RESTRICTED  
  
WT/TPR/S/376  
12 June 2018  
(18-3639) Page: 1/102 
Trade Policy Review Body   
 
TRADE POLICY REVIEW  
REPORT BY THE SECRET ARIAT  
ISRAEL 
This report, prepared for the fifth Trade Policy Review of Israel, has been drawn up by the WTO 
Secretariat on its own responsibility. The Secretariat has, as required by the Agreement 
establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement 
Establishing the World Trade Organization), sought clarification from Israel on its trade policies 
and prac tices.  
 
Any technical questions arising from this report may be addressed to Mr. John Finn (tel.: 022 739 
5081) , Mr. Ricardo Barba (tel.: 022 739 5088), Mr. Thomas Friedheim (tel.: 022 739 5083) and 
Mr. Wolf Meier -Ewert  (tel.: 022 739 6344).  
 
Document WT/T PR/G/376 contains the policy statement submitted by Israel.  
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Israel. This rep ort was drafted in 
English.  WT/TPR/S/ 376 • Israel  
 
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  CONTENTS  
SUMMARY  ................................ ................................ ................................ ........................  6 
1   ECONOMIC ENVIRONMENT  ................................ ................................ ........................  10 
1.1   Main Features of the Economy  ................................ ................................ ..................... 10 
1.2   Recent Economic Developments  ................................ ................................ ................... 10 
1.3   Developments in Trade and Investment  ................................ ................................ ........ 14 
1.3.1    Trends and patterns in merchandise and servi ces trade  ................................ ................ 14 
1.3.2    Trends and patterns in FDI  ................................ ................................ ....................... 14 
2   TRADE AND INVESTMENT  REGIMES ................................ ................................ ...........  19 
2.1   General Framework  ................................ ................................ ................................ ....19 
2.2   Trade Policy Formulation and Objectives  ................................ ................................ ........ 19 
2.3   Trade Agreements and Arrangements  ................................ ................................ ........... 20 
2.3.1    WTO ................................ ................................ ................................ ...................... 20 
2.3.2    Regional and preferential agreements  ................................ ................................ ........ 20 
2.3.2.1    European Union  ................................ ................................ ................................ ....21 
2.3.2.2    Colombia  ................................ ................................ ................................ ............. 21 
2.3.2.3    Panama  ................................ ................................ ................................ ............... 22 
2.3.3    Other agreements and arrangements  ................................ ................................ ......... 23 
2.3.3.1    Qualifying Industrial Zones ................................ ................................ ..................... 23 
2.4   Investment Regime  ................................ ................................ ................................ ....23 
3   TRADE POLICIES AND P RACTICES BY MEASURE  ................................ ........................  26 
3.1   Measures Directly Affecting Imports  ................................ ................................ .............. 26 
3.1.1    Customs procedures, valuation, and requirements  ................................ ....................... 26 
3.1.2    Rules of origin  ................................ ................................ ................................ ......... 27 
3.1.3    Tariffs  ................................ ................................ ................................ .................... 27 
3.1.3.1    Applied MFN tariffs  ................................ ................................ ................................ 28 
3.1.3.2    Bound tariffs  ................................ ................................ ................................ ........ 32 
3.1.3.3   Preferential tariffs  ................................ ................................ ................................ .33 
3.1.4    Other charges affecting imports  ................................ ................................ ................. 33 
3.1.5    Import prohibitions, restrictions, and licensing  ................................ ............................ 35 
3.1.6    Anti-dumping, countervailing, and safeguard measures  ................................ ................ 36 
3.1.7    Other measures affecting imports  ................................ ................................ .............. 38 
3.2   Measures Directly Affecting Exports  ................................ ................................ .............. 38 
3.2.1    Customs procedures and requirements  ................................ ................................ .......38 
3.2.2    Taxes, charges, and levies  ................................ ................................ ........................ 39 
3.2.3    Export prohibitions, restrictions, and licensing  ................................ ............................. 39 
3.2.4    Export support and promotion  ................................ ................................ ................... 39 
3.2.5    Export finance, insura nce, and guarantees  ................................ ................................ ..40 
3.3   Measures Affecting Production and Trade  ................................ ................................ .......41 
3.3.1    Incentives  ................................ ................................ ................................ ............... 41 WT/TPR/S/ 376 • Israel  
 
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  3.3.2    Standards and other technical requirements  ................................ ............................... 44 
3.3.3    Sanitary and phytosanitary requirements  ................................ ................................ ....47 
3.3.4    Competition policy and price controls  ................................ ................................ ......... 50 
3.3.5    State trading, state -owned enterprises, and privatization  ................................ ............. 54 
3.3.6    Government procurement  ................................ ................................ ......................... 55 
3.3.7    Intellectual property rights  ................................ ................................ ........................ 57 
3.3.7.1    Overview  ................................ ................................ ................................ ............. 57 
3.3.7.2    Economic policy context  ................................ ................................ ......................... 57 
3.3.7.3    International context and WTO participation  ................................ ............................. 60 
3.3.7.4    Structure and use of the IP System  ................................ ................................ ......... 62 
3.3.7.4.1    Patents  ................................ ................................ ................................ ............. 63 
3.3.7.4.2    Industrial designs  ................................ ................................ ............................... 65 
3.3.7.4.3    Trademarks  ................................ ................................ ................................ .......66 
3.3.7.4.4    Geographical indications  ................................ ................................ ..................... 66 
3.3.7.4.5    Copyright and related rights  ................................ ................................ ................ 67 
3.3.7.4.6    Enforcement  ................................ ................................ ................................ ......68 
4   TRADE POLICIES BY SE CTOR  ................................ ................................ .....................  70 
4.1   Agriculture, Forestry, and Fisheries  ................................ ................................ ............... 70 
4.1.1    Agriculture  ................................ ................................ ................................ .............. 70 
4.1.1.1    Features  ................................ ................................ ................................ .............. 70 
4.1.1.2    Trade  ................................ ................................ ................................ .................. 71 
4.1.1.3    Policies  ................................ ................................ ................................ ................ 72 
4.1.1.3.1    Trade Policies  ................................ ................................ ................................ ....73 
4.1.1.3.2    Internal policies  ................................ ................................ ................................ .76 
4.1.1.3.3    Support levels ................................ ................................ ................................ ....78 
4.2   Mining and Energy  ................................ ................................ ................................ ......81 
4.2.1    Mining  ................................ ................................ ................................ .................... 81 
4.2.2    Natural gas and oil  ................................ ................................ ................................ ...82 
4.2.3    Electricity  ................................ ................................ ................................ ............... 83 
4.3   Manufacturing  ................................ ................................ ................................ ............ 84 
4.4   Services  ................................ ................................ ................................ .................... 86 
4.4.1    Overview  ................................ ................................ ................................ ................ 86 
4.4.2    Financial services  ................................ ................................ ................................ .....86 
4.4.3    Banking  ................................ ................................ ................................ .................. 87 
4.4.4    Insurance  ................................ ................................ ................................ ............... 89 
4.4.5    Telecommunications and postal services  ................................ ................................ .....90 
4.4.6    Transport  ................................ ................................ ................................ ................ 92 
4.4.6.1   Maritime transport  ................................ ................................ ................................ 92 
4.4.6.2    Air transport  ................................ ................................ ................................ ......... 93 
4.4.7    Tourism  ................................ ................................ ................................ .................. 94 WT/TPR/S/ 376 • Israel  
 
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  5   APPENDIX TABLES  ................................ ................................ ................................ .... 96 
 
CHARTS  
 
Chart 1.1 Israel's trade in goods and services, 2007 -17 ................................ .......................... 15 
Chart 1.2 Composition of merchandise trade, 2012 and 2016  ................................ .................. 16 
Chart 1.3 Direction of merchandise trade, 2012 and 2016  ................................ ....................... 17 
Chart 1.4 Trade in services by major services, 2012 and 2016 ................................ ................. 18 
Chart 3.1 Tax revenue distribution, 2017  ................................ ................................ .............. 28 
Chart 3.2 Frequency distribution of applied MFN tariffs, 2018  ................................ .................. 30 
Chart 3.3 Trade in charges for the use of intellectu al property n.i.e., 2011 -16 ........................... 58 
Chart 3.4 Trade in technology -intensive services, 2011 -16 ................................ ...................... 58 
Chart 3.5 Number of seizures (imports) by Customs 2004 -16 ................................ .................. 69 
Chart 4.1 Value of agricultural output 2005 to 2016  ................................ ............................... 70 
Chart 4.2 Domestic support for agriculture , 2005-16 ................................ .............................. 79 
Chart 4.3 OECD measurements of support for agricul ture, 200 5-16 ................................ ......... 80 
Chart 4.4 Composition of manufacturing exports, 2017  ................................ ........................... 85 
 
TABLE S 
 
Table 1.1 Selected macroeconomic indicators, 2012 -17 ................................ .......................... 11 
Table 2.1 Trade with FTA partners  ................................ ................................ ........................ 21 
Table 2.2 Israel's FTAs, 2018 ................................ ................................ ............................... 22 
Table 2.3 Selected foreign ownership limitations by sector, 2018  ................................ ............. 24 
Table 3.1 Customs clearance and release time, 2012 -16 ................................ ......................... 26 
Table 3.2 Import time and cost, 2012 and 2018 ................................ ................................ .....27 
Table 3.3 Structure of applied MFN tariffs, 2012 and 2018  ................................ ...................... 28 
Table 3.4 Summary analysis of the MFN tariff, 2018  ................................ ............................... 30 
Table 3.5 Duty concessions and exemptions on c ommercial imports  ................................ ......... 32 
Table 3.6 Applied MFN tariffs exceeding bound rates, 2018  ................................ ..................... 32 
Table 3.7 Summary analysis of the preferential tariffs, 2017  ................................ ................... 33 
Table 3.8 Taxes on imported or domestic goods and services, 2018  ................................ ......... 34 
Table 3.9 Import prohibitions,  2018 ................................ ................................ ..................... 35 
Table 3.10 Definitive anti -dumping measures, 2018  ................................ ............................... 37 
Table 3.11 Export time and cost, 2012 and 2018  ................................ ................................ ...39 
Table 3.12 Main incentive schemes, 2018  ................................ ................................ ............. 42 
Table 3.13 Equivalence of Israeli standards with international standards, 2017  .......................... 46 
Table 3.14 Principal SPS -related law s and regulations  ................................ ............................. 48 
Table 3.15 Antitrust law enforcement, 2012 -17 ................................ ................................ .....52 
Table 3.16 Regulated prices, 2018  ................................ ................................ ....................... 53 
Table 3.17 Key features of Israel's government procurement provisions  ................................ ...56 WT/TPR/S/ 376 • Israel  
 
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  Table 3.18 Applications for trademarks, industrial  designs, and patents, and patents 
granted, 2012 -16 ................................ ................................ ................................ ............... 62 
Table 4.1 Exports and imports of agricultural products (HS2012 6 -digit lev el), 2012 -16 .............. 72 
Table 4.2 Principal agriculture laws and regulations  ................................ ................................ 73 
Table 4.3 Imports under WTO tariff quotas 2010 -16 ................................ ............................... 74 
Table 4.4 Export subsidies 2007 -16 ................................ ................................ ...................... 75 
Table 4.5 Milk and egg production quotas and minimum producer prices 2 011-17 ...................... 76 
Table 4.6 Over -quota production penalties, 2018  ................................ ................................ ...77 
Table 4.7 Water quotas 2012 -17 ................................ ................................ .......................... 78 
Table 4.8 OECD indicators for support to agriculture, 2009 -16 ................................ ................. 80 
Table 4.9 Natural gas production and trade in Israel  ................................ ............................... 83 
Table 4.10 Electricity generation by type of energy and producer  ................................ ............. 84 
Table 4.11 Revenue of main manufacturing sectors, 2012 and 2016 ................................ ......... 85 
Table 4.12 Financial system structure, 2013 -17 ................................ ................................ .....87 
Table 4.13 Banking soundness indicators, 2012 -17 ................................ ................................ 88 
Table 4.14 Insurance soundness indicators, 2012 -17 ................................ .............................. 89 
Table 4.15 Selected telecommunications indicators, 2012 -17 ................................ .................. 90 
Table 4.16 Int ernational passenger traffic at Ben Gurion Airport, 2012 -17 ................................ 93 
 
APPENDIX TABLES  
 
Table A1.1 Merchandise exports by group of products, 2012 -16 ................................ ............... 96 
Table A1.2 Merchandise imports by group of products, 2012 -16 ................................ .............. 97 
Table A1.3 Merchandise exports by destination, 2012 -16 ................................ ........................ 98 
Table A1.4 Merchandise imports by origin, 2012 -16 ................................ ............................... 99 
 
Table A2.1 WTO notifications by Israel, 2012 -17 ................................ ................................ .. 100 
 WT/TPR/S/ 376 • Israel  
 
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  SUMMARY  
1. Since the last Trade Policy Review of Israel in 2012, economic growth has averaged 3.3%, 
and GDP per capita increased to more than US$40,000 in 2017. Growth has been driven primarily 
by private consumption and domestic investment and, while trade is very important to the 
economy, the trade (goods and services) to GDP ratio declined from 72% in 2012 to 57% in 2017. 
However, despite a decline in the value of imports and exports of goods in 2012 -16, the total 
value of trade  (goods and services) in nominal terms increased due to strong growth in exports of 
services and a more modest growth in imports of services. Israel's external position remains 
strong with a current account surplus in every year of the review period and co mfortable reserves, 
against the background of an appreciating currency. The unemployment rate declined to a 
historical low of 4.2% in 2017, but challenges remain to increase labour market participation rates 
among the Arab -Israeli and ultra -orthodox commun ities 
2. After public protests in 2011 over the high cost of living , the Government appointed the 
Trajtenberg Committee to investigate socio -economic issues and make proposals for changes. 
Following the recommendations of this and other committees, tariff red uctions were made, 
autonomous tariff quotas introduced, and measures taken to increase competition in several 
sectors, including finance, telecoms, and air and sea transport. Furthermore, reforms are 
continuing and include an ongoing programme to reduce ad ministrative costs and regulatory 
requirements  for imports (including for food products and spare parts) . 
3. Another major development during the review period was the start of natural gas production 
in 2013 from the Tamar field, while production from the lar ge Leviathan gas reservoir is expected 
to start in 2019. Israel is in the process of establishing a sovereign wealth fund for the purposes of 
safeguarding the tax revenues from natural gas exploitation. The fund, which will be managed by 
the Bank of Israel , is expected to become operational in 2020.  
4. The increase in domestic production of gas has contributed to a reduction in the quantity 
and value of imports of fuels in general, from 22% of the value of imports of goods in 2012 to 9% 
in 2016. Diamonds are i mportant for both imports and exports: in 2016, about a tenth of all 
imports of goods and a quarter of exports were diamonds as Israel remains a major trading and 
processing centre. The principal trading partners are the United States and the European Unio n: in 
2016, over half of all goods were exported to these two trading partners, and the European Union 
alone accounted for 42% of imports. The main services exports are computer services, and 
research and development services.  
5. Inward and outward investment s are important to Israel with inward investment averaging 
US$10 billion and outward investment US$7 billion per year for 2012 -16. Investment into Israel 
has been mainly in the form of acquisitions, including from venture capital funds that invest in 
Israeli start -ups, and real estate. The main recipients of FDI were the manufacturing sector, 
telecoms, computer programming and information services, research and development , and 
financial services (except insurance and pension funds) . There is no specific la w for foreign 
investment and  Israel maintains foreign -ownership restrictions in a few sectors, including air and 
maritime transport, telecommunications and broadcasting, and energy, mainly for public interest 
and energy security reasons . 
6. In the WTO, Israel  has implemented the revised Information Technology Agreement  and the 
revised Government Procurement Agreement, accepted the Trade Facilitation Agreement and 
submitted a notification on its Category A commitments, accepted the TRIPS amendment, and, in 
line with the Nairobi Ministerial Decision, submitted a notification stating that it will stop using 
export subsidies for agricultural products from 1 January 2023. From 1995 to end -2017, Israel had 
been a third party in eight dispute settlement cases, four in  the period 2012 -2017.  
7. Israel's average applied MFN tariff was reduced from 7.6% in 2012 to 5.2% in 2018. This 
was mainly the result of unilateral elimination of import duties on a range of products triggered by 
the 2011 protests. Some 67% of all tariff li nes are now duty free, and only 3.7% are above 20%. 
Customs duties amount to 1% of total tax revenues. During the review period, Israel also 
transposed its Schedule XLII of concessions from the Harmonized System (HS) 1996 nomenclature 
to the HS2012 nomencl ature. It is presently under waiver for the introduction of HS2017 changes.  WT/TPR/S/ 376 • Israel  
 
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  8. The average applied MFN tariff on non -agricultural products is relatively low (3%, compared 
with 4.2% in 2012), while tariffs on agricultural goods (WTO definition) average 19.1% (down 
from 27.7% in 2012). Tariff protection is particularly high on dairy products (with an average of 
65.6%). Moreover, many agricultural tariffs comprise specific, compound or mixed duties. Outside 
of agricultural products, the maximum tariff is general ly 12%, except for fish and fishery products 
(up to 146.3%), textiles (up to 22%), and minerals and metals (up to 16.9%).  
9. About three -quarters of Israel's tariff lines are bound. The average bound rate is 20.6%, 
15.4 percentage points higher than the aver age applied MFN rate. Bound rates are high for 
agricultural products, averaging 78.1%, while for non -agricultural goods the average bound rate is 
9.6%. MFN applied rates exceeded their bound levels for 18 tariff lines on products such as parts 
and accessor ies of machines; for some tariff lines the gap is 12 percentage points.  
10. Israel has a network of FTAs that covers Canada, EFTA, the European Union, Jordan, 
MERCOSUR, Mexico, Turkey and the United States. Since the last Review, Israel has concluded 
FTAs with  Colombia and Panama, which are not yet in force.  
11. No major changes have been made to the legislative and institutional framework regarding 
Israel's customs regime since its last TPR. Nonetheless, Israel has ratified the Trade Facilitation 
Agreement, which entered into force on 8 December 2017. On the other hand, Israel maintains 
non-automatic import licensing procedures on a wide range of products for various reasons, such 
as health, safety, security, and tariff -quota administration. Up -to-date notification s would help 
improve the transparency of these import procedures.   
12. A tax reform for alcoholic beverages was implemented in 2014 and the TAMA (a type of 
import surcharge which approximates domestic wholesale prices) was cancelled and replaced by a 
specific  tax on imports and domestic products alike. VAT accounts for about 30% of Israel's tax 
revenues; VAT is applied on imported and domestic goods and services. The standard rate for VAT 
was increased from 16% to 17% in 2012 and to 18% in 2013. In October 201 5, it was decreased 
to 17% (at a cost to government revenue equivalent to 0.4% of GDP). A number of items, 
including fruit and vegetables, are zero -rated. Alcoholic beverages, cigarettes and fuel are subject 
to excise tax.  
13. The legal framework governing tra de contingency measures has remained unchanged since 
Israel's last Review in 2012. During 2012 -17, Israel initiated ten anti -dumping proceedings; one 
AD measure is currently in force. Israel has not taken any countervailing or safeguard actions 
during the period under review.  
14. Israel maintains export licensing and approval (permit) schemes for selected products for 
reasons such as commitments under international agreements, quality control, and conservation, 
but there are no export taxes or levies.  Israel p rovided export subsidies for agricultural products 
during the review period. One export state -trading enterprise is active in the groundnut sector.  
15. During the review period, Israel eliminated six programmes that had been notified to the 
WTO Committee on Su bsidies and Countervailing Measures: the Design Product Programme; the 
New Media Support Programme; the Marketing Tutorial Programme; the Consortia Programme; 
the "Two Hundred Times Two"; and the Greenhouse Gas Emissions Reduction Programme. Three 
of these  programmes (Marketing Tutorial, Consortia, and Two Hundred Times Two) have been 
replaced by other programmes with similar expenditure amounts.  
16. The Israeli economy specializes in the development and production of high -tech goods and 
services , supported by the highest level of civilian R&D in the world (about 4.3% of GDP in 2015). 
The Israel Innovation Authority, set up in 2015, encourages both local and foreign investment by 
offering a wide range of incentives and benefits to investors in industry, tourism and real estate. 
Most of these incentive programmes offer participation in the risks involved in the development 
process via conditional loans.  
17. During 2012 -17, Israel submitted 453 notifications to the TBT Committee, mostly on 
revisions of technical regula tions or the adoption of international standards. Israel aims to align all 
of its standards to international standards by August 2019. Legislative amendments have recently 
been made requiring the adoption of international and regional standards in place of  Israeli WT/TPR/S/ 376 • Israel  
 
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  standards, and also set out timetables for a revaluation of all technical regulations by August 
2019. Regulatory impact analysis became mandatory in January 2016.  
18. Different government agencies are responsible for different sanitary and phytosanitary 
measures but in general the National Food Service is responsible for fisheries and imported foods 
and domestically produced food after picking, slaughtering, or delivery  for processing, while the 
Veterinary Services and Animal Health, and the Plant Protection and Inspection Service are 
responsible for unprocessed food, and live animals and their slaughter. Israel has not made a 
notification on SPS measures since 2011 alth ough some of the TBT notifications submitted since 
then may include references to SPS -related issues. The Protection of Public Health (Food) Law of 
2015 is intended to increase competition in marketing of food by reducing the regulatory burden 
on imports. Imports of "non -sensitive" foods (where "sensitive" foods are so classified based on 
risk assessment) no longer need prior authorization to be imported and only require a declaration 
of conformity with Israeli regulations rather than documentary evidence f rom the manufacturer. 
Except for meat products, there is no legal requirement for food products to have kosher 
certification, but it has been reported that it is often a practical market requirement as many 
hotels and shops do not stock non -kosher products .  
19. Some major reforms have been introduced to the competition regime to enhance 
productivity at the firm level, foster GDP growth, and improve consumer welfare. Notably, the 
Israel Antitrust Authority (IAA) director may now impose monetary penalties for co mpetition law 
infringements (including cartel violation, abuse of dominant position, or mergers carried out 
without IAA approval). In addition, the Antitrust Commissioner may now issue instructions to 
members of a concentration group to prevent harm to com petition or to the public, or in order to 
improve the competitive situation; and a series of reforms have been launched to increase 
competition and efficiency in some sheltered sectors (e.g. financial services, telecoms). 
Furthermore, the Promotion of Comp etition and Reduction of Concentration Law was enacted in 
2013 to reduce the risks posed by large, complex and leveraged business groups ("pyramids").  
20. State -owned enterprises (SOEs) continue to play an important role in the economy, notably 
in the electric ity, water, transport, ports and defence industries. At least two SOEs have been 
declared as monopolies under the Restrictive Trade Practices Law: the Israel Electricity 
Corporation; and Mekorot (the water corporation). In 2014, a new three -year privatizat ion 
scheme, equivalent to 1.75% of GDP, was launched involving the divestment of some SOEs, 
including the ports and the postal service, and a series of partial privatizations (electricity, water 
and defence).  
21. Israel is party to the Agreement on Government  Procurement (GPA) and was among the 
first parties to accept the revised GPA. Israel has made a number of market -access commitments 
that enhance opportunities for foreign companies to compete in government procurement. It will 
progressively reduce the curr ent 20% offset level and eliminate offsets entirely 15 years after the 
entry into force of the revised GPA for Israel (6 April 2014). After five years, Israel will also start 
reducing the number of entities that apply offsets. Israel's tendering regulation s allow for price 
preference of up to 15% to local suppliers using at least 35% domestic content. Preferences do not 
apply to contracts subject to GPA provisions.  
22. With its high -tech economy, Israel has a well -developed intellectual property system and, 
during the review period, undertook additional investment in the administrative functioning of the 
Israel Patent Office's (ILPO) examination procedures, and further modernization of intellectual 
property legislation, particularly in the areas of patents and d esigns. Reflecting a highly innovative 
and competitive industry where many start -ups depend on and enforce their intellectual property 
rights, Israeli courts frequently encounter IP litigation, including the Supreme Court which has 
issued a number of relev ant rulings and opinions since 2012. The challenges posed by the digital 
environment in the area of intellectual property rights are reflected in a number of developments 
during the review period. These include Supreme Court judgements on the extent of cop yright 
exceptions under the 2007 Copyright Act legislative changes to permit online distribution of TV 
broadcast signals. Israel is a member of WIPO and a party to most of its treaties but, while Israel 
is a signatory to the WIPO Copyright Treaty and the W IPO Performances and Phonograms Treaty , 
these have not been ratified, and Israel has not signed the Patent Law Treaty.  
23. Most of the land in Israel is publicly owned and managed by the Israel Land Authority with 
most agricultural production from kibbutzim and moshavim cooperatives on land leased from the WT/TPR/S/ 376 • Israel  
 
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  Authority. However, most members of the kibbutzim and moshavim now perf orm non -agricultural 
work as farms become larger and more specialized. With an arid climate, irrigation is essential for 
production in many areas although most water for irrigation is not fresh but treated waste water or 
saline water. Although agriculture in Israel is protected by relatively high tariffs and Israel 
continues to use export subsidies – which are expected to cease on 1 January 2023 – it is a net 
importer and has taken several measures to improve market access, including through tariff 
reductio ns and autonomous tariff quotas. Some sectors, particularly dairy products, and animals 
and products thereof, have high and often complex tariffs while the dairy and egg sectors are 
highly regulated with production quotas and minimum or target prices appli ed. As notified to the 
WTO, most domestic support is in the Amber Box and concentrated on milk and eggs (the only two 
products to exceed the de minimis  limit of 10% of current value of production). For 2011 to 2014, 
the Current Total Aggregate Measurement of Support exceeded the total AMS commitment level of 
US$568.98 million, although the notification for 2015 and 2016 (the most recent) shows Current 
Total AMS below the commitment level for these years.  
24. Services account for around 80% of GDP. Israel is a net-exporter of services, notably 
computer services and R&D services. The financial services regime underwent substantial reforms 
during the review period to enhance competition and efficiency of financial intermediation: the two 
largest banks have been re quired to sell their credit card subsidiaries by 2020/21; cross -holdings 
between major financial and non -financial companies have been made illegal; and new players 
have emerged, consumer credit has expanded, and classic bank intermediation has given way t o 
greater use of non -bank credit, primarily in corporate business. Nonetheless, no new banks have 
been established in Israel in almost half a century. The Capital Markets, Insurance and Savings 
Authority is now an independent regulatory body for the insura nce industry, pension funds and 
savings.  
25. The Israeli telecommunications sector has been further liberalized. Reforms include: a policy 
on network and frequency sharing which enables operators to share their sites and Radio Access 
Networks; the granting of  several fourth -generation mobile international services licences; in the 
fixed market, a new wholesale regulation which aims to facilitate competition in the 
telecommunication market; and improvement of competition in broadband internet through 
unbundling  the local loop of the incumbent operators. The establishment of an independent 
regulatory authority for telecommunications is still under consideration by the Government.  
26. Israel has three seaports, two of which are mainly operated by state -owned companie s, 
while the Eilat Port Company was privatized in January 2013. Together, these ports handle 99% of 
the volume of Israel's imports and exports. Since its last Review, Israel has continued to 
implement its port -user fee scheme, introduced in October 2010, t o put an end to imports 
effectively cross -subsidizing exports, and to base fees on costs. Foreign ownership remains limited 
to 49% of Israeli flag vessels, and majority control by Israeli nationals is required for the provision 
of port services open to int ernational shipping. Israel has open skies agreements with Colombia, 
the European Union, New Zealand, Turkey, and the United States. During the review period, the 
Israel Antitrust Authority limited the sector -specific exemptions in maritime and air transpo rt, the 
last remaining sectoral exclusions of the competition law.  
27. Since the last Review in 2012, Israel has taken a range of measures to liberalize trade and 
increase competition. These measures followed popular protests about the high cost of living and 
the results have helped improve trading and investment opportunities. Although the value of 
imports of goods declined, this was mainly due to lower fuel prices and imports as domestic 
production of gas increased. However, challenges remain with some parts of the agriculture sector 
highly regulated and protected while other traditional sectors risk falling further behind the high -
tech goods and services industries.  WT/TPR/S/ 376 • Israel  
 
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  1  ECONOMIC ENVIRONMENT  
1.1  Main Features of the Economy  
1.1.  Israel is a high -income country with a per -capita GDP of US$40,285 in 2017 (up from 
US$32,522 in 2012). The Israeli economy specializes in high -tech goods and services, notably in 
the area of computer components manufacturing, software engineering, medical technology, and 
pharmaceuticals. Services account for around 80% of GDP, while the industrial sector (including 
energy) contributed about 15.1% to GDP in 2016 (Table 1.1). Israeli enterprises also play an 
important role in the world's diamond industry, with diamonds accounting for around 26% of 
Israel's merchandise exports in 2016 (Table A1.1). The agriculture sector is small (about 1% of 
GDP) and the country is a net importer of agricultural products, despite significant agricultural 
exports (over US$2 billion per year) (Table A1.1).  
1.2.  The year 2013  marks a milestone for Israel's energy security, as major domestic supplies of 
natural gas came on -stream from the Tamar field in the Israeli EEZ. The natural gas is mainly used 
for electricity generation and has led to a significant decline in fuel import s. Also, the discovery of 
the Tamar reservoir and the far larger Leviathan gas field in the Mediterranean Sea (not yet in 
production) is transforming Israel from an importer into a (net) exporter of natural gas. The 
impact on economic growth has been limit ed so far but according to the authorities is expected to 
become more significant in the coming years as export opportunities begin to be realized.  
1.3.  One of the core strengths of the Israeli economy lies in its capacity for innovation. 
Expenditure on civilia n R&D amounted to about 4.3% of GDP in 2015, the highest share in the 
world.1 Israel's innovation policy encourages domestic R&D in generic and applied technologies 
through a range of incentive schemes for start -up companies, but the policy has evolved rec ently 
towards post start -up development (Section 3.3.1).2 
1.4.   Some of the main economic challenges lie in raising productivity growth, which is low by 
high-income country standards.3 Israel also faces demographic challenges in the labour market 
(particularly in the hi -tech sector), which are related to low participation and productivity among 
Arab-Israeli and ultra -orthodox (Haredi) communities, although some progress has been made in 
raising employment rates by increasing the incentives to work (notably, cuts  in income taxes and 
social benefits). However, income disparities and poverty levels remain high, despite some 
improvement in recent years.4 
1.2  Recent Economic Developments  
1.5.  The Israeli economy has shown robust performance during the period under review. 
Economic growth averaged 3.3% in 2012 -17, underpinned by a shift from exports towards private 
consumption and domestic investment as the main engine of growth.5 Unemployment declined to 
a historical low of 4.2% in 2017; inflation remained low; the central gove rnment deficit and the 
public debt were reduced; and the external position was strong with a current account surplus and 
comfortable reserves, against the background of an appreciating currency. While the export 
performance for goods has been modest, expor ts of services grew strongly, which appear to have 
been more resilient to currency appreciation. The authorities expect the economy to grow by 3.2% 
in 2018 and 3.1% in 2019.  
                                                
1 OECD online information . Viewed at:  
http://www.oecd.org/innovation/inno/researchanddevelopmentstatisticsrds.htm . 
2 Domestic and foreign venture capital financing for start -ups reached US$5.24 billion in  2017 (up from 
US$1.83 billion in 2012).  
3 Bank of Israel (2016), Annual Report 2016 . 
4 IMF (2017), Israel – 2017 Article IV Consultation . Viewed at:  
https://www.imf.org/en/Publications/CR/Issues/2017/03/28/Israel -2017-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-44769 ; and OECD (2018), "Economic Survey of Israel 2018". 
Viewed at: http://www.oecd.org/israel/economic -survey -israel.htm . 
5 Private consumption and investment growth reached 4.1% and 3.7% respectively over the period 
2012-17, while export gro wth (goods) averaged 1%.  WT/TPR/S/ 376 • Israel  
 
- 11 - 
 
  Table 1.1 Selected macroeconomic indicators, 2012 -17 
  2012  2013  2014  2015  2016  2017  
GDP at market prices (NIS billion)  992.1  1,056.1  1,103.5  1,162.5  1,220.3  1,262.9  
GDP at market prices (US$ billion)  257.2  292.6  308.5  299.3  317.7  350.8  
Real GDP (%age change at 2015 prices)  2.2 4.2 3.5 2.6 4.0 3.4 
Per capita GDP at current price (NIS)  125,469  131,097  134,374  138,775  142,839  145,012  
Per capita GDP at current price (US$)  32,522  36,321  37,562  35,730  37,192  40,285  
Unemployment rate, annual average, %  6.9 6.2 5.9 5.3 4.8 4.2 
GDP by economic activity (% of GDP at basic prices)  
Agriculture, forestry and fishing  1.4 1.3 1.3 1.3 1.3 .. 
Industry, including energy  16.5 16.2 16.1 15.3 15.1 .. 
Construction  5.8 5.9 5.9 5.7 5.8 .. 
Distributive trade, repairs; transport; 
accommodation, food services  14.9 14.7 14.7 14.8 14.8 .. 
Professional scientific, technical, administration 
and support services activities  10.1 10.7 10.5 10.7 10.6 .. 
 Information and communications  8.9 8.7 9.3 10.3 10.8 .. 
 Financial and insurance activities  5.2 5.6 5.0 4.7 4.6 .. 
 Real estate activities  15.0 14.7 15.2 15.1 15.2 .. 
Public administration; social security; education; 
human health  19.2 19.2 19.0 18.9 18.8 .. 
Other service activities  3.1 3.0 3.0 3.1 3.0 .. 
General government finances (% of GDP)a       
     Revenue  36.1 36.5 36.7 37.0 37.5 .. 
     Expenditure  41.1 40.7 40.1 39.6 40.1 .. 
     Overall fiscal balance  -5.0 -4.2 -3.4 -2.7 -2.5 .. 
     Ratio of public debt to GDP (%)  68.5 67.1 66.1 63.9 62.4 .. 
Prices and exchange rates        
     CPI (%age change)  1.7 1.5 0.5 -0.6 -0.5 0.2 
     NIS/US$ (period average)  3.9 3.6 3.6 3.9 3.8 3.6 
Real Effective Exchange Rate Index (based on 
CPI)b 96.3 102.6  103.5  103.3  104.8  109.7  
External sector (in current US$ million, unless otherwise indicated)  
Current account  1,566  8,665  11,942  15,454  12,031  10,540  
% of GDP  0.6 3.0 3.9 5.2 3.8 3.0 
Goods, net  -9,389  -7,873  -7,190  -3,298  -7,364  -9,509  
     Exports  61,014  62,358  63,527  56,683  56,171  58,010  
     Imports  70,403  70,231  70,717  59,981  63,535  67,519  
Services, net  9,347  13,179  11,469  12,272  13,956  15,185  
     Exports  31,738  34,971  35,832  36,826  40,004  44,322  
     Imports  22,391  21,792  24,363  24,554  26,047  29,137  
Primary income, net  -6,297  -5,649  -2,178  -2,576  -3,827  -2,901  
Secondary income, net  7,904  9,007  9,840  9,055  9,267  7,765  
Capital account  876 1,863  2,733  2,120  2,175  1,827  
Financial account  4,501  8,405  17,819  15,124  8,219  5,735  
Statistical discrepancies  2,059  -2,124  3,145  -2,450  -5,987  -6,632  
Total reserves (includes gold, US$ billion)  75.91  81.79  86.10  90.58  95.45  .. 
      in months of imports  8.6 9.3 9.7 11.1 11.1 .. 
Ratio of external debt to GDP (%)  37.8 32.9 33.2 28.8 27.6 .. 
FDI (US$ billion)        
Inward        
   Flow 8.5 12.4 6.7 11.5 12.3 .. 
   Stock  76.5 88.2 93.3 104.1  112.7  .. 
Outward        
   Flow 3.3 5.5 3.7 9.9 12.5 .. 
   Stock  71.2 76.7 79.7 89.4 102.1  .. 
.. Not available.  
a Preliminary data for 2016.  
b An increase indicates appreciation.  
 
Source:  Central Bureau of Statistics online information. Viewed at: 
http://www.cbs.gov.il/reader/cw_usr_view_Folder?ID=141 ; Bank of Israel online information. 
Viewed at: http://www.boi.org.il/en/Pages/Default.aspx ; IMF Country Report (2017) No. 17/75, 
March; IMF online information. Viewed at: http://elibrary -data.imf.org/Dat aExplorer.aspx ; UNCTAD 
Stat. Viewed at: http://unctadstat.unctad.org/EN/ ; and OECD. Viewed at: http://stats.oecd.org . 
1.6.  In 2012, economic growth slowed to 2.2% (compared to 5.2% in 2011) in line with a slow -
down in global growth which adversely affected Israel's exports. Two events in 2011 marked WT/TPR/S/ 376 • Israel  
 
- 12 - 
 
  economic developments in 2012. First, dwindling domestic production of natural gas (from the 
Yam Tetis field) and the suspension  of natural gas deliveries from Egypt to Israel which prompted 
a sudden shift to imported, more expensive fuels. The current account balance (traditionally in 
surplus) deteriorated in 2012 (+0.6% of GDP) as a result of the significantly higher energy impor t 
bill. Second, fiscal policy became more expansionary as a policy response to a wave of social 
unrest in 2011 against the high cost of living in Israel (see below). Planned reductions in corporate 
income taxes were cancelled; additional tax breaks for fam ilies were offered; and a new wage 
agreement in the public sector was signed; as a result, the fiscal deficit increased to 5% of GDP.6 
1.7.  Economic growth reached 4.2% in 2013, with approximately 1 percentage point due to the 
start of domestic natural gas production from the Tamar reservoir in April 2013.7 The availability of 
domestically produced natural gas has triggered a substitution process in electricity generation 
away from imported feedstock fuels.  Israel's fuel import bill fell from US$16.1 billion in 2012 to 
US$5.8 billion in 2016, also reflecting a sharp drop in world market prices for oil from mid -2014 
onwards (Table A1.2). The current account surplus increased to 3% of GDP in 2013. The fiscal 
deficit remained relatively large at 4.2% of GDP, despite tax increases.8 
1.8.  In 2014, economic growth declined to 3.5%, mainly due to real appreciation of the shekel, 
which slowed down export growth and investment in the economy. The fiscal deficit was reduced  
to 3.4% of GDP, reflecting the tax increases that came into force in 2013 and a new fiscal rule 
limiting expenditure growth at 2.5% per year.  
1.9.  In 2015, GDP grew at a moderate rate of 2.6%, partly due to a decline in merchandise 
exports (down 4.3% in volume  terms). According to the Bank of Israel, the Israeli economy has 
transitioned from export -led growth towards growth carried by domestic consumption and 
investment. With the weaker demand for exports, the transition is related in part to the sharp 
decline in energy and other commodity prices, as households enjoyed higher disposable incomes 
which has stimulated private consumption (up 2.6% in 2015). The current account surplus reached 
5.2% of GDP, reflecting inter alia  the drop in oil prices. The fiscal defi cit declined to 2.7% of GDP, 
with government revenues turning out higher than expected. The standard VAT rate was reduced 
from 18% to 17% (the current rate).  
1.10.   In 2016, economic growth increased to 4.0%. The acceleration was underpinned by strong 
growth in p rivate consumption (up 6.3%), due to higher employment rates and wages and as 
households received a boost in their purchasing power from tax reductions and improved terms of 
trade.9 The current account posted a surplus of 3.8% of GDP in 2016. Israel's comp aratively large 
current account surplus in recent years is linked to an increase of the savings rates (24.3% of GDP 
in 2016, higher than the OECD average), which is related to reforms of the pension system for 
public sector employees, the introduction of a  mandatory pension system (in 2008), and cuts in 
social security benefits, amongst other factors.10 
1.11.   In 2017, the economy grew by 3.3%, accompanied by a further decline in the 
unemployment rate (4.2% in 2017) and evidence of a tight labour market that is clo se to full 
employment, according to the authorities. Exports of merchandise continued to stagnate despite 
an increase in world trade, reflecting a continued appreciation of the real effective exchange rate 
of the shekel (Table 1.1), despite intervention by  the Bank of Israel. The public deficit (central 
government) declined to 2.0% of GDP in 2017. Funding for civil services and expenditures on 
welfare are comparatively low in Israel (32% of GDP in 2017), for fiscal reasons (deficit reduction) 
and to encoura ge higher labour market participation, amongst others. Military expenditures, on 
the other hand, are high at 6% of GDP. A deficit -reduction policy (Deficit Reduction Law) in 
conjunction with favourable economic conditions (better than expected tax revenues ) have led to a 
steady decline of the public debt ratio (61.1% of GDP in 2017, down from 68.4% in 2012).  
                                                
6 Also, t o shield the consumers from a n electricity price shock, the state -owned Israel Electric Company 
partly absorb ed the increased en ergy cost through higher debt.  
7 Bank of Israel (2013), Annual Report 2013 . 
8 The standard VAT  rate was increased from 17% to 18% in June 2013 , and under the Budget Law for 
fiscal year s 2013 and 2014 (biannual), the standard corporate income tax rate  was raised from 25% to 26.5% , 
effective August 2013.  
9 The standard corporate tax rate was reduced from 26.5% to 25% (from 1 January 2016) and 24% 
(from 1 January 2017); it will be further reduced to 23% with effect from 1 January 2018.  
10 Bank of Israel (2016), Annual Report 2016 . WT/TPR/S/ 376 • Israel  
 
- 13 - 
 
  1.12.   Housing prices in Israel are considered to be very high.11 Prices have doubled since 2007 
due to demographic factors, attractiveness of real estate as a n investment, and buyer subsidies for 
homes, amongst other factors. In 2017, the housing market showed the first signs of cooling -off, 
with the increase in prices moderating and the number of transactions declining.  
1.13.   Israel's financial system is sound, acco rding to the IMF.12 Monetary policy was 
accommodative during the period under review, as inflation moderated year after year, became 
negative in 2015 -16, edged up in 2017, but remained below the Bank of Israel's target ra nge of 1 -
3%. The low level of inflat ion reflects imported deflation, appreciation of the shekel, measures to 
reduce the co st of living and other factors.  Interest rate reductions by the Bank of Israel started at 
the end of 2011, reaching 0.1% in February 2015 and remaining at 0.1% until pres ent 
(March  2018). Additional monetary expansion came from foreign currency interventions by the 
Bank of Israel (starting in 2013) to offset the effect of natural gas production on the appreciation 
of the shekel. Nonetheless, the real exchange rate has cont inued to appreciate significantly. 
Israel's foreign currency reserves have increased substantially since 2013, reaching 
US$117.6  billion by end -January 2018 (34.5% of GDP).13 The foreign currency purchases by the 
Bank of Israel are to continue until a sover eign wealth fund managed by the central bank becomes 
operational (expected for 2020), which is to invest the receipts of the natural gas royalties abroad 
to counteract a further strengthening of the shekel.  
1.14.   Many of Israel's trade policy reforms since the l ast TPR were triggered by a wave of popular 
discontent in 2011 over the high cost of living in general, and for dairy products in particular 
("cottage cheese protests"). Thus, the Government appointed the Trajtenberg Committee in 2011 
to examine the socio -economic issues and propose changes to improve the standard of living. The 
Committee recommended, amongst others, unilateral trade liberalization to stimulate import 
competition.14 Following -up on the recommendations, tariffs for close to 400 tariff lines ( HS 8-digit 
level) of non -food consumer goods were eliminated. Subsequently, several committees were set 
up by the government to examine certain sectors and activities where competition was considered 
to be weak and/or appeared to be sheltered from import c ompetition. Based on the 
recommendations of the Kedmi Committee, Israel eliminated import duties on certain electrical 
appliances in 2012. Further unilateral initiatives include the elimination of import duties on textiles 
and clothing and the opening of a utonomous tariff quotas for some agricultural products, including 
for fresh meat and cheese. The opening of the Israeli cosmetics market to parallel imports is 
pending, according to the authorities.  
1.15.   As regards the services sector, there have been long -standing concerns by the Government 
and the IMF about the high concentration and lack of competition in the financial sector.15 Several 
committees have examined this matter (Bachar, Zaaken and Strum committees). Based on the 
recommendations of the Strum committ ee (set up in 2015 by the Minister of Finance and the 
Governor of the Bank of Israel), the Law for Increasing Competition and Reducing Concentration in 
the Israeli Banking Market (Legislation Amendments), 2017 was adopted, which imposes the 
divestiture of credit companies from the major banks and other changes in the lending ma rket to 
stimulate competition. Other competition -enhancing reforms in the services sector include the 
conclusion of an Open Skies Agreement with the European Union; further telecoms l iberalization; 
and the reform of Israel's ports.  
1.16.   Furthermore, Israel has launched a five -year initiative (2015 -19) to reduce the regulatory 
burden and cut administrative costs.16 Regulatory impact a nalysis (RIA) became mandatory in 
                                                
