Report: Israeli military and spyware firms use subsidiaries, acquisitions to enter European markets

Intracom Defence, a Greek company acquired by Israel's state-owned Israel Aerospace Industries, now participates in 15 European Defence Fund projects. Seven of those contracts were awarded after the acquisition and after Israel launched its war on Gaza in October 2023, according to a report published Thursday by two human rights organizations.

The report, titled "European Gateway for Genocide Technology," was produced by the Observatory for Human Rights and Business in the Mediterranean (ODHE) and Irídia, Centre for the Defence of Human Rights, and coordinated with SUDS and the International Institute for Nonviolent Action (NOVACT). It identifies nine distinct routes Israeli military and surveillance companies use to enter European markets, including NATO procurement channels, European Union research programs, and cybersecurity hubs such as Barcelona.

The study documents a pattern of corporate restructuring, acquisition, and rebranding that researchers say allows companies developed or tested in the context of Israeli military operations against Palestinians to obtain European funding and contracts while obscuring their origins.

"Many of these cybersecurity companies and surveillance companies participate in European funding programmes, starting with the European Defence Fund, but also Horizon, together with universities and other public institutions," Carlos Bodoque, a senior researcher at ODHE, told The New Arab.

Growth and market access

The expansion tracks rapid growth in Israel's defence-technology sector. Citing Israeli economic development organization Startup Nation Central, the report says the number of defence start-ups grew from 160 in 2024 to more than 300 in 2025. Europe accounted for 54 percent of Israel's defence export contracts in 2024, when their total value reached approximately $14.7 billion, according to figures cited in the report.

Felip Daza, a senior researcher at ODHE, said the expansion also reflects difficulty attracting domestic investment and security concerns driving relocation of workers and companies. He described Cyprus as offering a "soft landing framework" because of its proximity to Israel and flexible tax and administrative arrangements, while Germany and Luxembourg provide other routes through military-industrial cooperation and corporate structuring.

"Having a base in Europe facilitates access to the single market, public contracts, and research programmes," Daza said.

Barcelona as a case study

The report points to Barcelona, where more than 500 cybersecurity companies operate according to figures from Catalonia's cybersecurity agency. Bodoque highlighted the spyware firm Palm Beach Networks, citing media reporting that Alexei Levin, described as having links to NSO Group, interviewed prospective recruits for the company in Barcelona. NSO manufactures Pegasus spyware, which has been implicated in surveillance of journalists, lawyers, and human rights defenders in cases documented separately from this report.

Bodoque said the case raises questions about whether European authorities adequately scrutinize the backgrounds of people founding security-technology ventures, though he acknowledged that establishing legal accountability across borders remains difficult given differing national legal frameworks.

The findings arrive against a backdrop of shifting European policy toward Israel. Spain recognized Palestinian statehood in May 2024, and Barcelona's city council voted in May 2025 to sever institutional relations with the Israeli government and end its friendship agreement with Tel Aviv.