THE DRAKON FILES II: The Clearance Berlin Cannot Explain

Freddie Ponton
21st Century Wire

Germany attached an anti-corruption condition to its 2017 agreement to finance three submarines for Israel. Berlin has never identified who accepted that condition as satisfied, what evidence was examined or when the decisive notification arrived. German court and parliamentary records reveal a wider system of unpublished bilateral instruments under which Israel supplied the formal confirmation, Berlin retained the power to proceed, and Israeli consent later helped determine what Germany could disclose. This investigation traces the undisclosed decision that allowed Israel’s German-financed submarine programme to proceed while criminal proceedings in the Tel Aviv District Court remained unresolved.

INS Drakon left Kiel for Israel on 1 September 2026. Before it could sail, the 2017 financing agreement had to enter into force and Berlin had to grant the final export authorisation it said was still missing in 2025. Yet the public German records reviewed for this investigation identify neither decision by date, author, nor evidentiary basis.

Specialist German reporting places the transfer of responsibility at the Kiel yard of ThyssenKrupp Marine Systems (TKMS) on 22 July 2026, without a public ceremony. A departure ceremony followed on 31 August, and TKMS announced the next day that Drakon had left Kiel. The departure made the outcome visible, but the German decisions that enabled it remain concealed.

IMAGE: INS Drakon operating in the waters off Kiel during the period surrounding its discreet transfer to the Israeli Navy in July 2026. (Source: Kieler Nachrichten)

Part I of The Drakon Files investigation examined whether Berlin’s safeguard was formally satisfied or disappeared inside the secrecy surrounding the deal. This investigation follows the documentary trail through parliamentary answers, budget accounts, export records and court decisions to identify what Berlin disclosed, and the decisive record it withheld.

The condition

In October 2017, as the Israeli corruption affair gathered force, the Federal Government committed up to EUR 540 million towards three submarines for Israel, with a safeguard attached to the money.

The memorandum has never been published, but according to the only substantive contemporary account of its terms, every investigation had to be closed and every ground for suspicion resolved before delivery. Israel’s attorney general was expected to confirm that the investigations were over, but the final judgement belonged to Berlin. An official exchange of diplomatic notes, known in German as a Notenwechsel, was meant to record the governments’ formal declarations that the required conditions had been fulfilled. To this day, Berlin has never disclosed whether that exchange took place or produced either note.

IMAGE: Benjamin Netanyahu addresses the Knesset on 23 October 2017, the day he announced that Israel and Germany had signed the submarine memorandum whose anti-corruption condition remains unpublished. (Source: The Times of Israel)

The Bundestag identified the safeguard as section 10 of the 2017 memorandum, but did not receive its text. One month after signature, ThyssenKrupp chief executive Heinrich Hiesinger added a public assurance of his own, saying the deal would proceed only if it was ‘completely clean’.

On 12 December 2017, the Defence Ministry told Parliament that the agreement would enter into force once both governments had met their national requirements. Its official answer also specified when the agreement would take effect:

‘Maßgebend ist der Tag des Eingangs der letzten Mitteilung bei der anderen Vertragspartei.’ (The decisive date is the day the final notification is received by the other contracting party.)

The notification fixed the date on which the agreement entered into force, but Berlin has never disclosed the date on which it was received. The government also confirmed that the memorandum contained no withdrawal clause, meaning the condition could stop the programme before the notification but offered no contractual route back afterwards.

Between December 2018 and August 2021, the Federal Government repeatedly told Parliament that nothing material had changed, including reporting ‘kein neuer Sachverhalt’, or no new facts, in April 2020. Asked which conditions had been fulfilled and how compliance would be verified, Berlin pointed only to the final notification that would bring the agreement into force. It described the document that would announce the outcome, but not the evidence, threshold or authority behind it.

By August 2021, Berlin had preserved the appearance of a functioning safeguard for almost four years without identifying its decision-maker or verification procedure. Five and a half months later, Israel signed a EUR 3 billion contract with TKMS for three new Dakar-class submarines.

The change

Israel signed a EUR 3 billion contract for three new Dakar-class submarines with TKMS on 20 January 2022, five and a half months after Berlin had told Parliament that nothing concerning the agreement had changed. Germany’s contribution remained capped at EUR 540 million under the 2017 agreement, while the Economics Ministry agreed a separate industrial-cooperation package worth more than EUR 850 million.

Seventy-two hours later, Israel’s cabinet adopted Government Decision No. 1019 and established a state commission of inquiry into the procurement. Its mandate covered the submarines, Sa’ar 6 vessels, naval shipyards and Israel’s handling of proposed German submarine sales to a third country, allowing it to investigate the political and administrative system around the purchases but not the criminal defendants.

