WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO WT/TPR/M/157/Add.1 
15 March 2006 
 (06-1151) 
Trade Policy Review Body 
1 and 3 February 2006  Original:  English/Spanish 
                anglais/espagnol                 inglés/español 
  
TRADE POLICY REVIEW 
ISRAEL 
Minutes of Meeting
 
Addendum  
Chairperson:  H.E. Mr. Don Stephenson (Canada) 
 This document contains the advance writte n questions, and replies provided by Israel.1 
__________________________________________________________________________________  
Organe d'examen des politiques commerciales 
1 et 3 février 2006 
 
EXAMEN DES POLITIQUES COMMERCIALES 
Israel 
Compte rendu de la réunion
 
Addendum  
Président:  S.E. M. Don Stephenson (Canada)  
 Le présent document contient les questions écrites communiquées à l'avance et les réponses 
fournies par Israel.1 
__________________________________________________________________________________  
Órgano de Examen de las Políticas Comerciales 
1 y 3 de febrero de 2006 
 
EXAMEN DE LAS POLÍTICAS COMERCIALES 
Israel 
Acta de la reunión
 
Addendum  
Presidente:  Excmo. Sr. Don Stephenson (Canadá) 
 En el presente documento figuran las pre guntas presentadas anticipadamente por escrito, 
junto con las respuestas facilitadas por Israel.1 
                                                      
1 In English and Spanish only./En anglais et espagnol seulement./En inglés y español solamente.  WT/TPR/M/157/Add.1 
 Page 3 
 
 
 ADVANCE WRITTEN QUESTIONS 
QUESTIONS FROM TURKEY 
TRADE POLICY OBJECTIVES   (WT/TPR/S/157) 
 II.(3) (Page 10, para 10) 
 
WTO Secretariat report, para 10 reads that Israel is  exploring the possibility of free trade agreements 
with newly industrialized countries in Asia and Lati n America and that further steps in this regard 
depend on development in the multilateral area.  
Could Israel indicate what kind of developments in the multilateral area  is expected in that regard?  
 Could Israel authorities explain if there is any ongoing bilateral process between Israel and any 
country in Asia or Latin America or if there is a plan to do so?   
INVESTMENT REGIME   (WT/TPR/S/157) 
 II(5) (Page 12, para 17)  The Secretariat report states that Israeli Govern ment  provides additional incentives to “approved” 
investors in addition to the benefits available to all investors  and the share of  “ approved” investment 
is about 27%. 
 Could Israel explain the sectoral coverage of approved investments?  II.TRADE AND INVESTMENT REGIME   (WT/TPR/S/157) 
 
II(6) (iii) (b)   (Page 19, para 38)  The report by the Secretariat states that  Israel si gned an aggreement with Jordan in 1997 and then a 
trade protocol with Egypt in 2004 to strengthen economic cooperation and tr ade relations between  
Israel and respective countries. We understand that both agreements include  provisions as a basis for 
establishing “qualified industrial zones”.  We would be grateful if Israel  would inform us about the type of production in these regions.  
 
Besides,  we would appreciate if Israeli authoriti es could inform us on the practical need  to create 
"qualified industrial zones".  III. TRADE POLICIES AND PRACTICE BY MEASURE   (WT/TPR/S/157)  
(Page 20, para 2) 
 It is  stated  in  the Secretariat report that Isra el bound other duties and charges at zero. However it is 
understood that imported goods are subjected  to a wh arfage fee, whereas some  items are subject to 
"safeguard levies". 
 WT/TPR/M/157/Add.1 
Page 4  
 
 Could Israeli authorities inform  us how these me asures could be justified within the meaning of 
Article VIII and  XIX of the GATT 1994?  TRADE POLICIES AND PRACTICES BY MEASURES  (WT/TPR/S/157)  
(Page 26, para 18) 
 The Secretariat report para 18 states that as of Oc tober 2005, MFN applied rates on 88 tariff lines at 
the HS eight digit level exceed bound rates.  
We would appreciate if Israel could give the rationale behind such an outcome. 
 
ADDITIONAL QUESTIONS FROM TURKEY 
WT/TPR/G/157 (page 15, para 74) 
 
As it was also mentioned in the Secretariat report,  Government report para 74 states that Israel   
concluded   Qualified Industrial Zone (QIZ) Agreements operating unde r the framework of the Israel-
US Free Trade Area Agreement  w ith both Jordan and Egypt. 
 We would appreciate if Israeli authorities  could inform us  on the sectoral as well as product coverage of the QIZ Agreement signed with Egypt. In this regard, could Is raeli authorities  also 
explain the timeframe set for the phasing out of tariff s and the how rules of or igin operates in the said 
agreement.?  WT/TPR/S/157 (page  29, para 24)  
Reading para 24 of the Secretariat Report, it is underst ood that the 1.02%  of the c.i.f  cost of imports 
is charged by Israeli port authorities  for the use of ports  in importing  whereas exporters are demanded  to pay    0.2% on the f.o.b value  to benefit from a similar type of  service.  We appreciate the intention of Israeli authorities  to  change the above mentioned charge  to 0.3 % for 
both imports and exports.  
 
