RESTRICTED  WORLD TRADE  
ORGANIZATION  GPA/MOD/ISR/5 
12 December 2005 
 
 (05-5886) 
Committee on Government Procurement Original:   English 
  
 
PROPOSED MODIFICATIONS TO APPENDIX I OF ISRAEL  
 
Communication from Israel pursuant to Article XXIV:6(a)
1 of the GPA  
  
 The following communication, dated 12 Decemb er 2005, from the delegation of Israel is 
being circulated to the Parties to the Agreement on Government Procurement.    
_______________ 
 
 
1. Pursuant to Article XXIV:6(a) of the Agre ement on Government Procurement (hereinafter 
"the Agreement"), the Government of Israel  wishes to notify the Committee on Government 
Procurement of the following proposed modifications to its Note and Annexes 1-5 to Appendix I of 
the Agreement:  
- Paragraph 1(c) of the Note will read as fo llows:  "Offsets in any form may be required 
up to 35 per cent of the contract going down to 30 per cent after five years, 28 per cent after ten years and 20 per cent after 13 years, beginning from the date Israel implements the Agreement."  
 
- Paragraph 2(a) of the Note will read as follows:  "At the end of each period 
mentioned in paragraph 1(c) Israel will submit a report concerning the implementation of this Note." 
 - Israel's Annex 4 shall be replaced by the text shown in the attachments to this 
document. 
 
- Israel's Annexes  1, 2, 3 and 5, referring to the thresholds for construction services, 
shall be modified to read as follows:  " Threshold :  8,500,000 SDR;  during the period 
beginning from 1 January 2006 until 31 Decemb er 2008 the threshold shall be set at 
5,000,000 SDR". 
 
                                                     
 
 1 Article XXIV:6(a) reads as follows:  Rectifications or  Modifications   (a) Rectifications, transfers of an entity 
from one Annex to another or, in exceptional cases, other modifi cations relating to Appendices I through IV shall be notified 
to the Committee, along with information as to the likely cons equences of the change for the mutually agreed coverage 
provided in this Agreement.  If the rectifications, transfers or  other modifications are of a pur ely formal or minor nature, th ey 
shall become effective provided there is no objection within 30 days.  In other case s, the Chairman of the Committee shall 
promptly convene a meeting of the Committee.  The Committee shall consider the proposal and any claim for compensatory 
adjustments, with a view to maintaini ng a balance of rights and obligations and a comparable level of mutually agreed 
coverage provided in this Agreement prior to such notification.   In the event of agreement not being reached, the matter may 
be pursued in accordance with the provisions contained in Article XXII. GPA/MOD/ISR/5 
Page 2  
 
2.   The proposed modifications imply the following changes:  
- According to Israel's Note to its Appendix  I of the Agreement, the level of offsets 
invoked by Israeli procuring entities should be set at 20 per cent of the value of the contract, beginning on 1 January 2006. 
 
- Israel is proposing to modify its Note in order to set its level of offsets at 28 per cent 
for a three-year period, after which time the level of offsets would be set at 20 per cent.  
 
- Israel is proposing to modify its Note in order to adjust the time-periods for the 
submission of reports specifie d in paragraph 2(a), in order to reflect the proposed 
modifications to paragraph 1(c) of the Note. 
 
- With a view to maintaining a balance of rights and obligations as provided for in the 
Agreement Israel is proposing to significan tly increase the coverage of services listed 
in its Annex 4 and to temporarily redu ce its threshold for construction services. 
 
3. The reasons for the proposed modification ma y be found in Israel's submission in document 
GPA/W/294, dated 18 July 2005, and in Israel's st atements emphasizing the importance of offsets to 
its economy as a development instrument. 
 
4. The proposed modification prescribes a well-de fined time-frame for the gradual reduction of 
the level of offsets.  5. Attachment A indicates the proposed chang es to Annexes 1-5 to Appendix I (page 1/2 of 
Annex 1, page 1/1 of Annex 2, pa ge 1/1 of Annex 3, page 1/1 of Annex 4 and page 1/1 of Annex 5) 
in addition to the proposed changes to the Note to  Appendix I (page 1/1).  Attachment B shows how 
the revised pages would appear after the proposed modification.
2 
  
                                                     
 
