Israel Ministry Of Defense Fines 2 Large Exporters $860, 000

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The Ministry of Defense Export Supervision Department reports that, in 2013, two large defense companies were fined NIS 3 million (about $860, 000) , due to marketing activities that they conducted in violation of the export licenses they received, or without having the appropriate licenses. The companies received three separate fines – each totaling NIS 1 million(about $285, 000). The Ministry of Defense has not released the names of the companies.

The information was reported during a conference summarizing the Export Supervision Department’s 2013 activities. It was also reported that defense companies were fined more than NIS 4 million (about $150, 000) for violations last year.

This is the highest total in fines for defense exporters since the Export Supervision Department was established in 2007. Export Supervision Department Director Dubi Lavi reported in his review that, last year, there were 1, 414 exporters on the department’s defense exporter registry, 1, 055 companies and 328 individuals. Since the establishment of the department, more than 320, 000 active marketing licenses have been issued. According to Lavi, in 2013, the department received more than 27, 000 new applications for licenses to market defense products to 190 different countries.

Last week, “Globes” reported that the Export Supervision Department intends to tighten its supervision of defense exports. This refers mostly to broader enforcement of penalties for exporters who violate the terms of their export and marketing licenses, and requiring exporters of dual-use components (civilian items which can be easily converted for military uses) to submit more frequent reports to the Export Supervision Department. Lavi said, “We will act to raise the frequency of inspections of factories, and we will explore methods make inspection and enforcement more efficient, in order to ensure that the products leaving Israel meet the requirements and restrictions of the marketing and export licenses.”

Alongside the threats, Lavi also made a gesture of good will, and announced before hundreds of exporters that allowances will be implemented as well, including an exemption on marketing licenses for unclassified items to 100 countries. Today, the exemption from marketing licenses for such items is granted only for exports to 39 countries.

According to Lavi, this process will be implemented alongside other processes that are intended to benefit exporters: more frequent discussions in the Export Supervision Department advisory committees, a streamlining of services given by the department to parties that approach it, and a strengthening of ties with the defense industry.

Published by Globes [online], Israel business news – www.globes-online.com