Israeli defense companies will henceforth be allowed to negotiate with almost any country in the world for a possible sale of weapons systems defined as unclassified without obtaining special licenses in advance from the Israeli Defense Export Control Agency (DECA). The change is designed to ease regulations applying to defense exports and shorten the chain of approvals for them.
At the same time, the Ministry of Defense says that it has instructed defense exporters that despite the exemption from marketing licenses, no binding agreements can be signed with customers before DECA approves the deal. In any case, DECA is recommending that exporters include release clauses in their agreements with foreign customers covering a possible veto of the deal by the state.
The relief is included in a reform of defense exports supervision led by DECA director Racheli Chen, who told "Globes," "An Israeli company will be able to speak with customers around the world for unclassified weapons systems and offer a price for them, but will not be allowed to commit to going through with a deal before obtaining final approval from the Ministry of Defense… In any case, details of all unclassified products now appear on the Internet and are available to everyone."
Previously, under the Export Control Law, Israeli companies negotiating with foreign customers for a weapons deal without an appropriate license were breaking the law, and were summoned to hearings in the Ministry of Defense. The companies were exposed to sanctions even if their negotiations with foreign customers concerned unclassified systems.
The new relief will not apply to negotiations between Israel defense exporters and representatives of countries on the list of enemy countries: Lebanon, Syria, Iraq, and Iran.
It was formerly alleged that Israeli weaponry was being exported clandestinely, primarily through arms traders, to countries that violate human rights and were under a UN arms embargo. These allegations were stated in a number of High Court of Justice petitions against the Ministry of Defense, which refuses to disclose the list of countries to which it allows weapons exports.
According to figures reported today by DECA, the list of defense products whose export is subject to state supervision has been changed. Exporters of thousands of defense products that previously required a marketing license will now be exempt from obtaining such a license.
The relief refers to exports to the 102 countries to which exports are allowed, and to products such as various types of night vision equipment, cyber systems, refueling aircraft, mission aircraft, command and control aircraft, civilian satellites, some unmanned aerial vehicles (UAVS), and training in counter-terrorism provided by Israeli companies.
In these situations, DECA says, products can be marketed to these countries without previously obtaining a marketing license. The length of time currently needed to obtain a marketing license is 120 days.
Figures from DECA show that the agency started over 100 enforcement proceedings over the past year following suspicions that defense companies or weapons traders had violated the law. The Ministry of Defense conducted more than 10 hearings in these matters. The concerns involved were fined in five of these cases.
Israeli defense exports totaled an all-time record $9.2 billion in 2017.
Published by Globes, Israel business news - en.globes.co.il - on October 31, 2018
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