Defense Ministry to require cyber export permits

cyber security
cyber security

Israel's Ministry of Defense's Exports Control Agency has issued an oversight order for certain cyber security products.

The Israeli Ministry of Defense's Exports Control Agency (DECA) is to increase its oversight of systems exported by Israeli companies to protect against cyber-attacks. Ahead of the enhanced oversight, the Ministry of Defense has composed a first draft of an order detailing the kind of systems for export to customers worldwide that will require a permit, similar to those currently required by weapons systems. The draft paper was published several days ago to seek the public's response.

In the draft order's explanatory notes, revealed here for the first time, it says that the cyber security market is one of the most dynamic and highest potential markets in the Israeli economy. However, while cyber security is an enormous economic and strategic growth engine, the Ministry of Defense also sees the potential for risks in the products developed by Israeli companies.

The draft paper says, "Cyber products might contain technologies and capabilities that if they fall into the wrong hands would lead to a grave risk for Israel's defense and diplomatic interests." The draft order will be valid for three years. In addition to the Ministry of Defense, representatives from the Ministries of Foreign Affairs, Economics and Industry, the National Security Council and the National Cyber Bureau at the Prime Minister's Office all participated in drawing up the draft order.

Oversight by the Ministry of Defense, according to the order being formulated, will focus on the capabilities of cyber systems to penetrate and attack. According to the draft order, these systems are based on software developed or adapted for preventing discovery by monitoring tools or in such a way that allows it to overcome the protective systems of a computer or device connected to the Internet. The list of products that will be subject to DECA oversight will also include systems, equipment and accessories that are adapted so as to deceive users, operating programs or communications with penetration programs; systems, equipment and components that were programmed or adapted for protecting or monitoring communication lines at a national level; and equipment and components designed to implement digital forensics, which have a significance defined by the Ministry of Defense as 'dramatic in the intelligence world."

In recent weeks, the Ministry of Defense has presented the draft to the heads of Israel's defense companies. The four large defense companies Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT), Rafael Advanced Defense Systems Ltd., Israel Military Industries Ltd. (IMI), and Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) have expanded their operations in the cyber sector in recent years, and some of them have even set up divisions for the development of attack and defense systems in this sector.

The expected restrictions by the Ministry of Defense will target attack systems that have the ability to cause damage in the name of protecting the systems they are defending.

DECA head Dubi Lavi said, "Oversight will only be placed on the necessary things, almost the entire protection sector will not require oversight. 70-80% of the systems designed to gather information and for attack, which are to all intents and purposes weapons systems will be overseen."

Lavi added that work on composing the draft order took into account the need for some of the companies to work with parent companies abroad. In such cases, contacts between the parent company and subsidiary on the matter will be overseen. However, there will be no oversight on academic research, which belongs to the public domain.

Lavi said, "Although the Ministry of Defense is seen as a conservative organization. The draft bill is not conservative and we have left many areas free of oversight."

Defense sources told "Globes" that many other countries including the US are currently formulating similar oversight orders.

Published by Globes [online], Israel business news - - on January 11, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

cyber security
cyber security
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