2 Attachments A and B are in English only. GPA/MOD/ISR/5 
   Page 3 
 
APPENDIX I ISRAEL  ANNEX 1 Page 1/2
 
 
 ATTACHMENT A 
 
ISRAEL  
 
(Authentic in the English language only) 
 
 
ANNEX 1 
 
Central Government Entities wh ich Procure in Accordance 
With the Provisions of this Agreement 
  
Supplies  Threshold : 130,000 SDR 
 Services   (specified in Annex 4)  Threshold : 130,000 SDR 
 
Construction   (specified in Annex 5)  Threshold : 8,500,000 SDR;  during the 
period beginning from 1 January 2006 until 
31 December 2008, the threshold shall be set 
at 5,000,000 SDR  
 
List of Entities : 
 House of Representatives (the Knesset) Prime Minister's Office Ministry of Agriculture Ministry of Communications and Culture 
Ministry of Construction and Housing 
Ministry of Economics and Planning Ministry of Education Ministry of Energy and Infrastructure excluding Fuel Authority Ministry of the Environment 
Ministry of Finance 
Civil Service Commissioner Ministry of Foreign Affairs Ministry of Health (1) Ministry of Immigrants Absorption Ministry of Industry and Trade 
Ministry of the Interior 
Ministry of Justice Ministry of Labour and Social Affairs Israel Productivity Institute Ministry of Religious Affairs 
Ministry of Science and Technology 
Ministry of Tourism Ministry of Transport The State Controller's office  GPA/MOD/ISR/5 
Page 4  
APPENDIX I ISRAEL  ANNEX 2 Page 1/1
 
 
 
1 March 20 00 (WT/Let/330)  ANNEX 2 
 
Sub-Central Government Entities which Procure in Accordance 
With the Provisions of this Agreement 
 
 
Supplies  Threshold : 250,000 SDR 
 Services   (specified in Annex 4)  Threshold : 250,000 SDR 
 Construction   (specified in Annex 5)  Threshold : 8,500,000 SDR;  during the 
period beginning from 1 January 2006 until 
31 December 2008, the threshold shall be set 
at 5,000,000 SDR  
  List of Entities : 
 
Municipalities of Jerusale m, Tel-Aviv and Haifa 
 The company for economy and management of the Center of Local Government 
 GPA/MOD/ISR/5 
Page 5 
 
APPENDIX I ISRAEL  ANNEX 3 Page 1/1
 
 
1 March 2000 (WT/Let/330)  ANNEX 3 
 
All Other Entities which Procure in Accordance 
With the Provisions of this Agreement 
 
Supplies  Threshold : 355,000 SDR 
 
Services   (specified in Annex 4)  Threshold : 355,000 SDR 
 Construction   (specified in Annex 5)  Threshold : 8,500,000 SDR;  during the 
period beginning from 1 January 2006 until 
31 December 2008, the threshold shall be set 
at 5,000,000 SDR  
List of Entities : 
 Israel Airports Authority Israel Ports and Railways Authority (1) Israel Broadcasting Authority 
Israel Educati onal Television 
Postal Authority Bezek (Israel Communication Company) (1) (2) Israel Electricity Company (2a) Mekoroth Water Resources Ltd. 
Sports' Gambling Arrangement Board 
Israel Standards Institute National Insurance Institute All entities operating in the field of urban transpor t, except those operatin g in the field of bus 
services (2b)  Notes to Annex 3  
 
(1) Procurement of cables is excluded.  (2) With regard to procurement by Bezek, this Ag reement shall apply only to  goods and services of 
the US. 
  Israel is willing to negotiate the opening of its telecommunication sector also to other Code 
members under the condition of reciprocity. 
 (2a) Excluded products:  cables (H.S. 8544), electro-mechanic mete rs (ex. H.S. 9028), transformers 
(H.S. 8504), disconnectors and switchers (H.S . 8535-8537), electric motors (H.S. 8501). 
 (2b) With regard to procurement by entities operati ng in the field of urban transport, except those 
operating in the field of bus services, this Ag reement shall apply only to goods and services, 
including construction services, of the European Community. 
 