11 IMF (2017), "Israel – 2017 Article IV Consultation". Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2017/03/28/Israel -2017-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-44769 . 
12 IMF (2017), "Israel – 2017 Article IV Consultation". Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2017/03/28/Israel -2017-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-44769 . 
13 Bank of Israel online information. Viewed at: 
http://www.boi.org.il/en/NewsAndPublications/PressReleases/Pages/7 -2-18.aspx . 
14 See TPR of Israel (2012), Box I.1.  
15 IMF (2017), "Israel – 2017 Article IV Consultation". Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2017/03/28/Israel -2017-Article -IV-Consultation -Press -
Release -Staff-Report-and-Statement -by-the-44769 . 
16 http://regulatoryreform.com/wp -content/uploads/2015/06/Israel -Reducing -the-Regulatory -Burden -
Government -Resolution -No-2118-2014.pdf . WT/TPR/S/ 376 • Israel  
 
- 14 - 
 
  January 2016. Steps have also been taken to reduce the regulatory burden for imports of "non -
sensitive" food items and spare car parts and to align all of Israel's technical standards to 
international standards by August 2019.  
1.3  Developments in Trade and Investment  
1.3.1   Trends and patter ns in merchandise and services trade  
1.17.   Israel is an export -oriented economy specializing in high -tech products and services, 
supported by incentives for export -oriented enterprises (Law on Encouragement of Capital 
Investment). Approximately 22.5% of Israel's  industrial exports in 2015 were high -tech products 
from the machinery, pharmaceutical and electronics industries.  
1.18.   Even so, Israel had a trade deficit in goods in the period under review (Chart 1.2), with 
merchandise exports in 2016 (in value terms) below the 2012 level (Chart 1.3). Also, Israel 
experienced a major shift from exports of goods to exports of services. The modest performance of 
Israel's merchandise exports is related mainly to currency appreciation, as well as factors specific 
to three large e nterprises (Israel Chemicals Ltd., Intel, and Teva Pharmaceutical Industries).17 
Exports of chemicals, in particular, declined significantly (Table A1.1). Merchandise imports also 
declined between 2012 and 2016, largely owing to the lower import bill for fu els, which reflects a 
price effect (i.e. lower world market prices for fuel) and a volume effect (i.e. substitution of 
imported with domestically produced natural gas).  
1.19.   Israel's trade continues to be affected by the geopolitical situation that prevails in the Middle 
East, which seriously impedes trade between Israel and its neighbours. Approximately two -thirds 
of Israel's trade takes place with its preferential trading partners (Section 2.3.2). The European 
Union and the United States remain Israel's main t rading partners, although Israel's trade with 
Asia continued to increase over the review period (Chart 1.4 and Tables A1.3 and A1.4). 
Merchandise exports to China, in particular, show a steady increase over the review period 
(US$3.3 billion in 2016). Also,  imports from the European Union increased substantially between 
2012 and 2016.  
1.20.   Israel is a net exporter of services. While Israel's share in world trade is small, its share in 
world services exports is twice as high (0.8% in 2016) as its share in world me rchandise exports 
(0.38% of world exports and 0.42% of world imports in 2016).18 Israel's services exports have 
increased strongly, reaching US$44.3 billion in 2017, up from US$31.7 billion in 2012 (Table  1.1). 
The large majority of Israel’s services export s are business services, notably computer services 
and R&D services (Chart 1.5). The United States and the European Union are the main 
destinations and constitute about 59% of Israel's total business services exports. Services imports 
are mainly transport and travel services.  
1.3.2   Trends and patterns in FDI  
1.21.   In the period under review, Israel recorded annual net inflows of foreign direct investment 
(except in 2016, when FDI inflows and outflows were roughly equal).19 The stock of inward FDI 
increased to US$112.7 b illion in 2016 (up from US$76.5 billion in 2012), as Israel received net 
inflows of FDI exceeding US$10 billion per year in 2013, 2015 and 2016 (Table 1.1). Foreign 
investment has been mainly in the form of acquisitions, including from venture capital fund s that 
invest in Israeli start -ups, and real estate. The main recipients of FDI were the manufacturing 
sector, telecoms, computer programming and information services, R&D, and financial services 
(except insurance and pension funds). Foreign investment abr oad increased from US$3.3 billion in 
2012 to US$12.5 billion in 2016.20 
                                                
17 IMF (2017), "Israel – 2017 Article IV Consultation". Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2017/03/28/Israel -2017-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-44769 . 
18 http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Country=IL&Language=E . 
19 Overall, Israel is a net lender of capital (as shown by net outflows of capital  in the financial account of 
the balance of payments, see Table 1.1).  
20 The 2016 FDI outflow also reflects a large investment in the US (Allergan) by Teva Pharmaceutical 
Industries  of Israel . WT/TPR/S/ 376 • Israel  
 
- 15 - 
 
  Chart 1.1 Israel's trade in goods and services, 2007 -17 
(US$ billion and % of total exports)  
 
Source:  Central Bureau of Statistics online information. Viewed at: 
http://www.cbs.gov.il/reader/cw_usr_view_Folder?ID=141 . 
-10010203040506070
  2007   2008   2009   2010   2011   2012   2013   2014   2015   2016   2017
Net trade  in services Net trade in goods
Services exports Goods exportsChart 1.[Israel] Exports of services, 2007 -16
(US$ billion and % of total exports)
Source:   Central Bank of Statistics online information. Viewed at: http://www.cbs.gov.il/reader/cw_usr_view_Folder?ID=14.US$47.0 bn.
(67.8%)
US$ 22.3 bn.
(32.2%)US$ 61.0 bn.
(65.8%)
US$ 31.7 bn.
(34.2%)US$ 58.0 bn.
(58.7%)
US$ 44.3 bn.
(43.3%)WT/TPR/S/ 376 • Israel  
 
- 16 - 
 
  Chart 1.2 Composition of merchandise trade, 2012 and 2016  
 
Source:  UNSD, Comtrade database (SITC Rev.3).  
Chart 1.1 Composition of merchandise trade, 2012 and 2016
2012 2016
(a)    Exports (f.o.b.)
Manufactures
92.0%Manufactures
92.3%Chemicals
23.7%Mining 2.4%
Electrical 
machines
17.3%Other 
manufactures
15.2%
Non-electrical 
machinery
5.5%Other
1.8%
Diamonds 
25.9%Agriculture
3.6%
Transport 
equipment 
4.7%
Total:   US$63.1 billion Total:  US$60.6 billion  
(b)    Imports (c.i.f.)
Manufactures
67.9%
Chemicals
11.3%Fuels 
22.0%
Electrical 
machines
12.5%Other 
manufactures
14.1%
Non-electrical 
machinery
8.8%Other
2.0%
Diamonds 
11.2%Agriculture
8.1%
Transport 
equipment 
7.6%
Iron and steel 
2.4%Manufactures
79.5%Chemicals
11.2%Fuels 
8.8%
Electrical 
machines
14.9%Other 
manufactures
17.9%
Non-electrical 
machinery
10.6%Other
2.3%
Diamonds 
10.8%Agriculture
9.4%
Transport 
equipment 
12.0%Iron and 
steel 
2.1%
Total:   US$73.1 billion Total:   US$65.8 billion Chemicals
26.8%Mining 3.2%
Source:  UNSD, Comtrade database (SITC Rev.3).Electrical 
machines
16.0%Other 
manufactures
13.0%
Non-electrical 
machinery
5.4%Other
1.0%
Diamonds 
27.7%Agriculture
3.9%
Transport 
equipment 
3.2%WT/TPR/S/ 376 • Israel  
 
- 17 - 
 
  Chart 1.3 Direction of merchandise trade, 2012 and 2016  
 
Source:  UNSD, Comtrade database.  
Chart 1.2 Direction of merchandise trade, 2012 and 2016
2012 2016
(a)    Exports (f.o.b.)
Asia  
25.3% Asia  
26.1%United States
29.1%
Other Europe
4.8%
EU-28
26.1%Other America
3.9%Other 
10.1%
India 4.0%
Europe
30.8%Hong Kong, 
China
7.3%Other Asia 
9.3%
China 5.5%Americas
33.0%
Total:   US$63.1 billion Total:  US$60.6 billion
(b)    Imports (c.i.f.)
Asia  
20.5%United States
12.9%
Other Europe
0.2%EU-28
34.5%Other America
1.8%Other 
21.7%
Europe
43.0%
Japan 2.4%Other Asia 
10.9%
China 7.3%Americas
14.7%
Switzerland 
5.5%Turkey 
2.8%Asia  
26.1%United States
12.3%
Other Europe
0.3%EU-28
41.6%Other America
2.0%Other 
7.2%
Europe
52.4%Japan 3.6%Other Asia 
13.6%
China 9.0%Americas
14.3%
Switzerland 
6.5%Turkey 
4.0%
Total:   US$73.1 billion Total:   US$65.8 billionUnited States
27.8%
Other Europe
4.2%
Source:  UNSD, Comtrade database.EU-28
27.3%Other America
5.3%Other 
10.0%
India 3.9%
Europe
31.6%Hong Kong, 
China
7.7%Other Asia 
9.3%
China 4.4%Americas
33.1%WT/TPR/S/ 376 • Israel  
 
- 18 - 
 
  Chart 1.4 Trade in services by major services, 2012 and 2016  
(US$ billion)  
 
Source:  OECD Stat. Trade in services – EBOPS 2010. Viewed at: 
https://stats.oecd.org/Index.aspx?DataSetCode=TISP_EBOPS2010 . 
6.37.1
0.84.14.6
0.5
-1.94.66.58.99.8
0.86.37.0
0.6
-3.23.66.8
-4.0-2.00.02.04.06.08.010.0
Net
Exports
Imports
Net
Exports
Imports
Net
Exports
Imports
Net
Exports
Imports
Net
Exports
Imports
Net
Exports
Imports
Net
Exports
Imports
. . . . . . .2012 2016Chart 1.[Israel] Trade in services by major services
(US$ billion)
Source:   OECD Stat.  Trade in services -EBOPS 2010.  Viewed at:  https://stats.oecd.org/Index.aspx?DataSetCode=TISP_EBOPS2010.Major net exporting services Major net importing servicesComputer 
servicesProfessional & 
management 
consulting 
servicesR&D
servicesTechnical, 
trade -related 
and other 
business 
servicesCharges for 
the use of 
intellectual 
property 
n.i.eTransport TravelWT/TPR/S/ 376 • Israel  
 
- 19 - 
 
  2  TRADE AND INVESTMENT  REGIMES  
2.1  General Framework  
2.1.  Israel is a parliamentary democracy with no formal constitution, but an uncodified body of 13  
"Basic Laws" that lay down the foundations of the State and its institutions, the economy and the 
state budget, as well as fundamental rights . The State of Israel is headed by the President , who is 
elected for a  non-renewable seven -year term by the unicameral legislature, the Knesset . The 
Prime Minister is one of the 120 members  of the Knesset,  and is elected by universal suffrage for a 
four-year term. Israel judiciary  comprises t he Supreme Court, district courts, magistrate  courts, 
religious courts, and tribunals.  
2.2.  Legislation may be initiated by the Government ( government bills), by members of the 
Knesset (private members' bills), or by certain  Knesset committee s. Before becoming law , a bill is 
subject to three readings  in the Knesset . The President, the Prime Minis ter, and the minister 
concerned must sign the bill before it can become law. Ratification of international agreements is 
required.  In the case of a conflict between a WTO agreement and domestic law, the latter prevails, 
except for government procurement regulations .1 However, according to a former President of the 
Israeli Supreme Court, "The State of Israel is a member of the Law of Nations. Therefore it is 
imperative that Israel not be in breach of its international obligations; so that where two possible 
explanations exist in the interpretation of a law, it is desirable to choose the interpretation which 
will bring about fulfilment of Israel' s international obligation and not one which will result in a 
breach of it. "2 The foregoing statement has been quoted in Supreme Court decisions , by lower 
courts and by the advisory committee  in the context of anti-dumping pro ceedings.  
2.2  Trade Poli cy Formulation and Objectives  
2.3.  Israel is highly dependent on foreign trade as an engine for growth , innovation, and 
competition. It  is purs uing trade liberalization through a three -pronged approach: on an MFN  basis 
through WTO negotiations, bilaterally  through reciprocal preferential agreements, and unilaterally  
through autonomous initiatives  (Section 1 .2). Israel reaffirmed its commitment to the WTO at the 
Ministerial Conference in Buenos Aires in December 2017.3 While Israel has long -standing free 
trade ag reements (FTAs) with some of its main trading partners, it has been negotiating and 
exploring others with partners in Latin America  and Asia, with a view to opening new markets for 
its exporters and diversifying its foreign trade.  
2.4.  There have been few chang es in the institutional framework  for Israel's trade policy since its 
last TPR in 2012 . The Ministry of Industry, Trade and Labor (MOITAL) has been renamed  the 
Ministry of Economy and Industry, and responsibility for labour is now with the Ministry of Labor, 
Welfare and Social Services.  The Foreign Trade Administration at the Ministry of Economy and 
Industry remains  responsible for trade policy , and functions as the WTO enquiry/contact point. The 
key functions of the Foreign Trade Administration are: to  formulate Israel's trade policy, including 
in the WTO, to initiate and oversee FTAs, and address overse as regulatory barriers (Trade Policy 
and International Agreements Division ); to maintain and develop foreign trade relations and to 
promot e export s (Export Promotion Division) ; and to administer support programmes for Israeli 
companies abroad (International Projects and Financing Division). The Ministry has 43 economic 
and trade representatives worldwide (two additional offices are expected to be opened i n Africa in 
2018). The Trade Levies Unit was removed from the Foreign Trade Administration and now 
function s as an independent unit under the responsibility of the new Import Administration that 
was established in the Ministry in 2015. The Unit is in charg e of investigation and imposition of 
trade contingency measures ( Section 3.1.6 ). The Foreign Investments and Industrial Cooperation 
Authority at the Ministry of Economy and Industry are responsible  for offset management  in 
government procurement, promoting  foreign investment, and industrial cooperation agreements 
with international corporations.  
                                                
1 Article 5A(b) of the Mandatory Tenders Law, 1992.  
2 Statement by the Honourable Justice Aharon Barak , quoted in WTO document G/ADP/Q1/ISR/15, 
11 September 2006 . 
3 Viewed at: https://www.wto.org/english/thewto_e/minist_e/mc11_e/statements_e/isr_e.pdf . WT/TPR/S/ 376 • Israel  
 
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  2.3  Trade Agreements and Arrangements  
2.3.1   WTO  
2.5.  Israel has developing country status in the WTO. It grants at least MFN treatment to all 
trading partners. It is a signatory to the WTO Information Technology Agreement (ITA) and has 
modified its schedule of concessions  in line with the Nairobi Ministerial Declaration on the 
Expansion of Trade in IT Products4, as well as the Nairobi Ministerial Decision on Export  
Competition  (Section 4. 1.1).5 Israel is party to the WTO Government Procurement Agreement. The 
revised Government Procurement Agreement entered into force in Israel on 6 April 2014.6 Israel  
accepted the WTO Trade Facilitation Agreement  on 8 December 2017 and has submitted a 
notification regarding Category A commitments.7 
2.6.  In the WTO, Israel is a member of the following groupings: G -10 coalition of net 
food-importing members; "Friends of Anti -Dumping Negotiations" (FANs)8; and Joint Proposal in 
Intellectual Property ( concerning the  establishment of a multilateral system of notifications and 
registration of geographical indications for wines and spirits ).9  
2.7.  Since 1995, Israel  has been involved in eight WTO dispute settlement cases reserving its 
rights as third  party, four of them since the last TPR in 2012.10 In the period under review, it has 
provided over 500 WTO notifications, mostly TBT measures ( Table A2.1 ). 
2.3.2   Regional and preferential agreements  
2.8.  Israel's network of FTAs remains unchanged, and covers Canada, EFTA, the European Union, 
Jordan, MERCOSUR, Mexico, Turkey and the United States. Since the last Review, Israel has 
concluded FTAs with Colombia (awaiting ratification) and Panama (not yet signed), which are 
Israel's first FTAs covering trade in both goods and services, and investment. Furthermore, Israel 
has been engaged in free  trade negotiations with China, the Republic of Korea, India, Ukraine, 
Vietnam, and the Eurasian Economic Union. The FTA with Canada has been updated (awaiting 
signature and ratific ation) and the agricultural part of the FTA with EFTA has also been updated to 
provide for more liberal trade in this sector.  
2.9.  The previous TPR , in 2012, noted the strong growth of Israeli trade with its FTA partners over 
the period 2006 -11, while the relat ive importance of trade via regional trade agreements had 
declined steadily, reflecting an increase in Israel's trade with (non -FTA) trading partners in Asia, 
notably China. Since the last Review, Israel's imports from current FTA partners have increased 
moderately, while the share of imports from FTA partners has increased from 57.8% of total 
merchandise in 2012 to 66.8% in 2016, reflecting notably an increase in imports from the 
European Union and EFTA c ountries . Exports of merchandise to the world as well as to FTA 
partners have declined  between 2014 and 2016 , leaving the share of exports to FTA partners more 
or less unchanged at about 63% of total merchandise exports ( Table 2.1 ). 
                                                
4 See WTO document s G/MA/W/117 and Add.11, 26 January 2016 and 28 January 2016 , respectively . 
Viewed at: https://www.fta.go.kr/webmodule/_PSD_FTA/support/ITA/W117A11 -02_Israel.pdf . 
5 See WTO document G/MA/TAR/RS/511, 11 December 2017.  
6 Viewed at: https://www.wto.org/en glish/tratop_e/gproc_e/memobs_e.htm . 
7 WTO document WT/PCTF/N/ISR/1, 31 July 2014.  
8 Israel was part of FANs'  last communication/proposal, which focused on transparency (of anti -dumping 
investigation procedures) and due process (rights). See WTO document TN/RL/W/257, 15 June 2015.   
9 TN/IP/W/10/Rev.4, 31 March 2011. Viewed at: 
https://www.wto.org/english/tratop_e/dda_e/negotiating_groups_e.htm#grp026 . 
10 Argentina — Measures Affecting the Importation of Goods  (DS438, DS444, DS445) ; and China — 
Domestic Support for Agricultu ral Producers  (DS511 ). WT/TPR/S/ 376 • Israel  
 
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  Table 2.1 Trade with FTA partners  
  (US$ million)  % of total  
2012  2013  2014  2015  2016  2012  2016  
Israel's imports from:  42,248.2  40,948.8  42,246.5  39,018.9  43,953.5  57.8 66.8 
Canada  399.7  408.7  373.1  263.2  283.2  0.5 0.4 
EU-28 25,208.3  24,413.7  24,130.0  22,571.4  27,364.6  34.5 41.6 
EFTA 4,168.4  4,532.1  5,395.8  4,574.5  4,467.8  5.7 6.8 
Jordan  205.4  266.6  378.2  410.5  308.0  0.3 0.5 
Mercosur  634.2  673.0  570.3  552.6  662.1  0.9 1.0 
  Argentina  188.8  187.1  137.0  146.9  139.4  0.3 0.2 
  Brazil  190.9  206.8  180.8  167.4  253.5  0.3 0.4 
  Paraguay  22.7 111.5  92.2 92.9 104.1  0.0 0.2 
  Uruguay  231.7  167.6  160.4  145.4  165.1  0.3 0.3 
Mexico  149.6  141.0  151.4  111.3  168.8  0.2 0.3 
Turkey  2,082.8  2,354.1  2,683.6  2,446.1  2,601.5  2.8 4.0 
United States 9,399.9  8,159.5  8,564.1  8,089.2  8,097.7  12.9 12.3 
World  73,112.1  71,995.0  72,331.8  62,067.8  65,802.7  100.0  100.0  
Israel's exports to:  40,090.5  42,214.7  43,851.5  39,439.0  38,106.2  63.5 62.9 
Canada  766.9  634.8  587.9  556.3  594.6  1.2 1.0 
EU-28 17,263.2  18,462.3  18,808.8  16,069.9  15,785.6  27.3 26.1 
EFTA 1,220.5  1,450.4  1,503.7  1,572.5  1,524.1  1.9 2.5 
Jordan  153.8  98.4 107.7  98.7 48.9 0.2 0.1 
Mercosur  1,289.5  1,188.3  1,049.6  881.7  877.3  2.0 1.4 
  Argentina  127.5  121.6  105.5  111.9  107.9  0.2 0.2 
  Brazil  1,130.8  1,041.9  922.1  737.5  747.2  1.8 1.2 
  Paraguay  8.1 6.0 5.8 5.2 5.0 0.0 0.0 
  Uruguay  23.1 18.9 16.1 27.2 17.2 0.0 0.0 
Mexico  452.3  359.7  464.4  434.2  380.5  0.7 0.6 
Turkey  1,421.2  2,515.4  2,755.6  1,701.2  1,297.6  2.3 2.1 
United States 17,523.0  17,505.4  18,573.8  18,124.4  17,597.5  27.8 29.1 
World  63,140.6  66,781.2  68,965.0  64,062.2  60,570.6  100.0  100.0  
a Based on trade figures at nominal prices.  
Note:  Based on Israeli trade data; bilateral trade flows between Israel and its trading partners (not actual 
trade flows utilizing FTAs).  
Source:  WTO Secretariat  calculations based on UNSD Comtrade.  
2.3.2.1   European Union  
2.10.   Bilateral trade in industrial products between Israel and the EC has been duty free since 
1989 under a preferential trade agreement. In 2000, an association agreement between Israel and 
the European Union (Euro -Mediterranean Agreement) entered into force. Trade in agricultural 
products was progressively libe ralized between 2004 and 2010. Bilateral trade in agricultural 
products, fish and fishery products was further liberalized through a new protocol that entered into 
force on 1  January 2010, whereby a pprox imately 95% of processed agricultural products were 
granted duty -free access.  
2.11.   Since the last Review, Israel has signed , in 2013, and ratified the Regional Convention on 
Pan-Euro-Mediterranean preferential rules of origin . For pharmaceutical products, the mutual 
recognition  of certification is being implemented, following the entry into force of the A greement 
on Conformity Assessment and Acceptanc e of Industrial Products in 2013.11 In 2013, Israel and 
the E uropean Union signed an Open Skies aviation agreement  (Euro -Mediterranean Aviation 
Agreement), followed by the signature in 2016 of a  Eurocontrol Association Agreement concerning 
air traffic management. Israel has also signed the EU Horizon 2020 programme  (the latest EU 
Research and Technological Development  Framework ). 
2.3.2.2   Colombia  
2.12.   Negotiations for an FTA with Colombia were launched in 2012. The FTA between the two 
countries was signed on 30 September 2013. The ratification process is pending.  
                                                
11 Official Journal of the European Union, Legislation 1, 4 January 2013. Viewed at: http://eur -
lex.europa.eu/legal -content/EN/TXT/PDF/?ur i=CELEX:32013D0001&from=EN . WT/TPR/S/ 376 • Israel  
 
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  2.13.   The FTA covers trade in goods and services, rules of origin, SPS meas ures, technical 
barriers to trade, bilateral safeguard measures , government procurement,  and dispute settlement, 
amongst others.12 It provides for  the possibility of accumulation of origin with third parties, 
dependent on the existence of equivalent provisions of other FTAs . Tariff elimination for industrial 
goods will take place over a period of 3 to 10 years after the FTA's entry into force. For agricultural 
products, s ome tariffs will be immediately eliminated , while most tariffs will be phased out  over 3 
to 12 years, depending on the product. There are also some product -specific tariff reductions or 
tariff quota commitments.  
2.14.   Bilateral trade  in goods declined over 2012 -16, dropping to  US$104 million in 2016. Israel 
exports mainly machinery and elect ronic equipment, organic chemicals and plastic products to 
Colombia, and imports mainly spices, organic chemicals, wood, and iron and steel products from it.  
2.3.2.3   Panama  
2.15.   Free trade negotiations with Panama were launched in 2014, and an FTA between Israel and 
Panama was concluded in November 2015. The FTA is expected to be signed in 2018, according to 
the authorities, and will be subject to ratification in both countries.  
2.16.   The Agreement covers trade in goods and services, rules of origin, SPS and TBT measures, 
and investment, amongst others. Tariffs on most industrial products will be eliminated immediately 
after entry into force of the Agreement, while some industrial tariffs will be phased out over 3 to 
15 years. The tariff treatment of agricultural products depe nds on the product: MFN rate; 
elimination upon entry into force of the FTA; phase -out over five years; product -specific tariff 
reduction; or tariff quota commitment.  
2.17.   Bilateral merchandise trade  with Panama is relatively small, at about US$62 million in 201 6. 
Israel exports mainly machinery and electronic equipment to Panama, and imports mainly food 
and chemical products from there.  
Table 2.2 Israel's FTAs, 2018  
Trading partner  
(entry into force)  Transition to f ull implementation  Rules of origin  
Canada  
(1 July 1997)  NAMA: duty free since 1 July 1999  
Agriculture: some tariff quotas; further 
market access for agricultural goods from 
November  2003 Wholly obtained or sufficiently worked 
or processed based on conditions set 
out in a "processing list". 
Trans -shipment through the 
United  States allowed under certain 
conditions.  
EFTA  
(1 January 1993) NAMA: duty free since 1  January  1993 
Agriculture: duty free for some fish, marine 
and processed agricultural products; some 
tariff quotas; bilateral agreements covering 
some agricultural products  Wholly obtained or sufficiently worked 
or processed based on conditions set 
out in a "processing list" (change in 
tariff heading and/or added value). 
Pan-Euromed diagona l cumulation.  
European Uniona 
(1 January 1996)  NAMA: duty free since 1 January 1989  
Agriculture: duty free for some agricultural 
products since 1  January  1989; further 
liberalization effective 1  January 2004 and 
1 January  2010. Some tariff quotas  Pan-Euromed rules of origin with 
diagonal cumulation.  
Jordan  
(23 September 
2005)  NAMA: phased tariff reduction; enhanced 
concessions since 2006  
Agriculture: some tariff quotas  Pan-Euromed rules of origin with 
diagonal cumulation.  
MERCOSUR  
(Israel -Brazil:  
1 June 2010)  
(Israel -Paraguay: 
1 June 2010)  
(Israel -Uruguay:  
1 June 2010)  
(Israel -Argentina:  
9 September 2011)  
 NAMA: 4,8, 10 years depending on product  
Agriculture: some tariff quotas  Wholly obtained or sufficiently worked 
or processed products, conditional on 
change in tariff heading or a minimum 
of 50% (60% for Paraguay) local 
content. Bilateral cumulation allowed.  
                                                
12 Viewed at: http://www.mof.gov.il/chiefecon/internationalconnections/doclib1/colombia.pdf . WT/TPR/S/ 376 • Israel  
 
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  Trading partner  
(entry into force)  Transition to f ull implementation  Rules of origin  
Mexico  
(1 July 2000)  NAMA: duty free since 1 January 2005  
Agriculture: some tariff quotas  Wholly obtained or sufficiently worked 
based on conditions set out in a 
"processing list" (change in tariff 
heading and/or added value).  
Turkey  
(1 May 1997)  NAMA: duty free since 1 January 2000  
Agriculture: some tariff quotas  Pan-Euromed rules of origin with 
diagonal cumulation.  
United States  
(1 September 1985) 
(4 December 1996)  NAMA: duty free since 1  January  1995 
Agriculture: some tariff quotas; further 
liberalization in January 2004  Wholly obtained or substantial 
transformation with minimum 35% of 
the value of the materials produced 
including the direct costs of processing.  
a Association Agreement between the E uropean Communities and Israel.  
Source : WTO Secretariat, based on information provided by the Israeli authorities; and UN Comtrade.  
2.3.3   Other agreements and arrangements  
2.3.3.1   Qualifying Industrial Zones  
2.18.   In 1996, the United States  launched the Qualifying Industrial Zone (QIZ) initiative to 
support the pea ce process and economic cooperation in the Middle East. QIZs are designated 
industrial parks in Egypt and Jordan from which goods can be exported duty  free and quota  free to 
the United States. Most of the QIZ  production has been in textiles and clothing, given relatively 
high tariffs on these products in the United States. According to the authorities, the Jordanian 
QIZs have not been  in use since 2010 , following the full implementation of tariff concessions 
(textiles) under the U.S. -Jordan FTA. The QIZ rules require local content of at least 35%, of which 
a minimum of 11.7% must be Israeli under the Israel -Egypt QIZ agreement.13 The remain ing local 
content may come from a Jordanian QIZ,  an Egyptian QIZ , Israel,  the West Bank and the Gaza 
Strip, or the United States (a maximum of 15% U.S. content). Israeli suppliers to the QIZ 
manufacturers must comply with the rules of origin under the Israel -U.S. Free Trade Agreement, 
i.e. a minimum of 35% local content, and su bstantial transformation. The QIZ initiative has no 
expiry date and thus does not require renewal by the U.S. Congress.  
2.19.   The Israel -Egypt QIZ agreement entered into force in February 2005, resulting in Israeli 
exports to Egypt of US$100 million per year si nce 2011 (from US$29 million in 2004), of which 
about US$ 80 million are Israeli inputs to Egyptian QIZs (currently 14 QIZs). As a result of the QIZ, 
Egyptian exports to the United States reached approximately US$800 million, according to the 
authorities.  
2.4  Investment Regime  
2.20.   Israel does not have a foreign investment law. There is no special approval or screening 
process for investments by foreigners, according to the authorities. Establishment  is governed by 
the Companies Law of 1999. C ompanies must register w ith the Registrar of Companies (within a 
month of establishment) , the Israel Tax Authority , and the National Insurance Institute . 
Registration of a business in Israel takes about 12 days, according to the World Bank.14 Israel 
ranked 54th out of 1 90 countrie s in the World Bank's ease of doing business indicator  for 2018  
(down from 34th place in 2012).15 Nevertheless, Israel performed better in individual measures 
comprising the ease of doing business index, such as "protecting minority investors" (ranked 16th), 
"resolving insolvency" (ranked 29th) and "starting a business" (ranked 37th). In July 2017, the 
Government established a committee for the improvement of the business environment in Israel.  
2.21.   Israel maintains foreign -ownership restrictions in a few secto rs, including air and maritime 
transport, telecommunications and broadcasting, and energy, mainly for public interest and energy 
security reasons ( Table 2.3 ). Under the GATS, Israel has scheduled foreign -ownership limitations 
on international fixed telecom munications services (74% foreign equity cap) and wireless 
                                                
13 For high -tech products  the minimum is 7% . 
14 World Bank Doing Business online information. Viewed at: 
http://www.doingbusiness.org/~/media/WBG/DoingBusiness/Documents/Profiles/Country/ISR.pdf . 
15 World Bank. Doing Business Report  2017. Viewed at: http://www.doingbusiness.org/reports/global -
reports/doing -business -2017. WT/TPR/S/ 376 • Israel  
 
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  telecommunications services (80% foreign equity cap).16 In certain sectors, Israeli law imposes 
nationality and residency requirements on members of boards of directors and other personnel, 
involvin g in some cases security clearance and approval by the regulator (Israeli airlines; 
electricity generation, transmission, and distribution; natural gas operations; domestic fixed line, 
radio, mobile, and international telecommunications services; televisio n, radio, satellite, and cable 
broadcasting; and defence corporations).  
2.22.   Private ownership of land is much lower than in many other countries (about 7% of the total 
area).17 Foreign -owned companies are entitled to own or lease land (for 49 or 98 years), subj ect 
to prior approval by the Ministry of Housing and Construction through the Israel Land Authority. 
The Land Authority may agree to bestow or transfer rights of land to foreign -controlled companies 
once an advisory opinion has been received from the Minis ter of Foreign Affairs  and the Ministry of 
Defence.  
2.23.   The Foreign Investments and Industrial Cooperation Authority (formerly "Invest in Israel") 
under the Ministry of Economy and Industry is the Government's investment promotion arm for 
foreign investors. El igible foreign or domestic investments in industrial projects benefit from 
assistance pursuant to the Law for the Encouragement of Capital Investment, which is managed by 
the Investments Authority at the Ministry of Economy and Industry. Various tax and no n-tax 
incentives are available for research and development (R&D), including grants to launch joint R&D 
projects with Israeli entrepreneurs, or to encourage foreign multinational companies to establish 
financial R&D cent res in Israel . Israel currently has investment protection agreements with 37 
countries and double taxation treaties in force with 54 countries.  
Table 2.3 Selected foreign ownership limitations by sector, 2018  
Sector  Legal base  Limitation  
Air transport services  Aviation Law, 1927; 
Licensing of Aviation 
Services Law, 1963  Foreign ownership is limited to 49% of the airline's 
capital.  
Maritime transport 
services  Maritime Law 
(maritime vessel), 
1960 (a) Foreign ownership is limited to 49% of Israeli flag 
vessels;  
(b) majority control by Israeli nationals is required for 
the provision of port services open to international 
shipping.  
Telecommunications 
and broadcasting  Communication Law, 
1982; Second 
Authority for Television 
and Radio Law, 1990  (a) International communications services: a foreign 
operator may hold up to 49% of the controlling interest 
of a licensee , and at least 26% of the control in a 
licensee must be held by nationals who are residen ts of 
Israel;  
(b) domestic licensed fixed line services: the controlling 
interest must be held by an Israeli individual or a 
corporation incorporated in Israel in which an Israeli 
individual holds at least 20% interest;  
(c) radio and mobile telephone servi ces: at least 20% of 
the shares must be held by Israeli residents;  
(d) satellite broadcasting: at least 26% of the controlling 
interest in a licensee must be held by nationals who are 
residents of Israel;  
(e) cable broadcasting: at least 26% of the control ling 
interest in the licensee must be held by nationals who 
are residents of Israel; and a license may not be granted 
to an applicant in which a foreign government holds 
shares, unless the Minister of Communications 
authori zes an indirect holding in the li censee of up to 
10% by such an applicant;  
(f) commercial television and regional radio: at least 
51% of the controlling interest in the concession must be 
held by nationals who are residents of Israel.  
                                                
16 WTO document S/DCS/W/ISR, 24 January 2 003. 
17 Viewed at: http://land.gov.il/en/Pages/AboutUs.aspx . WT/TPR/S/ 376 • Israel  
 
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  Sector  Legal base  Limitation  
Electricity  Electricity Economy 
Law, 1996  The maximum  share of investment in a company 
licensed to transmit, distribute or produce a substantial 
part of electricity to be held, directly or indirectly, by a 
non-resident, is subject to a determination by the 
Minister of National Infrastructures; and the contro lling 
interest of the company must be held by a national who 
is a resident of Israel.  
Oil refining  Vital Interest Orders; 
Government 
Companies Law, 2003  Limitation regarding control or holdings of 5% or more or 
holding a significant influence in the company by a 
hostile state, a citizen or resident of a hostile state, a 
corporate body registered or incorporated or whose main 
business is in a hostile state, or a company controlled by 
a citizen and resident of a hostile state. 
Legal services   Branches of foreign law firms must employ at least one 
Israeli licenced lawyer or one foreign lawyer as defined 
in Israeli law. 
Tour guides  Tourism Services Law, 
1976 Tourist guides must be Israeli residents or citizens.  
Source : OECD (1 March 2012), Accession of Israel to the OECD, Review of International Investment Policies, 
Paris. Viewed at : http://www.oecd.org/israel/49864025.pdf . 
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  3  TRADE POLICIES AND P RACTICES BY MEASURE  
3.1  Measures Directly Affecting Imports  
3.1.1   Customs procedures, valuation, and requirements  
3.1.  No major changes have been made to the legislative and institutional framework regarding 
Israel's customs regime since its last TPR . The main legal instruments include the Customs 
Ordinance of 1957, the Customs Ordinance Amendment Law of 1997, the Customs Order of 2005, 
the Free Export Order of 2006, the Free Import Order of 2014, and the Customs and Purchase Tax 
Tariff Order (last updated in January 2018) . The Israel Tax Au thority (ITA), under the Ministry of 
Finance, is responsible for all customs -related issues, including the collection of indirect taxes 
(customs duties, VAT, excise and purchase tax es).1 
3.2.  Israel has no importer registration requirements for customs -related purposes (Free Import 
Order, 2012). However, importers must be registered with the ITA for purposes of VAT and, in 
certain cases, purchase tax ( Section 3.1.4 ). Food importers must register with the Food Control 
Service of the Ministry of Health, and carry an official importer certificate.  
3.3.  The documents required for the importation of goods include : import declaration (single 
administrative document); commercial invoice; bill of lading (or airway bill); certificate of origin (if 
a preferential treatment is required ); packing list; import licence (if required); and SPS -related 
import permit and/or certificate (if required).  
3.4.  Israel has a fully computerized customs system to which all customs agents are linked. The 
services of a customs broker/agent are not mand atory for commercial imports. A company may 
request special authorization from the ITA to have a direct link to the customs systems if it 
employs a licensed customs clerk with at least five years of experience. Since 2008, Israel 
Customs operates a single window with electronic processing of import permits through the 
competent authorities: the Ministry of Economy and Industry, the Ministry of Transport and Road 
Safety, the Ministry of Energy, the Ministry of Health, and  the Israel Standards Institute. Ther e are 
seven customs houses.  
3.5.  According to the authorities, about 86% of import consignments are released within one 
hour, and some 5% of shipments are subject to non -security -related inspection (Table 3.1). 
Inspection is based mainly on risk assessment (ris k profiling), and random selection is also used. 
Selection criteria include the origin of the goods (country, supplier), complaints regarding violation 
of intellectual property rights, and the past record of importers. Customs has broad powers to 
seize and  destroy counterfeit goods. Israel has no laws or regulations regarding pre -shipment 
inspection.  
Table 3.1 Customs clearance and release time, 2012 -16 
Indicator  2012  2013  2014  2015  2016  
Total declarations submitted ('000)  1,611  1,652  1,717  1,758  1,897  
Cleared without examination (% of total)  80 77 79 74 79 
Cleared subject to limited examination (% of total)  3 2 3 3 2 
Cleared subject to detailed examination: documentary 
check and/or physical inspection (%  of total)  9 8 9 8 7 
Cleared with physical inspection (% of total)  6 6 6 5 5 
Average clearance time (hours)  5:43 5:06 6:30 5:54 5:47 
Cleared without examination (hours)  1:02 1:01 1:16 1:09 1:02 
Source:  Data provided by the authorities.  
3.6.  Israel has in place the Authorized Economic Operator (AEO) programme2, a voluntary 
program me based on the  SAFE Framework of Standards of the  World Customs Organization . The 
program me's main goal is to promote international trade facilitation and efficacy while meeting 
                                                
1 ITA online information. Viewed at: 
https://taxes. gov.il/English/About/Pages/AboutIasralTaxesAuthority.aspx . 
2 AEOs include manufacturers, importers, exporters, brokers, carriers, consolidators, intermediaries, 
ports, airports, terminal operators, integrated operators, warehouses and distributors.  WT/TPR/S/ 376 • Israel  
 
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  global supply chain standards, thus reducing shipping costs. Companies that are willing to adopt 
the framework of standards benefit from Israel's mutual recognition agreement s (MRAs) . Israel 
has signed MRAs with: Canada (2016), China (2017), the Republic of  Korea (2016), Separate 
Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese  Taipei) (2013), and the 
United  States (2014). Negotiations for MRAs with Hong Kong, China; and Mexico are still 
underway . 
3.7.  According to the World Bank 's ease of trading a cross borders ranking , regarding border 
compliance, it takes 64 hours and US$307 to import into Israel (down from 240 hours and US$545 
in 2012). This is more than the OECD high income countries  average  (Table 3.2).3 In the World 
Bank's Logistics Performance Index (LPI), Israel ranked 28th (23rd for customs) out of 160 
countries in 2016 (41st in 2014).4 
Table 3.2 Import time and cost, 2012 and 2018  
Indicator  2012  2018 Israel  2018 OECD 
high income  
Time to import: border compliance (hours)  240 64 8.7 
Cost to import: border compliance (US$)  545 307 111.6  
Time to import: documentary compliance (hours)  .. 44 3.5 
Cost to import: documentary compliance (US$)  .. 70 25.6 
.. Not available.  
Source:  World Bank  online information. Viewed at: www.doingbusiness.org/data/exploreeconomies/israel . 
3.8.  Customs valuation is based on the transaction value, adjusted to reflect costs and services 
that a re not already included in the purchase price (Customs Ordinance Amendment Law of 
1997).5 The ITA provides an electronic facility for advance rulings regarding the classification of 
goods. Customs appeals procedures are set out in the Customs Ordinance of 1957. In cases of 
disagreement with the authorities, the importer must stipulate on the import declaration form that 
the disputed customs duties were paid under protest. Appeals must first be made to the High 
Customs Authority and then to the courts; they may be lodged against any customs decision.  
3.9.  In July 2014, Israel notified its Category A commitments under the Trade Facilitation 
Agreement  (TFA).6 The Agreement was ratified and entered into force on 8 December 2017 .7 
3.1.2   Rules of origin  
3.10.   Israel notified the WTO that it does not maintain any non -preferential rules of origin .8 
3.11.   Within the framework of its trade arrangements , Israel applies preferential rules of origin  as 
described in Table 2.2 . 
3.1.3   Tariffs  
3.12.   Fiscal revenues from the collection of customs duties amount ed to NIS 3  billion , or about 
1% of total tax revenues, in 2017 (compared with NIS  2.7 billion, or 1% of total tax revenues, in 
2010). VAT accounts for most of the revenue  (30%) , followed by income tax and payroll tax 
(Chart 3.1).  
                                                
3 World  Bank online information. Viewed at:  www.doingbusiness.org/data/exploreeconomies/israel . 
4 The LPI is based on a worldwide survey of operators on the ground (global freight forwarders and 
express carriers), providing feedback on the logistics "friendliness" of the countries in which they operate and 
those with which they trade.  World Bank  online information. Viewed at: https://lpi.worldbank.org/about . 
5 The costs and services include fees and commissions (other than buyer commissions); containers; 
packaging; royalties and licence fees; transportati on to the ports; loading, unloading, and handling; and 
insurance.  
6 WTO document WT/PCTF/N/ISR/1, 31 July 2014.  
7 WTO document WT/ LET/1328, 13 December  2017. 
8 WTO document G/RO/N/13, 19 November 1996.  WT/TPR/S/ 376 • Israel  
 
- 28 - 
 
  Chart 3.1 Tax revenue distribution, 2017  
 
Source:  Information provided by the authorities.  
3.1.3.1   Applied MFN tariffs  
3.13.   During the review period, Israel transposed its Schedule XLII of concessions from the 
Harmonized System  (HS) 1996 nomenclature  to the HS2007 and HS2012.9 It is presently under 
waiver for the introduction of HS2017 changes.10 
3.14.   Israel's tariff has 8,528 lines based on HS2017 at the eight -digit level (8,505 lines on 
HS2012 nomenclature at the nine -digit level), inclu ding 320  non-ad valorem  tariffs (566 in 2012) 
(Table 3.3). The non -ad valorem  tariffs (3.8% of total lines in 2018) comprise specific (75 lines), 
compound (13), mixed (227), and other (5)  tariffs. The Israeli authorities did not provide ad 
valorem  equivalents (AVEs) to the WTO Secretariat. Nonetheless, some AVEs were calculated on 
the basis of 2016 import data from UNSD Comtrade database.11 The ad valorem  parts of 
compound or mixed rates (if no estimated AVEs) are also included in the tariff analysi s (Table 3.3 
and Chart 3.2).  
Table 3.3 Structure of applied MFN tariffs, 2012 and 2018  
(%) 
 2012  2018  Final bounda 
Bound tariff lines (% of all tariff lines)  n.a. n.a. 74.5 
Simple average rateb 7.6 5.2 20.6 
  WTO agricultural products  27.7 19.1 78.1 
  WTO non -agricultural products  4.2 3.0 9.6 
  Agriculture, hunting, forestry and fishing (ISIC 1)  34.4 21.8 71.1 
  Mining and quarrying (ISIC 2)  0.2 0.2 5.0 
  Manufacturing (ISIC 3)  6.1 4.0 18.3 
Duty free tariff lines (% of all tariff lines)  54.6 67.0 10.6 
Simple average of dutiable lines only  17.0 15.8 24.2 
Tariff quotas (% of all tariff lines)  .. 1.7 0.6 
Non-ad valorem  tariffs (% of all tariff lines)  6.7 3.8 5.9 
Non-ad valorem  tariffs with no AVEs  (% of all tariff lines)  1.9 1.7 5.2 
Domestic tariff "peaks" (% of all tariff lines)c 4.2 4.1 6.5 
                                                
