File 2: Indefensible: Dutch support to Israeli arms manufacturers

Two of Israel’s largest weapons manufacturers are using the Netherlands as their base to invest in Europe and acquire arms manufacturing companies in various European countries. These two companies, Elbit Systems and Rafael Advanced Defence Systems, are “deeply integrated into Israeli military operations in the Occupied Palestinian Territories”(opens in new window) . Amnesty International(opens in new window) has determined that these companies are critical suppliers(opens in new window) of weapons(opens in new window) and equipment to the Israeli military, which are used in the commission of crimes, including genocide. Both companies have seen revenue and profit increase(opens in new window) since the beginning of the genocide in Gaza, with Rafael announcing its 2025 financial results as “another record year”(opens in new window) .

These companies use Dutch holding companies to own their weapons manufacturing businesses in European countries like Spain and Germany. Europe is a critical market for both companies . Elbit’s largest market outside of Israel is Europe, generating nearly a third of its revenue(opens in new window) . The arms manufactured by Israeli arms companies in Europe may or may not go to Israel, but the profits made by the arms companies do. Profits enabled and likely enhanced by their ability to be Dutch.

This file shows how.

Rafael Advanced Defense Systems

Rafael, one of Israel’s largest weapons companies, uses a Dutch company to hold its subsidiaries in Germany, Spain and the UK. Rafael is a state-owned company and falls under the responsibility of Israel’s Ministry of Finance, headed by Bezalel Smotrich.

Rafael Advanced Defense Systems (Rafael) is one of the three largest weapons companies in Israel and is owned(opens in new window) by the Israeli government. According to its CEO, “Rafael is the largest and most central supplier to Israel’s defense establishment”(opens in new window) . Rafael has 10,000 employees and recorded $3.8 billion in revenue and $159 million in net profit in 2024(opens in new window) . In 2025(opens in new window) , Rafael made record profits, with over $6 billion in sales and $391 million in net profit. Rafael annually transfers 50 per cent of its net profit to Israel’s state treasury, and in 2024 paid 444 NIS million(opens in new window) (approximately €129 million) in dividends to the state.

Since 2004, Rafael has expanded its footprint in Europe through acquisitions of arms c­ompanies in Germany, Spain and the UK . These companies are all owned by the Dutch company ERCAS B.V., as shown by the corporate structure in figure x. Rafael set up ERCAS B.V. in 2004 specifically to “market its products (…) in Europe” and to “act as a holding company” for companies Rafael would incorporate or acquire .

ERCAS B.V. has zero employees in the Netherlands . According to its 2024 annual report, the company had £181.2 million worth of assets (ca. €210 million) . It does not have a street address in the country and only lists “The Hague” as its legal seat . It registers its annual accounts with the Dutch Chamber of Commerce and is subject to Dutch law . However, the person registered as director of ERCAS B.V. is located in London, which is where the company has a “UK branch”, with 3 employees engaging in market activities . ERCAS B.V. is also listed as Rafael’s UK representative(opens in new window) .

The registered address(opens in new window) of ERCAS B.V. in London was found, by investigators from the media organisation Declassified UK(opens in new window) , to have been closed and unused for several years. Because ERCAS B.V. has no employees in the Netherlands, but has sizable financial assets, it is referred to here as a letterbox company.

The contradictions at the heart of Dutch policy: who ultimately controls Rafael and ERCAS B.V.

Because Rafael is wholly owned by the State of Israel, the benefactor and controlling party of ERCAS B.V. is the State of Israel . Israel’s Ministry of Finance is responsible(opens in new window) for the activities(opens in new window) of all state-owned enterprises. Since 2022, Israel’s Ministry of Finance has been headed(opens in new window) by Bezalel Smotrich.

In July 2025, the Dutch government declared(opens in new window) Smotrich persona non grata and banned him from entering the Netherlands because of his statements inciting settler violence against Palestinians and “calling for ethnic cleansing in the Gaza strip”. Yet the Netherlands continues to host ERCAS B.V. which is part of a corporate group over which Minister Smotrich has responsibility. Bezalel Smotrich cannot enter the Netherlands because he advocates ethnic cleansing in Gaza. But Rafael – the company that manufactures the weapons used in the commission of grave crimes in Gaza – is welcome.

Rafael’s gateway to Europe: European subsidiaries owned by Rafael’s Dutch letterbox company

Rafael’s Dutch holding company, ERCAS B.V., provides it with a gateway to Europe. As the graph on ‘Rafael’s corporate structure’ above shows, it is used to hold its investments in three European countries. Because of a shortcoming(opens in new window) in Dutch legislation, ERCAS B.V. is classified as a “small company” and only has to publish a short balance sheet in its annual ­report. Details of its activities and transactions are therefore not public information. Rafael did not respond to SOMO’s requests for comment.

The next section gives an overview of the subsidiaries held by ERCAS B.V.

Germany

Rafael’s first foray into Europe came with the acquisition of Dynamit Nobel Defense in 2004. The aim of this acquisition was to “enter the shoulder-launched rocket launcher business” . Dynamit Nobel Defense produces(opens in new window) missile launchers, software systems, and vehicle and fire protection systems. It produces for the German government as well as other NATO partners(opens in new window) , including the US, Croatia and Belgium, and recorded €146 million in revenue in 2024 . Six of the eight members of Dynamit Nobel Defence’s supervisory board are senior Rafael officials .

In 2024, Dynamit Nobel Defence opened an R&D facility and arms factory in Hungary(opens in new window) that will produce anti-tank grenade launchers, a joint venture with the Hungarian government.

