G/SCM/Q2/ISR/21  
 
4 April 2022 
(22-2693) Page: 1/2 
Committee on Subsidies and Countervailing Measures  Original: English  
 
 
SUBSIDIES  
REPLIES TO QUESTIONS1 POSED BY THE UNITED STATES REGARDING  
THE NEW AND FULL NOTIFICATION OF ISRAEL2 
The following communication, dated and received on 4 April 2022, is being circulated at the request 
of the delegation of Israel . 
 
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Question 1  
For the program entitled " Smart Money Programme", it appears that this program is 
conditional on international sales of over $250,000. Please explain how th is program is 
consistent with SCM Article 3?  
Reply : 
 
International sales is used in this program as an indicator for economic viability and maturity  of a 
company,  quite necessary  in Israel,  in which  the business  sector  is almost  completely reliant  on 
outside  markets  for real growth.  It should  be noted  that this program  assists  only SMEs . 
 
Question 2  
These questions relate to programs contained in Israel's Trade Policy Review 
(WT/TPR/S/376)  
a) On page 7 of Israel's June 2018 Trade Policy Review, the Secretariat's Report 
states that "Israel provided export subsidies for agricultural products during the 
review period." If these subsidies continued to be in effect during the period 
covered by this notification, please explain why they were not reported.  
 
b) On page 7 of the June 2018 Trade Policy Review, the Secretariat's Report notes 
that several subsidy programs which were previously reported had been 
eliminated or folded into other programs. Please explain whether the Marketing 
Tutorial, Consortia, and Tw o Hundred Times Two programs were replaced by 
programs which are mentioned in this notification.  
 
c) On page 44 of Israel's June 2018 Trade Policy Review, the Secretariat's Report 
notes that certain large multinational corporations are eligible for special t ax 
breaks. To the extent that these programs continued to operate during the period 
covered by this notification, please explain why they were not included in your 
notification.  
 
1 G/SCM/Q2/ISR/19  
2 G/SCM/N/372/ISR  G/SCM/Q2/ISR/21  
 
- 2 - 
 
  Reply : 
 
a) Following  the Nairobi  Round,  Israel  has committed  to eliminate  export  subsidies for 
agriculture by the end of 2022. Export subsidies for 2018 were reported on G/AG/N/ISR/72.  
 
b) The Marketing Tutorial, Consortia program, and the Two Hundred Times Two programs  were 
indeed  eliminated,  and partly  replaced  by new programs  mentioned  in this notification.  
 
c) Israel SCM notification included all information regarding currently active programs  covered  
by the Agreement . See Page 36 in the notification  for tax breaks  under the Law for the 
Encouragement of Capital Investment.  
Questi on 3 
Please explain whether the Eilat Free Trade Zone program has any kind of export 
requirement for companies seeking to take advantage of the tax benefits associated with 
this program.  
 
Reply : 
 
No, the tax concessions  are provided  for Eilat residents  and companies  located in Eilat.  
Question 4  
With respect to the "Fisheries – Waiver of Excise Tax on Fuel" subsidy program described 
on page 40 of Israel's notification, how will Israel ensure that the program will not lead 
to overcapacity or over fishing?  
 
Reply : 
 
The vast majority of fish consumption in Israel originates from fish produced by Israeli aquaculture 
and imports to Israel. In addition, in 2016 Israel took a number of operative steps to prevent 
overcapacity and overfishing including lim iting trawler fishing zones  and times  of year and a 
scrappage  program  for trawlers.  In accordance,  the scope  of the "Fisheries – Waiver of Excise Tax 
on Fuel " subsidy has been reduced. There are currently 16 fishing trawlers operative in Israel, which 
have minimal to no effect on global fishing capacity.  
 
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