9 See WTO documents WT/Let/1070 (certification of HS02 ), 9 September 2015; WT/Let/1198 
(certification of ITA -Expansion), 28 September 2016; WT/Let/1233 (certification of HS07), 26 January 2017; 
and G/MA/TAR/RS/525 (approval of HS12), 21 March 2018.  
10 See WTO document WT/L999/Add.4, 10 April 2017.  
11 For 2.1% o f all tariff lines, AVEs were not available.  
Payroll tax
(NIS 62.8 bn, 20.2%)
Income tax
(NIS 64.9 bn, 20.8%)
Capital market
(NIS 4.1 bn, 1.3%)
Tax on dividend
(NIS 15.5 bn, 5.0%)VAT
(NIS 92.9 bn, 29.8%)Non-profit institutions tax 
(NIS 14.8 bn, 4.8%)Import purchase tax 
(NIS 16.1 bn, 5.2%)Customs duties
(NIS 3.0 bn, 1.0%)Full excise and domestic 
purchase tax
(NIS 19.6 bn, 6.3%)Real estate tax
(NIS 11.3 bn, 3.6%)
Tolls
(NIS 6.4 bn, 2.1%)Chart 3.1 Tax revenue distribution, 2017
Source:   Information provided by the authorities.WT/TPR/S/ 376 • Israel  
 
- 29 - 
 
   2012  2018  Final bounda 
International tariff "peaks" (% of all tariff lines)d 5.1 4.1 19.0 
Overall standard deviation  21.1 15.4 38.8 
Coefficient of variation  2.8 3.0 1.9 
Nuisance applied rates (% of all tariff lines)e 0.8 0.6 0.1 
Number of lines     
Total number of tariff lines  8,505  8,528  8,132f 
Ad valorem  7,939  8,208  5,578 
  Duty free lines  4,647  5,716  860 
Non-ad valorem  566 320 482 
  Specific  137 75 176 
  Compound  55 13 127 
  Mixed  374 227 145 
  Other  0 5 34g 
Memo:     
Simple average rate for ad valorem  rate only  5.2 3.3 20.9 
  WTO agricultural products  14.4 8.0 78.3 
  WTO non -agricultural products  4.0 2.7 9.3 
.. Not available.  
n.a. Not applicable.  
a Calculations for final bound rates are taken from the CTS database. The final bound schedule is 
based on the HS20 07 nomenclature. Final bound rates are applied for tariff codes under the 
Expansion of the ITA , although some tariff codes are still under the implementation period up to 
2023.  
b Ad valorem  rates, AVEs, and the ad valorem  part of compound or mixed rates (if no estimated AVEs) 
is taken into account in calculations.  
c Domestic tariff peaks are defined as those exceeding three times the overall simp le average applied 
rate. 
d International tariff peaks are defined as those exceeding 15%.  
e Nuisance rates are those greater than zero, but less than or equal to 2%.  
f Including unbound lines.  
g Other rates refer to cases where one tariff code at the natio nal tariff line level consists of different 
types of duties ( ad valorem and non -ad valorem  rate). For example, the tariff code of HS 37061000  
consists of different types of duties (with different product descriptions), namely ad valorem  tariff 
(16%) and specific rate ( 6.8 NIS /kg). 
Note:  All tariff calculations exclude in -quota lines. The 2012 tariff ( nine-digit) is based on the HS12 
nomenclature; AVEs using 2011 import data were provided by the Israeli authorities. The 2018 tariff 
(eight-digit) is based on the HS17 nomenclature. AVEs for the 2018 and the final bound tariffs were 
estimated based on 2016 import data taken from the UNSD Comtrade database.  
Source:  WTO Secretariat calculations, based on data provided by the authorities, the WTO IDB, and the CTS 
database.  
3.15.   During the review period, Israel unilaterally eliminated import duties on several products. 
This was triggered by a wave of popular discontent in 2011 over the high cost of living 
(Section  1.2). Consequently, Israel's average applied MFN tariff wa s reduced from 7.6% in 2012 to 
5.2% in 2018.12 
3.16.   Israel's tariff shows high dispersion of rates which range from zero to 221%. Some 67% of 
all tariff lines are duty free, and 3.7% are above 20% (Chart 3.2).  
                                                
12 The simple average rate for 2012 differs from the one calculated in the TPR Report of Israel in 2012 
(7%) because the ad valorem  part of compound or mixed rates was not taken into account in those 
calculations.  WT/TPR/S/ 376 • Israel  
 
- 30 - 
 
  Chart 3.2 Frequency distribution of applied MFN tariffs, 2018  
 
Note:  Figures in parentheses indicate the share of total lines. Calculations include ad valorem rates, AVEs, 
and the ad valorem part of compound or mixed rates (if no estimated AVEs). They do not a dd to 
100% due to the unavailability of AVEs for some tariff lines (representing 0.4% of total tariff lines).  
Source:  WTO Secretariat calculations, based on data provided by the authorities.  
3.17.   The average applied MFN tariff on non -agricultural products is re latively low (3%, compared 
with 4.2% in 2012). The maximum tariff is generally 12%, except for fish and fishery products (up 
to 146.3%), textiles (up to 22%), and minerals and metals (up to 16.9%). On agricultural goods 
(WTO definition), the MFN tariff ave rages 19.1% (27.7% in 2012). Tariff protection is particularly 
high on dairy products (with an average of 65.6%); animals and products (with an average of 
35.8%); and fruit, vegetables, and plants (with an average of 26.5%) (Table 3.4). Moreover, 
many agricultural tariffs comprise specific, compound or mixed duties.  
Table 3.4 Summary analysis of the MFN tariff, 2018  
 
Number 
of lines  Average 
(%) Range 
(%) Standard 
deviation  Share  of total 
tariff lines (%)  
 Duty 
free Non-ad 
valorem  
rates  
Total  8,528  5.2 0-221 15.4 67.0 3.8 
HS 01 -24 1,481  17.2 0-221 33.4 47.1 19.9 
HS 25 -97 7,047  2.7 0-50 4.5 71.2 0.4 
By WTO category        
WTO agricultural products  1,163  19.1 0-221 35.6 43.9 20.4 
  Animals and products thereof  150 35.8 0-170 50.7 38.7 42.7 
  Dairy products  42 65.6 0-212 61.0 7.1 52.4 
  Fruit, vegetables, and plants  384 26.5 0-221 36.1 19.3 29.2 
  Coffee and tea  27 0.2 0-5 0.9 96.3 0.0 
  Cereals and preparations  126 13.2 0-170 30.9 62.7 13.5 
  Oils seeds, fats, oil and their products  131 7.6 0-102 17.4 58.0 10.7 
  Sugars and confectionary  20 0.6 0-4 1.4 85.0 0.0 
  Beverages, spirits and tobacco  117 6.1 0-33.1 7.9 55.6 4.3 
  Cotton  5 0.0 0.0 0.0 100.0  0.0 
  Other agricultural products, n.e.s.  161 3.4 0-105 10.3 66.5 1.9 
WTO non -agricultural products  7,365  3.0 0-146.3  6.2 70.7 1.1 
  Fish and fishery products  389 8.3 0-146.3  19.1 62.7 15.4 
  Minerals and metals  1,536  3.4 0-16.9 4.6 62.4 0.0 
  Chemicals and  photographic supplies  1,117  1.3 0-12 3.4 85.8 0.0 
  Wood, pulp, paper and furniture  359 3.2 0-12 5.1 69.4 1.4 
  Textiles  970 0.9 0-22 3.4 92.6 1.9 
  Clothing  266 0.2 0-6 1.0 97.0 0.0 
(67.0)
(2.1)(15.5)
(10.9)
(0.4) (0.5)(3.2)
01,0002,0003,0004,0005,0006,0007,000
0 0-5 >5-10 >10-15 >15-20 >20-25 >25Chart 3.2 Breakdown of applied MFN tariffs, 2018
Number of tariff lines
WTO Secretariat calculations, based on data provided by the authorities. Source:Figures in parentheses indicate the share of total lines.  Calculations include ad valorem rates, ad valorem equivalents 
(AVEs), and the ad valorem part of compound or mixed rates (if no estimated AVEs) .  They do not add to 100% due 
to  unavailability of AVEs for some  tariff lines (representing 0.4% of total tariff lines).  Note:WT/TPR/S/ 376 • Israel  
 
- 31 - 
 
   
Number 
of lines  Average 
(%) Range 
(%) Standard 
deviation  Share  of total 
tariff lines (%)  
 Duty 
free Non-ad 
valorem  
rates  
  Leather, rubber, footwear and travel 
goods  211 3.4 0-12 4.7 63.5 0.0 
  Non-electric machinery  993 4.2 0-12 4.9 56.5 0.0 
  Electric machinery  548 3.5 0-12 5.1 65.9 0.0 
  Transport equipment  362 3.9 0-12 3.9 46.4 0.0 
  Non-agricultural products, n.e.s.  586 3.0 0-12 4.7 66.9 0.0 
  Petroleum  28 0.9 0-8 2.5 89.3 0.0 
By ISIC sectora       
ISIC 1 - Agriculture, hunting and fishing  575 21.8 0-221 37.0 45.7 27.3 
ISIC 2 - Mining  99 0.2 0-12 1.3 98.0 0.0 
ISIC 3 - Manufacturing  7,854  4.0 0-212 11.7 68.2 2.1 
By stage of processing        
First stage of processing  989 14.2 0-221 31.6 64.3 20.5 
Semi-processed products  2,508  1.1 0-40 3.3 87.2 0.0 
Fully processed products  5,031  5.4 0-212 13.4 57.5 2.3 
By HS section        
01 Live animals and products  552 22.3 0-212 41.8 53.1 27.4 
02 Vegetable products  454 22.8 0-221 35.7 35.7 26.0 
03 Fats and oils  92 7.1 0-65.5 13.7 54.3 10.9 
04 Prepared food, beverages and tobacco  383 5.9 0-50 8.0 50.1 4.2 
05 Mineral products  171 0.3 0-12 1.6 96.5 0.0 
06 Chemicals and products thereof  987 1.2 0-50 3.8 87.5 0.2 
07 Plastics, rubber, and articles thereof  329 3.9 0-12 4.7 58.1 0.0 
08 Raw hides and skins, leather, and its 
products  78 1.1 0-12 3.2 89.7 0.0 
09 Wood and articles of wood  121 0.2 0-10.8 1.3 98.3 0.0 
10 Pulp of wood, paper and paperboard  176 3.4 0-12 5.0 67.6 0.0 
11 Textiles and textile articles  1,216  0.6 0-22 3.0 94.7 1.5 
12 Footwear, headgear, etc.  50 0.9 0-12 3.1 92.0 0.0 
13 Articles of stone, plaster, cement  246 5.1 0-16.9 5.1 46.7 0.0 
14 Precious stones and metals, pearls  79 4.2 0-12 5.1 57.0 0.0 
15 Base metals and articles thereof  1,062  3.3 0-12 4.6 62.1 0.0 
16 Machinery, electrical equipment, etc.  1,558  3.9 0-12 5.0 60.3 0.0 
17 Transport equipment  376 3.9 0-12 3.9 47.3 0.0 
18 Precision equipment  337 2.7 0-12 4.3 65.6 0.0 
19 Arms and ammunition  23 0.5 0-12 2.4 95.7 0.0 
20 Miscellaneous manufactured articles  218 5.8 0-12 5.8 47.2 2.3 
21 Works of art, etc.  20 4.8 0-12 5.5 55.0 0.0 
a ISIC Rev.2 classification, excluding electricity (1 line).  
Notes:  Excluding in -quota rates and including ad valorem rates, AVEs, and the ad valorem  part of 
compound or mixed rates (if no estimated AVEs) . AVEs using 2016 import data taken from the 
UNSD Comtrade database.  
Source:  WTO Secretariat estimates, based on data provided by the authorities, and the WTO IDB.  
3.18.   Israel  has tariff -quota commitments for 12 agricultural product groups  in its Schedule. Two 
of these quotas (walnuts, and edible fats and oils) are currently not implemented, since the 
applied tariffs are equal to or lower than the corresponding bound in -quota rates 
(Section  4.1.1.3.1 ).13 
3.19.   Israel grants tariff concessions and exemptions on commercial imports within the framework 
of several schemes (Table 3.5).  
                                                
13 WTO document G/AG/N/ISR/62, 1 September 2017.  WT/TPR/S/ 376 • Israel  
 
- 32 - 
 
  Table 3.5 Duty concessions and exemptions on commercial imp orts 
Scheme and coverage  Incentives  
End-use provision schemes   
Importers listed in the Customs Tariff Book Duty free on 201 items in total 
Duty -drawback system   
Any exporter meeting conditions (e.g. imported raw materials 
intended for the manufacture of goods to be exported  Refund of customs and excise duties paid on 
imported inputs after realization of export  
Programme under the Petroleum Law of  1952   
Holders of petroleum rights, and contractors operating on their 
behalf  Duty free imports  
Programme  under the Petroleum Pipeline Concession 
Law of  1968   
Petroleum Services Co. Ltd. Oil  Refineries Co. Ltd.  Duty free imports  
Conditional Exemption – permanent import   
 Non-denatured ethyl alcohol for the production of alcoholic 
beverages, medications and vinegara 
 Taxis, sightseeing vehicles, hearses and ambulances  Free of purchase tax subject to the approval 
of the competent authorities  
a This incentive applies for all industries using alcohol as a raw material.  
Source:  Information provided by the authorities.  
3.1.3.2   Bound tariffs  
3.20.   Some 74.5% of Israel's tariff lines are bound. The average bound tariff rate is 20.6%, 
15.4 percentage points higher than the average applied MFN rate (5.2%). Bound rates are high for 
agricultural products, averaging 78.1% with a  maximum rate of 560% (dates), while for non -
agricultural goods the average bound rate is 9.6%.  
3.21.   A full comparison between MFN applied and bound rates was not possible; some 13% of 
tariff lines could not be compared, mainly due to changes in HS nomenclature  and in the structure 
of the tariff schedule. On this basis, MFN applied rates exceeded their bound levels for 18 tariff 
lines; for some products the gap is 12 percentage points (Table 3.6).  
Table 3.6 Applied MFN tariffs exceeding bound rates, 2018  
No. Tariff 
code  Product description  2018  
duty 
rate 
(%) Final 
bound 
duty 
rate (%)  
1 73129000  Stranded wire, ropes, cables, plaited bands, slings and the like, of 
iron or steel, not electrically insulated; - Other  8 6 
2 84021200  Water  tube boilers with a steam production not exceeding 45 t per 
hour 8 0 
 847340  - Parts and accessories of the machines of heading 84.72    
3 84734010  Parts and accessories for machines of subheading 84.72.3000  12 0 
4 84734090  Other  12 0 
5 84762100  Automatic goods -vending machines; - incorporating heating or 
refrigerating devices  12 8 
6 85045020  Other inductors, earthing coil for a voltage exceeding 22 kilo volts 
(kv) 10.8 0 
7 85181020  Stands for microphones  12 0 
8 85229020  Cabinets  8 0 
9 85365030  Other switches, designed for installation in a structure or on it; 
instruments designed for outdoor installation  12 0 
 8543 Electrical machines and apparatus, having individual functions not 
specified or included elsewhere in this chapter.    
 854390  Parts   
10 85439031  Of the kind used for motor vehicles, other than tax exempted 
tractors, for forklifts or vehicles which move on rails  12 0 
11 85439040  For apparatus of subheading 85.43.7059  12 0 
 9028 Gas, liquid or electricity supply or production meters    
 902890  - Parts and accessories    
12 90289019  For water meters; other  10 0 
13 90289090  Other  2 0 
 9030 Oscilloscopes, spectrum analysers and other instruments and 
apparatus for measuring or checking electrical quantities    
 903033  Other, without a recording device    WT/TPR/S/ 376 • Israel  
 
- 33 - 
 
  No. Tariff 
code  Product description  2018  
duty 
rate 
(%) Final 
bound 
duty 
rate (%)  
14 90303330  Which are special for small tractors, exempted from tax, for forklifts 
or vehicles which move on rails  6 0 
15 90303340  Others, of kind used in motor vehicles  6 0 
16 90303390  Other, with a recording device  2 0 
17 90303990  Other, with a recording device  2 0 
18 90309020  Parts and accessories, of the kind used in motor vehicles, other than 
tax exempted tractors, for forklifts or vehicles which move on rails  2 0 
Source:  WTO Secretariat calculations, based on data provided by the authorities, the WTO IDB, and the CTS 
database.  
3.22.   Other duties and charges (ODCs) have been bound at zero on all products covered by tariff 
bindings. Over 90% of Israel's tariff bindings are in ad valorem  terms; non-ad valorem  tariff 
bindings exist mainly for certain fish and fishery products, textiles and textile articles, base metals, 
and machinery and electrical equipment.  
3.1.3.3   Preferential tariffs  
3.23.   Most of Israel's trade is conducted under various pre ferential agreements.  Table 3.7 refers 
to 2017 (the latest preferential tariff data available at the time of finalizing this Report). The 
simple average rates under all preferential arrangements are lower than the simple average MFN 
rate, although the aver ages among arrangements are different, ranging from 2.1% with the 
United  States to 4.3% with Jordan . 
Table 3.7 Summary analysis of the preferential tariffs, 2017  
 Simple averagea Duty  free linesb 
 Overall  WTO  
agriculture  WTO non -
agriculture  Overall  WTO 
agriculture  WTO non -
agriculture  
Applied MFN  6.0 19.8 3.7 56.6 42.3 58.8 
Canada  2.8 18.6 0.3 91.8 51.0 98.3 
EFTA 2.9 19.2 0.3 91.3 46.3 98.4 
European Union  2.4 15.8 0.2 93.6 59.5 99.1 
Jordan  4.3 18.2 2.0 75.5 46.7 80.1 
Mexico  3.0 19.2 0.4 90.7 45.0 98.0 
MERCOSUR        
  Argentina  2.8 18.8 0.3 91.0 48.6 97.8 
  Brazil  2.8 18.9 0.2 92.1 48.8 99.0 
  Paraguay  2.8 18.9 0.2 92.1 48.8 99.0 
  Uruguay  2.8 18.9 0.2 92.1 48.8 99.0 
Turkey  3.0 19.7 0.4 90.6 42.9 98.2 
United States  2.1 13.6 0.2 94.9 69.2 99.0 
a Average comprising both MFN and preferential rates.  
b MFN and preferential tariff rate as a percentage of total tariff lines.  
Note:  The 2017 tariff is based on the HS17 nomenclature, consisting of 8,531 tariff lines ( eight-digit). 
AVEs using 2016 import data taken from UNSD Comtrade database. In case of no AVEs, the ad 
valorem  part of compound or mixed rates is taken into account in calculations.  
Source:  WTO Secretariat calculations, based on data provided by the authorities and the WTO IDB.  
3.1.4   Other charges affecting imports  
3.24.   Israel applies value added tax (VAT) on imported and domestic goods and services. The VAT 
standard rate was increased from 16% to 17% i n 2012 and to 18% in 2013. In October 2015, it 
decreased to 17% (at a cost to government revenue equivalent to 0.4% of GDP).14 A number of 
items, including fruit and vegetables, are zero -rated (Table  3.8). Alcoholic beverages, cigarettes 
and fuel are subject to excise tax.  
                                                
14 OECD (2016), Economic Surveys: Israel , Paris.  WT/TPR/S/ 376 • Israel  
 
- 34 - 
 
  Table 3.8 Taxes on imported or domestic goods and services, 2 018 
Tax Product  Rate Imports  Domestic  
VAT Standard rate for goods and services  17% Value of goods for 
customs purposes 
plus customs 
duties, port and 
stevedoring fee, 
levy (if  applicable)  Value of 
transaction  
VAT Fresh fruit and vegetables; ships and 
airlines for service on international 
lines; travel tickets for international 
sea and air -lines; cargo 
transportation by sea and air; hotel 
accommodation for foreign tourists; 
most products and selected services 
in Eilat free port  0% Value of goods for 
customs purposes 
plus customs 
duties, port and 
stevedoring fee, 
levy (if  applicable)  Value of 
transaction  
Purchase 
tax Certain luxury and consumer goods, 
mostly motor vehicles, and a limited 
number of intermediate goods  Tax rates vary 
according to the 
product  Customs value plus 
customs duties plus 
TAMA  Wholesale 
price 
Excise 
tax Cigarettes  Ad valorem  tax of 
270% of the common 
wholesale price; 
Specific tax of NIS 
393.82 per 1,000 
cigarettes (or NIS 7.9 
per 20 cigarettes 
pack);  
Minimal specific tax of 
NIS 754.4 per 1,000 
cigarettes (or NIS 15.1 
per 20 cigarettes pack)  Wholesale price  Wholesale 
price 
Excise 
tax Gasoline  NIS 3,022.57 per 
1,000 litres  Wholesale price  Wholesale 
price 
Excise 
tax Kerosene  NIS 2,895.96 per 
1,000 litres  Wholesale price  Wholesale 
price 
Excise 
tax Diesel  NIS 2,895.96 per 
1,000 litres  Wholesale price  Wholesale 
price 
Excise 
tax Heavy fuel oil  NIS 15.02 per tonne  Wholesale price  Wholesale 
price 
Excise 
tax Gas NIS 17.98 per tonne  Wholesale price  Wholesale 
price 
Excise 
tax Coal NIS 45.37 per tonne  Wholesale price  Wholesale 
price 
Excise 
tax Alcoholic beverages  NIS 84.24 per litre  Wholesale price  Wholesale 
price 
Source:  WTO Secretariat based on data provided by the authorities.  
3.25.   In general, internal taxes are levied on the duty -inclusive c.i.f. value of imports, or on the 
wholesale price of locally produced goods. However, for the imposition of purchase taxes on 
imported products, Israel uses an assessment called TAMA (the Hebrew acronym for additional 
rate of increase).15 The TAMA approximates local wholesale prices by adding estimated profits, 
insurance, and inland freight to the declared value of imports (coefficients for calculating the TAMA 
vary from product to product). The effect of the TAMA is similar to an import surcharge.  
3.26.   A tax reform for alcoholic beverages was implemented in 2014, and the TAMA was cancelled 
and replaced by a specific tax of NIS 80 per litre of alcohol on imports and domestic products 
alike. Since then, the tax rate has been linked to the consumer price index.  
3.27.   Israel's port user fee scheme, based on the cost of services rendered, is being implemented 
over the period 2010 -20. 
                                                
15 Alternatively, importers have the option of declaring the actual wholesale value of their products . 
Importers concerned must register with the ITA. To register, a person must import goods of least US$100,000 
per calendar year and must not have been convic ted of a tax offence in the preceding five years.  WT/TPR/S/ 376 • Israel  
 
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  3.1.5   Import prohibitions, restrictions, and licensing  
3.28.   Israel maintains import prohibitions for reas ons of protecting human health, public morals, 
security, and the environment, or in accordance with its international commitments under the 
Basel Convention on Hazardous Wastes, the Montreal Protocol, and CITES (Table 3.9). Import 
prohibitions are provided  for in the 2005 Customs Order and the Free Import Order of 2014. Israel 
maintains a ban on imports of non -kosher meat and meat products (Kosher Meat Import Law of 
1994). A general import ban remains in place for products from Iran, Lebanon, and Syria.  
Table 3.9 Import prohibitions, 2018  
Items  Reason for prohibition  
Non-kosher meat and meat products  Religious/cultural reasons  
Wine, spirits products and grape juice, whether called by a geographical 
name that is not its place of origin or by a name that incorporates such a 
geographical name or that may give the impression that it incorporates 
such a geographical name  Enforcement  of laws and 
regulations  
Tobacco and manufactured tobacco substitutes (excluding 
unmanufactured tobacco, tobacco refuse)  Protection of human health 
(Art. 5 of the Limitation of 
Advertising and Marketing of 
Tobacco Products, 1983)  
Transparent spray made for blurring the license plate of vehicles while 
shooting/photographing  Enforcement of laws and 
regulations (toll, speed limits)  
Matches made from white or yellow phosphorus  Environment protection  
Licentious or indecent films  Public morals  
Currency notes, bank notes or coins that are legal tender in any country 
or which have been at some time legal tender in any country, whether 
counterfeit or imitation  Public morals  
Tickets or publicity items for lottery or gambling  Public morals  
Sales invoice form that is a form or other paper that purports to be a 
form on which it is possible to fill in blank spaces so as to use it as a sales 
invoice for goods from foreign countries  Public morals  
Used bags for packaging vegetable material  Protection of human health  
Knives, cutlasses, spears, and swords having a serrated point or sharp 
blade, except for knives of a kind for professional work or domestic use  Protection of human life  
Disruptive instruments of laser speed measuring meters  Public safety  
Firearms resembling a pen, starting pistols, items activated by gas, etc.  Security  
Nerve gas containers resembling a gun  Security  
Games of chance or part of them as defined in the Penal Code  Public morals  
Motor skateboards  Public safety  
Goods of all types that carry a false commercial description as defined in 
the Consumer Protection Law of 1981  Public morals  
Postal packages containing live creatures such as vipers, explosives, 
inflammable materials, and other dangerous packages  Protection of human h ealth 
Used equipment for bee farming  Protection of human health  
Goods that can be used as tools for preparing or consuming dangerous 
drugs as defined in the Dangerous Drug Order, 1973.  Protection of human health  
Goods that can be used to incite violence, terror, or racism as defined in 
Goods Chapter H of the Penal Code  Security  
Source:  Information provided by the authorities.  
3.29.   Israel applies non -automatic licensing procedures under the Free Import Order of 2014, 
mainly for reasons of safety, health, protection of the environment, and security, or to comply with 
international (non -WTO) commitments, or for purposes of tariff quota  administration 
(Section  4.1.1.3.1. ). 
3.30.   Annex 1 to the Free Import Order, 2012 contains a list of 203 items (from HS four - to eight -
digit levels) subject to import licensing principally for (food) safety and security reasons. The 
procedures involve the licen sing of import consignments and importers. Importer licences are 
granted at the discretion of the competent authority. For example, for importing certain types of 
goods, the criminal record of the importer may be relevant.  WT/TPR/S/ 376 • Israel  
 
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  3.31.   Annex 2 to the Free Import Order,  2012 lists goods that are subject to specific standards 
and technical requirements in order to ensure safety, security, and environmental objectives.16 
Approvals (permits) are granted prior to importation, if the imported goods comply with technical 
requir ements. Annual approvals may be granted, subject to a declaration by the importer that 
subsequent consignments will be identical.  
3.32.   Depending on the product, licences/approvals are issued free of charge by the Ministry of 
Economy and Industry, the Ministry o f Agriculture and Rural Development, the Ministry of Health, 
and the Ministry of Transport and R oad Safety  within 14 to 21  working days, but in most instances 
in less than 7 days, upon completion of all necessary documentation. Reasons for refusal of a 
licence must be provided in writing, and the applicant has the right of appeal to the High Court of 
Justice. Exemptions are granted mainly by the Ministry of Economy and Industry in cases of 
imports used in manufacturing; goods intended for exhibitions or mar keting samples; re -export; 
imports for own use; spare parts; computers and peripheral equipment; and equipment for audio 
visual professional use.17 
3.33.   Imports from 17 WTO Members  (Bahrain, Bangladesh, Brunei Darussalam, Cambodia, Chad, 
Cuba, Indonesia, Kuwait,  Malaysia, Mali, Morocco, Oman, Pakistan, Qatar, Saudi Arabia, Tunisia, 
and the United Arab Emirates) and non -Members that do not have diplomatic relations with Israel 
or that prohibit imports from Israel are subject to a special import licensing regime ad ministered 
by the Ministry of Economy and Industry, which is subject to annual review (i.e. the Free Import 
Order does not apply to these countries).18 Textiles and bed linen require import licences when 
imported from Bangladesh or Pakistan. In addition, pl astic raw materials require a licence when 
imported from Bahrain, Oman, Qatar, Saudi Arabia or the United Arab Emirates.  
3.1.6   Anti-dumping, countervailing, and safeguard measures  
3.34.   The legal framework governing trade contingency measures has remained unchanged si nce 
Israel's last Review in 2012 . The Trade Levies and Safeguard Measures Law  of 1991 , which covers 
anti-dumping  (AD), countervailing  (CVD) , safeguard measures and a so -called safeguard levy, was 
last amended in 2011. The legislation has yet to be notified to the WTO.  
3.35.   The Trade Unit, under the Ministry of Economy and Industry,  is the competent autho rity for 
contingency measures. The  Commissi oner for Anti -dumping and Countervailing Measures  is 
responsible  for initiating and conducting investigations. The final decision on the imposition of AD, 
CVD or safeguard duties  rests with the Minister of Finance ; and, in the case of the AD/CVD duties, 
also with the Finance Committee of the Knesset.  Under  the Law, provisions require the 
Commissioner to deal with, inter alia , the calculation of production costs, the comparison between 
export price and normal value, the content of complaints, and the conduct  of investigations when 
investigating a complaint.19 
3.36.   Although the Commissioner makes preliminary determinations, imposes provisional 
measures, enters into undertakings, and terminates investigations without final measures, findings 
regarding the imposition of final measures are submitted to the Advisory Committee on Anti -
Dumping and Countervailing Measures. The Committee, composed of six public representatives, 
four employees of the Ministry of Economy and Industry, and four employees of the Ministry of 
Finance, deliberates the findings of the Commissioner and invites the domestic industry, importers, 
exporters, government representatives of exporting countries, trade organizations and other 
interested parties to present arguments. The Committee then submits its conclusions regarding 
dumping/subsidization, injury, causation, and public interests, along with a recommendation on 
the imposition of a duty, including its rate, applicability, and period of validity, to the Minister of 
Economy and Industry. Any decis ion by the Minister of Economy and Industry to levy a duty must 
be submitted to the Minister of Finance for approval. The duty will only take effect following 
approval by the Finance Committee of the Knesset.  
                                                
16 Annex 2 lists 882 items (HS 4 - to 8-digit level) plus HS chapters 1, 2, 4, 6, 8, 9, 10, 11, 16, 17, 18, 
19, 21, 46, 57, 61 and 62.  
17 Article 2(c) 2 of the Free Import Order, 2012.  
18 In July 2003, Israel l ifted its general import prohibition from the WTO Members concerned.  
19 See WTO documents G/ADP/Q1/ISR/13 and G/SCM/Q1/ISR/13, 9 June 2006.  WT/TPR/S/ 376 • Israel  
 
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  3.37.   Israel applies a mandatory lesser duty rule in respect of final AD and CVD measures; where 
the Commissioner or the Advisory Committee finds that a duty less than the margin of dumping or 
rate of subsidization is sufficient to prevent material injury to the domestic industry, the lower rate 
is to be app lied.20 The rule has been applied to all measures imposed since 2013. Further, under 
Israeli law, the imposition of AD/CVD duties is permissive and, in deciding whether to levy a duty, 
the Minister of Economy and Industry must take into account, inter alia , the trade relationship 
between Israel and foreign countries and reasons pertaining to the economy in general.21 Thus, in 
2010, the Minister of Finance determined that it was not in the public interest to impose a duty in 
the case of recycled containerboard s from the European Union.22 
3.38.   Since  1995, Israel has initiated 50 AD investigations, of which 24 resulted in final AD duties, 
placing  Israel in the middle range among those WTO Members that have used AD measures. 
During  the period 2012 -17, Israel initiated 10 AD proceedings. The only AD  measure currently in 
force was imposed in November 2016 on float glass from Turkey (Table 3 .10).23 
Table 3.10 Definitive anti -dumping measures, 2018  
Country  Product  
(HS number)  Initiation of 
investigation  Provisional 
measure  Implementation 
date Status  
China  Cutting & grinding 
wheels (HS680422)  28/06/05  11/11/05  26/11/07  Terminated 
31/12/13  
European Union 
(Italy)  Stretch wrap  
(HS 392010, 
391990)  02/04/09  30/08/09  15/04/10  
Price undertaking 
1.23-1.45 €/kg  Terminated 
15/04/15  
Turkey  Stretch wrap  
(HS 392010, 
391990)  02/04/09  30/08/09  22/02/10  
Price undertaking 
1.17-1.34 €/kg  Terminated 
15/04/15  
China  Elbow -butt pipe 
fittings  
(HS73079340, 
73079920)  18/03/10  07/09/10  12/04/11  Terminated 
23/01/13  
South Africa  Rubber procured 
trends (HS 400610, 
400829, 4012909)  12/01/11  24/07/12  21/03/13  Terminated 
20/03/15  
Saudi Arabia, 
Kingdom of  Stretch wrap 
(HS392010, 
391990)  02/07/12  No measure  Terminated 
09/04/13  
Italy Bituminous 
membranes  
(HS 680710)  16/12/12  No measure  Terminated 
23/02/14  
Turkey  Machine made rugs 
(HS 5701, 5702, 
5703, 5704, 5705)  05/05/13  No measure  Terminated 
05/02/14  
Turkey  Float glass  
(HS 70052990)  27/10/15  18/04/16  23/11/16  In force  
European Union 
(Italy and 
Poland)  Cocoa spread  
(HS 18069020, 
18069099)  27/09/16  No measure   Terminated  
European Union 
(Greece)  Portland cement  18/05/17  Under 
investigation    
Turkey  Portland cement  18/05/17  Under 
investigation    
Turkey  Low voltage copper 
cable 27/06/17  Under 
investigation    
Source:  WTO Secretariat  and information provided by the authorities . 
3.39.   During the last TPR, concerns were raised by WTO Members regarding the duration of 
Israel's AD investigations (Article 5.10 of the Agreement on Anti -dumping).24 In this respect, the 
investigation on float glass from Turkey lasted 13 months. According to the authorities, Israel has 
complied with the timeline in recent investigations.  
                                                
20 Trade Remedies  and Safeguards Measures Law, 1991, Articles 32.19(b) and 32.20(b).  
21 Trade Remedies  and Safeguards M easures Law, 1991, Article 32.13(a).  
22 WTO document WT/ADP/N/209/ISR, 20 January 2012.  
23 WTO document G/ADP/N/294/ISR, 7 February 2017 . 
24 WTO document WT/TPR /M/272, 3 December 2012, p. 32.  WT/TPR/S/ 376 • Israel  
 
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  3.40.   A safeguard levy may be imposed by the Minister of Economy and Industry on imports  or 
exports of goods and services in any of the following circumstances: (i) to prevent the 
deterioration of Israel's balance of payments or foreign currency reserves; (ii) to regulate 
production, demand or consumption of agricultural and fishery products;  (iii) to protect agricultural 
products against substantial injury caused, or that may be caused, by competing imports, in 
accordance with the Special Safeguard provisions of the Agreement on Agriculture 
(Section  4.1.1.3.1. ); (iv) to prevent exhaustion of mineral deposits; (v) to restrict the export of 
raw materials produced or mined in Israel, in order to prevent shortages in the local market, or to 
regulate the price of these raw materials; (vi) to absorb or prevent excess profits due to legislative 
provision; (vii) to absorb assistance or benefits accorded by the Government in respect of goods 
that were intended for use in Israel but were actually exported; (viii)  to adopt economic counter -
measures against any state that has violated an agreement with Isr ael; and (ix) to restrict or 
prevent imports from any country that prohibits or restricts trade with Israel or imposes 
discriminatory measures against Israeli products.  
3.41.   A safeguard levy is set as a proportion of the goods' value or a fixed sum or a proport ion of 
the excess profit or according to any other calculation, as prescribed by the Minister of Economy 
and Industry. It can be in effect for a maximum of two years; the Minister of Economy and 
Industry may re -impose the levy or extend its effect by order , as long as it is required for one of 
the purposes enumerated above. Imposition of the levy requires approval by both the Minister of 
Finance and the Finance Committee of the Knesset. The amount of the safeguard levy is capped so 
that the ordinary customs  duty plus the safeguard levy do not exceed Israel's tariff binding of the 
product concerned.  
3.42.   Israel has not taken any CVD or safeguard action s during the period under review .25 
Regarding safeguards, following an investigation on glass wool and rock wool  from Turkey initiated 
in 201126, the proposed measure was not approved by the  Minist er of Finance and no action was 
taken.27 
3.1.7   Other measures affecting imports  
3.43.   Israel has notified the WTO that its laws and regulations do not contain measures which are 
not in con formity with the provisions of the TRIMs Agreement.28 
3.2  Measures Directly Affecting Exports  
3.2.1   Customs procedures and requirements  
3.44.   There is no registration requirement for exporters. The main documents for customs 
clearance include the export declaration (except  for goods under US$100 exported without 
financial compensation or sales transaction); commercial invoice; bill of lading (or airway bill); 
certificate of origin; packing list; and export licence/permit (if required).  
3.45.   According to the World Bank, in terms of border compliance, it took 36 hours and US$150 to 
export from Israel in 2018, compared with 240 hours and US$610 in 2012. Regarding 
documentary compliance, some 13 hours and US$73 were needed to export in 2018, well above 
the OECD's high income average (Table 3.11).  
                                                
25 See notifications to the SCM Committee in WTO documents G/SCM/N/2 28/Add.1/Rev.2, 26 July 2012; 
G/SCM/N/267/Add.1, 15 April 2014; G/SCM/N/281/Add.1, 24 April 2015; G/SCM/N/289/Add.1, 22 October 
2015; G/SCM/N/305/Add.1, 21 October 2016; G/SCM/N/298/Add.1/Rev.1, 25 October 2016; and 
G/SCM/N/313/Add.1, 21 April 2017.  
26 WTO document s G/SG/N/6/ISR/2, 12 January 2011 , and G/SG/N/8/ISR/1  and G/SG/N/11/ISR/2,  
9 January 2012 . 
27 WTO document G/SG/N/ISR/1, 25 October 2013.  
28 WTO document G/TRIMS/N/1/ ISR/1, 31 October  1996. WT/TPR/S/ 376 • Israel  
 
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  Table 3.11 Export time and cost, 2012 and 2018  
Indicator  2012  2018 Israel  2018 OECD 
high income  
Time to export: border compliance (hours)  240 36 12.7 
Cost to export: border compliance (US$)  610 150 159.9  
Time to export: documentary compliance (hours)  .. 13 2.4 
Cost to export: documentary compliance (US$)  .. 73 35.4 
.. Not available.  
Source:  World Bank  online information. Viewed at: www.doingbusiness.org/data/exploreeconomies/israel . 
3.2.2   Taxes, charges, and levies  
3.46.   Israel does not apply any export taxes or levies.  
3.47.   Israel's port user fee scheme, based on the cost of ser vices rendered, is being implemented 
over the period 2010 -20. 
3.2.3   Export prohibitions, restrictions, and licensing  
3.48.   In accordance with the Ordinance on Trade with Enemy States, Israel prohibits exports to 
Iran, Lebanon, and Syria.  
3.49.   In order to comply with UN Sec urity Council resolutions, Israel has enacted the Import and 
Export Order (Control of Export of Goods to the Democratic People's Republic of Korea) , 5576 of 
2015. According to this Order, goods exported to North Korea require export licenses. Certain 
goods  are prohibited from export to North Korea (e.g. precious metals including silver and gold, all 
types of cars, and photographic equipment ). 
3.50.   Israel maintains export licensing and approval (permit) schemes. Products may require an 
export licence/approval for  reasons such as commitments under (non -WTO) international 
agreements; control of quality and standards of Israeli goods; and conservation of local resources. 
Products subject to export licensing are listed in Annexes 129, 330 and 4 of the Free Export Order of 
2006 (as amended); most are chemicals or agricultural products. Export approval is required for 
selected food and fresh agricultural products for sanitary and quality reasons (Annex 2 of the Free 
Export Order)31; diamonds; certain tools; and certain reli gious articles. Approvals are granted if 
the exported goods fulfil the applicable technical/sanitary requirements, while export licences are 
granted at the discretion of the competent authority. Licences and approvals are granted free of 
charge.  
3.51.   According to the authorities, Israel does not apply export quotas.  
3.2.4   Export support and promotion  
3.52.   Israel provided export subsidies for agricultural products during the review period 
(Section  4.1.1.3.1. ). 
3.53.   Exporters are eligible for drawbacks with respect to AD duties, purchase tax, and customs 
duties when importing raw materials that are used for manufacturing products for export, or when 
purchasing local raw materials for export or for use in manufactured products that are exported. 
Reimbursement (drawbacks) of customs  duties for exports under the RTAs with the European 
Union, EFTA, Jordan, and Turkey is not permitted. Exports are exempt from VAT.  
3.54.   Under the Eilat Free Trade Zone Law of 1985, the Government aims to promote the 
development of the Red Sea's coastal city of  Eilat, especially tourism.32 Enterprises are exempt 
from import duties. The Law also provides for tax concessions and other benefits granted to Eilat 
                                                
29 HS chapter 6.  
30 HS 4- to 8-digit levels, 58 items.  
31 HS chapters 1 to 4, and 6.  
32 Airport -related activities at Ovda are covered by the Eilat Free Trade Zone.  WT/TPR/S/ 376 • Israel  
 
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  residents and companies located in Eilat. Most products (imported or domestically produced) 
purchased in E ilat are exempt from VAT.33 Employers receive tax refunds for employees, of up to 
20% of gross wages paid to employees.  Fiscal advantages under this programme are not 
contingent upon export. No data was available on budget/expenditure.34 
3.55.   Under the Free Port Zone Law of 1969, enterprises located in the Free Port Zone of Eliat 
benefit from various forms of tax incentives including, inter alia : enterprises in zone A (like Eilat) 
were entitled to a reduction in  income taxes to 10% in 2011 -12 and 7% in 2013 -14; and a tax of 
15% on dividends paid out of the above income with no stipulated time -limit. Fiscal advantages 
under this programme are not contingent upon export.  No data was available on 
budget/expenditure or revenue forgone.35 
3.56.   The Free Export Processing Zone Law of 1994 allows the establishment of duty free 
processing zones. There are no export processing zones currently in operation.  
3.2.5   Export finance, insurance, and guarantees  
3.57.   During the review period, Israel eliminated the following programmes that had been notified 
to the WTO Committee on Subsidies and Countervailing Measures: the Design Product 
Programme; the New Media Support Programme; the Marketing Tutorial Programme; the 
Consortia Program me; the "200 X 2" – "Two Hundred Times Two"; and the Greenhouse Gas 
Emissions Reduction Programme.36 
3.58.   The Design Product Programme  provided support to manufacturers employing up to 100 
employees in factories located in disadvantaged areas . In 2012, its expenditures amounted to 
US$1.3 million.  This Programme was terminated in  2013.37 
3.59.   The New Media Support Programme  was provided to companies employing up to 100 
employees with a turnover not exceeding US$28 .5 million with high economic potential in Haifa 
and the surrounding  area. In 2012, its expenditures amounted to US$1.3 milli on. This Programme 
was terminated in 2013.38 
3.60.   The Marketing Tutorial Programme provided support to companies (in all sectors) that 
exported up to US$200,000 per year and required assistance for building a marketing 
infrastructure. In 2012 -13, its expenditure s amounted to US$26.8 million. This Programme was 
terminated in 2013.39 
3.61.   The Consortia Programme  was provided to companies (in all sectors) with a revenue not 
exceeding US$ 30 million,  operat ing in certain designated area s. In 2012 -13, its expenditures 
amount ed to US$27.2 million. This Programme was terminated in 2013.40 
3.62.   The "200 X 2" – "Two Hundred Times Two"  provided support only to companies in peripher y 
areas of the country  (in all sectors ) intending to build and/or strengthen their marketing 
infrastructure abroad.  In 2012 -13, its expenditures amounted to US$3.3 million. This programme 
was terminated in 2013.41 
3.63.   Three of the programmes described above (i.e. Marketing Tutorial, Consortia, and T wo 
Hundred Times Two) have been replaced by others with similar expenditure amounts. In this 
regard, the Israeli authorities are preparing a new notification to the WTO Committee on Subsidies 
and Countervailing Measures.  
                                                
33 This tax benefit is available to Eilat residents and companies, for products consumed in Eilat.  
34 WTO document  G/SCM/N/253/ISR, 25 September 2014.  
35 WTO document  G/SCM/N/253/ISR, 25 September 2014.  
36 WTO document G/SCM/N/253/ISR, 25 September 2014.  
37 WTO document G/SCM/N/253/ISR, 25 September 2014.  
38 WTO document  G/SCM/N/253/ISR, 25 September 2014.  
39 WTO document  G/SCM/N/253/ISR, 25 September 2014.  
40 WTO document  G/SCM/N/253/ISR, 25 September 2014.  
41 WTO document  G/SCM/N/253/ISR, 25 September 2014.  WT/TPR/S/ 376 • Israel  
 
