On May ^16th, the Hotline for Migrant Workers submitted a report to the Knesset Subcommittee on Trafficking in Women. It described the considerable profits the State of Israel makes from trafficking in women in particular, and trafficking in persons in general. Among other sources, the state of Israel profits from income taxes, municipality taxes, fines and confiscated property.

Income Tax: The income tax law permits taxation of illegal activities, including trafficking in persons. Joint teams of police officers and investigators from the Ministry of Finance conducted raids on brothels. The State believes that taxing businesses run by organized crime is an excellent way to combat organized crime, but, by taxing these businesses instead of shutting them down, the State is, in fact, actually legitimizing them.

Municipal Tax: "We are interested in collecting municipal taxes. Legal, illegal, that is the police's job," explained an official in the Haifa Municipality to a volunteer at the Hotline for Migrant Workers. Local authorities, it turns out, make a pretty penny from municipal taxes on massage parlors. The moment a municipality discovers that an apartment is being used as a brothel and not for residential use, it charges the higher rate demanded by commercial enterprises. Over the last seven years, the Tel Aviv Municipality collected over 50,000 NIS in municipal taxes from a Tel Aviv apartment where a brothel operated and where women were held forcibly and even trafficked. The number of brothels operating in Tel Aviv is estimated at over 100. Thus, it is reasonable to assume that they generate 1 million NIS annually for the city.

Fines: Between the years 2004 – 2006, the government charged 585,500 NIS in fines from traffickers. This money, made through the sale of women, went to the State treasury instead of those who most deserve to benefit from it.

Income from Confiscation of Money According to the Law Prohibiting Money Laundering: The police have no information regarding how much money is confiscated from traffickers. Nevertheless, the State profits, because traffickers who have been convicted are fined. In 2004, fines totaled 216,000 NIS and in 2006, 260,000 NIS. The State coffers also expand when traffickers are released on bail and disappear. In these cases, the State forecloses on the bail money and confiscates funds found on the criminals. In the Livshitz ruling for example, the state collected around 91,000 NIS, $2,600 and 700 euros made through trafficking in women, but the victim of this trafficker was only awarded 30,000 NIS in legal redress, or around 20% of the sum confiscated.

Income from Confiscation of Money According to the Law Combating Organized Crime: To date, the Public Attorney has made little use of this law, but in each of the cases in which it was applied, the government confiscated large sums of money. In the Boslovich verdict, for example, the plea bargain agreement required one of the defendants to pay 50,000 NIS to the Treasury and 200,000 NIS to the confiscation fund. Meanwhile, his victims received between 7,500 NIS to 15,000 NIS. Each of the two remaining defendants in this case were required to pay a fine of 20,000 NIS however, their victims received no legal redress whatsoever.

The Parliamentary committee meeting, held on May ^16th, disclosed a few other problematic facts: The law banning trafficking in persons, enacted in October 2006, requires the establishment of a fund. Monies in this fund are to be dedicated to combating trafficking in persons and for rehabilitation of its victims. Although this could be an important means of assistance for women, it seems that there is no hurry to either establish this fund or create regulations for its operation.

So far no indictments have been issued under the new law combating trafficking in persons. This law expands the definition of the crime of trafficking in person to include slavery and forced labor for labor migrants. MP Zahava Gal - On announced that she would approach the Director of the Investigations Unit at the Police with a request to give this issue priority.

In conclusion, most State profits are generated indirectly. This includes taxes paid by taxi drivers who take the women to their clients, taxes paid by apartment owners who rent their apartments to escort services and brothels, from attorneys who represent traffickers, newspapers which publish ads for sex services and others. This money stems from the fees paid for sexual services, but in the end reaches the state's coffers.

Trafficked women face many difficulties in claiming legal redress from traffickers because they are not allowed to remain in Israel and because they fear for their lives. Even if a judge rules they are entitled to compensation, in most cases they are unable to collect it. Often, this forced women to compromise for the miserable sum of $1,000-2,000.

The Hotline for Migrant Workers' believes that in each case where it is clear that the money confiscated was made from trafficking, it should be directed to a fund for trafficking victims. In order to expand the monies available in the fund, income and municipality taxes taken from traffickers should also be included. Monies in the fund should be dedicated to rehabilitation and not law enforcement. Just as it is unconceivable to expect a rape victim to finance law enforcement against her perpetrator, trafficking victims should not finance these activities. This is particularly true given that enforcement efforts lagged so many years behind perpetration of these crimes, years in which the Israeli government ignored law enforcement yet benefited from its profits.

From the press:

Call to Order / How much does the state earn from trafficking in women?  "Haaretz" , 27 May 2007

For the full report