Defense Export Controls Agency head Racheli Chen today presented the Knesset Foreign Affairs and Defense Committee with the main points of the reform in defense exports. The defense industries are very alarmed about stricter supervision and penalties from the state.
Chen focused on a long series of regulatory concessions to be made to defense exporters in the framework of the reform, including extending the exporters' exemption from the requirement for marketing licenses for exports of weapons systems to 98 countries around the world, permission for exporting an item for demonstrating it to customers or display at a defense exhibition without obtaining an export license, and an exemption from a marketing license for a product categorized as non-classified (so that it can be marketed through an intermediary party from one of the 98 countries on the list of license-exempt countries).
The concessions reported today also include an expansion of the Defense Export Controls Agency's online services for exporters, thereby substantially shortening waiting times. This is especially important for the US market, because the Defense Export Controls Agency receives thousands of requests every year for marketing activity for defense products in the US.
Stiffer sanctions for senior officeholders
Chen, who took up her post only recently, is continuing the reform begun by Dubi Lavi, her predecessor, who is currently heading a Ministry of Defense procurement delegation in New York. She told "Globes" that the plan is to first promote a series of regulatory concessions for defense exports, and later to also include stiffer penalties, including sanctions and restrictions on companies and senior officeholders found to have violated the Defense Export Control Law. The stiffer penalties she cited exclusively to "Globes" in recent months include stiffer supervision of exports, with the CEO and VPs in defense companies being held personally responsible for having marketed or exported a product or know-how without a license. In such cases, the company's senior officeholders will be personally fined hundreds of thousands of shekels. In addition to personal sanctions, the Defense Export Controls Agency is aiming to push through a plan for a significant increase in the fine to be paid by a major defense company found to have violated the Defense Export Control Law.
Published by Globes [online], Israel Business News - www.globes-online.com - on February 20, 2017
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