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  3.64.   The main objective of the Greenhous e Gas Emissions Reduction Programme  was to achieve 
a reduction of 20% by 2020 of electricity production from polluting  resources.  To do so, it was open 
to all sectors , including industry, tourism, commerce, services, agriculture , and the municipal and 
public sector.  In 2012 -13, its expenditures amounted to US$3 million. This Programme was 
terminated in 2013.42 
3.65.   The state -owned Israel Foreign Trade Risk Insurance Corporation Ltd. (ASHR'A) provides 
credit insurance to Israeli exporters, as well as credit guaran tees for loans extended by 
commercial banks to exporters. ASHR'A insures medium - and long -term export credit transactions 
(ranging from 1 to 15 years) and Israeli investments abroad, against political and commercial 
risks, mainly in developing countries. A SHR'A covers up to 95% of losses for political risks and up 
to 90% of losses for commercial risks. There is no maximum commitment per transaction. ASHR'A 
income consists mainly of premiums; there are no transfers from the Government. Its maximum 
guarantee exposure is US$2.5  billion.  
3.66.   The Ministry of Finance (MOF) provides reinsurance for private credit insurance companies 
for short -term export transactions of up to 50% on top of the amount the private company takes 
upon itself (i.e. up to 33.3% of the entire  transaction amount can be insured by the Government). 
A minimum domestic content of 40% of the insured transaction is required.  
3.67.   The MOF also provides reinsurance for private credit insurance companies for medium - and 
long-term export transactions; the Gov ernment assumes most of the long -term risk and the 
private company, the short -term risk ("top up 2"). The programme aims to enhance competition 
by encouraging the private sector, with state guarantees, to expand into the market segment 
traditionally served  by ASHR'A. The export credit agency has so far faced little competition from 
Israeli private insurance companies, since it generally insures transactions with high level risks. 
The maximum allowed exposure of guarantees under both MOF programmes is NIS 1 billion.  
3.68.   Export promotion activities are administered by the Israel Export and International 
Cooperation Institute (IEICI), a joint -venture between the Israeli Government and the private 
sector. The IEICI provides services to exporters such as marketing, q uality control, publicity, and 
participation in international trade fairs. IEICI activities are financed by the Government (50%), 
and regular or voluntary contributions (50%).  
3.69.   The Law on Encouragement  of Capital Investment has export -oriented objectives 
(Section  3.3.1 ). 
3.3  Measures Affecting Production and Trade  
3.3.1   Incentives  
3.70.   Israel encourages both local and foreign investment by offering a wide range of incentives 
and benefits to investors in industry, tourism and real estate. Special emphasis is given to hi -tech 
export -oriented companies and R&D activities.  The hi -tech industry is a key driver of economic 
growth and exports. Israel's expenditures on civilian R&D amounted to 4.3% of GDP in 2016, the 
highest share in the world. Most of the R&D expenditures are fin anced by the private sector 
(venture capital industry).  In 2017, the Government's R&D budget amounted to NIS  1.6 billion 
(NIS 1.3 billion in 2012).  
3.71.   In July 2015, t he Israel Innovation Authority  was set up in the Ministry of Economy and 
Industry on the basis of the Office of the Chief Scientist (OCS), with the objective of fulfilling the 
missions assigned to it by the Law for the Encouragement of Industrial R&D 1984 (as amended), 
and providing ef ficient and high -quality service to the Israeli innovation system. In order to do so, 
the Authority operates with a structure of six divisions that pave a variety of customized paths for 
entrepreneurs and companies to promote, implement and realize their i nnovative R&D ideas at 
various stages: Start -up Division43; Growth Division44; Technological Infrastructure Division45; 
                                                
42 WTO document  G/SCM/N/253/ISR, 25 September 2014.  
43 The Start -up Division offers tools to support the early development stages of technological initiative s. 
These tools assist entrepreneurs and start -up companies in developing their innovative technological concepts 
at the pre -seed or initial R&D stages, and the aim of helping transform their ideas into reality.  WT/TPR/S/ 376 • Israel  
 
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  Advanced Manufacturing Division46; International Collaboration Division47; and Societal Challenges 
Division.48 
3.72.   Most of the incentive programme s that the Authority operates offer participation in the risks 
involved in the development process via conditional loans (Table 3.12). Companies that receive 
this kind of support undertake to repay the received funding to the Authority via the payment of 
royalties from sales (up to 3% from the annual sales associated with the supported R&D activity), 
but only if the project succeeds in reaching the commercialization stage. Usually the share of the 
R&D project's cost that the Authority will finance will not exceed 50% of the approved 
expenditures (some programmes in the Start -up Division offer up to 85%).  
Table 3.12 Main incentive schemes, 2018  
Programme/description  Eligibility criteria  Incentive  Annual  
budgetary 
expenditure  
(NIS 
million)  
R&D Fund  
 
Industrial research aimed at the 
discovery of new knowledge for 
the development or substantial 
improvement of new products 
or processes. Administered by 
the Israel Innovation Authority  Companies in all sectors  are 
eligible  Grants of up to 50% of 
approved R&D 
expenditures; repayable 
as a percentage of total 
revenues derived from the 
sale of the newly 
developed product, up to 
the entire amount of the 
grant in U.S. dollar terms, 
with the addition of yearly 
interes t (Libor rate)  2010: 986  
2011: 816  
2012: 1,002  
2013: 908  
2014: 812  
2015: 895  
2016: 652  
Long-term R&D support for 
large investors in industrial R&D  
 
To encourage and support 
substantial investments in long -
term industrial R& D. 
Administered by the Israel 
Innovation Authority  Over 200 R&D employees or 
an annual R&D budget 
exceeding US$20  million; 
yearly revenues exceeding 
US$100 million. Repayment 
of all royalties due to the 
Israel Innovation Authority 
for support received und er 
the Law for the 
Encouragement of Industrial 
Research and Development  Grants of up to 50% of 
approved R&D 
expenditures  2010: 76  
2011: 64  
2012: 56  
2013: 88  
2014: 53  
2015: 79  
2016: 52  
 
Incubators programme  
 
To promote and support the 
creation of start -up companies 
based on innovative new 
products and technologies. 
Administered by the Israel 
Innovation Authority  Initiated by an individual 
(not an existing company) 
to develop a product with 
export potential; criteria 
depend on the incubator 
type (technology , 
biotechnology, "technology -
based"); stay within the 
incubator for 2 to 3 years  Grants of up to 85% of 
approved R&D expenses, 
with a maximum of NIS 
2.0-2.3 million for 2  years; 
repayment through 
royalties in the case of the 
commercial success of the 
project (3% -3.5%)  2010: 158  
2011: 158  
2012: 159  
2013: 131  
2014: 132  
2015: 127  
2016: 131  
                                                                                                                                                  
44 The Growth Division operates various incent ive programmes that promote technological innovation of 
mature and growth companies. This Division contributes to the promotion and preservation of competitiveness 
and technological leadership of companies, as well as to the increase of their growth rates and potential.  
45 The Technological Infrastructure Division offers incentive programmes to promote cooperation, 
exchange of knowledge and experience, and development of generic ground -breaking knowledge by an 
integrated group of researchers from academia an d industry.  
46 The Advanced Manufacturing Division focuses on promoting the implementation of R&D and 
innovation processes in companies in the manufacturing sector, in order to strengthen their competitiveness in 
the global arena and improve productivity ac ross a variety of industrial sectors. The programmes offered by 
this Division boost manufacturing -oriented industries.  
47 The International Collaboration Division is responsible for creating bridges to new international 
markets, building platforms for coope ration in innovative R&D, and attracting strategic foreign stakeholders to 
Israel. These initiatives are made possible through an array of bilateral cooperation agreements and bi -national 
funds that support joint R&D and industrial projects between interna tional partners.  
48 The Societal Challenges Division focuses on improving productivity through technological innovation in 
the public sector and social organizations. This Division is also responsible for R&D aimed at dealing with social 
and environmental c hallenges, including the diversification of the population employed in the hi -tech industry, 
and the creation of appropriate technological solutions for disadvantaged populations in Israel and abroad.  WT/TPR/S/ 376 • Israel  
 
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  Programme/description  Eligibility criteria  Incentive  Annual  
budgetary 
expenditure  
(NIS 
million)  
Magnet programmes:  
 
To encourage the development 
of innovative generic 
technologies through 
cooperation between academic 
research institutes and industry. 
Administered by  the Israel 
Innovation Authority  Crucial for the 
competitiveness of 
participating companies; 
technology unavailable at 
competitive prices and 
delivery schedules; R&D 
must be economically 
justified   2010: 245  
2011: 226  
2012: 205  
2013: 219  
2014: 202  
2015: 22 2  
2016: 240   
(includes (a), 
(b), (c) and 
(d) below)  
(a) Magnet Consortia  
 
Supports the formation 
of consortia between 
companies and academic 
institutions to jointly 
develop generic, pre -
competitive technologies  Consortia of at least three 
companies and one 
academic institution  Grants for participating 
companies of up to 66% of 
total eligible expenses; no 
royalty payments  Included above  
(b) Magneton  
 
To support applied 
academic research in 
order to promote the 
transfer of technology to 
industry  Cooperation between an 
industrial company and an 
academic research institute  Grants up to 66% 
(maximum of 
NIS 3.4 million over 
2 years); no royalty 
payments  Included above  
(c) Nofar  
 
To encourage applied 
research activities in 
biotechnology and 
nanotechnology 
implemented by 
scientific research 
institutes  Research institutes  
 Grants up to 90% of the 
approved expenses 
(maximum of NIS  420,000 
for up 15 months); no 
royalty payments  Included above  
(d) Kamin  Cooperation between an 
industrial company and an 
academic institute  Grants up to 90% of the 
approved expenses 
(maximum NIS 400,000 
for up to 24 months); no 
royalty payments  Included above  
Tnufa Program  
 
To encourage and support 
entrepreneurs to build a 
prototype, register a patent, 
design a business plan, etc.; 
administered by the Israel 
Innovation Authority  Entrepreneurs with a plan 
to promote a new 
innovative technological 
idea Grants of up to 85% of 
approved expenses for a 
maximum of NIS 210,000  2010: 17  
2011: 12  
2012: 12  
2013: 15  
2014: 13  
2015: 14  
2016: 14  
Source:  Information provided by the authorities . 
3.73.   For purposes of the Law for the Encouragement of Industrial R& D of 1984, Israel is divided 
into two areas: "priority area A" includes the peripheral regions in the north and the south (the 
Galilee, the Jordan Valley, the Negev, and Eilat) and Jerusalem (for hi -tech industries only); the 
remaining area covers mainly t he central part of Israel. Priority area A's firms receive up to 10% 
more than the share of the approved grant from the approved budget.  
3.74.   The investment incentives in the Law on Encouragement of Capital Investment of 1959 aim 
to encourage local and foreign capital investments and commercial entrepreneurship , particularly 
innovation and economic activities in disadvantaged areas.  The support given under this 
programme is in the form of grants and/or reduced rates of taxation.  Grants of up to 2 0% of the 
approv ed capital investment are given to approved enterprises located in disadvantaged areas.  
Subsidies under this programme are provided to globally competitive industrial companies, as well WT/TPR/S/ 376 • Israel  
 
- 44 - 
 
  as companies in tourism (hotels) and real estate sectors.49 The corpora te tax rate in priority area A 
was reduced from 10% in 2011 -12 to 9% as from 2014, and to 7.5% as from 2017; elsewhere, 
the rate increased from 15% in 2011 -12 to 16% as from 2014 (the standard corporate tax rate 
was reduced from 26.5% in 2014 -15 to 23% sta rting from 2018). Dividends are taxed at a 
preferential rate, subject to the provisions of applicable double -taxation agreements. The duration 
of tax benefits is open -ended. In 2014 -16, expenditures (not including tax benefits) under this Law 
amounted to U S$574  million.50 
3.75.   Since 5 January 2011, large (multi -national) companies, such as Intel, with an annual 
turnover of at least NIS 1.5 billion and a combined company balance sheet of NIS 20 billion, are 
eligible for special tax breaks (special preferred enterp rise). Since 2011, the corporate tax rate is 
5% for a minimum investment of NIS 400 million completed over three years in priority area A. 
For investments of at least NIS 800 million in other regions, the tax rate is 8%. Alternatively, 
these tax incentives  are available for investments in R&D of at least NIS 100 million in priority 
area A (NIS  150 million elsewhere) or a business programme generating additional employment. 
The duration of the tax benefits is 10 years.  
3.76.   The grant for investment in fixed asset s (land, buildings, machinery and equipment) is 20% 
of expenditures in priority area A. The rest of the country is not eligible for grants. Tax incentives 
and grants may be combined. Projects must be completed within five years of the date of 
approval. The  requirement of a minimum investment in fixed assets has been eliminated. Grants 
totalled about US$609  million during the period 2010 -13.51 
3.77.   The eligibility criteria include the following: investment projects must be in the industrial 
sector; enterprises mus t export at least 25% of sales; there must be generation of high value -
added; and the company must be registered in Israel. Eligible enterprises must obtain "approved 
enterprise" status from the Israel Investment Authority, and "special preferred enterpris e" status 
from the ITA. The economic viability of projects is assessed by the Ministry of Economy and 
Industry.  
3.78.   Israel also provides employment subsidies for: (i) industrial enterprises, call centres, 
computer services support centres, and logistics centre s in outlying areas of Israel with high rates 
of unemployment, subject to a maximum support per employee of NIS 135,000 for 30  months or 
NIS 4,500 per month; (ii) high salaries, including R&D centres; and (iii) large enterprises.  
3.79.   Government assistance to s mall- and medium -sized enterprises (SMEs) is coordinated by 
the Israel Small - and Medium -size Business Agency of the Ministry of Economy and Industry .52 
About 540,000 SMEs  employ 60% of Israel's workforce  in the business sector , and constitute 
about 9 9% of all businesses in Israel.53 Loans with a government guarantee are provided to small 
firms with up to 100 employees or an annual turnover of up to  NIS 100  million. The credit limit for 
a small business is NIS 500,000; for a medium -sized business is up to 8% of its annual turnover ; 
and for businesses with exports of above US$250,000 is up to 12% of its annual turnover . The 
loan is given for a period of up to five years , with half a year grace.  In 2016 -17, aid to SMEs 
amounted to approximately NIS 2 billion ann ually.54 
3.3.2   Standards and other technical requirements  
3.80.   Standards, conformity assessment , and their enforcement are governed by the Standards 
Law of 1953 (as amended). Under this Law, the Standards Institution of Israel (SII), a statutory 
                                                
49 Investments related to the structure of the industria l facility and equipment (starting from 2013) or 
tax benefits for households for rent.  
50 WTO document  G/SCM/N/253/ISR, 25 September 2014.  
51 WTO document G/SCM/N/253/ISR, 25 September 2014.  
52 The Small - and Medium -size Business Agency also established 40  SBCDs (Small Business 
Development Centres) all over Israel . These Centres provide workshops, training and consultancy for 
entrepreneurs and SMEs, and serve as a central address  ("one -stop shop")  for small business owners and 
entrepreneurs planning new bus inesses.  
53 The following thresholds apply for government incentives, benefits or loans to enterprises: very small 
enterprise - up to 5 employees or a turnover of up to NIS 2 million; small enterprise - up to 20  employees or a 
turnover of up to NIS 20 milli on; and medium -sized business - up to 100 employees or a turnover of up to 
NIS 100 million.  
54 WTO document  G/SCM/N/253/ISR, 25 September 2014.  WT/TPR/S/ 376 • Israel  
 
- 45 - 
 
  non-governmental organ ization, is the sole authority for the development of standards and for 
permitting manufacturers the use of the Standard Mark, indicating that a product conforms to an 
Israeli standard. The SII is a largely self -financing institution, but receives support from the 
Government for work on standards preparation. The Commissioner of Standardization, under the 
Ministry of Economy and Industry, is in charge of enforcement of mandatory standards and 
approval of testing laboratories. It also has responsibility for enforcement of technical regulations 
(mandatory standards). However, there are more than 20 governmental authorities that enforce 
technical regulations pertinent to their fields of activity. For example, the Ministry of Health 
enforces regulations on pharm aceuticals, medical equipment, cosmetics, and food; the Ministry of 
Transport is responsible for automobiles and spare parts; the Ministry of Communications is in 
charge of communications equipment (wire and wireless); and the Ministry of National 
Infrastr ucture deals with fuel and energy efficiency.55 
3.81.   In October 2014, a re solution on Regulatory Impact Analysis  (RIA)  was adopted. It came 
into effect in January 2016  as a mandatory process throughout the Israeli G overnment.56 The 
Prime Minister's office overlooks the implementation of the RIA across the Government. The 
purpose of this resolution was to bring about a reduction in the unnecessary regulatory burden, 
and to create the correct balance between vital governmental intervention an d leaving room for 
market forces to operate. The resolution introduced a plan of action based on two central 
components: reducing the regulatory burden of existing regulation, and carrying out an 
assessment of the expected impact of regulation before formu lating new regulation s. The 
regulations' drafts and the RIA are published on each Ministry's website and on the site of the 
Prime Minister 's Offic e.57 
3.82.   The Ministry of Economy and Industry is the TBT enquiry point under the TBT Agreement. In 
the period 2012 -17, Israel submitted 453 notifications (420 during 2006 -11) to the Committee on 
Technical Barriers to Trade, mostly concerning the revision of mandatory standards or the 
adoption of international or regional standards.58 During the period under review, two specific 
trade concerns were raised in the TBT Committee.59 
3.83.   Steps have been taken to align all of Israel's technical standards to international standards.  
Over 2016 -17, various government resolutions were adopted regarding standards, including 
Amendments No s. 12 and 13 to the Standards Law of 1953. The amendments require the adoption 
of international and regional standards in place of Israeli standards that have no national 
deviations, and also set out timetables for a three -year re-evaluation of all mandato ry standards, 
by August 2019. Food standards, for example, are undergoing a gradual revision under the 
existing food standards committees, with the purpose of bringing them closer to existing 
international standards such as those of the Codex Alimentarius.  
3.84.   By the end of 2017, the SII has published 3,504 standards (compared with 3,192 as of 
January 2012). In 2017, 653  standards (excluding food standards) were mandatory. Mandatory 
standards are important  in electrical and mechanical engineering, and in food ( Table  3.13). In 
2017, 78% of Israel's mandatory standards involved the adoption of international, regional or 
other foreign standards. Of these, 53% are international (ISO/IEC), 35% are European 
(CEN/CENELEC), and 12% are "other", including standards of th e United States.  
                                                
55 A separate authority within those ministries governs technical regulations.  
56 Every regulator is respo nsible fo r assessing the possible impact of any legislation  to be submitted . 
57 Governmental regulation online information. Viewed at: http://regulation.gov.il/RIA_REP . 
58 2012: 543 -645; 2013: 646 -728; 2014:729 -809; 20 15: 810 -82; 2016: 822 -940; 2017:941 -996; 
2018: 998.  
59 These matters concern the "Warning regulations on alcoholic beverages" (WTO documents 
G/TBT/N/ISR/609, 17 July 2012 and G/TBT/M/58, 6 February 2012); and "Resistance to ignition of mattresses, 
mattress pads, divans and bed bases" (WTO documents G/TBT/N/ISR/666, 10 April 2013 and G/TBT/M/64, 10 
February 2015).  WT/TPR/S/ 376 • Israel  
 
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  Table 3.13 Equivalence of Israeli standards with international standards, 2017  
 Israeli 
standards  Mandatory 
Israeli 
standards  Mandatory Israeli 
standards equivalent to 
international, regional 
or other foreign 
standards  Equivalence 
(%) 
Building  392 39 22 56 
Electrical engineering  486 141 133 94 
Chemicals  239 46 29 63 
Mechanical engineering  412 114 87 76 
Textiles, leather, paper  190 9 7 78 
Polymers  152 46 38 82 
Electronics  213 24 20 83 
Water appliances  162 25 8 32 
Information systems  325 0 n.a. n.a. 
Environmental protection  139 1 1 100 
Motor vehicles  112 6 5 83 
Medical equipment  122 35 31 89 
Packaging  37 0 n.a. n.a. 
Safety  159 18 16 67 
Management quality  97 0 n.a. n.a. 
Energy  78 2 n.a. n.a. 
Total (excluding food)  3,315 506 393 78 
Food standards  189 147 (97 in 
harmonization 
process)a 4 (49 adopted standards 
will replace 97 original 
standards)a 3 (49)a 
n.a. Not applicable.  
a To date, 97 original Israeli food standards are under the process of harmonization with international 
standards, and they will be replaced by 49 adopted standards.  
Source:  SII. 
3.85.   The SII is a signatory to the Code of Good Practice for the Preparation, Adoption and 
Application of Standards, and operates in accor dance with the ISO/IEC guidelines set out for this 
purpose. The standardization process is laid down in the Rules for the Preparation of Israeli 
Standards of 1991. Voluntary standards are elaborated by the SII's technical committees, after 
which the SII ci rculates each draft standard for comments prior to adoption. At present, 17 central 
committees, 130 technical committees, and 863 experts groups are active in the SII. The Minister 
of Economy and Industry may declare a particular standard to be mandatory a fter consultation 
with representatives of producers, importers and consumers (one month), and obtaining the 
written consent of the competent Minister, following which they are published in the Official 
Gazette . If there are several standards suitable for a doption, the SII may publish alternative 
standards, provided that each is based on a current international standard.  
3.86.   Most imports that are subject to technical requirements (as listed in Annex 2 of the Free 
Import Order, 2014 ( Section 3.1.5 ) are inspected at the port of entry. Domestic products are 
subject to market inspection. Compliance testing, for both domestic and imported products, is 
generally carried out by one of the SII's laboratories or by a laboratory which holds an approval 
and/or recognition c ertificate from the Commissioner of Standardization to carry out the tests and 
issue a compliance certificate. Imports with an SII Standards Mark, certifying compliance with a 
certain standard, may enter Israel without being tested. As of 2017, 2,290 permi ts had been 
granted for marking products with a Standard Mark, to 863 companies, mainly domestic. The SII 
has also licensed 745 production processes. There is, however, no requirement that imported 
goods be supervised by the SII and bear a Standards Mark.  
3.87.   The procedures for imports without the Mark depend on the degree of product safety and 
the reliability of the importer. All imported goods subject to mandatory standards (Annex 2 of the 
Free Import Order, 2014) have been classified into four levels of exam ination according to the 
degree to which they might endanger public health and safety. The goal of creating these groups 
was to ease the inspection burden on imported consumer products by evaluating possible risk, and 
to shift the emphasis of enforcement t o inspection at the post -marketing stage. For goods in 
Group 1, representing the highest danger level, an examination of each shipment remains 
mandatory (e.g. electrical home appliances, toys); goods in Group 2, with an intermediate danger 
level, are subje ct to type approval tests; while goods in Group 3 must be accompanied by a WT/TPR/S/ 376 • Israel  
 
- 47 - 
 
  supplier's declaration of conformity (SDoC). Imported goods intended solely for industrial use 
(Group 4) do not undergo any special inspection. Like a number of high income countrie s60, Israel 
applies the presumption of conformity approach. It places more responsibility on the supplier, 
including manufacturers, importers, and distributors, whose shipments must be accompanied by a 
personal declaration that the goods conform to Israeli mandatory standards. Penalties for 
infractions against the Standards Law are US$45,000 for each infraction by an individual, and up 
to US$70,000 in the case of corporate bodies. Moreover, the Commissioner is empowered to 
impose Group 1 status (i.e. examina tion of each shipment) on the goods of any unreliable 
supplier. This status may be maintained for one year.  
3.88.   Israel has few mutual recognition agreements (MRAs). The first MRA was a Good Laboratory 
Practice Agreement with the European Union, in force since 2000. Israel and the European Union  
also have an MRA on acceptance of conformity assessment (ACAA) with a sectoral annex on Good 
Manufacturing Practice in pharmaceuticals, in force since December 2013. Israel and Canada have 
an MRA on conformity assessment  procedures for telecoms equipment, in force since January 
2013. Israel and the United States also have an MRA on conformity assessment procedures for 
telecoms equipment, in force since December 2013. Israel, through the SII, has also signed MRAs 
on test d ata with 18 certification organizations which have testing facilities in 135 countries. It has 
also signed memoranda of understanding for mutual recognition of ISO 9000 registration with 35 
organizations worldwide.  
3.3.3   Sanitary and phytosanitary requirements  
3.89.   The principal agencies responsible for sanitary and phytosanitary (SPS) measures are:  
 The National Food Service (NFS) in the Ministry of Health for supervising locally 
manufactured and imported food;  
 The Veterinary Services and Animal Health (VSAH) in the Ministry of Agriculture and Rural 
Development for animal health;  
 The Plant Protection and Inspection Service (PPIS) in the Ministry of Agriculture and Rural 
Development for plant health; and 
 The Standards Institution of Israel for managing the standard set ting process generally, 
included SPS related measures (Section 3.3.2).  
3.90.   In addition, the Ministry of the Interior, the Ministry of Economy, and the Ministry of 
Environmental Protection are also responsible for some aspect of SPS measures. In general , the 
NFS is responsible for fisheries and imported foods, and domestically produced food after fruit 
picking/abattoir/delivery to dairy; and the VSAH and PPIS are responsible for unprocessed food, 
and live animals and their slaughter.  
3.91.   The national enquiry points and the notifications authorities for SPS measures are the PPIS 
and the VSAH. Israel is a member of the Codex Alimentarius and the World Organisation for 
Animal Health (OIE), and a contracting party to the International Plant Protection Convention 
(IPPC).  
3.92.   Israel has made a total of 13 notifications (including revisions, addenda, and corrigenda) to 
the WTO on SPS measures, most recently in 2011 on the approximation with OIE guidelines 
relating to BSE on the importation of live animals and animal products.61 Four specific trade 
concerns have been raised about SPS measures taken by Israel, all of which have been resolved.62 
In addition to notifications of SPS measures, some of the notifications on technical barriers to 
trade are concerned with protection of human  health or safety , protection of animal or plant life or 
health, or protection of the environment. From 1 January 2012 to 31  December 2017, 60 such 
notifications were made (including revisions, addenda, and corrigenda) about products under HS 
                                                
60 World Bank online information. Viewed at: 
https://datahelpdesk.worldbank.org/knowledgebase/articles/906519 -world -bank-country -and-lending -groups .  
61 WTO documents: G/SPS/N/ISR/9, 24 April 2010; and G/SPS/N/ISR/9/Rev.1, 19 July 2011.  
62 WTO SPS Information Management System. Viewed at: http://spsims.wto.org/ . WT/TPR/S/ 376 • Israel  
 
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  headings 1  to 24 (all for food and beverages , except for one notification on tobacco products).63 
Some of these notifications may include references to SPS measures.  
3.93.   The principal SPS -related laws are set out in Table 3.144. 
Table 3.14 Principal SPS -related laws and regulations  
Laws  Year Last amended  
Animal Diseases Ordinance  5745-1985 2015 
Law of Export Control (Animals and Animal Products)  5717-1957 2015 
Animal F eed Control Law  5764-2014 2016 
Plant Protection Law  5716-1956 1982 
 Plant Import Regulations   2009 
Laboratory Accreditation Authority Law  5717-1997 2002 
Control of Commodities and Services Law  5718-1958 2014 
Protection of Public Health (Food) Law  5775-2015 2017 
Law of Frozen Meat Export  5754-1994 1996 
Public Health Ordinance (Food)  5743-1983 2015 
Source:  Ministry of Agriculture and Rural Development online information (viewed at 
http://www.moag.gov.il/lawsregulation/pages/default.aspx  (Hebrew) [March 2018]); and  
 Knesset online information (viewed at 
http://main.knesset.gov.il/Activity/Legislation/Laws/Pages/LawPrimary.aspx?t=lawlaws&st=lawlaws
validity&lawitemid=2000839  (Hebrew) [March 2018]).  
Food safety  
3.94.   The Protection of Pu blic Health (Food) Law 5716 -2015, which came into effect in September 
2016, is intended to increase competition in marketing of food products by, inter alia , reducing 
regulatory requirements for imports while ensuring all food marketed in Israel complies w ith 
quality and safety regulations. Under the Law, food imports are divided into two groups: 
"sensitive", and "non -sensitive". According to the authorities, sensitive foods are classified as such 
based on risk assessment with regard to different aspects su ch as microbiology, chemistry, animal 
source, foods intended fo r particular consumer groups, etc. Sensitive goods under the 
responsibility of the NFS include: milk products and milk product substitutes; food supplements 
(vitamins, minerals and herbs); baby  food; low -acid canned foods; egg products; mineral water 
and beverages based on mineral water; mushroom products; high  caffeine food products; fresh 
fruit and vegetables; fish and fish products; and meat products.64 
3.95.   All food importers must be registered wi th the NFS,  and c onsignments of sensitive goods 
must have prior authorization from the NFS.  For non -sensitive food products, prior authorization 
for imports is no longer required, nor is original documentation from the manufacturer 
demonstrating compliance with Israeli regulations. Non -sensitive food products may be imported 
based on a declarati on by the importer that they comply with Israeli regulations and may be 
automatically released, unless randomly selected for documentary and physical checks (5% of 
consignments are sampled). The importer is required to keep all documents relating to the im port, 
including copies of labels and packages, for one year after the expiration of the shelf -life of the 
goods and the importer must also keep a record of those supplied with the goods.  
3.96.   Imports of sensitive foods must be accompanied by certificates of ana lysis that certify their 
quality and safety, are checked at import, are sampled every three months, and are released to 
the importer's warehouse subject to a bank guarantee while awaiting the test results.  
3.97.   The Food Law also sets out the responsibilities of  all food business operators, and applies 
uniform controls to imports and domestic production, with inspections based on risk assessment. 
The Law also requires the traceability of food through food business operators, with an obligation 
to report problems and recall affected products. Enforcement of the Law has also been reinforced, 
with both financial and criminal penalties possible.  
                                                
63 WTO TBT Information Management System. Viewed at: http://tbtims.wto.org/ . 
64 Ministry of Health online information. Viewed at: 
https://www.health.gov.il/Subjects/FoodAndNutrition/food/FoodImport/Pages/default.aspx  (Hebrew) 
[March  2018].  WT/TPR/S/ 376 • Israel  
 
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  3.98.   Currently, approval of novel foods is carried out on a case -by-case basis as set out in the 
Novel Food Procedure, and a list  of approved novel foods is published on the NFS website.65 The 
draft Public Health Regulations (Food) (Novel foods) 5773 -2013 deal with foods manufactured 
using gene technology that have not yet been approved by the Knesset. According to the draft 
Regulati ons, only GMOs on the list of approved GMOs could legally enter the food supply system in 
Israel. Manufacturers and importers will be required to submit an application to the Novel Food 
Committee of the NFS for the approval of novel foods, including GMOs, which are not on the list of 
approved novel foods. The Committee would then assess the safety of the novel food, on a case -
by-case basis. This assessment process is to be completed within 6 to 12 months, depending on 
the complexity of the application. Acco rding to the authorities, the safety criteria for assessment 
are derived from internationally established scientific principles and guidelines developed by the 
FAO, the WHO, and Codex Alimentarius.  
Veterinary services and animal health  
3.99.   The Department of Im port and Export in the VSAH is responsible for the import and export 
of animals, animal products, and biological material to and from Israel.  
3.100.   Under the VSAH's import procedures, meat and eggs must originate from plants approved 
by the VSAH in authorized c ountries. To be included in the list of authorized countries, an Israeli 
importer must make a request for a specific permit to import a specific animal or animal product. 
The VSAH then sends a questionnaire to the competent authorities of the exporting cou ntry. The 
completed questionnaire is evaluated, and further information may be requested. On conclusion of 
the written procedure, and in consultation with the competent authorities, the VSAH visits the 
competent authority of the exporting country. The fina l report by the VSAH may include a 
conclusion that imports may start immediately, whether additional guarantees are needed, or that 
the request for an import is refused.66 Once a year, the competent authority of the exporting 
country should send to the VSAH  a list of plants authorized for the export to Israel of meat and 
offal, although it may amend this list during the year. Each year, the VSAH also conducts risk 
analysis and, based on the results, may decide which countries and which plants within these 
countries are to be audited.  
Plant protection and inspection services  
3.101.   Under the Plant Import Regulations of 2009, importers of many plant products (as listed in 
Annexes 3 and 4 of the Regulations) no longer require an import permit, provided:  
 the plant products are not used for propagation, unless imported for this purpose and, if 
so, the relevant authority of the exporting country certifies that the materi al is not 
genetically modified;  
 for products listed in Annex 3 of the Regulations, the importer att aches to the 
consignment a certificate of origin. Annex 3 includes several major plant products, 
including: dried grains for human consumption, animal feed or oil extraction (excluding 
cotton seeds); wood products (excluding logs, bark and chips); shelled nuts (excluding 
peanuts and pecans); and dried fruit, vegetables, and herbs; and  
 for products listed in Annex 4 of the Regulations, the importer attaches a phytosanitary 
certificate. Annex 4 includes a long list of plants and plant products, and includes 
requirements that must be met (often stating they must originate from "European 
countries"67).68 
                                                
65 National Food Service, Ministry of Health online information. Viewed at: 
https://www.health.gov.il/UnitsOffice/HD/PH/FCS/NovelFood/Pages/NovelFoodL ist.aspx  [March 2018].  
66 Ministry of Agriculture and Rural Development, VSAH (2017), Import procedure to the State of Israel , 
August. Viewed at: 
http://www.moag.gov.il/vet/Yechidot/inport%20export/yevu_basar/Documents/import%20procedure.pdf . 
67 For the purposes of the Regulations, these countries are defined as: Austria; Italy; Ireland; Belgium; 
the United Kingdom; Germany; Denmark; the Netherlands ; Spain; Portugal; Finlan d; France; Sweden; and 
Switzerland . WT/TPR/S/ 376 • Israel  
 
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  3.102.   Imports of regulated articles such as plants, plant products, seed s, ‎propagation material, 
and biotic material  not listed in Annexes 3 and 4 of the Regulations require import permits from 
the PPIS and, where a new commodity or originating market is concerned, a pest risk assessment. 
For these products, applications for import permits must be submitted before the date of import. If 
approved, a permit will be grant ed and will include t he import requirements for the specific 
product, a certificate of origin, and ‎additional statements required for import, based on PPIS 
decisions. The se statements should appear in the health certificate accompanying the shipment 
from the country of origin . Under the Plant Protection Law, Regulations for Importation of Plants – 
2009, imports of biotic material (which include invertebrate organisms, microbes, fungi, viruses , 
and soil ) are forbidden. However, for research and development purposes a permit may be issued 
for imports of limited amounts from proven reliable sources and under restrictive conditions.69 
Animal Feed Control Division  
3.103.   The Animal Feed Control Division (AFCD) is responsible for setting conditions and issuing 
instructio ns relating to imports of animal feed. According to the authorities, the Animal Feed Law 
of 2014, which come into force in March 2017, adopted some of the main features of the 
legislation of the European Union on animal feed regarding transparency, consist ency, and a risk -
based control system. Under the Law, Israel has adopted a new approach to ease the flow of 
imports by merging feed controls and other import requirements.  
Kosher certification  
3.104.   Except for meat products, there is no legal requirement for foo d products to have kosher 
certification, but it has been reported that it is often a practical market requirement as many 
hotels and shops do not stock non -kosher products.70 Under the Law for Prevention of Fraud in 
Kashrut (1983), the Chief Rabbinate of Is rael has exclusive competence over kosher certification 
and the recognition of kosher certifying bodies outside Israel.71 
3.3.4   Competition policy and price controls  
3.105.   In Israel, there is a marked disparity between highly dynamic exposed industries (e.g. hi -
tech an d start -ups) and large, low -productivity sheltered sectors that are primarily focused on the 
domestic market. Indeed, labour productivity growth is lower in industries that are not very 
exposed to international competition (e.g. the food industry, banking,  electricity, gas, cement, rail 
and sea ports).72 These industries are also dominated by a small number of large public and 
private enterprises,  and present barriers to market entry.73 High tariff protection (agriculture), the 
small size of the economy, a ce rtain degree of geographic isolation with little regional trade, and 
even cultural factors have all contributed to some market inefficiencies.74 High food prices 
triggered the 2011 "tent protests", and the high cost of living is primarily attributed to limi ted 
competition. As a result, major reforms have been introduced to the competition regime during the 
review period to enhance productivity at firm level , foster GDP growth, and improve consumer 
welfare.  
                                                                                                                                                  
68 Ministry of Agriculture and Rural Development, Plant Import Regulations, February 2009. Unofficial 
translation. Viewed at: 
http://www.moag.gov.il/en/Ministrys%20Units/Plant%20Protection%20and%20Inspection%20Services/Import
%20of%20P lants%20and%20their%20Products/Documents/plantimportregulations2009unofficialtranslation1.p
df. 
69 Ministry of Agriculture and Rural Development online information. Viewed at: 
http://www.moag.gov.il/en/Ministrys%20Units/Plant%20Protection%20and%20Inspection%20Services/Import
%20of%20Plants%20and%20their%20Products/Pages/default.aspx . 
70 USDA Foreign Agricultural Service (201 7), Israel Retail Foods 2017 , 27 December, Section II . Viewed 
at: https://gain.fas.usda.gov .  
71 Chief Rabbinate of Israel online information. Viewed at: 
https://www.gov.il/he/Departments/Topics/national_kosher  (Hebrew).  
72 The inefficiencies in sheltered sectors reduce productivity and wages for employees and contribute to 
the high prices in Israel relative to per capita incomes. IMF Country Report 17/75.  
73 At the end of the last decade, the 5 largest Israeli business groups held assets amounting to 63% of 
GDP, and the 10 largest groups represented over 40% of total market capitalization. OECD (2016), Boostin g 
competition on Israeli markets , Paris.  
74 One example of cultural factors is the Kashrut, religious dietary laws that apply to only a very small 
market.  WT/TPR/S/ 376 • Israel  
 
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  3.106.   The main competition legislation in Israel is the Re strictive Trade Practices Law, 5748 -1988 
(RTP). It provides the legal grounds upon which the Antitrust Commissioner and the Israel 
Antitrust Authority (IAA) regulate restrictive arrangements, merger transactions, monopolies and 
concentration groups.  The IAA has various means at its disposal to apply competition law in the 
economy: it can block mergers, instigate criminal proceedings against cartels, may file a petition 
with the Antitrust Tribunal for an order to divest holdings in certain cases of cro ss-ownership 
among members of a concentration group , and impose administrative sanctions in response to 
competition violations and lift them after negotiating consent decrees with the relevant parties 
involving the payment of a fine. The Law also allows me mbers of the public, businesses and 
consumer groups to launch proceedings, including class actions, to obtain reparations for any 
damage caused by anti -competitive actions.  
3.107.   The RTP covers restrictive arrangements, monopolies, and mergers, with the aim of 
preventing harm to competition. The Law substantially follows the competition model of the 
European Union and the United States; it also applies to state -owned enterprises. The Law is 
enforced by the IAA, which is independent from the Government, and is ves ted with powers to 
initiate civil and criminal proceedings. The competition law allows private enforcement through 
individual action or class actions by consumer and business organizations. An Antitrust Tribunal at 
the District Court in Jerusalem has exclu sive jurisdiction over non -criminal competition 
proceedings brought to it by the IAA. The District Court of Jerusalem has exclusive jurisdiction on 
criminal matters. Decisions by the Tribunal may be appealed to the Supreme Court, Israel's 
highest judicial authority.  
3.108.   In 2011, the RTP Law was amended to enable the IAA to make an official declaration of a 
"concentration group" where an oligopoly exists, and provides the agency with a new toolbox to 
intervene. Under the amended law, the Antitrust Commissioner w as granted additional powers, 
and may now issue instructions to members of a concentration group to take certain steps in order 
to prevent harm to competition or to the public, or in order to improve the competitive situation.  
3.109.   At the end of 2013 , the Kness et passed the Promotion of Competition and Reduction of 
Concentration Law, 5774 -2013.75 The Law limits firms ' use of pyramidal control structures , which 
are particularly widespread and complex and have allowed a handful  number of business groups to 
control a large proportion of the economy. Under the Law, these groups have until the end of 2018 
to reduce the maximum number of levels in these pyramids to two. This Law also restricts the 
control of major financial institutions by large non -financial enterprise s. Such cross -ownership can 
distort competition between businesses , in that access to credit depends on whether they belong 
to one of these groups. Moreover, the Law requires all government authorities to take competition 
considerations in to account when g ranting licenses  or franchises or selling asset s which may affect 
market concentration and, in certain cases, to consult with the IAA on the issue.76 
3.110.   The Promotion of Competition in the Food Sector Law, 5774-2014 (Food Law) was enacted 
to increase competiti veness in the food sector and reduce product prices. It prohibits, limits and 
regulates certain practices that could potentially be used by major suppliers or retailers to limit 
competition. Additionally, it empowers the Antitrust Commissioner to intervene  when retail 
markets are geographically concentrated. The Law imposes severe criminal, administrative and 
civil penalties. The IAA has exercised its powers under the Food Law, has granted exemptions and 
approvals to various practices and actions, and has i nitiated enforcement actions against violators.  
3.111.   Cartels and other restrictive arrangements are prohibited, unless block exempted or 
authorized by the General Director of the IAA or the Antitrust Tribunal (Table 3.1 5). Currently, 15 
block exemptions are in force: franchise agreements; exclusive purchase agreement; restraints 
ancillary to mergers; agreements for the execution of R&D; arrangements of "minor importance"; 
joint-ventures; several exemptions concerning certain arrangements between aircraft carrier s; 
                                                
75 This Law signaled a significant change of approach, because previous efforts had aimed at 
neutralizi ng the negative effects of concentration, rather than preventing them from arising in the first place.  
76 When licenses, franchises or asset sales concern ing essential infrastructure areas that are considered 
"essential facilities" are to be granted to larg e-scale companies  that are on a list of "concentration groups", the 
Law also requires the granting agency to consult with the C ommittee for Economic Concentration, which is 
chaired by the IAA 's director , on the effect of its actions on overall economic con centration in Israel . OECD 
(2016), Boosting competition on Israeli markets , Paris.  WT/TPR/S/ 376 • Israel  
 
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  arrangements between affiliated companies; non -horizontal arrangements which do not contain 
certain price restraints; liner shipping arrangements; and export of security equipment.  
Table 3.15 Antitrust law enforcement, 2012 -17 
 2012  2013  2014  2015  2016  2017  
IAA decisions on requests for exemption of restrictive 
arrangements  71 68 52 67 55 53 
  Granted  46 40 25 40 39 42 
  Granted subject to conditions  24 22 26 27 15 11 
  Objections  1 6 1 0 1 0 
Monopoly determinations  3 1 1 1 0 1 
IAA merger decisions  147 163 149 159 191 127 
  Approved mergers  137 154 146 158 184 123 
  Approved with conditions  6 7 2 1 3 4 
  Blocked mergers  4 2 1 0 4 0 
IAA infringement investigations/decisions, of which:        
  Abuse of dominant position  2 3 3 2 1 2 
  Criminal indictments: bid -rigging and price -fixing  4 3 2 2 0 4 
  Mergers  1 3 1 3 3 0 
  Restrictive arrangements  2 3 3 2 6 3 
Cases involving the leniency programme  0 0 1 1 0 0 
Proceeding brought before the Antitrust Tribunal  0 1 1 0 0 0 
Total fines and administrative monetary penalties 
(NIS million)  0.015  8.5 73.6 13.6 10.6 14.1 
Number of prison sentences  0 0 0 2 3 1 
Source:  Information provided by the authorities.  
3.112.   During the review period, the IAA limit ed sector -specific exemptions in agriculture and in 
maritime and air transport, the last remaining sectoral exclusions of the competition law. An 
exception applies to the growing or marketing of certain agricultural products, provided all parties 
are producers or wholesalers of the product concerned (fruit and vegetables, field crops, milk, 
eggs, honey, cattle, sheep, poultry, or fish).  
3.113.   Under Israeli law, the abuse of a dominant position by a monopoly may constitute a 
criminal offence. A firm is deemed  a monopoly if it controls more than 50% of a relevant market.77 
Recently, the IAA advocated for an amendment to the RTP which would subject firms possessing 
market power to the RTP's monopoly provisions even if their market share falls short of 50%. This 
legislative initiative is being discussed. The official list currently comprises 76 monopolies of goods 
and services (68 at the time of Israel's TPR in 2012). Instruments for regulating monopolies 
include price controls (see below); prohibition of certain c onduct, such as abusive pricing; 
instructions from the IAA regarding measures to be taken by the monopolist to prevent prejudice 
to competition; or break -up of a monopoly by order of the Antitrust Tribunal.  
3.114.   Mergers are subject to prior approval by the IAA if: (i) the merger creates a monopoly or 
one of the parties is a monopoly; or (ii) the combined sales turnover in Israel exceeds NIS  150 
million and the sales turnover of at least one of the companies exceeds NIS 10 million. There is a 
compulsory pre -merge r notification system for mergers exceeding these thresholds. Mergers are 
evaluated for anti -competitive effects in less than one month, on average, by the IAA. Post -merger 
remedies for mergers that did not receive approval include divestiture of companies  if ordered by 
the Antitrust Tribunal. The Income Tax Ordinance grants tax benefits for structural changes and 
mergers, mainly to improve efficiency.78 
3.115.   Since 2012, the IAA director may impose monetary penalties for competition law 
infringements (including c artel violation, abuse of dominant position or if  mergers are carried out 
without IAA approval), increasing the options open to the authorities. Israeli law provides for 
monetary fines which are up to 8% of the annual turnover of the violator, but no more than 
NIS 24 million.  
                                                
