens don't view Israel along the same lines as their governments.

zionism_answers 10y ago
>it's nice (and important) to see this reality get more recognition It's nice and important that the fascist occupation regime in Palestine is friends with the medieval dictatorship in Saudi Arabia? Not nice in the slightest.
- sctb 10y ago
  Hacker News is not a battleground for ideological warfare, and we ban accounts that were created to behave as though it is. We also ban the main account if it continues, so please stop.
  - wallace_f 10y ago
    Meanwhile similar comments criticizing Trump on ideological grounds are fine...
    - metaphorm 10y ago
      people are allowed to have political positions. what got banned there was a gimmick/troll account.

Fiahil 10y ago

> Moreover, common sense tells us that in order for Saudi Arabia to get any weapon systems, they have to be bought under trade agreements made with friendly countries that manufacture those systems with official and approved export trade certificates from their governments. It is also certain that Israel is not among the countries that have commercial relations with the Kingdom. I thought software sales were exempt from trade certificates ?

avip 10y ago

This has nothing to do with tech. There are unofficial trade relations between Israel and (almost?) any country in the world.

projectramo 10y ago

I wonder if these machinations are necessary. I mean what if the company didn't try to hide its affiliations (for instance, on the website or when customers visited). They assume that the customer would react negatively, but do we know this or is it just an untested assumption?

Cyph0n 10y ago

I'm a Muslim Arab American and I am against Israel's more aggressive policies and actions. But I definitely respect Israel as a state, and especially the Israeli tech sector. Israel has consistently produced world-class companies in almost every field you can think of. It's quite impressive once you consider all of the factors. The author of "Startup Nation" argued that one key reason behind this success is how the military ties back into civilian companies, especially with the mandatory service. I'm not sure how important that is, given how many other countries have a similar model yet they've achieved nothing close to what Israel has. There are a few that have, such as Singapore and South Korea. I'm hoping that my home country Tunisia can replicate (at least somewhat) the Israeli success story. We have a lot of talented people both inside the country and overseas. The biggest thing we're lacking right now is a functioning economy (yep, tough times)... but I hope we can get there in the near future!

DrHurtyio 10y ago
If you have a country like the US giving you lots of money every year, then you can do fine. No problem is there are homeless and starving americans. Lets keep on sending that load of money to Israel. No problem is they use the occupied Golan heights to send arms over to Al queda in Syria. Top of the line marvel country. Bravo
- TheGuyWhoCodes 10y ago
  I'm pretty sure even if you canceled all the US foreign aid it will change nothing for homeless Americans. Giving foreign aid is the US investing they get a lot of it back too, for example most of the aid money to Israel is strictly for buying military equipment from US companies not to mention that it is part of the peace agreement between Israel and Egypt. If you think Israel sends military equipment to Al qaeda your nuts.
  - dogma1138 10y ago
    >If you think Israel sends military equipment to Al qaeda your nuts. I'm pretty sure that Israel does sends military equipment to AQ from time to time, tho the equipment undergoes rapid unscheduled disassembly upon delivery.

Animats 10y ago

The "binary options" scam industry, which is mostly run from a suburb of Tel Aviv, has been targeting the Arab world recently. Mostly by default. The industry isn't allowed to scam Israelis, but the rest of the world's suckers are fair game under Israel law. They've been kicked out of the US, and recently, most of the EU. So they're telemarketing into the Arab countries now. This requires hiring Arabic speakers, who are available in Israel. Greed apparently overrides Arab-Israeli differences in this area. (Big 15-part expose in the Times of Israel: "The Wolves of Tel Aviv".[1] Summary: binary options are bets against the house, not against other speculators. Binary options "brokers" are not really brokers, they're shills for the house. Worse, the house cheats, tweaking the prices to make customers lose. Even if customers win, the house won't pay up. 80% of investors lose all their money. This brings in over 0.7% of Israel's GDP, and that's just the part that pays taxes.) [1] http://www.timesofisrael.com/the-wolves-of-tel-aviv-israels-vast-amoral-binary-options-scam-exposed/ http://www.timesofisrael.com/the-wolves-of-tel-aviv-israels-...

oDot 10y ago
Greed can be found to "overrides differences" in every area.
staticautomatic 10y ago
I'm looking forward to reading this, but my first impression is that calling a scam "amoral" is bizarre.
- hasenj 10y ago
  "Amoral" is used by sociopaths to justify their immoral behavior; "morality doesn't apply to me".
- edanm 10y ago
  I wouldn't take the word "amoral" in the title too seriously. This website has been working very hard (and somewhat successfully, I think) to take down the industry over the last few months. And the subtitle of the report is: "An industry turning over hundreds of millions of dollars, employing thousands of people, is cynically cheating naive would-be investors worldwide via a range of corrupt practices. It is doing terrible harm to its victims, and it risks doing the same to Israel’s reputation" I don't think they're particularly ambivalent about this industry being a bad thing.

gcb0 10y ago

can't say which side paid who for this piece.

