40,000 new requests for licenses to market defense products were filed by Israel exporters at the Ministry of Defense Export Controls Agency in 2016. Figures published today show that 93% of the requests involved marketing of unclassified equipment and systems as an initial stage in marketing them in 190 different countries around the world. According to Defense Export Controls Agency figures, 8,300 more such requests were filed last year for licenses to export defense products to 130 countries and defense agencies. The defense exporter must go through this procedure even if it previously received a license to market the product.
Defense Export Controls Agency head Racheli Chen said that the reform of the Defense Export Control Law being promoted by the Ministry of Defense in discussions being conducted in the Knesset Foreign Affairs and Defense Committee was likely to significantly reduce the number of requests filed at the Defense Export Control Agency in the coming years, especially for obtaining licenses to market defense products.
Chen told "Globes" today that the aim was to solve the bureaucratic procedures facing many defense exporters. "The figures for 2016 highlight the need for the extensive reform we have brought to the Knesset for approval. The package of exemptions that the reform includes is designed to greatly cut back on the need for obtaining marketing and export licenses from the Defense Export Controls Agency and to streamline its work in order to improve service to exporters, while significantly reducing the regulatory burden and increasing enforcement in other areas," she said.
Defense sources today predicted that the regulatory concessions that the Defense Export Controls Agency is promoting under the reform were likely to cut by 30% the number of requests for marketing licenses that individual exporters or defense companies have to obtain before displaying a weapons system or defense product to a potential customer at an exhibition or demonstration. The Defense Export Controls Agency is seeking to allow a defense exporter to hold a single license for a product it wishes to market that will be valid for 98 different countries in which the Ministry of Defense's policy on defense exports is more lenient.
At the same time, together with the concessions included by the Defense Export Controls Agency in the reform, enforcement measures against exporters who violate the Defense Export Control Law are being stiffened, so that senior officeholders in defense companies will be exposed to personal economic sanctions. The maximum fine for a company or exporter breaking the law will be raised from NIS 1 million to NIS 3 million, and the enforcement and supervisory authority of Defense Export Controls Agency personnel will be extended in order to provide them with more effective enforcement tools when a violation of the law is suspected.
In 2016, Defense Export Controls Agency data show that 150 suspected cases of violations of the Defense Export Control Law by defense exporters and companies were examined. According to Chen, 10 of the cases were heard by the enforcement committee, and fines totaling NIS 500,000 were levied.
On the other hand, since the beginning of 2017, three other cases of violations of the Defense Export Control Law have reached the enforcement committee, and fines totaling NIS 1.5 million were imposed in these cases. Since the supervisory department was founded in 2007, it has imposed fines totaling NIS 15 million on exporters and defense companies.
1,505 exporters are listed in the Israeli Defense Exporters Registry. According to the registry, these exporters have over 200,000 active marketing licenses for 18,300 products. In response to a question from "Globes" whether Israeli defense companies or exporters were selling weapons to countries that violate human rights, Chen answered, "Israel does not sell weapons to such countries. In any case, we handle these matters with the necessary sensitivity."
Last week, the Ministry of Defense Foreign Defense Assistance and Defense Export Organization (SIBAT) reported that Israel's defense exports rose 14% to $6.5 billion in 2016.
Published by Globes [online], Israel Business News - www.globes-online.com - on April 3, 2017
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