 Israel is willing to negotiate the opening of pr ocurement by entities operating in the field of 
urban transport, except those operating in the fi eld of bus services, to other Parties to the 
Agreement under the c ondition of reciprocity. GPA/MOD/ISR/5 
Page 6  
APPENDIX I ISRAEL  ANNEX 4 Page 1/2
 
 
 
1 March 20 00 (WT/Let/330)  ANNEX 4 
 
Services  
 
  Of the Universal List of Services, as cont ained in document MTN.GNS/W/120, the following 
services are included: 
  
CPC   Description  
 
6112, 6122, 633, 886 Maintenanc e and repair services 
 
641   Hotel and similar accommodation services
 
 642-3   Food and beverage serving services
 
 
712   Land transport services  
 73   Passenger transportation services 
 
 7471   Travel agency and tour operator services
 
 
752   Telecommunications services  
 821   Real estate services i nvolving own or leased property
 
 83106    Leasing or rental services c oncerning machinery and equipment without
 
to 83109   operator only  
 83203    Leasing or rental services c oncerning personal and household goods only
 
to 83209  
 
84   Computer and related services  
 841
-3   Computer and related services  
 861   Legal Services (advisory services  on foreign and international law only)
 
 
862   Accounting, auditing and bookkeeping services  
 863   Taxation Services (excluding legal services)
 
 864   Market research and public opinion 
 
865-6   Management consulting  GPA/MOD/ISR/5 
Page 7 
 
APPENDIX I ISRAEL  ANNEX 4 Page 2/2
 
 
 
1 March 2000 (WT/Let/330)  867  Architectural services; engineering services and integrated engineering 
services, urban planning and landscape arch itectural services; related scientific 
and technical consu lting services; technical testing and analysis services  
 8671
   Engineering services  
 
8672 -3   Architectural services  
 8674
   Urban planning  
 871   Advertising services  
874, 82201-82206 Building-cleaning services and property management services 
 876   Packaging services
 
 8814   Services incidental to forestry  and logging, including forest management
 
 
883   Services incidental to mining, including drilling and field services  
 88442   Publishing and printing servic es on a fee or contract basis 
 
887   Services incidental to energy distribution
 
 9401-5   Environmental services    
 
    
 
Note to Annex 4  
 
The offer regarding services (inclu ding construction) is subject to th e limitation and conditions specified 
in Israel's offer under
 schedule of  the GATS negotiation . 
 
 GPA/MOD/ISR/5 
Page 8  
APPENDIX I ISRAEL  ANNEX 5 Page 1/1
 
 
 
1 March 20 00 (WT/Let/330)  ANNEX 5 
 
Construction Services  
 
 Definition : 
 
 A construction services contract is a contract  which has as its objective the realization by 
whatever means of civil or building works, in the sense of Division 51 of the Central Product 
Classification.  
 
Threshold : 8,500,00 SDR;  during the period beginning from 1 January 2006 until 
31 December 2008, the threshold shall be set at 5,000,000 SDR  
 
List of constructi on services offered  
 
CPC   Description  
 
511   Pre-erection work at construction sites  512   Construction work for buildings 
 
513   Construction work for civil engineering  514   Assembly and erection of  prefabricated construction 
 515   Special trade construction work 
 
516   Installation work  517   Building completion and finishing work  
518   Renting services related to equipment for construction GPA/MOD/ISR/5 
Page 9 
 
APPENDIX I ISRAEL  NOTE Page 1/1
 
 
 
16 December 2004 (WT/Let/485)  NOTE 
 
Offset  
 
 1. Having regard to Article XVI and to genera l policy considerations regarding development, 
Israel may operate provisions wh ich require the limited incorpor ation of domestic content, 
offset procurement or transfer of technology, in the form  of objective and clearly defined 
conditions for participation in procedures for th e award of contracts, which do not discriminate 
between other Parties. 
  This shall be done under the following terms: 
 
 (a) Israel shall ensure that its entities indicate the existe nce of such conditions in their 
tender notices and specify them cl early in the contract documents. 
  (b) Suppliers will not be required to purc hase goods that are not offered on competitive 
terms, including price and quality, or to take  any action which is not justified from a 
commercial standpoint. 
  (c) Offsets in any form may be required up to 35 per cent of the contract going down to 
30 per cent after five years,
 and 208 per cent after ten years,  and 20 per cent after 
13 years,  beginning from the date Israel  implements the Agreement. 
 2. (a) At the end of each period mentioned in paragraph 1(c)
, of five years  Israel will submit a 
report concerning the implem entation of this Note. 
  (b) When the level of the offset has reached 20 per cent, Israel will consult with the Parties 
to this Agreement on the level of the use of of fset by Israel.  The review shall take into 
consideration inter alia  general and economic developments in Israel, its trade balance, 
the actual performance within the framewor k of this Agreement and the views of the 
other Parties. GPA/MOD/ISR/5 
Page 10  
APPENDIX I ISRAEL  ANNEX 1 Page 1/2
 