77 The General Director of the IAA has the authority to declare a company a monopoly in the Official 
Gazette  if the company supplies or purchases more than 50% of a product's or service's output in the domestic 
market (section 26); monopolists are thus covered.  
78 The conditions are set out in chapter 5B of the Income Tax Ordinance.  WT/TPR/S/ 376 • Israel  
 
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  3.116.   Since 2012 , IAA funding and staff resources have increased to NIS 61 million and 
120 employees in 2017 (up from NIS 24 million and 83 employees in 2011). The adaptation of 
competition policy to best practice has also led to significant  progress in several areas ; the IAA's 
competition advocacy role was institutionalized and broadened since 2013 .79 
3.117.   Antitrust offenders risk imprisonment of up to five years, plus financial penalties . 
Nonetheless, harsher penalties  (including bigger fines), increasing potential damages resulting 
from class actions , and reforming the leniency programme  (which cannot be used, for instance, 
once an investigation has been opened, even if it might speed up and improve results) would 
strengthen enforcement. The maxi mum fine applied under th ese procedures is only 
NIS 2.26 million (less than US$0.6 million). Until now, moreover, nobody has been sentenced to 
more than nine months in prison for cartel offences, and many sentences have been commuted to 
community service. The IAA expects to see the introduction of tougher prison sentences against 
cartels, and the Supreme Court wants judges to  implement them.80 
3.118.   During the review period, the Israeli authorities have launched a series of reforms to 
increase competition and efficiency in some sheltered sectors. For example, competition in 
broadband Internet has improved by unbundling the local loop of the incumbent operators in early 
2015 ( Section 4. 4.5); and recent measures have been taken to restructure the public postal 
services operator, enhance its regulatory framework and partially privatize it, and new segments 
of the market have been opened to improve customers service ( Section 4.4.5 ). However, some 
external sources suggest creating independent regulators with well -defined mandates (e.g. in the 
telecoms, postal services, and gas sectors) to improve competition.81 
3.119.   Retail prices of a number of goods and services remain under the control of the 
Government (Table 3.15). Prices are either fixed by the Government (e.g. certain  utilities, and 
communication and transportation fees) or are subject to supervision, requiring approval before 
they may be increased (certain foodstuffs, school books, and medicines). Price control and 
supervision concern almost 20% of food products in th e CPI basket.82 
Table 3.16 Regulated prices, 2018  
Controlled prices  Prices under supervision  
(Supervision of Prices of Goods and Services Law)  
Railway transport   
Municipal taxes  Milk (1% and 3% fat) 
Electricity (for domestic use)  Basic bread  
Water (for domestic use)  Hard cheese (2 types)  
Mail services  Sour c ream (15% fat)  
Phone services (local calls)  Edible salt  
Vehicle fees  Butter  
Vehicle mandatory insurance  Table eggs  
 Yoghurt (2 types)  
 School books  
 Medicines  
 Day-care centres and kindergarten 
 Fuel (reduced -lead benzene and 96 -octane benzene)  
 Domestic flights  
 Public bus transportation  
 Taxi rides  
Source:  Information provided by the authorities.  
3.120.   Price oversight is exercised under the Law on the Supervision of Prices of Goods and 
Services of 1996, rather than under competition law. The Minister of Finance, together with the 
ministers with jurisdiction over the product concerned, may order price controls if: (i) the product 
is controlled by a monopoly; (ii) the supply is controlled in a manner that substantially affects the 
market; (iii) the suppliers or purchasers of the product face little or no competition (e.g. fuel); or 
(iv) the product is subsidized (e.g. medicines or publ ic transportation). A price control order may 
also be issued if: (i) the product is essential and the restriction is in the public's best interest; 
                                                
79 OECD (2016), Economic Survey s: Israel , Paris.  
80 OECD (2016), Boosting competition on Israeli markets , Paris.  
81 OECD (2016), Economic Surveys: Israel , Paris.  
82 OECD (2016), Economic Surveys: Israel , Paris.  WT/TPR/S/ 376 • Israel  
 
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  (ii) there is a shortage of the product due to special circumstances; or (iii) price regulation is 
needed to  control inflation or to achieve the objectives of the Government's economic and social 
policy.  
3.3.5   State trading, state -owned enterprises, and privatization  
3.121.   Israel has notified to the WTO that the Israel Groundnuts Production and Marketing Board  
is the only state -trading enterprise (SOE) with exclusive export rights as defined in GATT Article 
XVII and the Understanding on the Interpretation of Article XVII.83 
3.122.   SOEs continue to play an important role in the economy, notably in the electricity, water, 
transport , ports and defence industries. There were 69 SOEs in 2016 (92 in 2011), contributing 
about NIS 67 billion in revenues or about 5% to GDP. According to Israel's annual SOE report of 
2016, at least two SOEs have been declared as monopolies under the  Competition Law : Israel 
Electricity Corporation, and Mekorot, the water corporation.  
3.123.   Government companies are subject to the general Companies Law and to the Government 
Companies Law of 1975 (the GCL). The Government Companies Authority (the GCA) is 
respo nsible, inter alia , for supervising, restructuring and privatization. Government -owned 
companies are divided into three groups: government companies (excluding state banks acquired 
pursuant to the Bank Shares Agreement), with the State holding more than 50 % of the voting 
power or the right to appoint over half of the board members; government subsidiaries, which are 
separately incorporated entities subordinate to existing government companies where the 
government company alone , or together with the State , possesses over half of the voting power or 
the right to appoint over half of the board of directors; and mixed companies, in which the State's 
ownership or control does not meet these thresholds.  
3.124.   Privatization of government -owned companies, other than banks , is administered by th e 
GCA. The Privatization Committee (consisting, inter alia , of the Minister of Finance, as chairman , 
and the Minister of Justice) may initiate the privatization of any government company or mixed 
company, and implement structural cha nges or other preparatory measures necessary for 
privatization (subject to approval by the Finance Committee of the Knesset) . Pursuant to the 1983 
Bank Shares Arrangement, responsibility for the privatization of banks is with the Ministry of 
Finance, throu gh a wholly -owned government entity (MI Holding).  
3.125.   Since the last Review in 2011, six privatizations took place: in 2009 -10, a development 
bank and the seaport of Eilat were sold to private investors ; in 2016, the State sold its share in 
three companies in the tourism sector, which were jointly owned with local municipalities84; and in 
2016, the central Government transferred all of its shares in a software company to the Federation 
of Local Authorities in Israel, with which it had previously jointly owned the company . 
3.126.   In 2014, a new three -year privatization scheme of NIS 20 billion (1.75% of GDP) was 
launched, involving the full divestment of some SOEs, including the ports and the postal service, 
and a series of partial privatizations through initial public  offering s (electricity, water and defence). 
In addition to the public revenue generated, the authorities also expect it to have a positive impact 
on the firms' management and performance as a result of their increased exposure to market 
forces and stri cter transparency requirements.  
3.127.   Over the last few years, reforms have improved the regulatory framework to ensure 
competitive neutrality between public and private firms in the same market in terms of regulation, 
financing and taxation. SOEs are strongly repr esented in defence and many network industries 
(maritime and rail transport, postal services, water management, electricity and other energy -
related activities). According to the authorities, the profitability of SOEs has recently  improved 
significantly; S OEs reported a consolidated net profit of NIS 1.9 billion in 2016.  
3.128.   Despite these positive steps, external sources have called for further reforms. For 
example, according to the OCED, the authorities should review the management of public service 
obligation s that are often imposed on SOEs, such as the rationale for having nationwide price 
                                                
83 WTO document G/STR/N/1/ISR/Rev.1, 26 September 1996 . 
84 The municipalities rem ained shareholders, in some cases with an increased share.  WT/TPR/S/ 376 • Israel  
 
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  equalization for electricity, water, telecoms, and postal services, despite regional cost 
differentials.85 
3.3.6   Government procurement  
3.129.   Israel is party to the WTO plurilateral Agr eement on Government Procurement (GPA) and 
was among  the first 10 parties to accept the revised GPA which entered into force on 6 April 
2014.86 Under Israeli law, commitments under the GPA prevail over national procurement 
regulations.87 In 2016, the Israeli  Government procurement market, excluding for defence, was 
estimated at approximately NIS 32 billion (about US$ 8.1 billion or around 3% of GDP).88 
3.130.   Under the revised GPA, Israel made a number of market  access commitments that 
enhance the opportunities for foreign companies to compete in its government procurement 
market. Several central government entities and government enterprises have been added to 
Israel's lists of covered entities and government ent erprises that procure in accordance with GPA 
provisions: the number of covered central government entities increased by 5 to a total of 26.89 
The threshold for construction contracts tendered by covered central government entities was 
reduced from SDR 8.5 m illion to SDR 5 million , starting from the sixth year after the entry into 
force in Israel of the revised GPA, i.e. from 6 April 2014 . Nine government enterprises and other 
entities have been added to Israel's list of GPA covered entities (e.g. Environment al Services 
Company Ltd., Arim Urban Development Ltd. and Marine Trust Ltd.).  Israel's covered procurement 
includes a number of additional service sectors , such as financial services, commercial courier 
services , and education services.  
3.131.   Israel has invoked developing -country status pursuant to the GPA 1994, allowing it to 
implement offset arrangements to ensure a certain domestic content in government procurement 
contracts. To satisfy the offset requirement, a foreign supplier may subcontract to local compan ies, 
invest in local industries or R&D, transfer know -how, purchase goods made in Israel, or in any 
other manner approved by the Industrial Co -operation Authority (ICA). The policy is aimed at 
protecting and promoting the participation of Israeli small and  medium -sized enterprises in 
government procurement contracts. In addition to government agencies and state -owned 
companies, local authorities are required to follow an offset policy. The offset percentage for 
procurements covered by Israel's GPA obligatio ns is 20% of the value of the contract; for 
procurements excluded from GPA coverage, it is 35%; and for military procurements , it is 50%. 
Israel has undertaken to phase out its offset regime with respect to procurement covered by the 
GPA. It will progressi vely reduce the current 20% offset level, and eliminate offsets entirely after 
15 years from the entry into force of the revised GPA in Israel. Additionally, a threshold of 
NIS 3 million will be set, below which offsets will not be applied. After five year s, Israel will also 
start reducing the number of entities that can apply offsets.  
3.132.   Procurement by central government entities, government authorities, statutory 
corporations, and government companies is governed by the Mandatory Tenders Law of 1992. 
Procure ment by local authorities is subject to the Municipalities  Ordinance of 1967 (Sections 197 
and 198) and the Municipalities Regulations (Tenders) of 1987, as amended.  
3.133.   There is an exemption committee in each government office, comprising the director 
general  of the office, the office's legal advisor (representative of the Attorney General), and the 
accountant (representative of the Accountant General), whose function is to grant exemptions 
from tenders, falling under the categories specified in the regulation s. This committee grants 
exemptions for transactions valued above NIS 150,000 and under NIS 4 million. Exemptions from 
                                                
85 OECD (2016), Boosting competition on Israeli markets , Paris.  
86 The revised text of the GPA, while based on the same  principles and main elements of the original 
text, improves it in many ways. For example, it brings it up  to date with developments in information 
technology and procurement methods, expands  access to government procurement contracts, and eliminates a 
number of discriminatory measures. Parties' total new market access commitments h ave been estimated by 
the WTO Secretariat to be worth about US$80 -100 billion annually.  
87 Article 5(A)(b) of the Mandatory Tenders Law of 1992 states that "Regulations under this Law shall 
apply to the extent that they do not conflict with an undertaking o f the State in an international agreement", 
such as the GPA.  
88 This figure does not include for defence purchasing bodies, governmental hospitals, sub -central 
entities, and about 17% of the governmental purchase of 2016 which was not specifically categoriz ed. 
89 The additions include the SMBA , and the Central Bureau of Statistics .  WT/TPR/S/ 376 • Israel  
 
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  tenders over NIS 4 million, and in some cases over NIS 2.5  million, are taken to the Central 
Exemption Committee for a decision.90 
3.134.   Each ex emption from public tender must be published on the website of the Government 
Publications Office within five days; this is a prerequisite for the entry into force of the exemption 
decision. The exemption committee may approve contracts of procurement from  a single supplier 
only after verifying the availability of additional suppliers, by advertising, via the Internet, five 
days before the intent to procure from a sole supplier, and allowing any person to notify the 
Tenders Committee that they believe that there is more than one supplier. The Tenders Committee 
is obliged to inform the person of its decision. A participant in a tender may be allowed access to 
the protocols of the Tenders Committee, the winner's bid, professional opinions submitted to the 
Tenders Committee, and the Committee's legal advisor's opinion.  
3.135.   The key features of Israel's government procurement provisions are described in 
Table  3.17. Public tenders are published in two daily Israeli newspapers, on the website of the 
Government Publicati ons Office, and in one daily or weekly Arabic publication. The announcement 
must include: type of contract, general information on the contract, option to continue the 
contract, period of the contract, conditions for participation in the tender, where to o btain the 
tender information and forms, and the place and date for submitting bids. For a tender under the 
GPA, the information must also be published in an English newspaper. The purchasing agency is 
required to notify all participants in the tender of it s final decision.  
Table 3.17 Key features of Israel's government procurement provisions  
Method  Application  
Procurement procedures   
No tender Contracts up to:  
- NIS 50,000 for ministries other than Defence and Public Security;  
- NIS 200,000 for government companies or subsidiaries  
 
Other instances: a contract that is urgently needed in order to prevent 
substantial harm; a contract pertaining to a transaction for which a tender is 
liable to cause substantial harm to national security; additional contracts within 
five years of the conclusion of the first contract; a contract with a professional 
specialist; contracts concerning marketing of agricultural produce, advertising 
in the media, cultural, artistic, ente rtainment, certain operations in the capital 
market, or certain areas of medicine.  
Expeditious electronic 
auction  Expeditious electronic auction for purposes of shortening procedures, applicable 
to tenders in which one of the following applies:  
- up to NI S 400,000;  
- the engagement is urgently required to prevent actual damage, in the scope 
and for the minimal period required in such circumstances . 
Public tender  Contracts above:  
- NIS 50,000 for ministries, other than Defence and Public Security;  
- NIS 200,000 for government companies or subsidiaries.  
Extraordinary tender  Contracts:  
- transaction with respect to R&D or scientific work (which are exempt from the 
public tender requirement);  
- when no technical specification is available;  
- for educational  or vocational training; and  
- when, for defence considerations, the Ministry will need to make investments 
in infrastructure.  
Preferences for domestic 
industries  All international tenders (except for GPA tenders): price preference of up to 
15% to domesti c suppliers (at least 35% domestic content). Preferences do not 
apply to contracts subject to GPA provisions.  
Offset requirement  International public tenders with a value above US$5 million; minimum "co -
operation" of 35% of the contract value (20% for GPA  members). The offset 
requirement can be satisfied in the form of subcontracting to local companies, 
investment in local industry, know -how transfer, or acquisition of goods made 
in Israel or of work or services in Israel (Mandatory Tenders Regulations 
(Mandatory Industrial Cooperation) of 2007).  
Source:  Information provided by the authorities.  
                                                
90 This committee is composed of representatives of the Ministry of Finance.  WT/TPR/S/ 376 • Israel  
 
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  3.136.   Israel's tendering regulations allow for price preference of up to 15% to local suppliers, 
with at least 35% domestic content. Preferences do not apply to contr acts subject to GPA 
provisions.  
3.137.   A party may challenge a tender at any stage of its process. Contract awards may be 
challenged in the District Court in the region where the tender was published. The Court may 
cancel the awarding of the tender on the basis of incorrect procedures, or temporarily hold up the 
tender until the facts are checked.  
3.138.   In September 2016, Israel and the United States signed a new security assistance 
Memorandum of Understanding (MOU) to succeed the current MOU which expires on 
30 September  2018. The new MOU has a total value of US$38 billion per year and will be in place 
from fiscal year 2019 through fiscal year 2028. It will discontinue both offshore procurement91 and 
Israel's use of security assistance funds to purchase fuel. Together, the se changes mean that 
Israel will spend up to US$1.2 billion more per year on advanced military capabilities that only the 
United States can provide.92 
3.3.7   Intellectual property rights  
3.3.7.1   Overview  
3.139.   Israel has further improved its already well -respected intellectual property system by 
investing in the administrative functioning of the ILPO's examination procedures, and further 
modernizing its IP statutes, particularly in the areas of patents and designs. Reflecting a highly 
innovative and competitive industry where ma ny start -ups depend on and enforce their intellectual 
property rights, Israeli courts frequently encounter IP litigation, including the Supreme Court which 
has issued a number of relevant rulings and opinions during the re view period.  
3.140.   The challenges posed by the digital environment in the area of intellectual property rights 
are reflected in a number of developments during the re view period. These include Supreme Court 
judgements on the extent of copyright exceptions under the 2007 Copyright Act legislative  
changes to permit online distribution of TV broadcast signals.  
3.3.7.2   Economic policy context  
3.141.   Rankings of the Israeli economy in global indices of innovation and competitiveness over 
the review  period reflect its status as one of the most innovative economies . It continues its efforts 
to further improve the policy framework for its vibrant high -tech industry sector. Israel's overall 
ranking in the Global Competitiveness Index  rose from 26th place in 2012 -13 to 16th in the 
2017-18 report93, with its 3rd place ranki ng in the innovation sub-category remaining unchanged 
throughout the period. Israel's ranking in the IP protection sub-category – improving from 33rd 
place in 2012 -13 to 10th place in the 2017 -18 report94 – reflects that IP protection is a central 
component  of its overall innovation policy, which is borne out by intensive use of the IP system for 
innovation outputs. In that regard, Israel ranked among the top ten countries in PCT patent 
applications per million population throughout the review  period.95 
3.142.   Given the diverse forms that IP takes in international trade, including IP embedded in 
manufactured goods, IP royalties recorded as services trade, and consumer downloads of 
IP content, it is difficult to establish a comprehensive tally of the full IP comp onent of Israeli trade. 
However, several indicators permit an approximate estimation of Israel's IP trade and confirm its 
                                                
91 The arrangement under the current security assistance MOU through which Israel has been permitted 
to spend 26.3% of its annual security assistance package within Israel on non -US products. USTR (2017), 
Foreign Trade Barriers: Israel , Washington, D.C.  
92 USTR (2017), Foreign Trade Barriers: Israel , Washington, D.C.  
93 Global Competitiveness Report Rankings. Viewed at: www.weforum.org/reports . Global Innovation 
Index Rankings 2013 -2016. Viewed at: www.globalinnovationindex.org . 
94 Indicator: 1st pillar: Institutions, 1.02 Intellectual property protection; Global Competitiveness Report 
Rankings. Viewed at: www.weforum. org/reports . 
95 Indicator: 12th pillar: Innovation, 12.07 PCT patent applications/million pop; Global Competitiveness 
Report Rankings. Viewed at: www.weforum.org/reports . WT/TPR/S/ 376 • Israel  
 
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  traditional situation as a net IP -exporting country, with the positive trade balance on IP licence 
fees rising to US$831 million in 20 15 (see Chart 3.3) . 
Chart 3.3 Trade in charges for the use of intellectual property n.i.e., 2011 -16 
(US$ million)  
 
Source:  OECD Stat. Trade in services – EBOPS 2010. Viewed at: 
https://stats.oecd.org/Index.aspx?DataSetCode=TISP_EBOPS2010 . 
3.143.   This reflects a context of an overall positive balance of trade in technology -intensive 
services that rose to US$11.83 billion in 2015, largely led by the categories of Computer and 
Information Services and Research and Development Services (see Chart 3.4) . 
Chart 3.4 Trade in technology -intensive services, 2011 -16 
(Percentage of services receipts and paym ents) 
 
Source:  OECD Stat. Trade in services – EBOPS 2010. Viewed at: 
https://stats.oecd.org/Index.aspx?DataSetCode=TISP_EBOPS2010 . 
3.144.   Israel remains among the most research -intensiv e economies in the world with gross 
domestic spending on research and development consistently remaining above 4% of GDP – 
05001,0001,5002,0002,500
2011 2012 2013 2014 2015 2016Exports Imports Trade balanceChart 3.[Israel] Trade in charges for the use of intellectual property n.i.e., 2011 -16
(US$ million)
Source:   OECD Stat.  Trade in services -EBOPS 2010.  Viewed at:  https://stats.oecd.org/Index.aspx?DataSetCode=TISP_EBOPS2010.
02,0004,0006,0008,00010,00012,00014,00016,00018,000
-30-20-100102030405060
2011 2012 2013 2014 2015 2016
Charges for the use of intellectual property n.i.e
Computer and information services
Research and development services
Architectural, engineering, scientific and other technical services
Trade balance technology-intensive services (right-hand axis)Chart 3.[Israel] Trade in technology -intensive services, 2011 -16
(Percentage of services receipts and payments)(US$ million)
Source:   OECD Stat.  Trade in services -EBOPS 2010.  Viewed at:  https://stats.oecd.org/Index.aspx?DataSetCode=TISP_EBOPS2010.Receipts PaymentsWT/TPR/S/ 376 • Israel  
 
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  almost twice the OECD average.96 With publicly financed R&D remaining limited97, however, the 
economic ecosystem of Israel relies heavi ly on foreign multinationals and large corporate R&D 
investors, as well as start -ups for the financing of R&D. With venture capital growing to 
US$4.8  billion in 201698, BERD and venture capital shares of GDP remain the highest in the OECD 
area.99 
3.145.   In early 20 16, in an effort to nurture and develop the Israeli innovation infrastructure, and 
to adapt and improve the innovation strategy of the former Office of the Chief Scientist (OCS), 
Israel replaced the OCS and its Industry Centre with the Israel Innovation Au thority (IIA).100 This 
new independent agency comprises several dedicated innovation divisions that administer 
program mes targeted at start -ups, R&D financing, technological infrastructure improvement and 
international collaboration on R&D, among others  (Section 3.3 .1). 
3.146.   In order to encourage multinational corporations to consolidate IP ownership and profits in 
Israel along with existing Israeli research and development (R&D) functions, in December 2016 
the Knesset approved the reduction of tax rates for IP-based companies.101 While multina tionals 
such as Google, Apple, Microsoft, Johnson & Johnson and IBM had opened development centres in 
Israel, a government committee found that Israel sees “almost no revenue from them, compared 
with the enormous profit th eir developments are creating for the parent company” since their IP 
assets were held abroad.102 The tax benefits created by this new "innovation box regime" include a 
reduction from 23% to 6% -12% of corporate  income tax on IP -based income, and on capital ga ins 
from future sale of IP where the IP was developed in Israel. The 6% rate would apply to qualifying 
Israeli companies that, inter alia , have revenue of over NIS 10 billion (US$2.5 billion) and a 7.5% -
12% rate would apply  to Israeli companies that, inter alia, have revenue of less than NIS 10 billion 
(US$2.5 billion).103 Earnings from IP not developed in Israel and owned by an Israeli company, 
even if acquired by Israeli companies, will remain subject to the country's full corporate tax.104 
3.147.   In Circular 4/2016 , published in 2016, the Israeli Tax Authority (ITA) provided an 
interpretation of the tax concept of "permanent establishment" to give more weight to internet 
activities directed at the Israeli market to establish corporate tax obligations, especially reg arding 
companies resid ing in countries with which Israel has no income tax treaty. In addition, the 
Circular establishes criteria for the registration of an international corporation that provides 
services to Israeli customers via the Internet  as a dealer for VAT purposes , including the existence 
                                                
96 OECD Data, Main Science and Technolog y Indicators, Gross Domestic spending on R&D as % of GDP. 
Viewed at: https://data.oecd.org/rd/gross -domestic -spending -on-r-d.htm . 
97 In 2013, publicly financed GERD constituted 0.55% of GDP. See OECD Science, Technology and 
Innovation Outlook 2016, Israel Country Profile. Viewed at: http://www.keepeek.com/Digital -Asset -
Management/oecd/science -and-technology/oecd -science -technology -and-innovation -outlook -
2016/israel_sti_in_outlook -2016-68-en#page1 . 
98 "Israel is a tech titan. These 5 charts explain its startup success", World Economic Forum on the 
Middle East and North Africa, Science & Technology. Viewed at: 
https://www.weforum.org/agenda/2017/05/tiny -israel -is-a-tech-titan-these -5-charts -explain -its-startup -
success/ . 
99 OECD Science, Technology and Innovation Outlook 2016, Israel Country Profile.  
100 See description of the Israel In novation Authority. Viewed at: 
http://www.matimop.org.il/about_authority.html . 
101 Economic Efficiency Law (Legislative Amendments to Achieve the Budget Goals in the Budget Years 
of 2017 -2018), p . 264. Viewed at:  
http://www.justice.gov.il/SitePages/OpenDocument.aspx?d=btfoGU%2fzRz98U4QZbe1n0k61Ydq3RBsn
RNfUSWZMPeE%3d . 
EY Global Tax Alert, "Israel approves new innovation box regime and reduces tax rates from 1 January 
2017", 16 December 2016. Viewed at: www.ey.com/taxalerts . 
102 Israel Courts Companies' Intellectual Property With New Tax B reaks , Bloomberg BNA World 
Intellectual Property Report, 29 WIPR 22, quoting a senior ministry official. Viewed at: 
http://iplaw.bna.com/iprc/5 008/split_display.adp?fedfid=71869306&vname=wiprunotallissues&split=0 . 
103 EY Global Tax Alert, "Israel approves new innovation box regime and reduces tax rates from 
1 January 2017", 16 December 2016 . 
104 Israel Courts Companies' Intellectual Property With New  Tax Breaks , Bloomberg BNA World 
Intellectual Property Report, 29 WIPR 22. An exception applies if IP assets are transferred to Israeli ownership 
as part of an active and ongoing business as a whole.  WT/TPR/S/ 376 • Israel  
 
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  of a significant economic presence in Israel, as defined in section 2.2.3 of the said circular, and the 
legal implications of such registration.105 
3.148.   In 2016, the Israeli Tax Authority (ITA), submitted a draft amendmen t to the VAT Law that 
would require foreign suppliers of business -to-consumer digital services to register and account for 
value added tax in Israel and would apply to telecommunication services and electronic services, 
including sales of intangible produc ts, provided through the internet or other network s, including 
software sales or upgrades, entertainment products, gaming, music, digital books, gambling, TV 
program mes, movies, transfer of rights to sell intangible goods or services in an online store in 
exchange for consideration.106 
3.3.7.3   International context and WTO participation  
3.149.   Since the last TPR in 2012, Israel has signed and ratified WIPO's Marrakesh VIP Treaty107 
which entered into force for Israel on 30  September  2016. Israel is a member of WIPO and a party 
to most of its treaties .108 The Patent Cooperation Treaty (PCT), the Protocol Relating to the Madrid 
Agreement Concerning the International Registration of Mark s, and the Lisbon Agreement for the 
Protection of Appellations of Origin and their International Registration directly affect the working 
of the domestic system of IP protection. While a signatory to the WIPO Copyright Treaty and the 
WIPO Performances and Phonograms Treaty since 1997, Israel has not ratified these agreements. 
It is also not a signatory of the Patent Law Treaty.  
3.150.   As a member of the WIPO Lisbon Agreement109, Israel participated actively in the 
negotiations of the Geneva Act of the Lisbon Agreeme nt on Appellations of Origin (AOs) and 
Geographical Indications (GIs)110 that was adopted on 20 May 2015. In the negotiations, Israel 
presented specific positions on GIs in trans -border geographical areas, on the scope of protection 
vis-à-vis earlier rights, and on the protection of registered AOs and GIs against becoming 
generic.111 With regard to the envisaged fees for use of the new Act, Israel supported a fee 
structure at the international level that permitted the financial sustainability of  the registration 
system while maintaining the option for Members to charge filing and renewal fees at the national 
level.112 While Israel signed the Final Act at the conclusion of the Diplomatic Conference in 
Geneva, this "does not constitute a decision […] to accede to the Final Act" and an inter -ministerial 
team will continue to deliberate "with the aim of formulating a clear position regarding the 
economic viability of joining".113 
3.151.   Israel's commitments with respect to IPR protection in bilateral agreements include an 
undertaking to protect intellectual property rights "in accordance with the highest international 
standards, including effective means of enforcing such rights".114 Israel also maintains a global 
network of nearly 40 Bilateral Treaties for the Rec iprocal Promotion and Protection of Foreign 
                                                
105 Israel Tax Authority, "The Israeli Tax Authority publ ished guidelines regarding taxation of foreign 
corporation activity in Israel via the Internet". Viewed at:  
https://taxes.gov.il/English/About/SpokesmanAnnoun cements/Pages/Ann_11042016.aspx . 
106 The Israeli Tax Authority published guidelines regarding taxation of foreign corporation activity in 
Israel via the Internet , Israeli Tax Authority, Announcement 11042016. Viewed at: 
https://taxes.gov.il/English/About/SpokesmanAnnouncements/Pages/Ann_11042016.aspx . See also Israeli Tax 
on Digital Services: Draft Law ; Dr. Avi Nov Law Offices. Viewed at: http://www.israeltaxlaw.com/page1223. 
asp. 
107 The Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually 
Impaired or Otherwise Print Disabled, adopted on 27 June  2013, seeks to create a set of mandatory limitations 
and exceptions for the benefit of the blind, visually impaired, and otherwise print disabled (VIPs). Viewed at: 
http://www.wipo.int/treaties /en/ip/marrakesh/ . 
108 For a detailed list of IP -related treaty membership, see: http://www.wipo.int/wipolex/en/profile.jsp? 
code=IL . 
109 The Lisbon Agreement for the Protection of Appellati ons of Origin and their International Registration 
provides for the protection of appellations of origin through a central register. See details at: 
http://www.wipo.int/treaties/en/regist ration/lisbon/ . 
110 See details of the Geneva Act at: http://www.wipo.int/wipolex/en/details.jsp?id=15625 . 
111 Israel Patent Office Annual Report 2015, p.98.  
112 Israel Patent Office Annual Repo rt 2015, p.98.  
113 Israel Patent Office Annual Report 2015, p.98.  
114 Euro-Mediterranean Agreement between the European Communities and Israel of 1995, Chapter 4, 
in WTO document WT/REG110/1.  WT/TPR/S/ 376 • Israel  
 
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  Investments (BITs)115, which also cover intellectual property rights as part of investment 
protection in the majority of cases. During the period under review, Israel concluded negotiations 
for a bilateral free tra de agreement (FTA) with Panama and has signed a n FTA with Colombia116, 
as well as BITs with Myanmar117 and Japan118, which include intellectual property rights in the 
definition of investment. An amended BIT with Ukraine entered into force on 
20 November  2012.119 
3.152.   As an exception to the investment's protection against expropriation, these agreements 
specify that, with respect to intellectual property rights, a party may permit the use of an 
intellectual property right, provided such permission is made in conformity with the principles set 
forth in the TRIPS Agreement.120 In the Israel -Colombia FTA, it is specified that such principles 
include "any waiver in force between the Parties of any provision of the TRIPS Agreement granted 
by WTO Members in accordance with the W TO Agreement"121 which would cover special 
compulsory licences for exportation that can be granted under the WTO mechanism established for 
that purpose.122 
3.153.   Israel is in negotiations for future or expanded FTAs with South Korea123, China124, 
Viet Nam, the Eurasian Economic Union, India125, and Canada.126 Both the agreements with South 
Korea and Canada will include IP chapters, however the inclusion of IP chapters in the rest of said 
FTAs, and the scope of such chapters, has not yet been decided . 
3.154.   As reported in the last TPR Report, Israel had reached an agreement with the United 
States127 in February 2010 in the context of its OECD accession to make three specific 
amendments to its patent and other provisions related to pharmaceutical protection, in an effort to 
downgrade i ts status from the USTR Special 301 "Priority Watch List".128 After the enactment of 
the two remaining patent law amendments foreseen in the agreement during this review period – 
on transparency and patent term extension129 – and significant efforts to reduce pendency and 
examination time at the ILPO, the United States downgraded Israel to the Special 301 "Watch List" 
in 2013130, and removed it from the Special 301 Report altogether in 2014.131 
                                                
115 See a list at http://investmentpolicyhub.unctad.org/IIA/CountryBits/102#iiaInnerMenu . 
116 Israel -Colombia FTA, signed on 30 September 2013, does not contain a Chapter on IP, but includes 
IP in the definition of investment in Article  10.1. V iewed at: 
http://www.mof.gov.il/chiefecon/internationalconnections/doclib1/colombia.pdf . 
117 Israel -Myanmar BIT, signed 5 October 2014, effective 5 Septembe r 2017. (See the definition of 
Investment in Article 1.1).  
118 Israel -Japan BIT signed 1 February 2017, effective 5 October 2017. ( See the definition of Investment 
in Article 1.(a) vii.).  
119 Israel -Ukraine BIT, amended on 24 November 2011, effective 20 Novemb er 2012. ( See the definition 
of Investment in Article 1.(a) 4.).  
120 Israel -Colombia FTA, Article 10.7 (2). See similar provisions in the Israel -Myanmar BIT (Article 5.2), 
the Ukraine -Myanmar BIT (Article 5.2), and in the Israel -Japan BIT (Article 11.5).  
121 Israel -Colombia FTA, Article 1.5: General  Definitions , Footnote  1. 
122 See the TRIPS waiver decision WT/L/540 (and Corr.1) of 2003, and the new Article 31 bis of the 
TRIPS  Agreement (in force since 23 January 2017), implementing Paragraph 6 of the WTO Declar ation on 
TRIPS and Public Health (WT/MIN(01)/DEC/2 of 20 November 2001).  
123 "S. Korea starts 2nd round of FTA talks with Israel", Yonhap News Agency on 11 December 2016. 
Viewed at: http://english.yonhapnews.co.kr/news/2016/12/11/0200000000AEN20161211001100320.html . 
124 See China FTA News Release of 15 July 2017. Viewed at: 
http://ft a.mofcom.gov.cn/enarticle/enrelease/201707/35539_1.html . 
125 See https://aric.adb.org/fta/india -israel -preferential -trade -agreement . 
126 See Canada's Press Release: http://international.gc.ca/trade -commerce/trade -agreements -accords -
comme rciaux/agr -acc/israel/fta -ale/info.aspx?lang=eng&_ga=2.246730244.1842988708.1513595794 -
937579896.1513595794 . 
127 USTR - Government of Israel Agreement of 18 February 2010:  
https://ustr.gov/sites/default/files/uploads/gsp/speeches/reports/IP/MOU%20Israel.pdf . 
128 The Special 301 lists identify states whose intellectual property laws are seen as trade barriers to 
U.S. companies and products.  
129 See below for more detail on these patent law amendments.  
130 United States Trade Representative Ron Kirk Announces Removal of Israel from Intellectual Property 
Rights Priority Watch List , USTR Press Release, 24 September 2012. Viewed at: https://ustr.gov/about -
us/policy -offices/press -office/press -releases/2012/september/USTR -announces -remov al-israel -ipr-priority -
watch -list. WT/TPR/S/ 376 • Israel  
 
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  3.155.   In the context of the WTO TRIPS Council, Israel is a supporter of the "Joint Proposal" in the 
WTO GI negotiations, advocating a voluntary GI register for wine and spirit GIs that has no legal 
effects at the national level.132 Under Article 63.2, Israel notified a consolidated version of its 2007 
Copyright Act to the TRIPS Coun cil in November 2011.133 Other legislative changes to its primary 
IP legislation since 2011 have not yet been notified to the TRIPS Council.  
3.3.7.4   Structure and use of the IP System  
3.156.   The Ministry of Justice  is responsible for IP policy and governmental initiatives of IP 
legislation  and in particular, the Israel Patent Office (ILPO), which is under the Ministry of Justice . 
The ILPO provides legal protection of industrial intellectual property, through the examination and 
registration of patents, designs, trademarks a nd appellations of origin. The ILPO is also in charge 
of registration -related adjudication.  
3.157.   The numbers of patent applications, patents granted, and trademark and industrial design 
applications between 2012 and 2017 in Israel are shown in Table 3.18 . Overa ll levels of filings in 
Israel have remained stable or increased at a moderate rate since 2012, with the relative share of 
filings by residents vis-à-vis foreign applicants remaining steady at around 26% for trademarks 
and around 20% for patents. The most significant growth is registered in filings by Israeli residents 
abroad. The number of PCT applications by Israeli residents abroad also continuously exceeds 
foreign PCT applications in Israel.134 The data illustrates the intensive use of the IP system by 
Israeli residents which corresponds to the highly competitive and innovative domestic economy 
and to the rise in IP exports over the same period is illustrated in the previous section.  
3.158.   A significant shift can be observed in the number of patents the ILPO has  been able to 
grant per year. While the number of patent applications remained stable, the ratio of grants per 
application improved from 50% in 2012 to over 80% in 2016, reflecting successful efforts to 
moderni ze the office procedure, improve capacity and reduce the pendency rate and examination 
time. 
Table 3.18 Applications for trademarks, industrial designs, and patents, and patents 
granted, 2012 -16 
 2012  2013  2014  2015  2016  2017  
Trademark applications   
Resident  2,186 2,244 2,379 2,507  2,341  2,570  
Non-resident  6,160  6,381  6,576  6,716  6,748  8,070  
Total 8,346  8,625  8,955  9,223 9,089  10,640  
Abroad  10,963  12,855  15,004  14,301  17,347  n.a. 
Industrial design applications   
Resident  1,011 860 921 1,049  1,181 1,074  
Non-resident  538 489 459 489 684 583 
Total 1,549 1,349 1,380 1,538 1,865 1,657  
Abroad  6,901  6,029  8,654  9,147  9,131  n.a. 
Patent applications   
Resident  1,319  1,201  1,125  1,285  1,300  695 
Non-resident  5,473  4,984  5,148  5,623  5,119  6,118  
Total 6,792  6,185 6,273 6,908  6,419 6,813  
Abroad  11,065  11,566  12,312  13,203  13,808  n.a. 
Patents granted   
Resident  484 594 690 723 787 728 
Non-resident  2,902  3,103  3,294  3,769  4,151  4,078  
Total 3,386 3,697 3,984 4,492  4,938 4,806  
Abroad  4,129  4,797  5,257  5,673  6,108  n.a. 
n.a. Not applicable.  
Source:  WTO Secretariat, based on WIPO statistical data, last updated in March  2018, and information 
provided by the authorities.  
                                                                                                                                                  
131 Israel Removed from Special 301 Report , USTR Press Release, 2014. Viewed at: 
https://ustr.gov/about -us/policy -offices/press -office/press -releases/2014/February/Israel -removed -from-
Special -301-Report . 
132 See document TN/IP/W/10/Rev.4 dated 31 March 2011.  
133 WTO documents IP/N/1/ISR/C/11 (copyright and related rights).  
134 ILPO Annual Report  2016, p. 87, Chart 63.  WT/TPR/S/ 376 • Israel  
 
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  3.159.   Over the review  period, the ILPO  has made significant efforts to improve efficiency and 
timely service through training and improved allocation of existing resources135, as well as 
recruitment of new patent and trademark examiners, with the particular aim of reducing the 
pendency and exami nation time, which had been one of the concerns that lead to the 2010 
agreement with the United States.136 Fully online service and correspondence systems were 
established in the patents, trademark and designs departments of the ILPO by December 2016137 
and th e ILPO's patent department has participated in WIPO's global system for centralized access 
to search and examination (CASE) since 2014 and computer -aided search and examination 
(CASE2) since 2015.  
3.3.7.4.1   Patents  
3.160.   The majority of patent applications in Israel are filed in the fields of human necessities 
(42.5%)138, chemistry and metallurgy (27.3%), physics (11.9%) and electricity (6.8%)139. While 
the top three foreign patent applicants in 2010 were Qualcomm Inc., F. Hof fmann -La Roche, and 
BASF SE, the top three in 2016 were Facebook, Inc., Dow Agrosciences LLC, and Philip Morris 
Products S.A.140 
3.161.    The ILPO has carried out significant steps to improve its performance, in all areas of its 
activity, i.e. patents, trademarks an d designs. In view of those steps and continued efforts to 
improve its search and examination capabilities141, average patent pendency time (the time until 
an application is taken up for first examination) has improved modestly from 32.5 months in 2012 
to 28 .5 months in 2016, with pendency remaining longest in the areas of "IT, electronics and 
medical devices" and " mechanics and physics". The average of total examination time (the time 
from the first examination until a decision on patent grant or refusal) co ntinued its historical 
upward trend for most of the review  period, peaking at 30 months in 2015142, partly due to 
reorganization and the assumptions of additional functions (see below)143, before falling to 24.4 
months in 2016. The longest examination times pe rsist in applications for biotechnology patents. 
In 2015, the Committee for Setting and Evaluation of ILPO's Goals decided to "lay out a multi -year 
goal to reduce first examination pendency to 24 months within 3 years."144 In line with the 
Committee's decisi on, 16 new patent examiners and 2 trademark examiners were recruited in 
2016, and 20 additional patent examiner positions have been approved for 2017 -18.145 
3.162.    In June 2012 , the ILPO started operating as an International Searching and Preliminary 
Examining Aut hority (ISA/IPEA) under the Patent Cooperation Treaty (PCT), allowing applicants to 
select the ILPO as an international authority authorized to conduct a search and preliminary 
examination of their international patent applications under the PCT. In 2017, 65% of all Israeli 
applicants designated the Israeli ISA/IPEA. The others designated the US and European ISA/IPEAs. 
While originally offered only to Israeli applicants, the service expanded to international applicants 
from the United States and Georgia in 2014 and 2015, with designations slowly rising.146 
                                                
135 Israel Patent Office Annual Report 2014, p.7, stating "2014 was marked with an increase in the 
scope of work conducted in the departments of the Israel Patent Office (ILPO), while diligently increasing the 
quality assurance proced ures, without increasing the scope of human resources."  
136 See above.  
137 Israel Patent Office Annual Report 2016, p.5.  
138 Human Necessities  include , inter alia , pharmaceuticals, Medical Preparations and Medical Device s. 
139 Israel Patent Office Annual Report 20 16, p.67.  
140 Israel Patent Office Annual Report 2010 and 2016.  
141 Israel Patent Office Annual Report 2014, p.8. "As in previous years, during this year continuous 
efforts were made for improving the searching capabilities for the examination: by means of enh ancing the 
accessibility of new search engines which refine the searching abilities of the examiners and by increasing the 
budget for ordering of professional literature (Non -Patent Literature). In addition, many efforts were made to 
improve the supporting  systems for international examinations and in particular the quality assurance 
procedures for international examinations." See also Israel Patent Office Annual Report 2016, p.63.  
142 Israel Patent Office Annual Report 2015, p.27, Chart 11, showing "Average of Total Examination 
Time (months) in Patent Application in 2006 -2015 (by Departments)".  
143 Israel Patent Office Annual Report 2015.  
144 Israel Patent Office Annual Report 2014, p.7. This aim is formulated "via and subject to the allocation 
of addition approp riate manpower examination resources."  
145 Israel Patent Office Annual Report 2016, p.5.  
146 The share of Israeli PCT applicants designating ILPO as ISA/IPEA rose from 55% in 2013 to 64% in 
2016, while the number of U.S. PCT applicants designating ILPO as ISA/IPEA rose from zero to 327 over the WT/TPR/S/ 376 • Israel  
 