Waterluvian 10y ago

Is there any relevance to this taking place in Israel? Does it happen elsewhere?

johncolanduoni 10y ago
Uh, the fact that you're doing business with companies from a country which doesn't have any formal diplomatic relations with you?

am185 10y ago

they are buyer's of ISIS cheap oil. http://www.timesofisrael.com/arab-paper-claims-israel-biggest-buyer-of-islamic-state-oil/ http://www.timesofisrael.com/arab-paper-claims-israel-bigges...

em3rgent0rdr 10y ago

Saudi Arabia govt & Israel govt are friends as a result of being friends of US foreign-policy, and because they share the same major enemy of Iran.

vidoc 10y ago

This makes me think of an interesting experience I had in my first job, almost 20 years ago! I was working for a small company that was at the time pioneering on-demand video systems. We were a software company but did sell our stuff as an appliances as we did need some control on the hardware. I was once flown to Ryad to deliver our best system to our client, a wealthy hotel resort with a cost-no-object kind of attitude in terms of what perks they supplied to their clients. Our marketing strategy was basically not putting too much emphasis on the hardware and we'd typically be very open in terms of what we had assembled and how much the components retailed for. We'd typically give them a 'dossier' (trendy these days uh?) with hardware details and the manuals of all the components we had assembled. Things went well, the engineers I was working with were super cool, first demos went without a hiss, we were just rolling the whole week! The night before I was flying back home, my boss called me from Europe in panic mode: someone had read those damn manuals and found out that our mpeg2 decoding hardware was made by an Israeli company and wanted us to cancel everything. What was interesting was how all engineers I talked to the next day went out of their way to apologize and tell me how completely stupid this whole matter was. Few months later, when the client found out there was basically all alternatives to this card basically sucked, the finally changed their mind :)

edblarney 10y ago
"I talked to the next day didn't apologize and tell me how completely stupid this whole matter was" I dare say you should not be so presumptuous to assume that local customs and values are 'stupid'. There can be lot of resentment between two groups of people, and not all of it is unwarranted. Would you buy software from a company that by de-facto policy did not hire Black people? Maybe not. Someone from another part of the world might consider that to be 'stupid' or 'irrelevant to the situation', because of a lack of understanding of the context (i.e. maybe it's a very segregated part of the world and such weird policies are reciprocated) I have no love for anti-Israeli antagonists, at the same time, issues such as very illegal Jewish settlements on land upon which Arabs are basically kicked off of at the point of a gun - are real. Anyhow - I take no sides on the issue, other than to point out how these things are very real problems, locally. It's good to see that 'sound states' such as Israel and Saudi can get along, despite historical antagonisms and despite some pretty big differences in ethos even outside of historical issues ... but I think it's important not to project our own cultural context (or rather dismiss theirs), and try to understand them in their respective situations.

anon2264 10y ago

I always wondered why when Greenwald revealed the proof that Hillary Clinton's #1 foreign policy goal, in partnership with the CIA, was war with Russia.

WillyOnWheels 10y ago
Url ?
- anon2264 10y ago
  On mobile but I remember he was on Tucker Carlsen's show recently talking about it, search for that and I'm positive you will find it.
  - rat87 10y ago
    bullshit nobody wanted war, we just had different goals
    - wallace_f 10y ago
      You do realize that Obama dropped over 100,000 bombs, and the al-Qaeda and ISIS rebels in Syria that the Syrian government is fighting against... You realize they are funded by the US government?(1) And have you been living under a rock to ignore all of the "Russia is the enemy" rhetoric in mainstream politics? Nothing says 'we don't want war' quite like bombing other countries and funding terrorists. 1-https://gabbard.house.gov/news/press-releases/congresswoman-tulsi-gabbard-returns-syria-renewed-calls-end-regime-change-war https://gabbard.house.gov/news/press-releases/congresswoman-...
    - anon2264 10y ago
      What? Anerica has been involved in many wars. Syria is a proxy war with Russia.
  - WillyOnWheels 10y ago
    I'm having a hard time finding a video. Was it in Nov Dec Jan? When I search for terms you have been commenting, I get a lot of links to Zerohedge articles, but not that video. I found an hour long plus Tucker Carlson Tonight video that has Greenwald in there somewhere, but I don't have enough time today to trawl through it.

davidf18 10y ago

Many of the Intel processor chips are designed in Israel as is the Apple iPhone/iPad processor. Intel employs about 10,000 in Israel and I think Apple around 800. There are many, many other US firms represented in Israel -- often for buying up Israeli startups.

godmodus 10y ago

This does not belong on Hackernews tbh