There has been a turning point in defense relations between Israel and the US. The US administration now recognizes security clearances given by Israeli authorities to employees in the defense industry.
This refers to Israeli employees who were born in countries automatically defined as a security risk in the US. Until now such employees were not allowed to be part of US projects handled by Israeli companies.
Employees born in Russia, Arab countries, Iran and other countries not considered friendly to the US, who work in managerial or engineering jobs in Israeli defense companies, are well aware of the fact that they are not permitted to work on projects relating to US weapons or technologies, unless they have received specific clearance from the US authorities.
From the point of view of Israeli companies obtaining such a clearance for their employees was an onerous task involving hiring US lawyers. Except in rare instances, Israeli defense companies have foregone this option and simply avoided employing personnel born in the "wrong" countries on US projects, even if they were the most suitable employees for the job and they had high security clearance from the Israeli authorities.
The fact that similar restrictions were also applied to the defense industries of other countries like Canada and the UK was no consolation to the likes of Elbit Systems Ltd. (Nasdaq: ESLT; TASE:ESLT), which were prevented from allocating employees at their own discretion. Now this discrimination has been ended.
The US State Department has published new regulations that recognize the security clearance given by the Israeli authorities to employees in defense companies.
For Israeli defense companies, especially larges ones such as Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1), Israel Military Industries Ltd. (IMI), Rafael Advanced Defense Systems Ltd., and Elbit Systems this is a major change, Harold Luks, who heads an international trade consultancy firm, told "Globes". The Washington DC firm bearing his name which specializes in regulations restricting exports has many Israeli companies among its clients.
"Think of these engineers and technicians who immigrated to Israel as children in one of great waves of immigration from a CIS country and are now completely Israeli, but whom the Americans consider as having dual citizenship with a passport from a former Communist country, which sounds alarm bells among State Department auditors," said Luks. He says that the previous regulations discriminated against thousands of defense industry employees over the years.
Israel's defense industries have welcomed the changed regulations.
Published by Globes, Israel business news - www.globes-online.com - on June 15, 2011
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