A German criminal inquiry had closed one year earlier, but the public record does not show that its findings supplied the missing clearance. ThyssenKrupp announced in July 2017 that it had found no evidence of corruption in its handling of the Israeli contracts, while acknowledging that it could not investigate in Israel, possessed no law-enforcement powers and regarded its conclusions as provisional. Company records reported by Globes indicate that the inquiry interviewed neither Michael Ganor, ThyssenKrupp’s sales agent in Israel, nor any of his representatives, and did not question Walter Freitag, the company executive linked to Ganor’s appointment.

The public prosecutor’s office in Bochum, a city in the western German state of North Rhine-Westphalia, opened a criminal investigation through its white-collar crime unit in March 2019 after reviewing reports on the Israeli proceedings, then closed the case in January 2021 because there was ‘no sufficient suspicion’ of offences by specific domestic persons. No closure memorandum appears in the public record reviewed for this investigation. Consequently, there is no public account of whether Bochum interviewed Freitag, sought assistance from Israel, obtained ThyssenKrupp’s internal report or later reconsidered the file.

The Federal Government has never said that Bochum’s closure satisfied section 10 or identified another German assessment that did. Months after Bochum closed its file, Berlin was still telling Parliament that nothing concerning the agreement had changed.

The criminal proceedings in Israel moved more slowly. Michael Ganor retracted his account in 2019, denied bribing anyone and withdrew from his state-witness agreement. A court ruled his police confessions admissible on 6 May 2025, although neither he nor the other defendants has been convicted.

IMAGE: Michael Ganor, ThyssenKrupp’s former representative in Israel, waits outside the Rishon LeZion Magistrate’s Court in March 2019 after seeking to retract the testimony he had given as a state witness in the submarine affair. (Source: The Jerusalem Post)

The state commission was still at work when Drakon passed into Israeli control. Its January 2026 publication set out systemic findings about the procurement process, including failures attributed to the National Security Council and naval officials and inadequate documentation of contacts with foreign bodies. The separate stage addressing the personal responsibility of the five officials who received warning notices remained unfinished. The commission scheduled 18 closed hearing days between 1 November and 31 December 2026 to hear their evidence. The hearings will allow the five warned officials to challenge the evidence, question witnesses and argue against personal findings before the commission issues its final report.

The money resumed

Germany’s budget record changed in the same year that the Dakar contract was signed and the Israeli inquiry began. Its contribution to Israel’s defence systems appears under Titel 559 01 of the federal budget, where the annual accounts record what Berlin planned to spend and what it paid.

Germany’s budgeted and actual expenditure under Titel 559 01, ‘Contributions towards the procurement of defence systems for Israel’, from 2017 to 2025. The accounts establish aggregate spending under the budget title but do not publicly disaggregate every payment by project. Each linked figure opens the corresponding federal annual account.

After fully spending the line in 2017, Germany paid less than budgeted in each of the next four years and nothing in 2020 or 2021. Full disbursement resumed in 2022, when Israel signed the Dakar contract, and continued each year afterwards. The accounts establish when the money began moving again, but not why.

The 2019 accounts contain the only act in this sequence that identifies a German authority, legal basis and outcome. The Finance Ministry withheld its consent under section 45(3) of the Federal Budget Code to use the entire carried-over balance, but the accounts do not explain why or say whether the decision was connected to the anti-corruption condition.

Germany had entered the entire EUR 540 million as commitments in 2017, before the Israeli proceedings could have concluded. At the end of 2025, EUR 390 million remained outstanding, scheduled at EUR 65 million annually from 2026 to 2031.

The aggregate figures were public, but their allocation was not. In January 2024, MP Sevim Dağdelen asked the government to disclose its financial contribution to Israel’s submarines, broken down by amount, budget year and budget title.

MP Sevim Dağdelen, whose request for details of Germany’s submarine financing received a classified answer. (Source: German Bundestag)

Parliamentary State Secretary Thomas Hitschler classified the answer VS-NUR FÜR DEN DIENSTGEBRAUCH, or classified for official use only, because publication, he said, could cause ‘politischen Verwerfungen’, or political repercussions, in German-Israeli relations.

The aggregate remained public, and a later ministerial answer confirmed that the contribution was non-repayable, but the breakdown stayed secret. The reason given was not operational security but the risk of political damage to the bilateral relationship.

The accounts show when public money began moving again, while the licensing record shows when the submarine itself became capable of leaving Germany. Drakon required an approval under the War Weapons Control Act and another under the Foreign Trade Act authorising the export itself. By January 2025, Berlin had granted the first but not the second, confirming in Drucksache 20/14661 that the authorisation to transport a submarine for export existed, while the foreign-trade licence required to execute the export did not.