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  3.163.   The ILPO also continued to expand its Patent Prosecution Highway (PPH) arrangements, 
including those in the context of the PCT (PCT PPH) and the Global PPH program (GPPH), under 
which 25 offices worldwide ut ilize a single coherent agreement system, permitting accelerated 
examination of parallel patent applications. Applicants' use of accelerated examination based on 
PPH arrangements in Israel surged more than ten -fold since 2013.147 In addition to the PPH track  
of accelerated examination, the ILPO allows the applicant to elect for an abbreviated examination 
on the basis of acceptance of a parallel application by an approved examining authority abroad, 
such as the European Patent Office or the U.S. Patent Office.  With regard to other accelerated 
examination tracks, it should be noted that 25% of all applications first filed in Israel in 2017, 
which did not claim priority right elsewhere, used the option of accelerated examination. In 
contrast, the accelerated fast  track for "green" patent applications introduced in 2009 is not used 
much, despite a number of applications with the potential to be classified as green applications 
each year.148 
3.164.   The ILPO began using the new Cooperative Patent Classification (CPC) system149 in 2016.  
3.165.   As regards legislative activity, this review  period saw the implementation of the two 
remaining Patent Law amendments Israel had committed to in the 2010 agreement with the 
United States, which are of particular relevance to pharmaceutical patents. In light of Israel's large 
generic pharmaceutical i ndustry these amendments contain elements that respond to the interests 
of both the patentee and the generic pharma industry, as well as interests of public health policy.  
3.166.   Amendment No. 10 of Patent Laws150, which entered into force on 12 July 2013, 
introduc ed a number of procedural changes with respect to the examination process. Most 
importantly, it provided for the publication o n the ILPO's website o f Israeli patent applications, 
including the "file wrapper" (the application history), 18 months from the pr iority date or 45 days 
from the entering of the international application to the national phase, thus bringing Israel up to 
the standard of transparency applied in many other PCT member States. It also introduced 
reasonable royalties for unauthorized use o f an invention after the publication of the application, 
but before the grant of the patent, if the use constitutes infringement of the patent as granted. In 
a balanced approach, the amendment also expanded the rights of third -parties during the 
examinatio n period by allowing them to submit prior art to the patent examiner, and by allowing 
them to request expedited commencement of an application's examination in certain 
circumstances, e.g. if there are reasonable grounds to believe that without such expedit ed 
examination, the third party might have to postpone development or manufacture of a product or 
method claimed in the invention.151 68 prior art submissions, and no third parties requests for 
expedited examination, have been made since those amendments wer e introduced.  
3.167.   Amendment No. 11 of Patent Laws152, which entered into force on 24 January 2014, 
revised Israel's patent term extension (PTE) system, which governs the extension of the patent 
protection term to remedy delays in the granting of marketing approval for patented 
pharmaceutical products. The u nique Israeli PTE system is based on external linkages to PTEs or 
supplementary protection certificates (SPEs) in "Reference Countries"153 and calculates the period 
of Israeli PTEs in such a manner that they expire either before, or coterminous with, the ear liest-
expiring reference patent term extension in any of the reference countries, thus ensuring that 
generic companies will usually be among the first permitted to begin producing the now off -patent 
                                                                                                                                                  
same period. See Israel Patent Office Annual Report 2016, p.88. No applications were designated by Georgian 
applicants . 
147 Israel Patent Office Annual Report 2016, p.80, Chart 54.  
148 Israel Patent Office Annual Report 2016. See also Israel Patent Office Annual Report 2015, p.38.  
149 The CPC is the result of a partnership between the EPO and the USPTO in their joint effort to develop 
a common, internationally compatible classification system for technical documents, in particular patent 
publications, which will be used by both offices  in the patent granting process. See 
https://www.cooperativepatentclassification.org/index.html . 
150 The Patents Act (Amendment No. 10), 5772 -2012, adopted by the Knesset on 9 July 20 12, entered 
into force on 12 July 2012.  
151 Section 19A(c) of the Israeli Patent Law further lists "public welfare", "special circumstances", and 
"unreasonably long time -period from filing to examination compared to other applications in the same field" as 
further reasons justifying third -party requests for expedited examination.  
152 The Patents Act (Amendment No. 11), 5774 -2014, adopted by the Knesset on 20 January 2014, 
entered into force on 27 January 2014.  
153 For a more detailed description of the Israeli PT E system, see the 2012 TPR Secretariat Report 
WT/TPR/S/272, paras. 215 -217. WT/TPR/S/ 376 • Israel  
 
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  product for the Israeli market once all other legal prohi bitions have terminated. As agreed with the 
U.S. in 2010, amendment No. 11 reduced the number of reference countries from 21 to 6 
countries154 and introduced the early examination of a PTE application even if the reference 
extensions under the "two state req uirement" have not yet been granted in the reference 
countries. In addition, in order to increase the  certainty  for the Israeli market and for public health 
policy makers, the amendment also tightens the timeline for PTE examination procedures. PTEs 
automa tically expire when a reference patent is revoked, or a PTE or SPC for a reference patent is 
revoked or withdrawn in any of the reference countries.  
3.168.   Despite its active generic pharmaceutical industry that could potentially benefit from the 
permission to export pharmaceuticals produced under compulsory licences, Israel has not yet 
implemented the WTO's Paragr aph 6 System into domestic law.  
3.169.   In 2016, the ILPO conducted an empirical study of the efficiency of pre -grant opposition – 
the possibility for third par ties to oppose the patent application after allowance and before it is 
granted – on the basis of oppositions during the period 2012 -15, with a view to reform ing the 
patent opposition procedures .155 The results published in January 2017 indicate that the rate  of 
pre-grant oppositions has fallen continuously since 2000 and is now as low as 1% of the total 
allowed patent applications. Around 60% of oppositions are abandoned by the opposing party and 
around 30% of the oppositions result in the withdrawal of the p atent application by the applicant, 
around 75% of those before the evidentiary stage. The 10% of oppositions that are heard in full 
have a success rate of 92%, but the duration of those proceedings is around six years – which is 
three to six times as long as corresponding proceedings in Europe and the United States. Given 
that a pre -grant opposition suspends the grant of a patent, the cumulative delay in the patent's 
grant caused by the high pendency rate described above and the duration of pre -grant opposi tion 
proceedings can amount to a decade or more – although t his delay affected in practice only 1 -2 
patent applications in the four years that have been studied . The oppositions focus on patents in 
the fields of pharmaceuticals, biology or chemistry (44%) and mechanics, electronics and optics 
(41.6%), with the companies Teva and Unipharm together filing 98% of oppositions in the 
pharmaceutical field.156 As a result , the Ministry of Justice has called for a statutory overhaul of the 
pre-grant opposition proced ures. 
3.170.   As regards parallel importation  of patented products , there have been no developments in 
jurisprudence since the last TPR Secretariat Report.  
3.3.7.4.2   Industrial designs  
3.171.   As in other ILPO departments, efforts to continue reducing pendency times have been 
made at the Designs Department where the first examinatio n pendency was shortened to 
3.5 months, while the average overall examination time at year -end of 2016 stood at 3.5 months 
– the shortest time in the past 10 years.157 
3.172.   During the review  period, The Knesset adopted a new Designs Law158 in July 2017 which 
will enter into force in August 2018, replacing the Patents and Designs Ordinance of 1924.159 This 
law constitutes a complete overhaul of the design protection regime, with the aim of modernizing 
the legal regime , providing certainty to small and medium entities and enabling Israel to join the 
WIPO Hague Agreement Concerning the International Deposit of Industrial Designs which will 
permit Israeli applicants to use the international design registration system.160 The new Design s 
Law increases the protection period from 15 to 25 years from the filing date (subject to renewals), 
and replaces the current requirement for local novelty or originality, with cumulative requirements 
                                                
154 5 EU countries (United Kingdom, Spain, Germany, France and Italy) and the U.S.  
155 ILPO Annual Report 2016, p.8, p.43 -44. 
156 Recently published: New empirical study of ILPO relating  to pre -grant oppositions in Israel, 22 
January 2017; http://www.rcip.co.il/en/article/recently -published -new-empirical -study -of-ilpo-relating -to-pre-
grant -oppositions -in-israel/?utm_source=Mondaq&utm_medium=syndication&utm_campaign=View -Original . 
157 ILPO Annual Report 2016, p. 95.  
158 Designs Law, 5777 -2017. 
159 The Ordinance is in force with regards to designs; the patent -related provisions were revoked by The 
Patents Law, 5727 -1967.  
160 ILPO Annual Report 2016, p.7.  WT/TPR/S/ 376 • Israel  
 
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  of both global novelty and individual char acter in order for a design to qualify for protection.161 
Under the new law, graphic symbols and screen displays, such as graphical user interface (GUI) 
and App icons, are also eligi ble for protection as a design.  
3.173.   Under the new Design s Law, an unregistered design will be protected for 3 years from the 
first publication of the design if marketed in Israel. The new Design s Law also introduces statutory 
damages of NIS  100,000 for each act of infringement, and border measures for registered  design 
piracy . It establishes  as a criminal offen ce the intentional copying of a registered design by way of 
business and in a commercial manner. Corporate officers who – under the new law - are required 
to supervise and implement measures to avoid the of fence, are also liable in that regard.162 
3.174.   As regards the relationship between design and copyright protection, A rticle 7 of the 2007 
Copyright Act, which provides for mutual exclusivity of copyright and designs , has not been 
changed, however the new Designs Law specifically states that Typeface and Typefonts are 
protected by the copyright regime. In recent case law, the Israeli Supreme Court adopted the 
conceptual separability test .163 Under that test, a work is conceptually separated from an article if 
the wor k exists – either on paper or as a three -dimensional sculpture – independently from the 
article without destroying its basic shape. This test is satisfied only if the artistic work and the 
article may co -exist side by side and be perceived as two separate works, one an artistic work and 
the other a useful article. The court notes that the compensation for infringement shall be limited 
to the copyright infringement, isolated from the potential compensation for the counterfeit goods 
as a whole.  
3.3.7.4.3   Trademarks  
3.175.   Trademark applications in Israel are filed predominantly in the areas of scientific, electric 
and computer instruments (Class 9: 22%), business -related services – advertising, commerce 
(Class 35) , and pharmaceutical and veterinary preparations (Class 5).164 The leading applicant in 
the field of trademarks in Israel in 2016 was Apple Inc., followed by Gilead Sciences Ireland UC.165 
Trademark pendency - the time until a decision on whether or not to grant the trademark – 
remains at around 18 months from application.166 As in other ILPO departments, efforts to 
continue reducing pendency times have been made at the Trademarks Department where the first 
examination pendency currently stands at 12 months.  
3.176.   As regards parallel importation of trademarked goods, the Israel Sup reme Court in the 
2014 Tommy Hilfiger  case167 reconfirmed that parallel importation is legitimate. The licensed 
importer or franchisee cannot prevent parallel importing, but the parallel importer must actively 
take steps to avoid the impression of any relati onship with the right holder or giving the 
appearance of a licensed importer.  
3.177.   There have been no significant legislative developments in the area of trademarks since 
the last TPR R eport.  
3.3.7.4.4   Geographical indications  
3.178.   There have been no significant domestic legi slative developments in the area of 
appellations of origin or geographical indications since the last report.  Israel's involvement  in the 
negotiations of the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical 
Indications at the i nternational level is covered above.  
                                                
161 Webb&Co online information. "A new Designs Law for Israel". Viewed at: 
https://www.wbpatents.com/a -new-designs -law-in-israel/ . 
162 Webb&Co online information. "A new Designs Law for Israel". Viewed at: 
https://www.wbpatents.com/a -new-designs -law-in-israel/ . 
163 CA 1248/15 Fisher Price v. Devron  (31/8/2017) . 
164 ILPO Annual Report 2016, p. 53.  
165 ILPO Annual Report 2016, p. 52.  
166 ILPO Annual Report 2016, Chart 26, p. 57.  
167 CA 7629/12 Swissa v Tommy Hilfiger Licens ing LLC  (2014).  WT/TPR/S/ 376 • Israel  
 
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  3.3.7.4.5   Copyright and related rights  
3.179.   Since the modernization of Israeli copyright law through the introduction of the 2007 
Copyright Act covered in the previous TPR168, the courts have continued to develop jurisprudence 
under the  new legal regime. In the area of exceptions and limitations, where the 2007 Act had 
introduced a significant shift from a relatively restrictive "fair dealing" regime to a more flexible 
and open -ended approach of "fair use", the Israeli Supreme Court has issued  three landmark 
decisions regarding  whether the permitted "fair uses" constitute merely a legal defence against 
liability for copyright infringement, or whether they constitute "user rights" that should be treated 
on a par with the rights of authors.  
3.180.   In Premier League Ltd. V. Anonymous (2012)169 the Supreme Court, overruling the District 
Court decision in favour of fair use170, held that unauthorized streaming of Premiere League 
Football matches constituted copyright infringement and explicitly rejected t he "user rights" 
approach to fair use. However, in the 2013 Telran171 case concerning the sale of decoding cards to 
decode the broadcasts of World Cup games, the Supreme Court held that users who exercise user 
rights d o not commit an infringing act which is excused, but instead they act in a manner that is 
explicitly permissible by law, and therefore there is no infringement to begin with. Since merely 
watching copyrighted material did not constitute copyright infringement, the sale of decoding cards 
could no t constitute contributory copyright infringement.172 The Supreme Court confirmed this 
approach in the 2013 Safecom173 case, holding that "permitted uses constitute a right that is 
granted to the user to make certain types of use of a work" and pointed out that  the continuing 
controversy about the nature of "fair use," particularly in the digital context, might merit more in -
depth deliberation174 and more detailed legislative guidance.175 The current law also provides no 
clear statutory guidance on the circumvention  of technical protection measures and liability of 
online service providers.  
3.181.   In 2014, even before ratifying the WIPO Marrakech VIP Treaty which stipulates obligations 
with regard to visually impaired persons (VIPs), Israel introduced copyright provisions t hat permit 
the making of accessible format copies for the purpose of making works accessible to persons with 
disabilities, if such adaptations do not exceed those necessary to achieve the purpose of the 
law.176 The entities entitled to make such accessible f ormat copies are limited mainly to certain not 
for profit organizations and educational institutions when the adaptation is done on a non -profit 
basis, or a disabled person or a person acting on his behalf when done for personal use . The 
exception also app lies where an accessible format copy exists, but is not adequate to meet the 
needs of a particular disabled person or particular disability.  
3.182.   In March 2017, the Knesset approved the extension of the term of protection for 
performances from 50 to 70 years fr om the performance. In addition, the term of protection for 
phonograms was extended from 50 years from the making of the phonogram, to 70 years from its 
making or from the publication of the phonogram, if it was published within 2 years from the 
making of the phonogram. The extension of the term of protection for phonogram s is conditioned 
on the making of the phonogram available to the public  or by publishing copies in an amount  
sufficient to reasonably satisfy  the public's demand for the phonogram. This co ndition is examined 
at the end of fifty years from the beginning of the term of protection, and every year during the 
subsequent 20 years . In addition, when the phonogram is not protected because the producer did 
not meet the requirements, the performer wh ose performances are included in the phonogram 
may reproduce the performance and sell copies thereof even if ownership of the performer's right 
has been transferred to the producer of the phonogram.  
                                                
168 See WT/TPR/S/272, paras. 126 -132. 
169 CA 9183/09 Football Association Premiere League Ltd. v. Anonymous  (2012).  
170 See WT/TPR/S/272, para. 130, citing the District Court Decision.  
171 CA 5097/11 Telran  Communications (1986) Ltd. v. Charlton Ltd.  (2013).  
172 Copyright in a Digital Ecosystem; Niva Elkin -Koren: p.157; in Okediji (ed.), Copyright Law in an Age 
of Limitations and Exceptions, CUP 2017.  
173 CA 7996/11 Safecom Ltd. v. Raviv  (2013).  
174 CA 7996/11 Safecom Ltd. v. Raviv  (2013) (Justice Danziger). English translation of Safecom Ltd. v. 
Raviv , provided by Cardozo Law project VERSA. Available at: http://versa.cardozo.yu.edu/ . 
175 CA 5097/11 Telran Communication s (1986) Ltd. v. Charlton Ltd.  (2013)  (Justice Amit).  
176 Law for Making Works, Performances and Broadcasts Accessible for Persons with Disabilities (Law 
Amendments), 5774 -2014, entered into force, 19 March 2014.  WT/TPR/S/ 376 • Israel  
 
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  3.183.   As part of a reform that aimed to facilitate competition in the multi -channel television 
market , in 2016 Israel introduced an obligation for television broadcasters to licence certain pre -
registered multi -channel providers (including over the internet content providers) to 
simultaneously transmit their digital f ree-to-air broadcasts in Israel.177 While simultaneous re -
transmission of free -to-air broadcasts through cable and satellite networks has long been covered 
by a specific provision that makes the rebroadcasting of these broadcasts mandatory while 
exempting th e cable and satellite networks from royalty payment to ensure nationwide coverage, 
the 2016 reform of the Digital Broadcast Distribution Law introduces a statutory obligation for 
broadcasters to licence178 approved and registered multi -channel providers to s imultaneously 
transmit the free -to-air broadcast signals, including via internet, for reception within Israel under 
the condition that these providers take advanced and adequate  technological measures to prevent 
reception or download outside Israel's borde rs.179 The provisions explicitly recognize the rights of 
creators and performers180 and the fact that the registered multi -channel provider requires 
authorization from copyright holders and performers of content contained in the broadcast, and 
the Digital Broadcast Distribution Law indicates that such authorization can be  obtained either  
from the right holders directly, or indirectly through the television broadcaster.181 
3.3.7.4.6   Enforcement  
3.184.   The Israeli Customs Administration may detain imported goods suspected of trademark 
and copyright infringement, either ex officio  or upon a right holder's comp laint. Over 95% of 
seizures are made in ex officio  capacity. For design infringement, the Customs Administration will 
have the authority to detain such goods upon a right holder's complaint, after the Designs Law has 
come into force.  
3.185.   Customs must notify th e right holder and the importer upon seizure. The right holder must 
submit, within three working days (w hich can be extended to six), a bank guarantee to customs to 
compensate the importer or the Customs Authority for any financial damage, in order to obta in the 
importer's details and a sample of the seized goods. If the right holder takes no action within 10 
working days (or up to 20 working days if an extension was gr anted), the goods are released.  
3.186.   In a " forfeiture procedure", which is the exception, and applicable to situations where there 
is high certainty that the goods are infringing and their value is low, customs may agree to destroy 
the goods based on a written opinion by the rights holder and an undertaking to compensate the 
importer or the Customs  Administration for any financial  damage that may be inflicted as a result 
of the seizure. From Febru ary 2018, the ILPO is offering the  possibility of registering a specific 
address for the purpose of operating border measures by the Customs Administration , to facilitate 
a more efficient notification by the Customs, including for international registrations where there is 
no empowered Israeli agent.  
3.187.   During the years 2014 -17, 555 cases were handled by the State Attorney office under the 
Ministry of Justice, and 229 indictments were filed under  the Copyright Law, the Trademark 
Ordinance, the Performers' and Broadcasters' Rights Law and section 338(8) of the Penal Law.  
                                                
177 Israel introduced Digital Terrestrial TV in  2009, and introduced  the Law for Distributing Broadcasts 
through Digital Broadcasting Stations in 2012.  
178 The Economic Plan Law (Legislative Amendments for the Implementation of the Economic Policy for 
the Budget Years 2017 and 2018), Section 13c, Obligat ion to grant consent for signal retransmission.  
179 The Economic Plan Law (Legislative Amendments for the Implementation of the Economic Policy for 
the Budget Years 2017 and 2018), Section 13c (A) (5) and (6).  
180 The Economic Plan Law (Legislative Amendments for the Implementation of the Economic Policy for 
the Budget Years 2017 and 2018), Section 13c (B).  
181 The Economic Plan Law (Legislative Amendments for the Implementation of the Economic Policy for 
the Budget Years 2017 and 2018) . WT/TPR/S/ 376 • Israel  
 
- 69 - 
 
  Chart 3.5 Number of seizures (imports) by C ustoms 2004 -16 
 
Source:  Information provided by the authorities.  
3.188.   The Customs Administration under the Tax Authority at the Ministry of Finance is a partner 
in international intellectual property operations established by the World Customs Organization 
(WCO), leading to cross -continent cooperation and streamlining of work processes in light of the 
findings from such operations.  
 
343 440 431 
373 361 426 745 1,118 1,137 
958 
843 
759 
724 
02004006008001,0001,200
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Chart 3.[Israel] Customs number of seizures (imports), 2004 -16
Source:   Information provided by the authorities.WT/TPR/S/ 376 • Israel  
 
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  4  TRADE POLICIES BY SE CTOR  
4.1  Agriculture, Forestry, and Fisheries  
4.1.1   Agriculture  
4.1.1.1   Features  
4.1.  Agriculture contributed about 1.1% to GDP in 2016, down from 1.5% in 2010. This reflects 
the expansion of GDP in other sectors, as the value of output of agriculture has been relatively 
stable over the past few years, following a steady increase in the value of output from 2001 to 
2010. Crops represent abo ut 59% of the total value of output, and livestock and livestock products 
the other 41% (Chart 4.1).  
Chart 4.1 Value of agricultural output 2005 to 2016  
NIS million  
 
Source:  OECD PSE database. Viewed at: http://www.oecd.org/tad/agricultural -policies/producerand  
consumersupportestimatesdatabase.htm . 
4.2.  In 2016, there were about 75,000 people working in agr iculture, of which 12,000 were self -
employed Israelis, 3,000 were kibbutzim members, and 61,000 were employees, many from South 
East Asia.1 
4.3.  About 93% of land (1,959,800 ha) in Israel is publically owned, either by the State, the 
Jewish National Fund or the  Development Authority, and managed by the Israel Land Authority. Of 
this area, about one quarter is designated as agricultural land.2 
4.4.  About 80% of agricultural products are from kibbutzim and moshavim cooperatives on land 
leased from the Israel Land Autho rity subject to some conditions which include prohibitions on: the 
exchange of land use rights; sub -leasing; and the division of plots through succession.  
4.5.  One of the main differences between kibbutzim and moshavim  is that, on a kibbutz, land is 
managed and worked communally, while on a moshav each actively farming household works a 
                                                
1 Ministry of Agriculture  and Rural Development (2017), Annual Economic Report for 2016 , December, 
p. 59. Viewed at: http://www.moag.gov.il/yhidotm israd/research_economy_strategy/publication/2017/ 
Documents/calcala_chaklaut_2016.pdf  [March 2018] (Hebrew).  
2 Israel Land Authority online information. Viewed at: http://land.gov.il/en/Pages/AboutUs.aspx  and 
http://land.gov.il/Pages/agricultural_sector.aspx  [March 2018].  
05,00010,00015,00020,00025,00030,00035,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Chart 4.1 [Israel] Value of agricultural output 2005 to 2016
(NIS million)
OECD PSE database. Viewed at: http://www.oecd.org/tad/agricultural -
policies/producerandconsumersupportestimatesdatabase.htm.Source:   Poultry meat
Milk
Beef and veal
PotatoesAvocado
Pepper
Other fruits and vegetables
OtherWT/TPR/S/ 376 • Israel  
 
- 71 - 
 
  separate farm and the moshav operates as a cooperative for purchases, sales, and joint ownership 
of some assets. In addition, there are  second order cooperatives (i.e. cooperatives made up of 
other cooperatives) which provide a wide range of services, including collective purchases and 
sales, and which process outputs from the first order cooperatives. These second order 
cooperatives may operate at the national level. In addition, some moshavim operate cooperatives 
with other moshavim, and kibbutzim with other kibbutzim, on a regional basis. In 2014, it was 
reported that there were 442 moshavim operating, where most members worked on 
non-agricultural activities and production was concentrated in a declining number of specialized 
farms. Similarly, in the 286 kibbutzim, growth is focused on non -agricultural activities, and a 
growing number of members work outside the kibbutz.3 
4.6.  Agriculture in Israel is characterized by low and poorly distributed rainfall, with 80% of the 
water in the north where rainfall can exceed 1,000 mm per year but falling to as low as 30 mm per 
year in the south. Most rain falls from December to February, a nd droughts are common. As a 
result, irrigation is essential for production in many areas: out of a total of 437,000 ha of arable 
land, 162,000 ha are irrigated.  
4.7.  The National Water Carrier is the largest water carrier in Israel, carrying water from the Se a 
of Galilee in the north to the centre and south. However, its importance as a source of water has 
declined, as desalination plants were constructed, more efficient irrigation methods were 
introduced, and alternative water sources utilized (such as treate d waste water and saline water).4 
In 2000, the National Water Carrier supplied 230 million m3, which fell to 50  million m3 in 2015, 
while total water production and replenishment increased from 2,020 million m3 to 
2,125  million  m3 over the same period. Fur thermore, since 2004, over half of the water used for 
agriculture has been from treated waste water and saline water.5 In 2016, water consumption in 
agriculture was 1,282 million m3, of which 549 million m3 was fresh water, 528 million m3 was 
treated waste  water, and 295 million m3 was saline water.6 
4.1.1.2   Trade  
4.8.  Israel is a net importer  of agricultural products (WTO definition)7, with exports of US$2,118 
million and imports of US$5,219 million in 2016. Both imports and exports are diversified. The top 
10 imports,  at the HS four -digit level, represented 66% of total agriculture imports; while the top 
10 exports represented 46% of total agricultural exports in 2016. The main exports are food 
preparations n.e.s., dates, vegetable seeds, and mandarins and similar frui ts. In terms of the 
structure of exports, the value of exports of peppers (genus capsicum) declined while exports of 
vegetable seeds, and mandarins (and similar fruits) increased. The main imports were frozen 
boneless beef, followed by wheat, maize, and li ve cattle ( Table 4.1). 
                                                
3 Rosentahl G., Eiges H. (2014), Agricultural Cooperatives in Israel , Journal of Rural Cooperation, Vol. 
42, No. 1, Hebrew University Magnes Press, Jerusalem.  
4 Ministry of Agriculture and Rural Development (2016), Agriculture in Israel Facts and Figures  2016, 
presentation . Viewed at: 
http://www.moag.gov.il/en/Ministrys%20Units/CINADCO/Agriculture_in_Israel/Documents/israel_agriculture_e
nglish_16.pdf . 
5 Ministry of Agriculture and Rural Development (2010 ), Irrigated Agriculture – The Israeli Experience , 
presentation to the United Nations Commission on Science and Technology for Development, Panel on Water 
and Agriculture, December. Viewed at: 
http://www.water.gov.il/Hebrew/ProfessionalInfoAndData/2012/16_Israel_Water_Sector -
Water_and_Agriculture.pdf . 
6 Ministry of Agriculture and Rural Development (2017), Annual Economic Report for 2 016, December, 
p. 60. Viewed at: 
http://www.moag.gov.il/yhidotmisrad/research_economy_strategy/publication/2017/Documents/cal cala_chakl
aut_2016.pdf  [March 2018] (Hebrew).  
7 For the purposes of this Section of the Trade Policy Report, the definition of agriculture products used 
is that set out in Annex 1 of the Agreement on Agriculture , where fish and fish products are taken to i nclude 
tariff lines under HS2012 Headings 020840, 03, 050800, 050900, 051191, 1504, 1603, 1604, 1605, and 
230120.  WT/TPR/S/ 376 • Israel  
 
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  Table 4.1 Exports and imports of agricultural products (HS2012 6-digit level ), 2012 -16 
(US$ mill ion) 
Exports  2012  2013  2014  2015  2016  
Total Exports of all products  63,140.6  66,781.2  68,965.0  64,062.2  60,570.6  
Total agriculture exports  2,418.2  2,558.6  2,480.0  2,179.1  2,118.3  
of which        
210690  Food preparations not elsewhere 
specified or included. // -Other  168.7  170.7  184.2  167.6  165.9  
080410  Dates  111.8  132.4  150.6  138.7  141.5  
120991  Vegetable seeds  105.8  105.8  112.2  131.4  132.1  
080520  Mandarins (including tangerines and 
satsumas); clementines, wilkings and 
similar citrus hybrids  54.5 64.0 66.6 70.7 110.0  
070960  Fruits of the genus Capsicum or of the 
genus Pimenta  223.3  226.3  187.9  138.7  99.8 
070190  Potatoes, fresh or chilled. // -Other  88.0 109.4  129.5  83.6 94.4 
060390  Cut flowers and flower buds of a kind 
suitable for bouquets or for 
ornamental purposes, … // -Other  78.7 85.9 84.8 68.8 81.8 
190590  Bread, pastry, cakes, biscuits and 
other bakers' wares, … // -Other  59.3 57.7 63.3 59.8 69.1 
070610  Carrots and turnips  59.8 77.0 63.4 72.8 63.1 
070999  Other vegetables, fresh or chilled. // - 
Other: // -- Other  74.3 75.9 69.2 61.2 63.0 
Imports  2012  2013  2014  2015  2016  
Total Imports of all products  73,112.1  71,995.0  72,331.8  62,067.8  65,802.7  
Total agricultural imports  5,019.8  5,139.4  5,315.3  4,983.3  5,218.9  
of which        
020230  Meat of bovine animals, frozen. // -
Boneless  415.7  472.8  390.6  402.9  476.3  
100199  Wheat and meslin. // - Other: // -- 
Other  247.5  197.0  136.5  295.7  284.2  
100590  Maize (corn). // -Other  357.1  379.0  403.3  216.1  254.0  
010229  Live bovine animals. // - Cattle: // -- 
Other  104.2  131.8  101.4  204.0  216.9  
240220  Cigarettes containing tobacco  190.3  200.9  209.3  195.7  212.2  
210690  Food preparations not elsewhere 
specified or included. // -Other  191.0  205.3  231.7  182.8  205.4  
120190  Soya beans, whether or not broken. // 
- Other  127.4  203.8  193.1  172.7  181.2  
170199  Cane or beet sugar and chemically 
pure sucrose, in solid form. // - Other: 
// -- Other  180.7  118.9  135.7  134.9  103.9  
100630  Rice. // -Semi-milled or wholly milled 
rice 93.7 82.8 105.7  103.4  91.4 
170114  Other cane sugar  109.6  119.1  83.9 98.1 89.8 
Source:  UNSD Comtrade.  
4.1.1.3   Policies  
4.9.  The Ministry of Agriculture and Rural Development is the principal government agency 
responsible for developing agricultural policy and preparing draft legislation for the Knesset. In 
addition to its headquarters, the Ministry includes the Agricultural Res earch Organization, 
extension services, plant protection services, and veterinary services. There are also three 
production and marketing boards that operate under a specific law, and are responsible for 
implementing policy: the Egg and Poultry Board; the Groundnuts Board; and the Plants Production 
and Marketing Board.  
4.10.   Other agencies with a role in shaping agriculture policy include: the Ministry of Economy 
and Industry; the Ministry of National Infrastructures, Energy and Water (the Water Auth ority); 
and the Land Authority.  WT/TPR/S/ 376 • Israel  
 
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  4.11.   As noted in the last Report, the Government maintains a significant role in agriculture, 
particularly in the dairy and egg sector, and the overall policy objective has been to ensure food 
security, including through self -sufficiency in f resh dairy products, poultry, and eggs.8 
4.12.   The principal laws and regulations relating to agriculture are set out in Table 4.2. 
Table 4.2 Principal agriculture laws and regulations  
 Year Last amended  
Laws    
The Poultry Industry Council (Production and Marketing) Law  5724-1963 2015 
The Dairy Industry Planning Law  5771-2011 2015 
The Law for Supervision of Plant Production and Marketing,  5771-2011 2011 
The Council of Plants (Manufacturing and Marketing) Law  5733-1973 2011 
The Agricultural Settlement Law (Restrictions on the Use of Agricultural 
Land and Water)  5727-1967 2009 
The Fruit and Vegetables Products (Manufacturing and Export) Law  5733-1973 2003 
The Council for the Production and Marketing of Ground Nuts Law  5719-1959 1990 
Regulations    
The Water Regulations (Criteria for the allocation of water for agriculture 
in 2017)  (Temporary Order)  5767-2017  
The Regulations of the Poultry Industry Council (Rules Concerning Quotas 
for the Production of Eggs for Marketing in 2018)  5778-2018 Updated annually  
The Regulations for the Dairy Sector Planning (Milk Quotas)  5778-2017 Updated annually  
Source:  Ministry of Agriculture and Rural Development , online information . Viewed at: 
http://www.moag.gov.il/lawsregulation/pages/default.aspx  (Hebrew).  
4.1.1.3.1   Trade Policies  
Tariffs  
4.13.   The average applied MFN tariff on agricultural products (WTO definition) was reduced during 
the period under review, from 27.7% in 2012 to 19.8% in 2017, although this was higher than the 
average for non -agricultural products which was 3.7% in 2017. Among different groups of 
agricultural products, tariffs vary from one group to another and within groups, being particularly 
high and variable for dairy products (average 65.7%, and standard deviation 61%), and animals 
and products thereof ( average 37.1%, and standard deviation 51.1%).  
Tariff quotas  
4.14.   Israel's commitments under the Uruguay Round include 12 bound tariff quotas (TQs) 
covering a number of tariff lines, some at the eight -digit level and some at the four -digit level. 
However, two qu otas (for walnuts, and edible fats and oils) were not opened, as the out -of-quota 
applied tariff was below the in -quota tariff. According to the notifications on imports within tariff 
quotas, in most cases, in -quota imports are much greater than the commit ment level ( Table 4.3). 
4.15.   The most recent notification on the administration of TQs was in 2003. Import licences for 
in-quota imports may be issued by either the Ministr y of Economy and Industry for processed 
products or the Ministry of Agriculture and Rural Development for fresh products, usually based on 
a pro rata basis or, if applications exceed the TQ quantity, by a lottery or on a first -come -first-
served basis, with  10% of the TQ reserved for newcomers.9 
                                                
8 WTO document WT/TPR/S/272/Rev.1, 8 May 2013, Section IV, paras 7 -21. 
9 Israeli authorities, and WTO documents G/AG/N/ISR/27, 26 March 2003, and G/AG/N/ISR/27/Corr.1, 
4 November 2003.  WT/TPR/S/ 376 • Israel  
 
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  Table 4.3 Imports under WTO tariff quotas 2010 -16 
(Tonnes)  
  Bound 
quota 
quantity  2010  2011  2012  2013  2014  2015  2016  
Sheep and goats, fresh, 
chilled or frozen  0204  480  1,618  1,724  1,758  539  747  885  1,223  
Milk and cream 
concentrated powder 
granules , of fat contents 
not exceeding 1.5%  04021000  1,200  4,944  5,937  3,296  1,949  3,217  3,280  4,001  
Milk and cream 
concentrated powder 
granules , of fat contents 
exceeding  1.5%  04022000  100  2,731  2,615  2,925  2,422  3,249  2,685  3,702  
Processed cheese  04063000  68  288  273  384  385  573  459  574  
Other cheeses  04069000  1,080  1,492  1,606  2,252  2,129  5,107  3,499  7,266  
Prunes  08132000  600  2,222  2,182  2,072  1,515  1,615  1,641  1,523  
Walnutsa 08023000  170  3,645  4,065  3,693  4,392  4,497  4,833  6,011  
Wheat and meslin  1001  450,000  1,711,505  1,550,290  1,719,529  1,476,048  1,192,143  1,496,369  1,735,786  
Edible fats and oilsa 15162011  750  0   0   0   14,061  19,897  18,841  5,172  
Sweetcorn  20058000  350  2,277  2,389  1,630  2,141  3,377  3,025  4,509  
Citrus juices, 
concentrated  20091000   11,875  20,932  12,343  13,426  11,144  8,174  12,609  
20092000   7,656  11,989  3,985  3,413  2,508  1,461  3,805  
20093000   8,144  6,707  4,747  4,955  3,860  4,856  4,230  
Total   160  27,675  39,628  21,075  21,794  17,512  14,491  4,509  
Live, meat, offal and 
production of bovine 
origin  01022100   0   0   0   0 0   0   -   
01023100          
01022900   3,773  9,874  10,917   11,294  45,700  18,604  64,518  
01023900           
01029000          
0201   0   0   19  13  869  19  5,339  
0202   71,212  73,971  64,337  74,759  57,311  69,755  80,922  
02061000   0   0   0   0   0   0   -   
02062000   2,720  2,532  2,492  2,808  2,109  1,709  2,442  
16010090   0   0   1  0   0   0   0   
16025000   0   32  1  0   0   0   0   
1603   2  0   8  0   0   0   0   
Total   37,250  77,707  86,409  77,775  88,874  105,989  90,087  153,221  
a TQs for walnuts, and edible fats and oils were not opened in 2013 -16, as the out -of-quota tariff was 
less than the in -quota tariff. The notification includes all imports under these headings.  
Source:  WTO documents: G/AG/N/ISR/49, 7 November 2019; ISR/50, 14 February 2013; ISR/58, 
21 February  2017; and ISR/62, 1 September 2017.  
4.16.   In addition to the WTO TQ commitments in Schedule XLII, Israel has numerous TQs under 
preferential agreements (except with EFTA). In total, there are 258 TQs for agricultural goods, 
many of which were opened autonomously by Israel , some for significant amounts and 
accompanied by reductions in - the out -of-quota tariffs, such as the autonomous duty -free quota 
for fresh and chilled beef  which is being increased from an initial 6,000 tonnes in 2015 to 17,500 
tonnes by 2020, while the out -of-quota tariff of 12% + ILS  13/kg in 2015 is being reduced in 
stages to 12% by 2020. Some of these autonomous quotas are allocated on a first -come -first-
served basis, and some by a bidding process based on the lowest price to the consumer.  
Special agricultural safeguard  
4.17.   Israel reserved the right to apply the special agricultural safeguard to 42 tariff lines. 
However, the SSG has never been invoked.10 
                                                
10 WTO documents: G/AG/N/ISR/59, 31 August 2017; ISR/57, 1 December 2016; ISR/51, 
21 February  2013; ISR/43, 14 December 2009; ISR/38, 16 September 2005; ISR/35, 16 July 2004; ISR/28, WT/TPR/S/ 376 • Israel  
 
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  Expor t subsidies  
4.18.   Up to the end of 2016, Israel used export subsidies for a limited range of products, mainly 
for non -citrus fruits and for vegetables. During the period 2007 -16, the budgetary outlay for 
export subsidies varied from zero for the year ending 30 S eptember 2007 to US$2 million for the 
year ending 30 September 2011 ( Table 4.4). Israel has stated that, as of 1 January 2023, export 
subsidies will no longer be granted.11 
Table 4.4 Export subsidies 2007 -16 
Year ending  Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Dec-13a Dec-14 Dec-15 Dec-16 
Outlay ('000 US$)            
Cut flowers, fresh , and 
foliage, fresh  0 0 0   3.0 10.5  107.8  2.9  0   22.7  0.0 
Vegetables 
(0710 -0709)  0 64.3 455.7  873.5  475.8  25.0  467.1  58.0  216.5  31.0 
Fruits (not citrus) 
(0803 -0804, 
0806-0810)  0 124.8  906.8  713.3  1,490.3  664.8  584.5  1,757.2  894.0  549.7  
Citrus fruits (0805)  0 0   2.3  26.9  0.3  0   4.5  0   0   0 
Goose liver  0 0   0   0   0   0   0   0  0   0 
Cotton  0 0   0   0   0   0   0   0   0   0 
Quantity ('000 
tonnes, flowers 
million units)            
Cut flowers, fresh , and 
foliage, fresh  0.00 0.00 0.00 0.01 0.09 0.06 2.71 0.00 0.16 0.33 
Vegetables 
(0710 -0709)  0.00 0.33 2.93 10.08  4.36 0.06 1.62 0.09 0.50 0.06 
Fruits (not citrus) 
(0803 -0804, 
0806-0810)  0.00 0.35 2.79 3.71 3.84 1.22 1.12 3.62 2.31 1.09 
Citrus fruits (0805)  0.00 0.00 0.04 0.07 0.01 0.00 0.01 0.00 0.00 0.00 
Goose liver  0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 
Cotton  0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 
Total exports ('000 
tonnes, flowers 
million units)            
Cut flowers, fresh , and 
foliage, fresh  1,117.0  1,000.0  761.0  182.0  243.0  277.0  611.0  529.0  427.0  422.0  
Vegetables 
(0710 -0709)  578.0  618.0  598.0  563.9  672.2  610.1  659.9  651.5  548.9  528.2  
Fruits (not citrus) 
(0803 -0804, 
0806-0810)  113.7  81.5  93.2  112.9  125.6  116.6  116.7  128.5  117.4  113.3  
Citrus fruits (0805)  178.0  172.0  174.5  0.6  0.4 0.2 168.0  165.0  163.0  159.0  
Goose liver  0 0 0 0 0 0 0 0 0 0 
Cotton  18.5 8.9  7.1  14.0  10.1 11.7 11.7 13.9  17.9 14.0 
a Including October -December 2012 . 
0.0 Less than 0.05 but greater than 0.  
Source  WTO documents: G/AG/N/ISR/46, 14 February 2011; ISR/52, 1 2 June 2013; ISR/53, 
21 January  2016; ISR/56, 1 December 2016; and ISR/63, 30 January 2018.  
                                                                                                                                                  
26 March 2003; ISR/24, 1 March 2002; ISR/22, 8 December 2000; ISR/15, 24 February 2000; ISR/10, 
22 March 1999; ISR/6, 5 June 1998; and ISR/2, 20 September 1996.  
11 WTO document G/MA/TAR/RS/511, 11 December 2017.  WT/TPR/S/ 376 • Israel  
 
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  4.1.1.3.2   Internal policies  
Dairy  
4.19.   In 2016, the total value of milk production at the farm gate was about NIS 2,739 million, or 
9.4% of the total value of agriculture production.12 In 2016, there were about 129,000 cows on 
774 farms, with an average production of 11,970 kg of milk per cow, the highest in the world.13 
4.20.   Under the Dairy Sector Planning Law of 2011, which replaced the Milk Mar ket Planning Law 
of 1992, the dairy industry is closely regulated and controlled through production quotas, 
regulated prices for milk from producers, and regulated retail prices for milk and other dairy 
products. The Law and government policy are applied b y the Dairy Board and its governing body, 
the Dairy Industry Council.  
4.21.   The annual production quotas for cow, goat, and sheep milk are applied at farm level and 
divided into monthly quotas. Each producer is required to enter into annual contracts with a dair y, 
with guaranteed minimum prices for in -quota production of bovine milk. Over -quota production 
receives lower payments. Quotas are set each year by the Dairy Board and published as Industry 
Planning Orders.14 The total size of the quota is based on expecte d demand, and minimum prices 
are set by a formula based on the average cost of production plus an agreed return on labour and 
invested capital. Individual allocation of quotas is based on policy guidelines which may vary from 
one year to another, such as i ncreasing the quota for disadvantaged regions or for family farms. In 
general, about 51% of the quota is allocated to kibbutzim, 48% to moshavim, and 1% to 
agricultural schools. Quotas may also be transferred through the retirement of producers and the 
reallocation of their quotas to applicants.  
4.22.   Milk production quotas have increased steadily, reaching approximately 1.5 million tonnes in 
2017, while the guaranteed minimum price is adjusted every two months and tends to fluctuate in 
line with input prices ( Table 4.5). 
Table 4.5 Milk and egg production quotas and minimum producer prices 2011 -17 
  2011  2012  2013  2014  2015  2016  2017a 
Milk         
Production quota 
(total)  000 tonnes  1,313  1,318  1,365  1,372  1,416  1,318  1,500  
Minimum producer 
price US$ per tonne 
(average per year)  523 495 544 528 452 406 451 
Eggs          
Production quota 
(total)  million eggs  1,630  1,663  1,693  1,694  1,674  1,925  1,993  
Minimum producer 
price US$ per 000 units  0.124  0.115  0.128  0.122  0.108  0.106  0.113  
a Estimated.  
Source:  Ministry of Agriculture and Rural Development; and WTO document s G/AG/N/ISR/60, 
31 August  2017; and G/AG/N/ISR/55, 28 April 2016.  
4.23.   Over-quota production is penalized through lower prices, the amount of the reduction 
depending on the season and the over -quota volume ( Table 4.6). 
                                                
12 OECD PSE database. Viewed at: http://www.oecd.org/tad/agricultural -policies/producerandconsumer 
supportestimatesdatabase.htm . 
13 Israel Dairy Board (2017), Israel Dairy – Facts and Figures 2016 . Viewed at: 
http://www.halavi.org.il/roit -dpon_anglit.pdf . 
14 Israel Dairy Board online information. Viewed at: http://www.halavi.org.il/multi -appr/ma3.htm . WT/TPR/S/ 376 • Israel  
 
