German made INS Dolphin. Photo: wiki commons.

The Israeli navy is expected to receive a sixth German-made submarine in a deal to be signed on Wednesday between Israeli Defense Minister Ehud Barak and German Defense Minister Thomas de Maiziére.

The deal involves Germany reducing the cost of the deal by a third, and Israel releasing customs duties collected on behalf of the Palestinian Authority “which it froze after UNESCO admitted the Palestinians as a member state.”

Israel currently has three German-made Dolphin submarines that “are equipped with cruise missiles which have a range of 1,500 kilometers and can carry nuclear warheads,” allowing Israel to deliver a “second strike” in the case of a potential nuclear attack from Iran. The submarines also enable “Israel to carry out intelligence-gathering missions far from its borders and to defend its territorial waters.”

The first two submarines, INS (Israeli Naval Ship) Dolphin and INS Leviathan were donated by the German government, reportedly as compensation for the alleged involvement of German companies in helping Iraq develop chemical warheads prior to the first Gulf war.

Israel bought their third submarine, INS Tekuma, for $350 million after Germany reduced the cost by half.

The  submarines have a crew of 35 and a maximum range of 2,700 miles and each one can launch torpedoes, cruise missiles as well as commandos in swimmer delivery vehicles (SDVs).

The fourth and fifth submarines were sold for $846 million after Germany agreed to reduce cost by a third and are expected to be delivered in 2012 and 2013.

According to a Der Spiegel article, the submarine subsidies are funded by the German government because East Germany did not pay $500 million in Holocaust reparations payments that were part of the 1953 German-Israeli reparations agreement.

The Dolphin submarines are constructed in the German city of Kiel by ThyssenKrupp Marine Systems.

Iran link?

Iran Foreign Investment Company (IFIC) maintains a 4.5% stock control of ThyssenKrupp according to the IFIC website, however ThyssenKrupp offers a different account.

According to their 2010/2011 Annual Report, the company sold its Iranian subsidiary ThyssenKrupp Assanbar PJSC at the end of September 2010 to avoid severe penalties that would result from violating US and EU trade restrictions. In the same month, ThyssenKrupp announced that it “will not enter into any new transactions with Iranian customers.”  ThyssenKrupp’s subsidiary, Uhdeg, which was active in Iran’s energy sector also agreed “not to enter into any new contracts with Iranian customers.”

ThyssenKrupp was also “involved in German efforts in World War II and used slave labor to advance Nazi Germany’s military aims”.