If you are thinking of flying into Israel and waltzing in, loaded with contraband, think again.
Two smugglers just found out in the District Court what happens if you try to smuggle goods through the green channel at Ben-Gurion Airport. In brief, they each incurred heavy fines, a suspended sentence, and a criminal record because they appealed an administrative fine.
On March 24, 2023, the couple landed at Ben-Gurion Airport and entered the green Customs channel, which meant they had nothing to declare. When they were called in for screening, it turned out they were smuggling more than a few cigarettes. The gentleman had 197 cartons, and the lady had 83. Each carton contained 10 packs of 20 cigarettes.
Clearly, they were trying to evade taxes. In the case of the gentleman, it was to the tune of a purchase tax of NIS 43,354, plus VAT of NIS 9,304, totaling NIS 52,658. The lady’s purchase tax would’ve amounted to NIS 16,487, plus VAT of NIS 3,392, totaling NIS 19,879.
In the first trial, the smugglers confessed. The court found that their crime was financially motivated, intended to evade taxes that called for heavy financial penalties. The court based its ruling on an earlier Supreme Court decision, which dealt with a builder who built more than permitted in the hopes of financial gain.
Court issues fines, suspended jail terms in smuggling case
In the first trial, the court sentenced the gentleman to a three-year suspended jail sentence (which means that he won’t be jailed if he doesn’t repeat his offense during that period), plus a fine of NIS 52,658, payable over 75 months (or 90 days in jail if the fine is not paid).
The court gave the same three-year sentence to the lady as well. She was given a fine of NIS 19,879, payable over 75 months (or 45 days in jail if the fine is not paid).
The smugglers appealed their sentences to the Lod District Court: They had a bank overdraft, they had four children to support, and a medical disability that limited their ability to work. As such, they requested the court’s leniency, including a substantial reduction in fines.
The court turned down their appeal, saying that if an administrative offense is committed, the offender can elect to go to trial and any fines they incur are permissible by law.
Of course, their punishment must fit the circumstances. The minimum penalty is the amount of taxes that the offender sought to evade. When it comes to a crime committed for financial gain, such as in this case, public interest dictates a heavy penalty so as to deter others. Otherwise, entry into Israel via the green channel could be easily exploited by smugglers hoping to make a quick buck.
The judgment cites a Columbia Law Review article,” An Economic Theory of the Criminal Law” by R.A. Posner.
In Israel, the court said that, to impose penalties meant to deter others, Section 63(a) of the Penal Law empowers a court to impose a penalty of up to four times the damage caused or benefit gained.
Smuggling any quantity of items through the airport’s green channel is a crime. And let me say: Crime doesn’t pay! Don’t mix up the red and green channels.
As always, consult experienced professional advisors in each country concerned at an early stage in specific cases.
The writer is a certified public accountant and tax specialist at Harris Consulting & Tax Ltd.