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  Table 4.6 Over -quota production penalties, 2018  
Season  Up to 4% over quota  4% to 15% over quota  Over 15% over quota  
Winter  80% of the minimum 
price 40% of the minimum 
price 40% of the minimum 
price minus NIS 0.5/litre  
Summer  95% of the minimum 
price 85% of the minimum price  
Source:  Israeli Dairy Board, Payment Policy for Raw Bovine Milk 2018, Board of Directors' Decision 
14 December 2017. Viewed at: http://www.halavi.org.il/info/idb/09_policy_bakar/2017/liron -
mdiniot_bkr_2018.pdf  (Hebrew) [March 2018].  
Eggs  
4.24.   Regarding the dairy subsector, egg production is c ontrolled through production quotas and 
target prices for producers. Under the Poultry Industry Council (Production and Marketing) Law 
5724-1963, the Poultry Industry Council is responsible for administering the quota system, while 
the target prices are se t by the Ministry of Agriculture and Rural Development based on cost of 
production, and labour ( Table 4.5). 
4.25.   Under the Galilee Law, poultry producers in northern Israel  were eligible for assistance in 
the form of direct payments based on their historical share of the production quota – although 
production was not required for the direct payment. The subsidy was phased out in 2017, and 
represented about 17% of production costs for eggs and 13% for poultry meat.  
Other commodities  
4.26.   Apart from milk and eggs, minimum prices are also applied to wheat, based on the Kansas 
market price adjusted for quality and transport costs. However, domestic prices for wheat were 
higher than th e reference price. Other domestic support measures include investment programmes 
for fruits, vegetables, flowers, and poultry meat; income insurance for cereals; and herd aid for 
bovine meat.  
4.27.   Agricultural insurance is managed by the public Fund for Natura l Damages in Agriculture 
(KANAT), which is jointly owned by the Government and the marketing boards. KANAT provides 
two main insurance schemes:  
 Multiple Peril Crop Insurance (MPCI), which gives protection of up to about 90 -95% against 
losses in yield due t o unavoidable, naturally occurring events. The Government provides a 
subsidy of 35% of the gross premium for basic coverage; and  
 Natural Disaster Insurance (NDI), which provides protection of up to 70% against losses in 
yield due to unavoidable, naturally occurring events that are not covered under the MPCI. 
These include losses caused by pests and diseases. The Government provides a subsidy of 
80% of the gross premium for basic coverage.  
4.28.   Improvements in productivity in agriculture have been driven by techn ology changes, 
including genetics, inputs, water management, and storage technologies. Research is carried out 
by various agencies in Israel, of which the Agricultural Research Organization (ARO) of the MARD 
is the largest. Most of the soft funding for agr icultural research in Israel is provided by the Chief 
Scientist of the MARD. ARO is also supported by bi -national funds for (agricultural) research and 
development with the United States and other countries. Research areas include the development 
of new pl ant varieties; biotechnology; post -harvest technology; water recycling; and precision 
application of inputs (water, pesticides, fertilizer, etc).  
4.29.   Under a 2016 amendment to the Water Law, a single flat rate charge is applied to fresh 
water for agricultural  use, and extraction fees are no longer applied. For farmers, water rates were 
reduced from NIS 2.51/m3 to NIS 1.98/m3 in June 2017, and will be reduced further to NIS 
1.81/m3 in 2019 (for households, the rate is NIS 6.45/m3 up to 3.5 m3).15 This reduction in prices 
would mean a fall in prices for farmers using water provided by Mekorot (the National Water 
                                                
15 Globes (online ), Israel Business News , 28 May 2017 . Viewed at: http://www.globes.co.il/en/article -
water -rates-to-fall-145-from-june-1-1001190487 . WT/TPR/S/ 376 • Israel  
 
- 78 - 
 
  Company), but an increase in prices for water supplied by independent water providers who supply 
about half of Israel's farmers ( Table 4.7). 
4.30.   In October 2013, the Water Authority Council temporarily changed the water quota system 
from annual allocations to a three -year allocation for 2014 -16, and increased the quota for 
agriculture from 556 million m3 for 2013 to 1,800 million m3 for 2014 -16. In  2016, the supply 
price for fresh water for agriculture was increased to NIS 2.52 per m3. However, fresh water 
represents less than half of the total water used for agriculture. Since 2017, the quota allocation 
reverted to an annual system. In 2017, 758 mi llion m3 of treated waste water, brackish water and 
surface water were allocated to agriculture.16  
Table 4.7 Water quotas 2012 -17 
('000 m3) 
 2012  2013  2014  2015  2016  2017  
Agriculture        
Fresh – Mekorot  318,485  334,478  444,718  451,729  458,968  426,725  
Fresh – Other  221,985  221.064  271,588  301,453  288,436  279,913  
Marginal  689,455  761,674  754,800  748,196  773,594  758,065  
Reserve     2,024  9,866  13,154  
Total for agriculture  1,229,925  1,317,216  1,471,106  1,503,402  1,530,864  1,477,857  
Total supply to householdsa 286,252  315,912  294,785  301,530  282,995  281,530  
Total supply to industrya 157,260  150,928  153,115  n.a. n.a. n.a. 
n.a. Not applicable . 
a There are no quotas for households or for industry, and , since 2015, there has been no separate 
 allocation for industry.  
Source:  Water authority online information. Viewed at: http://www.water.gov.il/Hebrew/ProfessionalInfoAnd 
 Data/Allocation -Consumption -and-production/Pages/Assignments.aspx  (Hebrew) [March 2018].  
4.31.   In addition, there is a programme to encourage investment in water -saving technologies 
and practices. The budget  allocation for this programme was NIS  139.9 million in 2015.  In 
addition, investment support is available, with grants of up to 40% for equipment which benefited 
844 farmers at a cost of NIS 42 million in 2011 . Support under the programme increased steadi ly 
to NIS 194.7 million in 2017.  
4.32.   In compensation for the reduction in applied tariffs and the increase in the duty free quota 
for beef (see above), beef producers are to receive direct payments per hectare to a total cost of 
NIS 16 million in 2021.17 
4.1.1.3.3   Suppor t levels  
WTO notifications  
4.33.   The last notification by Israel to the WTO on domestic support was for the 2015 and 2016 
calendar years.18 According to this and earlier notifications, most support is through the Amber 
Box (including de minimis ) and, within the A mber Box, nearly all support is for milk and eggs. 
Total Amber Box support over the 2005 -16 period varied considerably, from as low as 
US$357  million in 2006, to US$725 million in 2013. The fluctuation of the value of support as 
calculated by the aggregate  measurement of support is primarily due to changes in the 
administered prices for milk and eggs. However, support for other commodities has also varied 
considerably from one year to the next but the amounts involved are much less than for either 
milk or e ggs (Chart 4.2). 
                                                
16 OECD (2017), Agricultural Policy Monitoring and Evaluation 2017 , OECD Publishing, Paris; OECD 
(2016), Agricultural Policy Monitoring and Evaluation 201 6, OECD Publishing, Paris; OECD (2015), Agricultural 
Policy Monitoring an d Evaluation 201 5, OECD Publishing, Paris; OECD (2014), Agricultural Policy Monitoring 
and Evaluation 201 4, OECD Publishing, Paris; OECD (2013), Agricultural Policy Monitoring and Evaluation 
2013, OECD Publishing, Paris; and OECD (2012), Agricultural Polic y Monitoring and Evaluation 2012 , OECD 
Publishing, Paris.  
17 OECD (2017), Agricultural Policy Monitoring and Evaluation 2017 , OECD Publishing, Paris, p.114.  
18 WTO document G/AG/N/ISR/60, 31 August 2017.  WT/TPR/S/ 376 • Israel  
 
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  4.34.   Excluding de minimis  support, the Current Total AMS varied from US$339 million in 2006 to 
US$689 million in 2013 (compared to a Total AMS commitment level of US$568 .98). 
4.35.   Support under the Green Box has also varied over the 2005 -16 period, from a low of 
US$207 million in 2010,  to a high of US$424 million in 2015. However, the increase in support 
from 2012 is partly due to the Green Box data including the general operations of the Ministry of 
Agriculture and Rural Development. Support for research and the general operations of t he 
Ministry account for over half of total Green Box support ( Chart 4.2). 
Chart 4.2 Domestic support for agriculture , 2005-16 
(US$ million)  
 
Source:  WTO notifications.  
050100150200250300350400450500
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Green Box 2005 -16
0100200300400500600700800
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Amber Box 2005 -16
Other
Fruits (other than citrus)
Non-product specific
MilkMeat of bovines
Vegetables
EggsChart 4.2 Domestic support for agriculture 2005 -16
(US$ million)
WTO notifications. Source:   Regional assistance programmes
Payments for relief from natural disasters
Public stockholding for food security
Ministry of AgricultureEnvironmental programmes
Decoupled income support
Other general services
ResearchWT/TPR/S/ 376 • Israel  
 
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  OECD indicators  
4.36.   Compared to the methodology used to calculate the level of support provided under the 
Amber, Blue and Green Boxes in the WTO, the OECD's annual monitoring and evaluation reports 
on agricultural policies in OECD countries use a different methodology to calculate the value of 
support , which is expressed in a number of indicators, including: the Producer  Support Estimate 
(PSE) for gross transfers from consumers and tax payers to agricul tural producers; the Total 
Support Estimate (TSE) for transfers to the agricultural sector in general; and the Single 
Commodity Transfers (SCT) for transfers to specific commodities. As previously noted, the PSE 
represents the value of transfers to produce rs, unlike support under the Amber, Blue and Green 
Boxes, which measure compliance with WTO commitments. Therefore, the value of support as 
notified to the WTO is neither compatible nor comparable with the values calculated by the 
OECD.19 
4.37.   According to the O ECD, the TSE for agriculture was NIS 5,794 million in 2016, compared to 
a peak of NIS 5,993 million in 2015. Of total support to agriculture, the PSE accounted for NIS 
5,226 million and, of the PSE, market price support accounted for NIS 4,333 million. Whi le the 
minimum prices for milk and eggs account for some of the market price support, most of it arises 
from border measures, particularly tariffs, which keep domestic prices higher than international 
ones. The Producer Nominal Protection Coefficient (Prod ucer NPC) was 1.15 across all 
commodities, indicating that domestic prices are about 15% higher than international reference 
prices, but the Producer NPC for some commodities was much higher: at 1.66 for milk; 1.32 for 
poultry meat; and 2.02 for bananas. H owever, the use of administered prices also means that 
market price support may be negative if the external prices are higher than the administered 
price, which happened in 2015 for wheat and in 2013 for eggs ( Table 4.8). 
Chart 4.3 OECD measurements of support for agriculture, 200 5-16 
(NIS million)  
 
Source : OECD PSE database. Viewed at: http://www.oecd.org/tad/agricultural -policies/producerand 
consumersupportestimatesdatabase.htm . 
Table 4.8 OECD indicators for support to agriculture, 2009 -16 
(NIS million (except producer NPC))  
 2009  2010  2011  2012  2013  2014  2015  2016  
Total          
 Value of 
 production  25,581  26,056  28,552  29,310  30,191  30,005  29,474  29,708  
 TSE 4,004  4,201  4,290  3,284  2,893  4,388  5,993  5,794  
 PSE 3,379  3,524  3,663  2,598  2,286  3,777  5,402  5,226  
 MPS 2,684  2,926  2,939  1,849  1,563  2,969  4,489  4,333  
 Producer NPC  1.12 1.13 1.11 1.06 1.06 1.10 1.16 1.15 
Wheat          
 Value of 155 107 139 206 173 163 128 130 
                                                
19 WTO document WT/TR/S/284/Rev.2, 28 November 2013, paragraph 4.34.  
05,00010,00015,00020,00025,00030,00035,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Total value of production (at farm gate)
Producer support estimate
 Market price support
Total support estimateChart 4.3 OECD measurements of support for agriculture, 2005 -16
(NIS million)
OECD PSE database. Viewed at: http://www.oecd.org/tad/agricultural -
policies/producerandconsumersupportestimatesdatabase.htm.Source:   WT/TPR/S/ 376 • Israel  
 
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   2009  2010  2011  2012  2013  2014  2015  2016  
 production  
 SCT 49 14 28 14 28 35 -12 14 
 MPS 49 14 28 14 28 35 -12 14 
 Producer NPC  1.46 1.15 1.25 1.07 1.19 1.27 0.92 1.13 
Milk         
 Value of 
 production  2,451  2,366  2,659  3,032  3,012  2,973  2,869  2,783  
 SCT 780 414 628 1,025  523 935 1,514  1,118  
 MPS 764 409 626 1,021  521 932 1,509  1,101  
 Producer NPC  1.47 1.21 1.32 1.51 1.22 1.47 2.10 1.66 
Beef and veal          
 Value of 
 production  1,234  1,445  1,707  1,623  1,597  1,498  1,984  1,629  
 SCT 517 624 689 260 257 284 404 307 
 MPS 517 624 689 260 257 284 404 307 
 Producer NPC  1.74 1.77 1.69 1.19 1.20 1.24 1.25 1.23 
Poultry meat          
 Value of 
 production  3,218  3,192  3,293  3,389  2,994  3,424  3,732  3,975  
 SCT 254 724 181 -39 86 185 804 953 
 MPS 233 704 127 -82 56 176 772 935 
 Producer NPC  1.13 1.31 1.07 0.99 1.04 1.09 1.25 1.32 
Eggs          
 Value of 
 production  717 710 776 812 869 739 788 874 
 SCT -54 58 93 -126 116 85 117 190 
 MPS -108 5 39 -188 56 20 63 139 
 Producer NPC  0.96 1.10 1.16 0.88 1.16 1.14 1.15 1.27 
Fruits and 
vegetables          
 Value of 
 production  6,285  4,970  7,160  7,286  7,250  7,346  6,697  7,522  
 SCT 257 112 312 150 55 414 385 517 
 MPS 257 112 312 150 55 414 385 517 
 Producer NPC  1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 
Note:  TSE is the annual monetary value of all gross  transfers from taxpayers and  consumers arising from 
policy measures that support agriculture, net of associated budgetary receipts, regardless of their 
objectives and impacts on farm production and income, or consumption of farm products.  
 PSE is the annual monetary value of gross transfers from consumers and taxpayers to agricultural 
producers, measured at the farm -gate level, arising from policy measures that support agriculture, 
regardless of their nature, objectives or impacts on farm production or  income.  
 SCT is the annual monetary value of gross transfers from consumers and taxpayers to agricultural 
producers, measured at the farm -gate level, arising from policy measures directly linked to the 
production of a single commodity , such that the producer must produce the designated commodity 
in order to receive the transfer.  
 Market price support (MPS) is an indicator of the annual monetary value of gross transfers from 
consumers and taxpayers to agricultural producers arising from policy measures creating a gap 
between domestic producer prices and reference prices of a specific agricultural commodity 
measured at the farm -gate level.  
 The Producer NPC is an indicator of the nominal rate of protection for producers measuring the ratio  
between the average price received by producers (at farm -gate), including payments per tonne of 
current output, and the border price (measured at farm -gate level).  
Source:  OECD Producer and Consumer Support Estimates database. Viewed at:  
http://www.oecd.org/tad/agricultural -policies/producerandconsumersupportestimatesdatabase.htm . 
4.2  Mining and Energy  
4.2.1   Mining  
4.38.   Israel is one of the world's largest produc ers of bromine, and is a significant producer of 
phosphate rock, potash, and magnesium metal.20 Bromine, potash and other minerals are 
extracted from the Dead Sea, under exclusive licence, by subsidiaries of Israel Chemicals Ltd . 
(ICL). Phosphate is mined b y an ICL subsidiary in the Negev Desert. Israel exported US$142 
                                                
20 U.S. Department of the Interior, 2014 Minerals Yearbook.  WT/TPR/S/ 376 • Israel  
 
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  million of phosphates in 2016. It also has significant mineral processing operations, notably of 
manufactured fertilizers. Exports of fertilizer amounted to US$1.1 billion in 2016 (1.8% of tot al 
merchandise exports). Although there are no diamond mines in Israel, diamonds play an important 
role in the Israeli economy. Israel is one of the world's major trading centres for rough diamonds , 
and is one of the largest exporters of polished diamonds,  earning about US$ 8.5 billion  (net).21 
Furthermore, all  coal ash , a waste product from Israel's coal -fired power plants , is recycled , mainly  
into cement production.  According to the authorities, there is additional demand in Israel of up to 
1 million tons o f coal ash . 
4.39.   The royalty regime  for minerals was changed in 2015, following recommendations made by 
the "Sheshin ski II" Committee.22 The Committee, established by the Minister of Finance, had the 
task of reviewing the taxation of natural resources other than natural gas and oil. The (new) 
mineral tax (on top of corporate income tax) applies to profits in excess of 14% return on equity 
(ROE), levied at a rate of 25% for profits in the 14 -20% ROE range and at a rate of 42% for 
profits exceeding 20% ROE.  
4.2.2   Natural gas and oil  
4.40.   Israel's energy policy is aimed primarily at ensuring energy security and achieving 
environmental protection goals (P aris Climate Change Agreement). The Ministry of Energy is 
responsible for ensuring energy supply, and t he natural gas industry is regulated by the Natural 
Gas Authority in the Ministry (Natural Gas Act, 2002).  
4.41.   Since the last Review, Israel has  experienced a major change in its energy mix and outlook,  
with the discovery of large offshore gas reserves in the Mediterranean Sea. In 2012, production 
from the small Yam Tethys field was depleted. In 2013, the Tamar gas field came on -stream, and 
it is currently the  only field in production.  It has a total estimated gas reserve of 28 2 billion cubic 
metres  (bcm), with proven gas reserves of 199 bcm . It is connected to the mainland via pipeline 
at Ashdod. In 2010, the Leviathan gas field, the largest so far, was discov ered; it has an estimated 
reserve capacity of 500 bcm . The exploitation is expected  to start in 2019 . The third main field in 
Israel is Karish -Tanin, which is expected to be in operation in 2020; it has an estimated reserve 
capacity of 55 bcm. Israel's tot al reserves are estimated at 900 bcm.  
4.42.   While the Tamar and Leviathan gas fields are exploited by a private -sector joint venture led 
by Noble Energy of the United States and Delek of Israel, the Karish -Tanin gas field is exploited 
and developed by Energean O il and Gas of Greece. In 2016 , the Ministry of Energy launched the 
first offshore bid round (ended in November 2017) , where 24 exploration sites with a maximum 
area of 400 km2 were offered: five new exploration licenses were granted to Energean Israel 
Limited, and one license was granted to a consortium of four companies from India. The Ministry 
of Energy is planning a second bid round during 2018.  
4.43.   Exploitation of natural gas is  governed by the Petroleum Law of 1952 (as amended in 1965) 
and the Petroleum Re gulations of 1953. Resources are the property of the State, and the award of 
rights is subject to licensing with: a preliminary exploration permit for a maximum of 18 months; 
an exclusive licence for further exploration covering up to 400 km2 for a maximum  of 7 years; and 
a production lease covering up to 250 km2 for up to 30 years, renewable up to 50 years. The 
taxation of natural gas and oil  is governed by the Taxation of Oil Profits Law, 2011 .23 Israel is in 
the process of establishing a sovereign wealth fund for the purposes of safeguarding tax revenues 
levied on natural gas exploitation. The fund, which will be managed by the Bank of Israel, is 
expected to become operational in 2020.  
4.44.   Annual production of natural gas reached 9.6 bcm in 2017 (up from 2.7 b cm in 2012). 
Imports of natural gas have fallen significantly , and Israel has begun to export natural gas to 
Jordan ( Table 4. 9). Israel  has a natural gas export policy (Government Decision No. 442 of 
23 June 2013), whereby, starting from June  2013, approximately 540 bcm of production is 
reserved for the domestic market and around 300 bcm for export. The Ministry may order that 
                                                
21 HS7102.  
22 IMF (2014), "Israel Technical Assistance Report — reviewing the fiscal regime for mining. Viewed at: 
https://www.imf.org/external/pubs/ft/scr/2014/cr14125.pdf . 
23 The Sheshin ski I Committee  made recommendations with respect to the t axation of natural gas and 
oil, which was followed by enactment of the Taxation of Oil Profits Law, 2011 . See the TPR of Israel (2012).  WT/TPR/S/ 376 • Israel  
 
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  domestic ne eds are met first at market prices. Exports require permits. The Tamar owners 
concluded an agreement to export 1.8 bcm to Jordan over 15 years  (industrial facilities at the 
Dead Sea ). In 2017, the Leviathan owners concluded an agreement to export 45 bcm to  Jordan 
over 15 years from the Leviathan field to the National Electric Power Company of Jordan (NEPCO).  
A pipeline from Israel to Jordan is under construction. Furthermore, in 2018, the Tamar owners 
and Leviathan owners concluded two agreement s to export  a total quantity of  64 bcm of natural 
gas to Egypt (32 bcm from each reservoir). Moreover, two new pipelines for export to Europe 
(East Med pipeline) and Turkey are planned , according to the authorities.  
4.45.   Israel Natural Gas Lines Ltd. (a state -owned enterpr ise) holds a licence to operate and 
develop the natural gas transmission system. The regional distribution networks are operated by 
the private sector; distribution licences are issued by public tender. To encourage a competitive 
domestic market for natura l gas, the Natural Gas Authority requires the national or regional 
licensees to provide open access without discrimination to all consumers and marketers of natural 
gas.24 Service fees for infrastructure services (transmission and distribution) require appr oval from 
the regulator; consumer prices of  natural gas are not regulated.  
4.46.   Liquefied natural gas (LNG) is  one of the main sources of energy in Israel, especially for 
home use. Israel has a consumption of LNG of about 650,000 tons annually, of which 40% are  
imported via the Hadera Deepwater LNG Terminal. The market is divided into two groups: 4 large 
companies hold a market share of approximately 85%, and about 20 companies account for the 
rest. In September  2016, the Israel Antitrust Authority initiated an investigation into suspected 
collusion between companies operating in the LNG market. Also, in 2016, the Israel Antitrust 
Authority published a draft report on the domestic gas market for public comment, as part of the 
Government's efforts to promote compe tition. Some of the conclusions of the examination were 
implemented in the Economic Arrangements Bill (supplementary legislation to the state budget). 
The Bill was enacted in January 2017 . Rules were included to reduce obstacles for consumers to 
change the ir gas supplier, and price discrimination between consumers connected to the same 
central gas system was prohibited.  The Fuel Authority in the Ministry of Energy has established an 
Internet price system that enables consumers to choose the company that giv es the best price in 
the town or region.  
4.47.   Israel has no domestic oil production (apart from minor production from natural gas  
condensates). There are  two refineries at Ashdod (Paz Oil Company Ltd.) and Haifa (Oil Refineries 
Ltd.) which emerged from the priv atized state -owned monopoly in 2007. Prices of refined 
petroleum products have been deregulated, and refined products may be imported without 
quantitative restrictions. Tariffs for short -term storage and transport services of refined products 
are regulated  by the Fuel Authority. Gasoline prices at petrol retail stations are also regulated. 
Petroleum products are subject to VAT and excise tax (revised quarterly, in line with inflation).  
Table  4.9 Natural gas pro duction and trade in Israel  
(Million cubic metres)  
 2010  2011  2012  2013  2014  2015  2016  
Domestic production  3,241  4,270  2,697  6,372  7,500  8,280  9,300  
Imports  2,106  700 120 576 120 156 360 
Exports  0 0 0 0 0 0 0 
Gross consumptiona 5,315  4,970  2,817  6,948  8,676  8,760  9,660  
a Gross consumption includes statistical differences, which are not shown.  
Source:  International Energy Agency, monthly gas statistics. Viewed at: 
http://www.iea.org/statistics/monthlystatistics/monthlygasstatistics/ . 
4.2.3   Electricity  
4.48.   Electricity and water supply (including sewerage and waste management) contributed 1.6% 
to GDP in 2016 (up from 0.9% in 2012). The Tamar natural gas field has led to the substitution 
process in electricity generation, away from imported coal and liquid fuels towards natural gas. As 
a result of the conversion from coal/oil -fired to gas -fired po wer plants, about 64% of total 
electricity generation in 2017 came from natural gas (Table 4.10).  Since 2012, a number of power 
                                                
24 Marketers are not required to establish a natural gas infrastru cture. WT/TPR/S/ 376 • Israel  
 
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  plants were constructed to address electricity shortages. Currently, there is a surplus of generation 
capacity. In 2016, the pea k demand was 12,612 MWh, while the total installed capacity (excluding 
renewables capacity) was approximately 16,700 MW. Israel is not connected to the grids of 
neighbouring countries, although works to connect to the European grid are underway.  
4.49.   The instit utional framework for regulating electricity comprises the Ministry of Energy, the 
Electricity Authority, the Israeli Corporation Authority, and various other government institutions in 
the case of projects by independent power producers (IPPs). The Electr icity Authority is 
responsible for, inter alia , setting tariffs, issuing licences, and regulating the Israel Electric 
Corporation. It is also responsible for establishing the feed -in tariffs for renewable energy.  Israel's 
electricity tariffs are among the lowest in the OECD countries in terms of purchasing power , and 
are about 10% lower than the OECD average.  
4.50.   The Government pursues the objective of fostering a competitive market structure in 
electricity generation, while maintaining a natural monopoly in tr ansmission, and regional 
monopolies in distribution. Reforms of the electricity market have been implemented to end the 
monopoly of the Israel Electric Corporation (IEC), mainly through the licensing of independent 
power producers. The share of electricity  generated by IPPs ( three at present ) has increased 
substantially in recent years ( Table 4.10 ). 
4.51.   Israel has established targets for renewable energy generation for environmental reasons 
(Paris Agreement), with the share of renewables to rise from 5% in 2014, to 10% by 2020 and 
17% by 2030.25 However, the transition to renewable energy sources is behind target (3% of total 
energy generation in 2017). Renewable electricity generation is encouraged through production 
quotas set by  the Electricity Authority, which are eligible for feed -in tariffs.  The production quotas 
are tendered (auctioned), using public procurement procedures. For solar PV capacity, the auctions 
in 2017 and 2018 are for about 1.2 GW, with supply contracts for 23  years at guaranteed feed -in 
tariffs.  
Table 4.10 Electricity generation by type of energy and producer  
  2013  2014  2015  2016  2017  
Total (million KWh)  61,368  61,295  64,230  67,210  68,100  
 Electricity production by type of energy (% of total)   
Non-renewable energy  99.1 98.5 98.1 97.7 97 
  Natural gas  43.1 48.9 51.6 61.4 64 
  Coal 52.3 49.1 45.4 35.9 32 
  Other  3.7 0.5 1.1 0.34 1 
Renewable energy  0.9 1.5 1.9 2.3 3 
  Solar power  0.8 1.4 1.7 2.1 2.5 
  Other  0.1 0.1 0.2 0.2 0.5 
 Electricity production by producer (% of total)   
IEC 93.1 84.4 78.8 72.5 72.1 
Independent power producers  6.9 15.6 21.2 27.5 27.9 
Source:  Information provided by the authorities.  
4.3  Manufacturing  
4.52.   Manufacturing  (including mining and quarrying) contributed 11.5% to GDP in 2017 (down 
from 12.9% in 2012), and the sector employed 11.3% of the workforce. Manufacturing growth 
averaged 1.2% in 2012 -17, well below the overall economic growth of 3.5% per annum. The 
petro leum and chemicals sector experienced a sharp decline in revenues between 2012 and 2016 
(Table 4.11 ). The labour -intensive textiles and clothing industries have declined further in terms of 
revenues, while the turnover by Israel's large food industry has b een stable between 2012 and 
2016, at NIS 60 -61 billion.  
4.53.   Israel's manufacturing sector is export -oriented. According to the authorities, over 40% of 
total manufacturing output is exported, but the export share exceeds 70% for the hi -tech industry. 
In 2014, 98% of manufacturing exports originated from 1,067 export -intensive enterprises (5% of 
all manufacturing establishments). The largest manufacturing industries and leading exports come 
from the hi -tech sector ( Table 4.11 ) and Chart  4.4). 
                                                
25 Viewed at: http://ene rgy.gov.il/English/PublicationsLibraryE/REPolicy.pdf . WT/TPR/S/ 376 • Israel  
 
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  4.54.   The hi -tech sector is one of the main drivers of growth and competitiveness of the Israeli 
economy. The sector contributed 10.7% to Israel's GDP in 2014, and accounted for 8.0% of total 
employment. It contributed about half of Israel's manufacturing exports in 2017 ( Chart 4. 4). The 
comparative advantage of the hi -tech sector is underpinned by an innovation culture and 
infrastructure with the world's highest expenditures as a share of civilian R&D, according to the 
OECD (4.3% in 2015). There are currently about 5,000 start -up companies in Israel, and over 300 
foreign R&D centres of multinational companies.  
4.55.   The main policy initiatives to strengthen the competitiveness of the manufacturing sector 
include a more favourable tax environment for hi -tech companies within the framework  of a reform 
of the Law on Encouragement of Capital Investment, and increased assistance for R&D. Other 
policy developments include the sector's greater openness to (duty -free) manufacturing imports, 
resulting from unilateral trade liberalization and Israe l's enlarged network of FTAs. Applied MFN 
manufacturing tariffs averaged 4.9% in 2017 (down from 6.1% in 2012) , with over half of the 
tariffs set at zero  (Table 3.3) . 
Chart 4.4 Composition of manufacturing exp orts, 2017  
(US$ billion and % of total manufacturing  exports ) 
 
 
Note:  Excluding diamonds.  
Source:  Information provided by the authorities.  
Table 4.11 Revenue of main manufacturing sectors, 2012 and 2016a 
Industry (division)  Revenue  
(NIS billion, 
current prices)a Employee jobs 
('000)b Establishmentsb 
 2012  2016  2012  2016  2012  2016  
Manufacturing  412.6  378.6  342.5  348.3  11,861  13,125  
 Computers, electronic and optical products  82.1 77.2 70.8 67.2 484 495 
 Food products  60.1 60.5 51.4 55.8 1,627  1,834  
 Petroleum products, chemicals and chemical 
products  89.4 54.5 18.7 19.9 257 318 
 Pharmaceutical products, including 
 homeopathic preparations  31.7 29.4 13.8 13.7 55 49 
 Fabricated metal products, except 
 machinery and equipment  25.6 26.4 43.7 43.0 2,438  2,439  
 Rubber and plastics products  19.5 19.3 20.4 21.0 491 495 
 Machinery and equipment n.e.c.  17.1 18.5 16.7 18.3 379 392 
 Other non -metallic  mineral products  12.7 16.0 9.5 11.1 561 616 
 Other transport equipment  9.7 11.4 13.2 13.2 34 33 
 Basic metals  11.3 9.4 6.5 6.4 211 237 
 Paper and paper products  7.5 8.2 7.6 7.9 141 162 
 Beverages and tobacco products  7.9 8.0 5.4 5.4 90 133 
Computers, electronic and 
optical products
(10.5 bn., 23.3%)
Pharmaceutical 
products
(7.5 bn., 16.8%)
Air and spacecraft and 
related machinery
(3.2 bn., 7.2%)Chemicals and chemical 
products
(7.8 bn., 17.3%)Machinery and equipment 
n.e.c.
(3.5 bn., 7.8%)Manufacture of fabricated 
metal products,except 
machinery and equipment
(2.3 bn., 5.1%)Rubber and plastic 
products
(2.2 bn., 4.9%)Other
(8.0 bn., 17.7%)Chart 4.[Israel] Composition of manufacturing exports, 2017
(US$ billion and % of total manufacturing exports)
Information provided by the authorities. Source:Excluding diamonds. Note:US$ 45.0 
billionHi-tech 
industries
47.3% of 
total 
manufacturing 
exportsWT/TPR/S/ 376 • Israel  
 
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  Industry (division)  Revenue  
(NIS billion, 
current prices)a Employee jobs 
('000)b Establishmentsb 
 2012  2016  2012  2016  2012  2016  
 Furniture  6.3 8.0 14.4 15.3 1,798  2,112  
 Electrical equipment  6.8 6.4 8.8 7.4 207 212 
 Other manufacturing  24.6 25.3 41.8 42.8 3,088  3,597  
a According to the size of revenue in 2016.  
b Monthly average.  
Source:  Central Bureau of Statistics, statistics online information. Statistical Abstract of Israel (Table 20.3).  
4.4  Services  
4.4.1   Overview  
4.56.   Israel's specific commitments under the GATS cover 58 out of 160  subsectors. Israel is a 
signatory of the Fourth Protocol (on telecommunications services) and the Fifth Protocol (on 
financial services) to the GATS. Under Article II of the GATS, Israel has listed MFN exemptions on 
film, video, and television programme co -production and distribution; and banking.26 For the first 
group, Israel grants differential treatment to persons from countries with which it has co -
production arrangemen ts or is engaged in film and video distribution. In banking, Israel retains the 
right to grant licences only to suppliers from countries that grant Israeli suppliers similar access.  
4.4.2   Financial services  
4.57.   Financial services (excluding banking credits) accounte d for 5.9% of GDP in 2015, and 3.3% 
of employment in 2016 (7.3% of GDP and 4% of employment in 2010), suggesting that labour 
productivity is almost twice as high as in the rest of the economy. Israel's financial services sector 
has undergone substantial ch ange in recent years. New players have emerged, consumer credit 
has expanded, and classic bank intermediation has given way to greater use of non -bank credit, 
primarily in the corporate business.  
4.58.   In November 2015 , the (then) Capital Markets, Insurance and Savings Department of the 
Ministry of Finance issued directives such as regulations for the participation of Israeli institutional 
investors in consortium and syndicated loan transactions, including in the secondary market , and 
allowing institutional inves tors to own 20% of the means of control in companies following 
enforcement of a security interest, even if  this exceeds the ownership limits normally imposed on 
such investors.  
4.59.   In November 2016, the Capital Markets, Insurance and Savings Authority, under t he 
Ministry of Finance, was relaunched as an independent regulatory body for the insurance industry, 
pension funds and savings, by separating the respective divisions from the Ministry of Finance.27 
Banks continue to be supervised by the Banking Supervisory  Department, an independent entity 
within the Bank of Israel (BOI). The Israel Securities Authority (ISA) is responsible for supervising 
the equity market, in particular the Tel Aviv Stock Exchange (TASE), mutual funds, brokers, 
securities firms, investmen t advisers, and portfolio managers. The ISA and TASE are both pursuing 
further reforms to bring Israel's regulations and trading procedures into line with global best 
practice, thereby encouraging foreign investment.  
4.60.   In December 2013, the Promotion of Comp etition and Reduction of Concentration Law, 
5774-2013, was enacted to reduce the risks posed by large, complex and leveraged business 
groups ("pyram ids"), and imposed a requirement to limit holding company structures to two tiers 
of companies , to be met over four to six  years, depending on the size of the company. Cross -
holdings between major financial and non -financial companies have also been made illegal, with a 
similar adjustmen t period for existing holdings.  
4.61.   The Strum Committee, set up in 2 015 by the Minister of Finance and the Governor of the 
BOI, was tasked to make recommendations to enhance competition in financial services.  The 
                                                
26 WTO document GATS/EL/44, April 1994.  
27 The Capital Markets, Insurance and Savings Authority replaced the department of the Ministry of 
Finance that had hitherto held this function.  WT/TPR/S/ 376 • Israel  
 
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  Committee's recommendations include separating the two credit card companies from the large 
banks; a more lenie nt level of supervision over entities that do not take deposits, to make it easier 
for new entities to compete with banks; providing tools for consumers to facilitate price 
comparisons; and establishing deposit insurance to help small banks compete for add itional 
customers.  
4.4.3   Banking  
4.62.   The banking sector is composed of five Israeli banking groups (Table 4.12). The two largest 
groups (Bank Hapoalim and Bank Leumi) have almost 60% of total bank assets (Bank Hapoalim 
(29%) and Bank Leumi ( 28.5%) .28 There have been no new entrants in almost half a century, and 
its cost efficiency is relatively low partly due to high human resource expenses.29 All of Israel's 
banks are universal banks, offering both traditional corporate and retail services, while also 
pursuing capital -market activities.  
Table 4.12 Financial system structure, 2013 -17 
 2013  2015  2017  
 No. of  Total assets  No. of  Total assets  No. of  Total assets  
 Institu -
tions/ 
funds  NIS 
billion  % of GDP  Institu -
tions/ 
funds  NIS 
billion  % of GDP  Institu -
tions/  
funds  NIS 
billion  % of GDP  
A. Banks           
Five major 
banks, 
consolidated  5 1,246  118.0  5 1,388  119.4  5 1,478  118.1  
Bank Leumi  1 374 35.4 1 416 35.8 1 439 35.1 
Bank Hapoalim  1 380 36.0 1 432 37.1 1 450 36.0 
Israel Discount 
Bank 1 201 19.0 1 205 17.6 1 220 17.6 
Mizrahi Tefahot 
Bank 1 180 17.0 1 209 18.0 1 240 19.2 
First 
International 
Bank of Israel  1 111 10.5 1 125 10.8 1 130 10.4 
Other Israeli 
banks  3 62 5.8 3 64 5.5 3 64 5.1 
Foreign bank 
branches  4 16 1.5 4 17 1.5 4 20 1.6 
B. Non -bank 
financial 
institutions  1,254  1,390  131.3  1,396  1,586  136.3  .. 1,833  145.2  
Provident and 
severance pay 
funds  75 204 19.3 75.0 212 18.2 67.0 242 19.2 
Advanced study 
funds  .. 143 13.5 .. 169 14.6 .. 207 16.4 
Old pension 
funds  18 348 32.8 18.0 394 33.9 18.0 408 32.4 
New pension 
funds  13 186 17.5 11.0 251 21.5 10.0 336 26.7 
New general 
pension funds  .. 2 0.2 .. 4 0.3 .. 6 0.4 
New 
comprehensive 
pension funds  .. 183 17.3 .. 247 21.2 .. 331 26.2 
Mutual funds  1,247  231 21.8 1,392  229 19.7 1,437  243 19.3 
Assured yield life 
insurance plans  .. 78 7.3 .. 83 7.1 .. 90 7.1 
Profit sharing life 
insurance plans  .. 202 19.0 .. 248 21.3 .. 306 24.3 
Total financial 
system (A+B)  .. 2,636  248.9  .. 2,975  255.6  .. 3,395  270 
.. Not available.  
Source:  IMF Report 17/75; and data provided by the authorities.  
                                                
28 The Government h olds 5.8% of shares in Leumi Bank.  
29 IMF Country Report 17/75.  WT/TPR/S/ 376 • Israel  
 
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  4.63.   Measures continue to be taken to promote competition and efficiency in Israel's banking 
sector. To help customers compare the costs of bank services, the BOI  has introduced a bank 
"identification card", which is an easy -to-read annual report from banks on a customer's financial 
assets, liabilities, loan and deposit rates, and various fees. A national credit register is in the 
process of being established to br oaden access to credit while also reducing the competitive 
advantage of the major banks30; legislation has been enacted to separate credit card companies 
from the two largest banks; and the BOI has promoted a reduction in banks' operating costs by 
requestin g the banks to provide five -year streamlining programmes.31 
4.64.   The Law for Increasing Competition and Reducing Concentration in the Israeli Banking 
Market (Legislation Amendments), 2017  ("Strum Law") requires, inter alia , that the two largest 
Israeli banks (Bank Hapoalim and Bank Leumi) sell their credit card subsidiaries by 2020/21. In 
addition, banks must reduce their holdings in the sole domestic card transactions processor to a 
maximum of 10%, and SHVA will be permitt ed to provide services to any person, apart from 
licensed Israeli banks and bank subsidiaries.  
4.65.   According to the IMF, Israel's banking system is sound on the basis of indicators for 
capitalization, loan quality, and profitability (Table 4.13). In March 2012 , as part of the 
preparations for Basel III, the Banking Supervision Department set new capital adequacy targets, 
under which banks had to post core capital of at least 9% of total assets by 2015. This target was 
raised to 9.5% for all banks and, reflectin g their systemic importance, to 10% for the two largest 
banks, by January 2017. All these targets have been reached. In addition, the leverage ratio of 
6.6% exceeds most advanced economies, and loan -to-deposit ratios below 100% show limited 
exposure to fun ding pressures.  
Table 4.13 Banking soundness indicators, 2012 -17 
 2012  2013   2014  2015  2016  2017  
Regulatory capital to risk -weighted assetsa 14.9 14.8 14.3 14.0 14.7 14.5 
Regulatory Tier I capital to risk -weighted assetsa 9.2 9.8 9.7 9.9 10.9 11.1 
Non-Performing Loans (NPLs) to total gross loans  3.5 2.9 2.2 1.8 1.6 1.4 
NPLs net of loan -loss provisions to capital  12.3 8.9 4.6 3.4 2.2 1.1 
Return on average assets (before tax) 0.8 0.9 0.8 1.0 1.0 1.0 
Return on average equity (before tax)  12.1 13.3 11.8 14.4 13.9 13.7 
Liquid assets as % of short term liabilities  .. 25.7 27.7 26.5 .. .. 
Customer deposits % of total (non -interbank) loans  113.0  113.9  115.8  117.8  121.6  120.1  
.. Not available.  
a The calculation of capital base follows rules under Basel II.  
Source:  IMF Report 17/75; and data provided by the authorities.  
4.66.   The terms and conditions for a deposit insurance scheme have not yet been created. 
Nevertheless, the BOI will enable the establishment of a new bank with a reduced minimum capital 
requirement (from NIS 100 million to NIS 50 million).   
4.67.   There are no restrictions on the establishment (through local incorporation) of banks or on 
their acquisition by foreign residents , provided prudential requirements  on ownership and 
management, laid down by the Supervisor of Banks, are respected. There are some requirements, 
mostly prudential, when foreign banks open branches in Israel. Nonetheless, the presence of 
foreign banks in Israel remains limited, mainly due t o the fact that it is a relatively very small and 
developed banking market. The four foreign banks (HSBC, Citibank, Barclays Bank P.L.C., and 
State Bank of India) together held 1.3% of bank assets in 2017, and operate mainly in niche 
markets (e.g. the diam ond industry, mergers and acquisitions). However, there is a large presence 
of foreign banks that are not deposit takers (underwriters, etc.).  
4.68.   Licensing and supervision of Israeli branches or subsidiaries of foreign banks are based on 
the "Concordat and Mi nimum Standards" agreed by the Basle Committee on Banking Supervision. 
                                                
30 The BOI is establishing  policies to facilitate electronic banking, which would ease account mobility 
between banks. IMF Country Report 17/75.  
31 These program mes are expected to reduce branch numbers by 20% and staffing by 10%, with the 
resulting savings to be used to support technological improvements and reduced fees , in addition to raising 
profits. The  associated upfront costs are accommodated by some temporary  relief in capital requirements. IMF 
Country Report 17/75.  WT/TPR/S/ 376 • Israel  
 
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  The criteria for licensing foreign banks to establish a banking subsidiary in Israel include: stability 
with respect to capital, and financial soundness of the parent bank; high interna tional rating; 
supervision on a consolidated basis, and supervisory and control mechanisms for its international 
operations; compliance with the laws and regulations; consent of the home bank supervisor, and 
consent of the foreign bank to transfer informat ion; and fit and proper checks on identifiable 
controllers. The BOI also checks the level of control and regulation in the home country of the 
foreign bank.  These criteria also apply to the establishment of a foreign bank branch in Israel. In 
this case, th e bank provides "endowment capital" to the branch to enable stability restrictions to 
be applied. The minimum capital requirement for a subsidiary or foreign branch is NIS 10 million. 
Permitted banking activities include classic banking intermediation, wit h a focus on commercial 
banking, e.g. mortgage banking, banking abroad (subsidiaries and branches); credit  card 
activities; pension consulting; trading of securities, including derivative products, exchange -rate 
and interest -rate instruments and  other nego tiable instruments; and underwriting.32 
4.4.4   Insurance  
4.69.   In 2017, the top five insurers (Harel33, Migdal, Clal, Phoenix, and Menorah) controlled about 
94% of the life insurance market and 57% of the non -life insurance market. As of end -2017, 
25 insurance companies were established in Israel, of which 2 were foreign -owned (AIG Israel and 
ICICI), 3 were branches of foreign insurance companies, and 3  were state-owned .34 Insurance 
premiums totalled about NIS  64 billion in 2017 (compared with NIS  43 billion in 2010), spli t fairly 
evenly between life and non -life premiums. Insurance premiums in Israel stood at just over 5% of 
GDP in 2015.35 The main reason for the relatively low penetration ratio in Israel in comparison to 
other western countries is that pensions, rather tha n life insurance, are more important  in terms of 
savings.  
4.70.   Life insurance represents just over 1 1% of financial assets held by the public. Regulatory 
changes to pension funds and asset management over the last few years  have increased the 
relative clout of insurance companies, which now take the central role in managing financial 
assets, but regulations introduced in 2013 have made insurance annuity schemes relatively less 
attractive vis-à-vis pension funds among long -term savings program mes. Insurance companies 
also manage pension funds, and therefore have other sources of income.  
4.71.   Israel's insurance sector recovered strongly in the wake of the global financial crisis of 
2008-09, and profitability was restored, mostly through rising investment income but also via an 
increase in premiums. According to the IMF, Israel's insurance syste m is sound on the basis of 
indicators for capitalization (Table 4.14).  
Table 4.14 Insurance soundness indicators, 2012 -17 
 2012  2013  2014  2015  2016  2017  
Return on equity  14.4 18.3 11.9 6.7 6.2 12.5 
Net premium as % of capital  213.2  201.3  194.3  205.7  257.2  259.6  
Capital as % of technical reserves  6.4 6.5 6.6 6.3 5.4 5.4 
Surplus capital as % of required solvency 1 capital  32.7 40.4 44.8 53.1 47.3 55.6 
Liquid assets as % of total assets  51.9 53.4 53.9 53.8 55.8 55.9 
Source:  IMF Report 17/75; and data provided by the authorities.  
4.72.   The regulatory framework for insurance services is based on the Insurance Business 
Supervision Law of 1981 and the Insurance Contracts Law.  The insurance subsector in which the 
insurer may operate  is defined  by a license . In order to improve competition and encourage 
                                                