Seven months later, ThyssenKrupp shareholders asked about the missing approval. At the company’s extraordinary general meeting on 8 August 2025, the recorded answer was direct.

‘Eine Ausfuhrlizenz liegt vor.’ (An export licence exists.)

ThyssenKrupp later confirmed this wording to journalists. Yet in a letter dated 15 August 2025, one week after the shareholder meeting, lawyers representing the Federal Government said that no Foreign Trade Act licence had yet been issued for the submarine, according to the letter obtained and reviewed by nd and Shadow World Investigations. This directly contradicted what ThyssenKrupp had told its shareholders and raised an obvious question: what approval, if any, was the company referring to?

The government’s parliamentary answer from the same period deepened the discrepancy. Berlin confirmed that the required Foreign Trade Act licence had not been granted but refused to disclose the status or substance of the continuing assessment, placing arms-export decisions within the Kernbereich exekutiver Eigenverantwortung, or core area of executive responsibility. The result was a striking gap between the company’s assurance that the necessary approvals had been secured, and the government’s position that a legally required licence remained outstanding, without a public explanation of how those statements could be reconciled.

If ThyssenKrupp meant the earlier weapons-control approval, it answered a specific question about the missing final licence by referring to a different authorisation. If it meant the Foreign Trade Act licence, the company and government gave incompatible accounts seven days apart. The contradiction remained unresolved when the question returned at TKMS’s annual general meeting on 27 February 2026.

Questioners at that meeting said the Federal Security Council had approved Drakon’s export in December 2023 while the Foreign Trade Act licence remained outstanding. That date has not been independently confirmed and should not be treated as an established government decision. It nevertheless points to a specific approval record that can be tested against the company’s August 2025 statement, the government’s contrary answer, and the authorisation that appeared in the second quarter of 2026.

Germany approved EUR 735,763,266 in arms-export licences for Israel during that quarter, of which EUR 508,750,000 covered war weapons. Around 67 per cent of the total related to ‘ein Großprojekt im maritimen Rüstungsbereich’, or a major project in the maritime defence sector, while another 21 per cent concerned cooperation between German and Israeli companies in the interests of the Bundeswehr.

The government did not name the maritime project. However, Der Spiegel and Globes identified it as Drakon. The maritime share, approximately EUR 493 million, closely matches published estimates of the submarine’s value. Berlin published the quarter, aggregate and proportion, but not the licence date, issuing authority or assessment behind it, including whether the anti-corruption condition formed any part of that assessment.

By the time Drakon left Kiel, Germany’s conduct had changed in every observable respect. The programme had expanded, payments had resumed, aggregate licensing figures had appeared for an unnamed maritime project with a value close to Drakon’s, and the submarine had departed. Yet the decision that made those steps compatible with section 10 remained undisclosed.

The secrecy surrounding the final licence was not an isolated feature of the programme, as court proceedings revealed that unpublished bilateral agreements also governed what Berlin could disclose about its military support for Israel. It appears that Berlin controlled the weapons, but not the public account of their transfer.

What Berlin withheld

A journalist’s attempt to discover whether Germany’s arms-export figures included equipment transferred directly from Bundeswehr stocks to Israel, and what those transfers were worth, reached the Administrative Court in Cologne after Berlin refused to answer.

In its decision of 26 May 2025, the court recorded that transfers from Bundeswehr stocks were governed by bilateral agreements containing a provision headed ‘Vertraulichkeit, Verschwiegenheit’, or confidentiality and secrecy. Germany’s agreement with Israel covered whether transfers had occurred, what they contained and how much they were worth. Berlin argued that disclosure could damage future cooperation and Germany’s standing as a reliable partner. The court accepted the protection of foreign relations as the decisive public interest.

 The government told the Cologne court that it had made the statement ‘im Einvernehmen mit dem Staat Israel’, or with the agreement of the State of Israel, and later told Parliament that Israeli consent to identifying those goods ‘war rechtlich erforderlich’, or was legally required.

Parliament asked which Israeli authority had been consulted, who within the German government had authorised the approach, what legal provision required Israel’s consent and what information had been withheld. The government’s answer identified neither the German decision-maker nor the instrument that made consent necessary, while confirming that Germany had not separately informed the International Court of Justice that its disclosure depended on Israel’s agreement.