 
… (WT/Let/…) ATTACHMENT B 
 
ISRAEL  
 
(Authentic in the English language only) 
 
 
ANNEX 1 
 
Central Government Entities wh ich Procure in Accordance 
With the Provisions of this Agreement 
  
Supplies  Threshold : 130,000 SDR 
 Services   (specified in Annex 4)  Threshold : 130,000 SDR 
 
Construction   (specified in Annex 5)  Threshold : 8,500,000 SDR;  during the 
period beginning from 1 January 2006 until 31 December 2008, the threshold shall be set at 5,000,000 SDR 
 
 
List of Entities : 
 House of Representatives (the Knesset) Prime Minister's Office Ministry of Agriculture 
Ministry of Communications and Culture 
Ministry of Construction and Housing Ministry of Economics and Planning Ministry of Education Ministry of Energy and Infrastructure excluding Fuel Authority 
Ministry of the Environment 
Ministry of Finance Civil Service Commissioner Ministry of Foreign Affairs Ministry of Health (1) Ministry of Immigrants Absorption 
Ministry of Industry and Trade 
Ministry of the Interior Ministry of Justice Ministry of Labour and Social Affairs Israel Productivity Institute 
Ministry of Religious Affairs 
Ministry of Science and Technology Ministry of Tourism Ministry of Transport The State Controller's office GPA/MOD/ISR/5 
Page 11 
 
APPENDIX I ISRAEL  ANNEX 2 Page 1/1
 
 
 
… (WT/Let/…) ANNEX 2 
 
Sub-Central Government Entities which Procure in Accordance 
With the Provisions of this Agreement 
 
 
Supplies  Threshold : 250,000 SDR 
 Services   (specified in Annex 4)  Threshold : 250,000 SDR 
 Construction   (specified in Annex 5)  Threshold : 8,500,000 SDR;  during the 
period beginning from 1 January 2006 until 
31 December 2008, the threshold shall be set 
at 5,000,000 SDR 
   
List of Entities : 
 Municipalities of Jerusale m, Tel-Aviv and Haifa 
 The company for economy and management of the Center of Local Government GPA/MOD/ISR/5 
Page 12  
APPENDIX I ISRAEL  ANNEX 3 Page 1/1
 
 
… (WT/Let/…) ANNEX 3 
 
All Other Entities which Procure in Accordance 
With the Provisions of this Agreement 
 
Supplies  Threshold : 355,000 SDR 
 
Services   (specified in Annex 4)  Threshold : 355,000 SDR 
 Construction   (specified in Annex 5)  Threshold : 8,500,000 SDR;  during the 
period beginning from 1 January 2006 until 31 December 2008, the threshold shall be set 
at 5,000,000 SDR 
List of Entities : 
 Israel Airports Authority Israel Ports and Railways Authority (1) 
Israel Broadcasting Authority 
Israel Educati onal Television 
Postal Authority Bezek (Israel Communication Company) (1) (2) Israel Electricity Company (2a) 
Mekoroth Water Resources Ltd. 
Sports' Gambling Arrangement Board Israel Standards Institute National Insurance Institute All entities operating in the field of urban transpor t, except those operatin g in the field of bus 
services (2b) 
 
Notes to Annex 3  
 
(1) Procurement of cables is excluded.  
(2) With regard to procurement by Bezek, this Ag reement shall apply only to  goods and services of 
the US. 
  Israel is willing to negotiate the opening of its telecommunication sector also to other Code 
members under the condition of reciprocity. 
 