United Kingdom

In 2022, Rafael acquired the UK arms manufacturer Pearson Engineering through ERCAS B.V. for £100 million (ca. €118 million) . This acquisition was intended to give Rafael “access to British Ministry of Defence tenders” and a “manufacturing center for Rafael in the UK” . The acquisition was financed by ERCAS B.V.’s issuance of capital notes to Rafael . Pearson Engineering manufactures countermine and IED (improvised explosive device) equipment and combat engineering equipment for armoured vehicles . Key expansion markets for Pearson include South-West Asia and Africa . Pearson has provided “decades of support to the US Army and US Marine Corps”(opens in new window) . According to its 2025 annual report, 28 per cent of its revenue is made in the UK, 44 per cent in Europe, and 27 per cent in the rest of the world .

Spain

PAP Tecnos(opens in new window) is a Spanish arms company and a key provider of military solutions to the Spanish Armed Forces. It sells weapons systems for land, air and naval as well as cyber defence. The company was founded(opens in new window) in 1996 and acquired by Rafael in 2010. It recorded €24.5 million in revenue in 2024(opens in new window) . Its main customer is the Spanish government, but it also has an international customer base. In 2025, the Spanish government suspended(opens in new window) a €285 million contract it had awarded to PAP Tecnos to provide anti-tank missile systems, over its ties with Israel.

SOMO contacted Rafael prior to publication for comment on its Dutch subsidiary and that entity’s role in holding subsidiaries in other European countries. The company did not reply.

Elbit Systems

Elbit, Israel’s largest publicly traded weapons company, uses two Dutch companies to hold its subsidiaries in Austria, Romania, and Germany. These subsidiaries produce and sell military systems and components to European governments.

Elbit Systems (Elbit) is Israel’s largest publicly traded weapons manufacturer, with $8 billion(opens in new window) in revenue in 2025. It is the country’s most valuable company(opens in new window) , worth $40 billion. Elbit paid out $112 million in dividends(opens in new window) to its shareholders in 2025.

It produces weapons systems(opens in new window) for all domains – land, naval, air and cyber – as well as a range of unmanned aerial vehicles (drones). Europe is the company’s largest market(opens in new window) after Israel, accounting for 27 per cent of its sales, worth $2.1 billion. In addition to selling its weapon systems to European governments, Elbit has also acquired a range of European military technology and arms manufacturing companies. It has subsidiaries in several European countries(opens in new window) , including the UK, Sweden, and Switzerland. Elbit’s subsidiaries in Austria, Germany, and Romania are held through two Dutch companies: Truley Investment B.V. (incorporated in 1983) and Talla-Com Wireless B.V. (incorporated in 1999) . The annual reports of Truley Investment B.V. and Talla-Com Wireless B.V. contain very limited information about their activities due to their classification as micro-companies under Dutch law. They only contain a limited balance sheet and no information on the number of employees or their financial activities. Both companies are registered at the address of a corporate service provider.

Elbit’s Gateway to Europe: European subsidiaries owned by Dutch companies

This section provides an overview of Elbit’s subsidiaries in Europe owned by the two Dutch companies.

Germany

Elbit’s Dutch subsidiary Talla-Com Wireless B.V. is the holding company of Elbit’s German subsidiary, Elbit Systems Deutschland(opens in new window) .

This company traces its origins to Telefunken Racoms, a German company specialising in communications technology for military systems. Telefunken Racoms was acquired in 2004 by Tadiran Communications, an Israeli military communications technology company. Elbit acquired Tadiran in 2005, and Tadiran was fully merged into Elbit in 2007 . Talla-Com Wireless B.V. takes its name from Talla-Com (Tallahassee Communications Industries Inc.), a US subsidiary of Tadiran at the time of its acquisition by Elbit .

In 2020, Telefunken Racoms was rebranded(opens in new window) as Elbit Systems Deutschland. The company sells a range of products(opens in new window) , including communications systems, unmanned aerial vehicles (drones), and weapon sights. According to its annual accounts, the company earns 45 per cent of its revenue in Germany and 55 per cent from other countries (not specified) .

In 2025, Elbit Systems Deutschland agreed to sell 350 drones(opens in new window) to the Austrian army. In 2026, Elbit announced that Germany would become the main production hub of missiles for the EuroPULS system, a joint venture (opens in new window) with German arms company KNDS. The system has already been sold to the Dutch(opens in new window) , German, and Greek(opens in new window) military. Elbit Systems Deutschland will manufacture the missiles, together(opens in new window) with other German companies.

Austria

Elbit set up a subsidiary in Austria in 2000: ESL Advanced Information Technology GmbH (ESLAIT). This company has been owned by the Dutch holding company Truley Investment B.V. since at least 2008. Nearly all of ESLAIT’s 2024 sales revenue was recorded in Austria . Elbit has sold a number of weapons systems to the Austrian military through this subsidiary.

Romania

Elbit has been active in Romania since 1996 and claims(opens in new window) to be the country’s largest exporter of military equipment. Elbit exports products(opens in new window) from Romania to the US, Germany, and other European countries, and has three subsidiaries in Romania (A-E Electronics, Simultec and ELMET), all of which have been owned by Truley Investment B.V. since at least 2008 . ELMET(opens in new window) is the largest military exporter(opens in new window) in Romania. It operates(opens in new window) a 12 km2 weapons factory and produces tank upgrade systems and the SPEAR, a mortar system. Simultec(opens in new window) is a training and simulator company. A/E Electronics(opens in new window) produces and tests critical electronic components for military and civil purposes. 

SOMO contacted Elbit prior to publication for comment on its Dutch subsidiaries and their role in holding subsidiaries in other European countries. The company did not reply.