In fact, Berlin never produced the agreement on which it relied. The Higher Administrative Court of North Rhine-Westphalia nevertheless accepted the government’s description of its terms without requiring the text and recorded that Israel still opposed disclosure of the transfers’ value on 12 June 2026, leaving the restriction active only weeks before Drakon passed into Israeli control.

The proceedings concerned Bundeswehr stocks, not the submarine memorandum, but exposed the same reliance on unpublished bilateral arrangements. Under one instrument, Berlin decided whether the submarine programme could proceed, while under another, Israeli consent shaped what Germany could disclose about its own military support afterwards.

On Monday 7 September 2026, only six days after Drakon left Kiel, Germany told the International Court of Justice that its ‘strict licensing procedure’, published reports and parliamentary answers allowed the public to scrutinise its arms-export decisions. Berlin was asking the Court to dismiss, on jurisdictional and admissibility grounds, a case brought by Nicaragua accusing Germany of breaching the Genocide Convention and international humanitarian law through its military support for Israel. By then, Berlin had already told a German court that another state’s consent determined part of what it could disclose and had persuaded that court to accept the restriction without examining the agreement that created it.

Germany’s representative Julia Monar at the International Court of Justice for the second round on 9 September 2026. (Photo: Anadolu)

The missing records go beyond the two unpublished instruments. Israel’s state commission found that officials had failed to document contacts with foreign bodies during the naval procurement, including contacts involving German officials and institutions. The German side of those exchanges may survive in files held by the relevant federal ministries or the Federal Chancellery. They may also include Federal Security Council records, whose deliberations are secret. It could not be established whether any relevant material has been transferred to the Federal Archives.

The dispute that surfaced in 2015 over Germany’s submarine sale to Egypt shows why those files are important. Amos Gilad, then head of the Israeli Defence Ministry’s political-security division, approached Christoph Heusgen, Angela Merkel’s foreign-policy and security adviser, to oppose the sale. He learned that Germany had already obtained Israel’s consent from Netanyahu, who later acknowledged giving that consent without informing Israel’s defence minister or military chief.

A 2025 Panorama investigation reported that pressure also moved in the opposite direction. Germany sought Israeli concessions on settlement construction and Palestinian statehood during the submarine negotiations, while Netanyahu sent his close adviser Ron Dermer, then serving in the Prime Minister’s Office, to demand Heusgen’s removal. Merkel refused, and Heusgen later described an exchange reaching the offices of both governments, precisely the kind of contact likely to have generated records on the German side.

Reporting cited by Globes places Ganor within that official channel. Berlin reportedly made delivery of the sixth submarine conditional on Israeli measures concerning the Palestinians, leading Ganor to approach Yitzhak Molcho, Netanyahu’s diplomatic emissary, and ask him to intervene. Ganor was not a diplomat but a private intermediary working on a two per cent commission. His reported involvement placed a commercial agent inside an official German-Israeli exchange, potentially leaving records in TKMS’s or its parent group’s compliance files, the Federal Chancellery, or both.

The industrial-cooperation package agreed in January 2022 created a separate documentary trail. Worth more than EUR 850 million, it directed reciprocal procurement and investment towards Israeli companies. Four years later, Elbit Systems, TKMS and the Israeli Ministry of Defence opened a submarine-component facility in Israel as part of TKMS’s offset procurement.

Assigning credit against that commitment would ordinarily have generated proposals, assessments and approvals. Those records could show which companies benefited, who proposed them and whether any were introduced or represented by Ganor, or linked to his business interests. Obtaining them is therefore central to establishing how the German side of the arrangement operated.

The notification

The last notification marked the moment when Berlin accepted that the anti-corruption condition no longer stood in the programme’s way. Germany has never produced it or disclosed when it was received, what evidence supported it or which official accepted it.

German and Israeli flags outside the Reichstag in Berlin. The notification that cleared the submarine programme remains unpublished. (Source: Middle East Monitor)

Germany committed EUR 540 million, resumed payments while the Israeli proceedings remained unfinished and authorised Drakon to leave. The expenditure and the submarine are public, but the decision that permitted both remains concealed.

That secrecy is consequential and goes beyond this procurement, as Germany continues military support for Israel while the conduct of the war in Gaza remains before international courts and the International Criminal Court has issued arrest warrants for Benjamin Netanyahu and Yoav Gallant over alleged war crimes and crimes against humanity. Public money, licences and military equipment cannot be governed solely by assurances the public is unable to test.

Berlin can resolve the central question by publishing the notification, naming the official who accepted it and disclosing the evidence on which Germany proceeded. Until then, its claim that strict controls protected the programme remains unproven.

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Source: https://21stcenturywire.com/2026/09/10/the-drakon-files-ii-the-clearance-berlin-cannot-explain/