(2a) Excluded products:  cables (H.S. 8544), electro-mechanic mete rs (ex. H.S. 9028), transformers 
(H.S. 8504), disconnectors and switchers (H.S . 8535-8537), electric motors (H.S. 8501). 
 (2b) With regard to procurement by entities operati ng in the field of urban transport, except those 
operating in the field of bus services, this Ag reement shall apply only to goods and services, 
including construction services, of the European Community. 
  Israel is willing to negotiate the opening of pr ocurement by entities operating in the field of 
urban transport, except those operating in the fi eld of bus services, to other Parties to the 
Agreement under the c ondition of reciprocity. GPA/MOD/ISR/5 
Page 13 
 
APPENDIX I ISRAEL  ANNEX 4 Page 1/2
 
 
 
… (WT/Let/…) ANNEX 4 
 
Services  
 
  Of the Universal List of Services, as cont ained in document MTN.GNS/W/120, the following 
services are included: 
  
CPC   Description  
 
6112, 6122, 633, 886 Maintenanc e and repair services 
 
641   Hotel and similar accommodation services  642-3   Food and bevera ge serving services 
 
712   Land transport services  
 73   Passenger transportation services   7471   Travel agency and tour operator services 
 
752   Telecommunications services  821   Real estate services i nvolving own or leased property 
 83106    Leasing or rental services c oncerning machinery and equipment without 
to 83109   operator only 
 83203    Leasing or rental services c oncerning personal and household goods only 
to 83209  
84   Computer and related services 
 861   Legal Services (advisory services  on foreign and international law only) 
 862   Accounting, auditing and bookkeeping services  
863   Taxation Services (excluding legal services) 
 864   Market research and public opinion  865-6   Management consulting 
 
867  Architectural services; engineering services and integrated engineering 
services, urban planning and landscape arch itectural services; related scientific 
and technical consu lting services; technical tes ting and analysis services GPA/MOD/ISR/5 
Page 14  
APPENDIX I ISRAEL  ANNEX 4 Page 2/2
 
 
… (WT/Let/…)  
871   Advertising services 
 874, 82201-82206 Building-cleaning services and property management services 
 876   Packaging services 
 
8814   Services incidental to forestry and logging, including forest management 
 883   Services incidental to mining , including drilling and field services 
 88442   Publishing and printing servic es on a fee or contract basis 
 
887   Services incidental to energy distribution  9401-5   Environmental services  
 
  
Note to Annex 4  
 The offer regarding services (inclu ding construction) is subject to th e limitation and conditions specified 
in Israel's schedule of the GATS.  
 GPA/MOD/ISR/5 
Page 15 
 
APPENDIX I ISRAEL  ANNEX 5 Page 1/1
 
 
 
… (WT/Let/…) ANNEX 5 
 
Construction Services  
 
 Definition : 
 
 A construction services contract is a contract  which has as its objective the realization by 
whatever means of civil or building works, in the sense of Division 51 of the Central Product 
Classification.  
 
Threshold : 8,500,00 SDR;  during the period beginning from 1 January 2006 until 
31 December 2008, the threshold shall be set at 5,000,000 SDR 
 
List of constructi on services offered  
 
CPC   Description  
 
511   Pre-erection work at construction sites  512   Construction work for buildings 
 
513   Construction work for civil engineering  514   Assembly and erection of  prefabricated construction 
 515   Special trade construction work 
 
516   Installation work  517   Building completion and finishing work  
518   Renting services related to equipment for construction GPA/MOD/ISR/5 
Page 16  
APPENDIX I ISRAEL  NOTE Page 1/1
 
 
… (WT/Let/…) NOTE 
 
Offset  
 
 1. Having regard to Article XVI and to genera l policy considerations regarding development, 
Israel may operate provisions wh ich require the limited incorpor ation of domestic content, 
offset procurement or transfer of technology, in the form  of objective and clearly defined 
conditions for participation in procedures for th e award of contracts, which do not discriminate 
between other Parties. 
  This shall be done under the following terms: 
 
 (a) Israel shall ensure that its entities indicate the existe nce of such conditions in their 
tender notices and specify them cl early in the contract documents. 
  (b) Suppliers will not be required to purc hase goods that are not offered on competitive 
terms, including price and quality, or to take  any action which is not justified from a 
commercial standpoint. 
  (c) Offsets in any form may be required up to 35 per cent of the contract going down to 
30 per cent after five years, 28 per cent afte r ten years and 20 per cent after 13 years, 
beginning from the date Israel implements the Agreement. 
 2. (a) At the end of each period mentioned in paragraph 1(c), Israel will submit a report 
concerning the implemen tation of this Note. 
  (b) When the level of the offset has reached 20 per cent, Israel will consult with the Parties 
to this Agreement on the level of the use of of fset by Israel.  The review shall take into 
consideration inter alia  general and economic developments in Israel, its trade balance, 
the actual performance within the framewor k of this Agreement and the views of the 
other Parties. 
 
__________