32 The list of allowed activities of commercial banks is set out in Article 10 -11 of the Banking (Licensing) 
Law, 5741 -1981.  
33 Harel merged with Dikla (a health insurance company) and replaced Migda l as the largest insurance 
company . 
34 Ashra (formerly an arm of the Israel Foreign Trade Risks Insurance Corporation) is run by the Ministry 
of Economy and Industry.  It offers insurance coverage of up to 95% against political risk s, and up to 90% 
against c ommercial risks. Ashra specializes in risk insurance for which commerc ial companies do not provide 
coverage, primarily for medium - and long -term credit transactions.  Inbal, under the Ministry of Finance, mainly 
provides insurance to some government held pr operties. KANAT (Insurance Fund for Natural Risks in 
Agriculture), owned equally by the Government and the Farmers Marketing Boards and Organizations, provides 
insurance coverage for damages caused by adverse weather conditions, pests and diseases.  
35 Again st a European average of about 7%, and much higher than anywhere else in the Middle East.  WT/TPR/S/ 376 • Israel  
 
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  innovation in the market, the minimum capital requirements for new insurance providers were 
lowered as follows: for life insura nce from NIS 52 million to NIS 15 million;  for non -life insurance  
from NIS 59 million to NIS 10 million; and for companies entering both markets from NIS 89 
million to NIS 25 million . 
4.73.   Israel has adopted the Solvency  II directives governing the regulation o f insurance 
companies in the E uropean Union, with a target date for full implementation of end -2024.  
4.4.5   Telecommunications and postal services  
4.74.   Israel's telecoms revenues reached NIS 20,177  million in 2016 (down from NIS 26,296 
million in 2012), over 40% of which came from the mobile sector (Table  4.15). The number of 
cellular subscribers increased from 9.23 million in 2012 to 10.54 million in 2017.  Israel's 
penetration rate for mobile telephone services is high by international standards (120% in 2017). 
The rate for fixed broadband subscriptions in 2017 was 26%, in line with the OECD average 
(30%).36 
Table 4.15 Selected telecommunications indicators, 2012 -17 
 2012  2013  2014  2015  2016  2017  
Distribution of revenues  (%)       
Fixed telephony and leased lines  15 16 16 17 17 .. 
Mobile  50 47 47 45 42 .. 
International operator s 5 5 5 4 4 .. 
TV: cable/satellite  15 17 17 17 18 .. 
Internet  15 16 15 17 19 .. 
Total (NIS million)  26,296  23,389  22,315  21,389  20,177  .. 
Other  selected indicators        
Fixed telephone lines (million)  3.59 3.40 3.43 3.41 3.34 3.24 
Fixed telephone lines per 100 inhabitants  47.02  43.95  43.81  43.08  41.61  36.83  
Mobile cellular subscriptions (million)  9.23 9.50 9.50 10.57  10.57  10.54  
Mobile cellular subscriptions per 100  inhabitants  116 117 115 125 122 120 
Percentage of individuals using Internet  70.80  70.25  75.02  77.35  79.78  84.00  
Fixed broadband subscriptions (million)  1.94 2.00 2.13 2.17 2.26 2.32 
Fixed broadband subscriptions per 100  inhabitants  25.34  25.90  27.24  27.44  28.13  26.00  
.. Not available.  
Source:  ITU online information, "ICT St atistics Database". Viewed at:  http://www.itu.int/ITU -
D/ict/statistics/ ; and data provided by the authorities.  
4.75.   During the review period, the Israeli telecommunications sector  has been further liberalized. 
For example, in May 2014, a policy on network and frequencies sharing was published , which 
enables operators to share their sites and radio access network (RAN); as from 2015, several 
fourth -generation mobile international services  licenses were granted (see below)37; in the fixed 
market , a wholesale regulation was established  in February 2 015 in order to facilitate  competition 
in the telecommunication market ; and by  setting cost oriented tariffs for  various wholesale 
services including Bit Stream Access (BSA) and Carrier Pre Selection (CPS) telephony. Lately, the 
cable operator ("Hot") bega n providing the same wholesale services .38 
4.76.   Over the years, Israel has pursued progressive liberalization and privatization of its 
telecoms market. It began in 1994 with the entry of Cellcom to compete with Bezeq (the 
incumbent) in mobile telephony.39 As of J anuary  2018, there were six domestic fixed services 
operators40; six mobile network operators (MNOs)41; three mobile virtual network operators 
                                                
36 OECD online information . Viewed at: http://www.oecd.org/sti/broadband/4.11.MTRs -2017-
06_rev.xls . 
37 The licenses include a requirement to use the frequencies within a specified time frame and minimum 
coverage requirements.  
38 The incumbent provid es BSA services, physical infrastructure services (e.g. ducts, manholes, poles) 
and dark fibres.  
39 In 2005, the Government sold its controlling interest in Bezeq.  
40 The six domestic fixed services operators are: Bezeq; Hot; 012 Telecom; Cellcom; Partner; and B.I.P.  
41 The six MNOs are: Cellcom; Pelephone; Partner; Hot; Golan Telecom; and Xfone.  WT/TPR/S/ 376 • Israel  
 
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  (MVNOs)42; and eight mobile operators providing international services.43 In the fixed market, 
Bezeq and Hot are requ ired to provide telephony and broadband nationwide under a universal 
service obligation. There are three large Internet service providers (ISPs): Bezeq International, 
012 Smile, and Netvision, and about 50  smaller ISPs (at least 6 of whom have over 20,000 
subscribers). Foreign ownership restrictions continue to apply for domestic, international, and 
wireless telecommunications services, considered to be essential infrastructure ( Table 2.3). 
4.77.   The institutional framework for telecoms remained basically unchang ed during the review 
period. The Ministry of Communications is responsible, inter alia , for telecommunications policy, 
regulation, and supervision of the incumbent (Bezeq), as well as other licensed operators. The 
establishment of an independent regulatory  authority for telecommunications is still under 
consideration by the Government. The Israel Antitrust Authority is responsible for enforcing 
competition in the sector (Section  3.3.4).  
4.78.   The licensing scheme is based on six types of "general purpose" license s for the provision of 
telecommunications or broadcasting services: fixed line services, including Universal Service 
Obligations (USO)  using copper plant on cable infrastructure ; specialized fixed line services without 
USOs; mobile services providers (MSP); international telephony providers (ITP); broadcasting 
licenses (B) for cable and satellite subscribers, and multi -channel television; and mobile virtual 
network providers (MVNO). "Special" and other single services purpose  licenses are issued for th e 
provision of, for example, Internet access (ISP license) , PABX and private network providers . 
4.79.   Tariffs for telecom services are not regulated in competitive market segments, e.g. outgoing 
domestic calls for operators other than the incumbent, outgoing cel lular calls, and international 
calls. In markets with high concentration, the tariff structure is controlled by the Minister of 
Communications: this includes domestic telephony, where Bezeq has 64.4% of the market share. 
There is no regulated retail price for multi -channel television . There is one mandatory package 
regulated by the Ministry of Communications, with less than 2% of multi -channel television  
subscribers). Content is regulated solely by the Cable and Satellite Broadcasting Council . The 
Minister of Communications, after consultation with the Minister of Finance, sets prices for 
telephony fixed line services to private and business consumers by the incumbent, Bezeq (but not 
for its competitors), sets termination rates, and sets prices of broadband access in the wholesale 
market (for Bezeq and Hot) . Cross -subsidization of competitive services with monopoly services 
(as defined by market share only) is not permitted. All tariffs by all operators are required to be 
"reasonable", and are subject to ex -post regulatory intervention if they fail to meet this criteria.44 
4.80.   Interconnection tariffs  are fixed by the Ministry of Communications and are not subject to 
negotiation between operators. The Ministry of Communications reduced mobile interconnection 
charges  from NIS 0.251/minute in 2010 to NIS 0.0609/minute currently.  
4.81.   In order to promote competition, the Ministry of Communications licensed a third 
communications infrastructure operator, which is owned mainly by the IEC. A process was 
launched in 2011 to esta blish a joint venture between the IEC and a private investor to build a 
fibre-optic-broadband infrastructure to homes  (covering 65% of the country within seven years). 
Licensing will include a prohibition on cross -subsidization between electricity and comm unications 
activities, and a requirement that the joint venture provide infrastructure to service providers in a 
"carrier's carrier" model (i.e. the company will make its infrastructure available to other operators 
and provide transmission services).  
4.82.   The I srael Postal Company (IPC) had annual revenue of about US$524 million in 2017 
(US$453 million in 2011). It dominates the market in most segments, excluding courier and 
expedited delivery services. The company's exclusive privilege (monopoly) is the transfe r of postal 
items of less than 500  g (not including bulk mail). It is also required to provide universal postal 
services. Plans to privatize the company have been shelved.  
                                                
42 The th ree MVNOs are: Rami Levy; Cellact; and Telzar.  A MVNO licensing regime, introduced in 2009, 
allows market entrants to lease and resell the mobile network capacity of another operator.  
43 The eight mobile operators providing international services are: 012 S mile; Netvision; Bezeq -
International; Xfone 018; Telzar; Golan Telecom; Hallo 015; and Hot.  
44 "Reasonableness" is a general clause whereby conditions differ, depending on the situation, which 
allows the regulator some discretion.  WT/TPR/S/ 376 • Israel  
 
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  4.83.   The IPC operates under a licence issued by the Minister of Communications, which all ows it, 
via the Postal Bank Ltd. (a subsidiary of IPC), to provide a wider range of services, credit products 
and services, and to issue VISA credit cards (prepaid cards only). In addition, the IPC may offer 
other services through a subsidiary. Tariffs for  the IPC's central services are controlled, on the 
basis of the recommendations of a public committee, and other tariffs are subject to a 
reasonableness condition. The IPC may not cross -subsidize between services and segments.  The 
market for courier servic es and international mail has been deregulated for many years. Bulk mail 
services have been open to competition since 2006/07.  
4.84.   Israel maintains foreign -ownership restrictions in telecommunications and broadcasting, 
mainly for public interest and security r easons (Table 2.3). Under the GATS, Israel has scheduled 
foreign -ownership limitations on international fixed -telecommunications services (74% foreign -
equity cap) and wireless -telecommunications services (80% foreign -equity cap).45  
4.4.6   Transport  
4.4.6.1   Maritime transport  
4.85.   Israel has three seaports, two of which are mainly operated by state -owned companies 
(Ashdod Port Company and Haifa Port Company)46, while the Eilat Port Company was privatized in 
January 2013.  Together, these three ports handle 99% of the volume of Israel's imports and 
exports. The Israel Ports Development and Assets Company  is a state -owned company for the 
management, maintenance, and development of port infrastructure and real estate.  The Shipping 
and Ports Authority in the Ministry of Transport  is the regulator of ports and maritime shipping 
services.  
4.86.   Competition between ports tends to be limited, for geographic or logistical reasons. All three 
ports have several terminal operators: (i) at the Port of Haifa, container throughput totalled 1.34 
million TEUs in 2017. The grain terminal is operated by Dagon; the chemical terminal is operated 
by several operators, including Gadot and Haifa Chemicals; the fuel terminal is operated by 
TASHAN. Israel Shipyards is competing with other ports on general car go and grain products; 
(ii) at the Port of Ashdod, container throughput totalled 1.53 million TEUs in 2017. The chemical 
terminal is operated by the Israel Chemical Company; and the cement terminal is operated by a 
private company; and (iii) at the Port of  Eilat, the chemical terminal is operated by the Israel 
Chemical Company.  
4.87.   Since October 2010, a new port tariff reform has been implemented.47 The new port service 
fees are based on operational costs of various services. The new infrastructure fees charged by the 
Israel Ports Development and Assets Company are determined according to the need to develop 
the port infrastructure. These infrastructure fees are set according to the goods handled, for 
example, approximately NIS  360 (January  2017) per imported 20 -foot full container and about 
NIS 400 per imported 40 -foot full container. This will decrease to NIS  148 and NIS  162, 
respectively, by 2019.48 The tariff reform ended the value -of-good and export/import cross -
subsidy based fees.49 Once fully implemented, thi s reform will end the cross -subsidization of 
exports through imports (i.e. lower wharfage fees for exports than imports), and of low -value 
freight by high -value freight. Israel has had a very low rate of night -time cargo handling (about 
12% in Haifa and 7%  in Ashod), which decreases port productivity. The new fee structure also 
provides incentives for ports to operate at night.50 
4.88.   All merchant shipping and transportation lines which use Israeli ports are owned and 
operated by private local or foreign shipping entities. There are no restrictions on foreign investors 
regarding  the supply of auxiliary maritime shipping services. Foreign companies are present in the 
supply of most auxiliary shipping services, including maritime agency services and  maritime 
freight -forwarding services. All services are available to users on an equal basis.  
                                                
45 WTO document S/DCS/W/ISR , 24 January 2003.  
46 A small portion of Haifa seaport is also operated by Israel Shipyards, a private operator.  
47 Order of Price Control on Goods and Services (Port Services) 2010.  
48 For general cargo, the infrastructure fees depend on the type of cargo.  
49 A cross-subsidy between import s and export s is managed by the Israel Ports Development and Assets 
Company in a diminishing manner from 2010 until 2019.  
50 NIS 100 reduction per container for trucks entering and exiting ports between 10.00 pm and 6.00 am 
(the Good Night Project).  WT/TPR/S/ 376 • Israel  
 
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  4.89.   The Government grants annual financial aid of up to NIS  20 million to Israeli flag and Israeli 
controlled vessels , and up to NIS 4 million to energy ships (tanker s, coal carriers, etc.) for 
employi ng Israeli officers and cadets on board. I srael imposes no limitations on foreign direct 
investment in maritime transport. To fly the Israeli flag, a vessel is required to be at least 50% 
owned by an Israeli entity. Howev er, exemptions are allowed  under the approval of the Minister of 
Transport in certain cases where there is a linkage to Israel . Maritime cabotage  by foreign vessels 
has to be authorized with a special permit issued by the Shipping and Ports Administration .  
4.90.   Foreign ownership is limited to 49% of Israeli flag vessels, and majority control by Israeli 
nationals is required for the provision of port services open to international shipping (Table 2.3).  
4.4.6.2   Air transport  
4.91.   There are currently four designated Israeli ai rlines  which operate international air services: 
El Al, Israir Airlines, Arkia Israel Airlines, and C.A.L. Cargo Airlines. Israir Airlines and Arkia Israel 
Airlines  also operate domestic air services.  
4.92.   The same criteria apply for the approval of both domest ic and international airlines, 
including national ownership (a minimum of 51% of equity  by an Israeli citizen or permanent 
resident51), a minimum aircraft fleet (two Israeli registered aircraft s owned or leased through a 
long-term financial arrangement), in surance coverage, access to sufficient financial resources , and 
compliance with International Civil Aviation Organization ( ICAO) safety standards. The share of 
passengers carried by foreign airlines in and out of the country was  about 65 % in 2017. Except f or 
very extraordinary circumstances, which are not currently applied, no approval by the Civil 
Aviation Authority (CAA) is required for passenger and cargo fares (domestic flight fares, in line 
operations, are subject to a maximum price limitation).  
4.93.   The Is raeli Airports Authority (IAA), a statutory public corporation, operates seven airports 
(two of them are jointly operated with the Israeli Air Force), provides air navigation services, and 
allocates slots. Some airport services, including ground handling, are operated by private 
companies which are concessionaries of the IAA. The cargo terminals are operated by private 
companies, which are also licensed by the IAA. There are no restrictions for foreign companies to 
provide ground -handling or self -handling s ervices, although in practice foreign airlines are required 
to use one of the three ground -handling agents  that are concessionai res of the IAA.   
4.94.   In case of operational difficulties at Ben -Gurion International Airport in Tel Aviv, airline 
companies can choose alternative airports according to their operational considerations.52 The new 
airport near the city of Eilat ("Ilan and Assaf Ramon Airport", or "Eilat -Ramon") is due to open by 
the end of 2018. It will  serve  as an international airport and, along wi th its other purposes, also as 
an alternate airport.  
4.95.   International passenger volumes and market shares at Ben Gurion Airport during 2012 -17 
are shown in Table 4.16  
Table 4.16 International passenger traffic at  Ben Gurion Airport, 2012 -17 
 2012  2013  2014  2015  2016  2017  
Total passenger traffic ('000)  12,378  13,426  14,240  15,640  17,317  20,160  
Passenger traffic, domestic airlines ('000)  4,840  5,050  5,430  5,920  6,740  7,055  
Arkia, Israir ('000)  750 760 770 920 1,200  1,390  
El Al ('000)  4,090  4,290  4,660  5,000  5,540  5,665  
Market share of domestic airlines (passengers) 
(%) 39.2 37.6 38.1 37.8 38.9 35.0 
Routes served by three or more airlines  11 12 17 17 18 19 
Source:  Data provided by the authorities.  
4.96.   Israel has a number of bilateral air services agreements to allow multiple carriers on 
scheduled routes, and to allow carriers to determine the capacity and frequency of flights without 
government approval. Domestic flights between the airports of Ben Guri on, Sde Dov, Haifa,  Rosh 
Pina, and Eilat are subject to a price cap.  
                                                
51 Article 18 of the Aviation Law.  
52 Main alternative airports are Larnaca in Cyprus and Amman in Jordan.  WT/TPR/S/ 376 • Israel  
 
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  4.97.   The Government pursues an open skies policy with the objective, inter alia , of enabling the 
designated carriers to determine the capacity of scheduled flights without government approval,  
up to the third and fourth freedom rights (passengers and cargo). Israel has full open skies 
agreements with Colombia, the European Union, New Zealand, Turkey and the United States.  
4.98.   In 2012, the Aviation Services Law (Compensation and Assistance for Flig ht Cancellation or 
Change of Conditions), 5772 -2012, was enacted. The main objective of the Law is consumer 
protection, as it defines the conditions and circumstances when the airline company is required to 
assist or compensate the passenger.53 
4.99.   The Restrict ive Trade Practices Law provides for block exemptions for restrictive 
arrangements between air carriers.54 Subject to compliance with certain conditions, the block 
exemptions specify arrangements between airlines where cooperation is not considered to 
under mine competition, and is likely to be efficient and for the benefit of the public. Airlines are 
not required to have prior approval from the IAA for those arrangements which are subject to self -
assessment by the relevant airlines. Arrangements which are co vered by the existing two block 
exemptions include: technical arrangements (e.g. on aircraft maintenance and repair); 
arrangements on aircraft leasing; frequent flyer arrangements; connecting flight arrangements 
(e.g. to allow an airline to offer passenger s continuing flights with another airline); and marketing 
arrangements of seats or freight capacity (e.g. an airline may sell to another airline block space of 
seats on a flight which it operates on routes that are regulated by the Open Sky Agreement 
betwe en Israel and the U.S. or by the Aviation Air Agreement between the European Union and 
Israel). However, the block exemption regime does not grant an exemption from prior approval to 
any arrangement that may have the effect of reducing competition on route s to and from Israel, 
and to some types of commercial arrangements between Israeli airlines. The block exemptions 
apply to new and existing arrangements, and they are granted for a limited period of five years 
which may extended by the IAA. Any commercial arrangements between airlines regarding 
domestic air transport are subject to the prior approval of  the IAA.  
4.100.   The Government provides a subsidy of US$197 million annually for security expenses in 
foreign airports , to enable Israeli airlines to compete with  other airlines on a level  playing field. 
According to the authorities, there are no other tax or non -tax incentives for airlines.  
4.101.   Foreign ownership is limited to 49% of the airline's capital (Table 2.3).  
4.4.7   Tourism  
4.102.   The direct contribution of travel and tourism to Israel's GDP was estimated at 2.5% in 
2017 (2.3% in 2010), with receipts totalling about NIS 41 billion. The Ministry of Tourism is 
responsible for planning, developing, and marketing tourism. During the review period, the 
Ministry of Tourism ha s been marketing activities in new emerging markets; providing incentives 
for investors that have resulted in an increase in the number of hotel rooms from 47,800 in 2012 
to 52,900 in 2017; and developing niche tourism (such as medical tourism, bird -watchi ng, wine, 
and gastronomy). As a result, there were 3.6  million international incoming tourists in 2017 (up 
from 3.4 million in 2011; figures do not take into account day visitors).  
4.103.   The main incentives for the tourism sector include: (i) the Law on Encoura gement of 
Capital Investment . Hotels benefit from a 20% grant for investments . A grant is provided for the 
establishment, expansion or renovation of hotels. In addition, there is a grant of 10% for the 
establishment of tourist attractions in the priority a rea; (ii) the Hotel Renovations Fund . The 
Ministry of Tourism provides grants of up to 20% of eligible expenditures. Given Jerusalem's place 
as Israel's premier tourism destination, and due to high demand for overnight accommodation with 
an insufficient nu mber of hotel rooms, an additional grant of 8% is provided for investments in 
new hotels or expansions; and (iii) e xemption from VAT . The tax expenditures (revenue forgone) 
for the exemption of tourism services were estimated at NIS 920 million in 2016 (NI S 690 million 
in 2012). Additionally, in Eilat, the Tax Authority provides an income tax credit of 10% for revenue 
up to NIS  230,000, and Israeli tour guides receive a significant discount on customs duties and 
purchase tax when importing specially designe d vehicles ("Eshkol" type).  
                                                
53 Aviation Services Law. Viewed at: http://www.tour ism-law.co.il/pdf/AviationServicesLawENG.pdf . 
54 Antitrust Rules (Group Exemption for Arrangements between Aircraft Carriers 5769 -2008).  WT/TPR/S/ 376 • Israel  
 
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  4.104.   Tour guides are licensed by the Ministry of Tourism and must be Israeli citizens, for 
reasons of public relations policy and of supervision . However, there are special permits for foreign 
tour guides with special language skills.  WT/TPR/S/ 376 • Israel  
 
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  5  APPENDIX TABLES  
Table A1. 1 Merchandise exports by group of products, 2012 -16 
  2012  2013  2014  2015  2016  
Total exports (US$ million)  63,140.6  66,781.2  68,965.0  64,062.2  60,570.6  
 % of total exports  
Total primary products  7.0 6.6 6.0 5.2 5.9 
  Agriculture  3.9 3.9 3.7 3.4 3.6 
   Food 3.2 3.3 3.1 2.8 2.9 
   Agricultural raw material  0.6 0.6 0.6 0.6 0.7 
  Mining  3.2 2.8 2.3 1.8 2.4 
   Ores and other minerals  1.0 0.8 0.8 0.6 0.6 
   Non-ferrous metals  0.4 0.4 0.4 0.3 0.3 
   Fuels 1.7 1.6 1.1 0.8 1.4 
Manufactures  92.0 92.4 92.7 93.8 92.3 
  Iron and steel  0.2 0.2 0.2 0.2 0.2 
  Chemicals  26.8 27.1 26.2 24.0 23.7 
     5429 - Medicaments, n.e.s.  9.4 8.6 8.1 9.6 10.4 
     5989 - Chemical products and preparations, n.e.s.  3.5 6.1 6.1 3.3 1.7 
      5629 - Fertilizers, n.e.s.  2.5 2.2 1.8 1.5 1.5 
      5913 - Weed -killers (herbicides), anti -sprouting 
products and plant -growth regulators  0.8 0.7 0.8 0.8 0.9 
      5822 - Other plates, sheets, film, foil and strip, of 
plastics  0.8 0.8 0.8 0.8 0.8 
  Other semi -manufactures  31.3 31.7 33.2 31.2 30.1 
      6672 - Diamonds (other than sorted industrial 
diamonds)  27.7 28.5 29.8 27.5 25.9 
      6956 - Knives and cutting blades, for machines or 
for mechanical appliances  1.4 1.3 1.5 1.4 1.5 
      6996 - Articles of iron or steel, n.e.s.  0.3 0.1 0.1 0.4 0.7 
  Machinery and transport equipment  24.6 24.2 24.0 28.8 27.5 
    Power generating machines  1.0 0.9 0.9 0.9 0.8 
    Other non -electrical machinery  4.4 4.1 4.4 4.6 4.7 
      7456 - Mechanical appliances for projecting, 
dispersing or spraying liquids or powders  0.6 0.5 0.5 0.6 0.7 
      7266 - Other printing machinery; machines for uses 
ancillary to printing  0.5 0.6 0.6 0.6 0.7 
      Agricultural machinery and tractors  0.4 0.3 0.4 0.4 0.4 
    Office machines & telecommunication equipment  11.0 11.8 11.3 14.3 11.5 
      7764 - Electronic integrated circuits and micro 
assemblies  4.4 6.0 5.6 8.5 5.1 
      7649 - Parts and accessories suitable for use with 
the apparatus of division 76 - telecommunications and 
sound -recording  1.4 1.1 1.0 1.0 1.0 
      7768 - Piezoelectric crystals, mounted  0.1 0.1 0.0 0.3 0.6 
    Other electrical machines  4.9 3.9 3.9 3.9 5.7 
      7787 - Electrical machines and apparatus, having 
individual functions, n.e.s.; parts thereof  0.5 0.4 0.3 0.3 2.1 
      7788 - Electrical machinery and equipment, n.e.s.  0.6 0.6 0.6 0.6 0.8 
    Automotive products  0.3 0.2 0.3 0.3 0.2 
    Other transport equipment  2.9 3.2 3.2 4.8 4.5 
      7929 - Parts, n.e.s. of the goods of group 792 - 
aircraft and associated equipment  2.5 2.8 2.2 3.9 4.0 
  Textiles  1.2 1.1 1.1 1.2 1.2 
  Clothing  0.3 0.2 0.2 0.2 0.2 
  Other consumer goods  7.7 7.9 7.8 8.2 9.4 
      8722 - Instruments and appliances used in medical, 
surgical or veterinary sciences  1.0 1.1 1.3 1.4 1.7 
      8742 - Drawing, marking -out or mathematical 
calculating instruments  1.7 1.8 1.4 1.1 1.4 
      8939 - Articles of plastics, n.e.s.  0.3 0.5 0.6 0.6 0.7 
Other  1.0 1.0 1.3 1.0 1.8 
Source:  UNSD, Comtrade database (SITC Rev.3).  WT/TPR/S/ 376 • Israel  
 
- 97 - 
 
  Table A1. 2 Merchandise imports by group of products, 2012 -16 
  2012  2013  2014  2015  2016  
Total imports (US$ million)  73,112  71,995  72,332  62,068  65,803  
 % of total imports  
Total primary products  31.5 30.2 27.9 22.9 19.5 
  Agriculture  8.1 8.5 8.8 9.5 9.4 
   Food 7.1 7.5 7.7 8.4 8.4 
     0112 - Meat of bovine animals, frozen  0.6 0.7 0.5 0.7 0.7 
   Agricultural raw material  1.0 1.0 1.0 1.1 0.9 
  Mining  23.4 21.7 19.1 13.5 10.2 
    Ores and other minerals  0.4 0.3 0.4 0.4 0.3 
    Non-ferrous metals  1.1 1.1 1.1 1.1 1.0 
    Fuels 22.0 20.2 17.6 11.9 8.8 
     3330 - Petroleum oils and oils obtained from 
bituminous minerals, crude  13.0 12.6 11.7 7.3 5.0 
     3212 - Other coal  2.0 1.6 1.3 1.2 0.8 
Manufactures  67.9 69.2 71.5 76.2 79.5 
  Iron and steel  2.4 2.4 2.3 2.4 2.1 
  Chemicals  11.3 11.1 11.3 12.2 11.2 
     5429 - Medicaments, n.e.s.  1.8 2.0 1.7 1.9 1.8 
     5416 - Glycosides; glands or other organs and 
their extracts  0.3 0.3 0.6 0.9 0.9 
     5157 - Other heterocyclic compounds; nucleic 
acids 0.9 0.8 0.9 0.8 0.6 
     5711 - Polyethylene  0.6 0.7 0.7 0.7 0.6 
  Other semi -manufactures  16.2 17.9 18.4 17.2 16.8 
     6672 - Diamonds (other than sorted industrial 
diamonds)  11.2 12.5 12.8 11.1 10.8 
  Machinery and transport equipment  28.8 28.1 29.2 32.5 37.5 
    Power generating machines  1.7 1.7 1.8 1.5 1.5 
    Other non -electrical machinery  7.0 5.3 5.3 6.4 9.0 
     7284 - Machinery and mechanical appliances 
specialized for particular industries, n.e.s.  1.4 0.4 0.4 0.7 2.8 
      Agricultural machinery and tractors  0.2 0.2 0.2 0.2 0.2 
    Office machines & telecommunication 
equipment  8.9 8.8 8.9 11.4 10.8 
     7764 - Electronic integrated circuits and 
micro -assemblies  2.9 2.6 2.4 4.1 4.2 
     7643 - Transmission apparatus for radio -
telephony, radio -telegraphy, etc.  0.9 1.0 1.1 1.4 1.2 
     7523 - Digital processing units  0.5 0.5 0.6 0.7 0.7 
     7522 - Digital automatic data -processing 
machines  0.6 0.6 0.6 0.6 0.6 
    Other electrical machines  3.6 3.8 3.9 4.4 4.1 
     7731 - Insulated wire, cable and other 
insulated electric conductors  0.5 0.5 0.5 0.5 0.5 
    Automotive products  5.6 6.6 7.3 7.3 10.2 
     7812 - Motor vehicles for the transport of 
persons, n.e.s.  4.0 4.5 5.6 5.0 7.5 
     7821 - Motor vehicles for the transport of 
goods  0.9 1.1 0.8 1.2 1.4 
    Other transport equipment  2.0 1.9 2.0 1.6 1.8 
     7924 - Aeroplanes and other aircraft, 
mechanically  propelled  0.2 0.3 0.4 0.2 0.7 
  Textiles  1.0 1.0 1.1 1.2 1.1 
  Clothing  2.0 2.2 2.3 2.6 2.6 
  Other consumer goods  6.3 6.6 7.0 8.1 8.2 
     8722 - Instruments and appliances used in 
medical, surgical or veterinary sciences  0.4 0.4 0.4 0.5 0.5 
     8514 - Other footwear with uppers of leather 
or composition leather  0.4 0.4 0.5 0.5 0.5 
Other  0.6 0.6 0.6 0.8 1.0 
Source:  UNSD, Comtrade database (SITC Rev.3).  WT/TPR/S/ 376 • Israel  
 
- 98 - 
 
  Table A1. 3 Merchandise exports by destination, 2012 -16 
  2012  2013  2014  2015  2016  
Total exports (US$ million)  63,140.6  66,781.2  68,965.0  64,062.2  60,570.6  
 % of total exports  
Americas  33.1 31.2 31.5 32.2 33.0 
  United States  27.8 26.2 26.9 28.3 29.1 
  Other America  5.3 5.0 4.5 3.9 3.9 
       Brazil  1.8 1.6 1.3 1.2 1.2 
       Canada  1.2 1.0 0.9 0.9 1.0 
Europe  31.6 33.6 33.5 30.3 30.8 
  EU-28 27.3 27.6 27.3 25.1 26.1 
    United Kingdom  5.7 5.8 5.8 6.2 6.5 
    Belgium  4.6 4.7 4.8 3.9 4.1 
    Netherlands  3.6 3.1 3.6 3.4 3.5 
    Germany  2.6 2.6 2.5 2.2 2.5 
    France  2.3 2.4 2.4 2.6 2.4 
    Italy 1.8 1.7 1.6 1.3 1.6 
    Spain  1.6 1.9 1.5 1.2 1.5 
  EFTA 1.9 2.2 2.2 2.5 2.5 
    Switzerland  1.8 2.1 2.1 2.3 2.4 
  Other Europe  2.3 3.8 4.0 2.7 2.3 
    Turkey  2.3 3.8 4.0 2.7 2.1 
Commonwealth of Independent States (CIS)  2.8 2.8 2.6 1.8 1.9 
    Russian Federation  1.7 1.6 1.4 1.1 1.0 
Africa  2.4 2.2 2.0 1.7 1.5 
Middle East  0.3 0.2 0.2 0.2 0.1 
Asia 25.3 25.4 25.4 28.0 26.1 
  China  4.4 4.3 4.0 5.1 5.5 
  Japan  1.3 1.1 1.1 1.2 1.3 
  Other Asia  19.7 20.0 20.2 21.7 19.3 
    Hong Kong, China  7.7 8.1 8.9 8.3 7.3 
    India 3.9 3.4 3.2 3.5 4.0 
    Viet Nam  1.1 1.0 1.0 2.8 2.0 
    Chinese Taipei  1.2 1.1 1.2 1.0 1.2 
    Malaysia  1.2 2.2 2.0 2.2 1.0 
    Korea, Republic of  1.1 0.9 0.9 0.9 1.0 
    Australia  0.9 0.9 0.9 0.8 0.8 
Other  4.5 4.6 4.9 5.9 6.7 
Source:  UNSD, Comtrade database.  WT/TPR/S/ 376 • Israel  
 
- 99 - 
 
  Table A1. 4 Merchandise imports by origin, 2012 -16 
  2012  2013  2014  2015  2016  
Total imports (US$ million)  73,112.1  71,995.0  72,331.8  62,067.8  65,802.7  
 % of total imports  
Americas  14.7 13.4 13.6 14.8 14.3 
  United States  12.9 11.3 11.8 13.0 12.3 
  Other America  1.8 2.0 1.8 1.8 2.0 
Europe  43.0 43.5 44.6 47.7 52.4 
  EU-28 34.5 33.9 33.4 36.4 41.6 
    Germany  6.3 6.5 6.4 6.1 6.2 
    Belgium  4.8 5.3 5.3 5.3 5.9 
    United Kingdom  3.6 3.4 3.2 3.7 5.6 
    Netherlands  3.8 3.8 3.3 3.9 4.1 
    Italy 3.8 3.7 3.8 4.0 4.1 
    Ireland  1.4 1.3 1.2 2.1 3.1 
    France  2.3 2.2 2.2 2.6 2.6 
    Spain  1.6 1.9 2.0 2.2 2.4 
    Slovenia  0.2 0.2 0.2 0.2 1.1 
    Czech Republic  0.7 0.7 0.8 0.8 0.9 
  EFTA 5.7 6.3 7.5 7.4 6.8 
    Switzerland  5.5 6.1 7.2 7.1 6.5 
  Other Europe  2.9 3.3 3.7 4.0 4.0 
    Turkey  2.8 3.3 3.7 3.9 4.0 
Commonwealth of Independent States (CIS)  1.5 1.7 1.5 1.4 1.6 
    Russian Federation  1.1 1.4 1.3 1.2 1.4 
Africa  0.5 0.4 0.5 0.4 0.4 
Middle East  0.3 0.4 0.5 0.7 0.5 
Asia 20.5 20.8 22.4 24.2 26.1 
  China  7.3 7.9 8.3 9.3 9.0 
  Japan  2.4 1.6 1.8 1.9 3.6 
  Other Asia  10.9 11.4 12.3 13.0 13.6 
    Hong Kong, China  2.1 2.3 3.0 3.3 3.0 
    India 2.6 2.9 3.1 3.0 2.7 
    Singapore  1.1 1.1 1.2 1.3 2.3 
    Korea, Republic of  2.3 2.1 1.9 1.8 2.0 
    Chinese Taipei  1.1 1.1 1.1 1.3 1.2 
    Thailand  0.7 0.7 0.8 0.9 0.9 
Other  19.5 19.9 16.9 10.7 4.7 
Source:  UNSD, Comtrade database.  
 WT/TPR/S/ 376 • Israel  
 
- 100 - 
 
  Table A2. 1 WTO notifications by Israel, 2012 -17 
Products 
covered/ 
subject  Description of notification  Document title  Date  
AGREEMENT ON AGRICULTURE  
Notifications under Articles 10 and 18.2  
Export subsidies   
2011-14 
2015 G/AG/N/ISR/52  
G/AG/N/ISR/53  
G/AG/N/ISR/56  12/6/2013  
21/1/2016  
1/12/2016  
Domestic 
support   G/AG/N/ISR/48 and Rev.1  
 
G/AG/N/ISR/54  
G/AG/N/ISR/55  
G/AG/N/ISR/60  29/8/2012 & 
22/10/2012  
27/4/2016  
28/4/2016  
31/8/2017  
Imports under 
tariff quotas   G/AG/N/ISR/49  
G/AG/N/ISR/50  
G/AG/N/ISR/58  
G/AG/N/ISR/62  7/11/2012  
14/2/2013  
21/2/2017  
1/9/2017  
Special 
safeguards  
  G/AG/N/ISR/51  
G/AG/N/ISR/57  
G/AG/N/ISR/59  21/2/2013  
1/12/2016  
31/8/2017  
AGREEMENT ON IMPLEMENTATION OF ARTICLE VI OF THE GATT 1994 (ANTI -DUMPING)  
Notifications under Article 16.4  
Annual and 
semi-annual 
reports   G/ADP/N/209/ISR  
G/ADP/N/216/ISR and Corr.1  
 
G/ADP/N/223/ISR  
G/ADP/N/230/ISR  
G/ADP/N/237/ISR  
G/ADP/N/244/ISR  
G/ADP/N/252/ISR  
G/ADP/N/259/ISR  
G/ADP/N/265/ISR and Add.1  
 
G/ADP/N/272/ISR  
G/ADP/N/279  
G/ADP/N/280/ISR  
G/ADP/N/287  
G/ADP/N/286/ISR  
G/ADP/N/289  
G/ADP/N/292  
G/ADP/N/294/ISR  
G/ADP/N/296  
G/ADP/N/302 and Corr.1  
 
G/ADP/N/300/ISR  
G/ADP/N/305  20/1/2012  
23/1/2012  
22/3/2012  
22/3/2012  
1/10/2012  
19/3/2013  
30/7/2013  
2/4/2014  
29/8/2014  
29/1/2015  
24/4/2015  
6/8/2015  
18/1/2016  
20/1/2016  
23/6/2016  
27/7/2016  
24/8/2016  
29/11/2016  
7/2/2017  
24/2/2017  
18/7/2017  
13/9/2017  
19/10/2017  
19/10/2017  
 
 Competent authorities in WTO Members  G/ADP/N/14/Add.41;  
G/SCM/N/18/Add.41  22/4/2016  
AGREEMENT ON GOVERNMENT PROCUREMENT  
 Questionnaire pursuant to para. 3.2 of 
the Committee's Decision on a Work 
Programme on SMEs  
 GPA/WPS/SME/21  22/6/2016  
 Notification pursuant to para. 2 of the 
Committee's Decision on a Work 
Programme on Exclusions and 
Restrictions in Parties' Annexes  
 GPA/WPS/EXCS/14  22/6/2016  
 Thresholds in national currency ( 1 April 
2012-31 March 2014)  GPA/W/314/Add.7  4/4/2012  
 Thresholds in national currency (2016 –
2017)  GPA/W/336/Add.8  15/2/2016  WT/TPR/S/ 376 • Israel  
 
- 101 - 
 
  Products 
covered/ 
subject  Description of notification  Document title  Date  
 Thresholds in national currency ( 2014– 
2016)  GPA/W/325/Add.7  6/2/2014  
AGREEMENT ON IMPORT LICENSING PROCEDURES  
Notifications under Article s 1.4 (a) and 8.2 (b)  
  G/LIC/N/1/ISR/2 and Corr.1.  
 
G/LIC/N/1/ISR/3  19/10/2012 
23/10/2012  
8/10/2013  
Notifications under Article s 5.1-5.4 
  G/LIC/N/2/ISR/2  
G/LIC/N/2/ISR/3  22/10/2012  
21/10/2013  
    
Notifications under Article 7.3  
  G/LIC/N/3/ISR/2  
G/LIC/N/3/ISR/3  19/10/2012  
9/10/2013  
AGREEMENT ON SAFEGUARDS  
Notifications under Article 12.1 (b) and (c), and Article 9, footnote 2  
Glass wool and 
rock wool  Investigation terminated with no 
measure  G/SG/N/8/ISR/1; 
G/SG/N/11/ISR/2.  
G/SG/N/9/ISR/1  
G/SG/N/8/ISR/1/Rev.1; 
G/SG/N/11/ISR/2/Rev.1  9/1/2012  
 
25/10/2013  
13/1/2014  
AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES  
Notifications under Article  25.11  
Semi-annual 
reports on CV 
duties  
  
 G/SCM/N/212/Add.1/Rev.2  
G/SCM/N/219/Add.1/Rev.2  
G/SCM/N/228/Add.1/Rev.2  
G/SCM/N/235/Add.1  
G/SCM/N/242/Add.1  
G/SCM/N/250/Add.1  
G/SCM/N/259/Add.1  
G/SCM/N/267/Add.1  
G/SCM/N/220/ISR/Suppl.1; 
G/SCM/N/253/ISR  
G/SCM/N/281/Add.1  
G/SCM/N/289/Add.1  
G/SCM/N/298/Add.1/Rev.1  
G/SCM/N/305/Add.1  
G/SCM/N/313/Add.1  
G/SCM/N/321/Add.1  26/7/2012  
26/7/2012  
26/7/2012  
24/4/2012  
12/10/2012  
10/4/2013  
18/10/2013  
15/4/2014  
25/9/2014  
 
24/4/2015  
22/10/2015  
25/10/2016  
21/10/2016  
21/4/2017  
23/10/2017  
AGREEMENT ON TECHNICAL BARRIERS TO TRADE  
Notifications under Articles 10.6 and 10.7  
Certification of 
products  Guidelines for certification of various 
products  G/TBT/N/ISR/543 -645; 
G/TBT/N/ISR/476/Add.1/Corr.1; 
G/TBT/N/ISR/284/Add.2.  
 
G/TBT/N/ISR/646 -728; 
G/TBT/N/ISR/555/Add.1 and 
Corr.1; G/TBT/N/ISR/372 -
385/Add.2;  
G/TBT/N/ISR/232/Add.2  
 
G/TBT/N/ISR/729 -809; 
G/TBT/N/ISR/611/Add.1; 
G/TBT/N/ISR/717/Add.1.  
 
G/TBT/N/ISR/810 -821; 
G/TBT/N/ISR/666/Add.2; 
G/TBT/N/ISR/672/Add.1; 
G/TBT/N/ISR/707/Add.1.  
 
G/TBT/N/ISR/822 -940; 
G/TBT/N/ISR/560/Add.1; 
G/TBT/N/ISR/666/Add.2.  
 2012 
 
 
 
2013 
 
 
 
 
 
2014 
 
 
 
2015 
 
 
 
 
2016 
 
 
 WT/TPR/S/ 376 • Israel  
 
- 102 - 
 
  Products 
covered/ 
subject  Description of notification  Document title  Date  
G/TBT/N/ISR/941 -972; 
G/TBT/N/ISR/709/Add.1  
G/TBT/N/ISR/946/Add.1  
G/TBT/N/ISR/862/Add.1  
G/TBT/N/ISR/929/Add.1  2017 
AGREEMENT ON TRADE FACILITATION  
Category "A"  
commitments   WT/PCTF/N/ISR/1  31/7/2014  
GENERAL  AGREEMENT ON TRADE IN SERVICES  
 Contact and enquiry points - Note by the 
Secretariat - Revision  S/ENQ/78/Rev.16  22/4/2016  
TRADE RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS AGREEMENT  
Notification under Article 63.2  
 Laws and regulations  IP/N/1/ISR/C/11  15/4/2013  
 Laws and regulations  IP/N/1/ISR/3  15/4/2013  
Source:  WTO Secretariat.  
__________