In this regard  we would like to  learn from  Israe li authorities when this new  pricing is planned to be 
started and if possible further details of  its operation  since the matter of  question is important for our 
exporters’ interests.  
WT/TPR/S/157 (page  37, para 48) 
 Kosher certification that is required  for exporting cert ain foods particularly meats to Israel is a real  
source of concern that our exporters face with. As po inted out in the Secretariat report the  costly and 
complex procedures sought in  granting those certificates   pose challenges to  exporters.  
From this point of view, we would appreciate  Isra eli authorities  to inform us   if there is any 
intention to simplify this proce dure and  make it less costly.  WT/TPR/M/157/Add.1 
 Page 5 
 
 
 QUESTIONS FROM THE GOVERNMENT OF CANADA 
WTO Secretariat Report (WT/TPR/S/157)  
 
Part II.  Trade and Investment Regime, (2) Trade Policy Formulation and Implementation, 
Paragraph 7: 
 The Secretariat report indicates that "consultations with representatives of consumer organizations, 
manufacturers, and importers are carried out by th e Standards Commissioner before any change in 
compulsory standards".    
Could Israel outline the notification process, indi cating whether and how information relating to a 
change in compulsory standards is available to investors? 
 
Part II.  Trade and Investment Regime, (5) Investment Regime, Paragraph 14: 
 
The Secretariat report states that foreign-owned companies are entitled to own or lease land after 
receiving approval from the Israeli Land Administra tion.  The Report also indicates that “As of 
November 2005, the legal regime govern ing land rights was under review.”  
 Could Israel explain why this review was initiated and how the outcome of such a review may affect 
current and potential investors?  Part II.  Trade and Investment Regime, (5) Investment Regime, Paragraph 17: 
 
The Secretariat report indicates that the Governme nt of Israel provides additional incentives to 
“approved” investors.   
 
Could Israel specify which sectors, if any, are exempt from “approved” enterprise status?    In addition, could Israel outline how investors are made aware of the application process for 
“approved” enterprise status?  
 Part II.  Trade and Investment Regime, (6) Trade Agreements, (iii) Other arrangements, Paragraphs 
36, 37:  
The Secretariat Report provides details on the Protoc ol on Economic Relati ons with the Palestine 
Liberation Organization.  
 
In light of recent developments, including the pu ll-out from the Gaza Strip, Canada would be 
interested in knowing what, if any, changes there have been, or are expected, with respect to the 
application of this Protocol between Israel  and the Palestine Liberation Organization? 
 
Part III. Trade Policies and Practices by Measure, (2 ) Measures Directly Affecting Imports, (iv) 
Other taxes and charges, Paragraph 23:  
Canada notes that Israel has bound other duties and charges at zero on all products covered by its 
tariff binding commitments. In the same paragraph, th e Secretariat notes that Israel charges a levy on 
a number of imported goods, which would appear to be  contrary to Israel’s binding commitment. We 
also note that this special levy is applied at va rying rates among WTO Members, which would appear 
to be contrary to the principle of Most Favoured Nation obligations.   WT/TPR/M/157/Add.1 
Page 6  
 
 Could Israel please explain how its Trade Levies Law is consistent with its WTO obligations? If it is 
not consistent, what action will be taken to remedy this situation? 
  
Part III. Trade Policies and Practices by Measure, (2 ) Measures Directly Affecting Imports, (iv) 
Other taxes and charges, Paragraph 24: 
 
Canada notes that Israel charges a wharfage fee and would like to know  whether this fee is consistent 
with the fact that Israel has bound other duties and charges at zero.  If the wharfage fee is, indeed, consistent with Isr ael’s binding, we would then note that GATT Article 
VIII requires that fees for services be based on the cost of the services provided and not on the value 
of the imported goods.   Further, we note that Israel’s current practice of  charging different wharfa ge fees for imports and 
exports would appear to be contrary to the GAT T's National Treatment provisions. We are therefore 
pleased to see that there is an intention to make  the fee identical for both imports and exports.  
 Could Israel inform us as to when this change  will occur and whether the wharfage fee will be 
adjusted at that time to reflect the cost of  service rather than the value of the goods? 
  We see no mention in the documentation of whether Israel has implemented the WCO's 2002 changes 
to the Harmonized System of tariff classification in its Tariff Schedule.  
 Could Israel please inform us whether this has b een done? If yes, when will Israel be updating the 
rules of origin in its free trade ag reements to reflect these changes? 
 
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (vii) 
Standards and other technica l requirements, Paragraph 39: 
 
Could Israel explain how SII ensures independen ce between its role as a standards development 
organization and a conformity  assessment organization?  
 
Could Israel elaborate on the role of the Ministry of Industry Trade and Labour (MOITAL) in 
“standards enforcement and approval of testin g laboratories”? Are these activities based on 
accreditation and the application of in ternational standards and guides? 
 What procedures do other government departments follow in the development and enforcement of 
standards? Are such standards mandatory or voluntary?  
 
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (vii) 
Standards and other technica l requirements, Paragraph 40. 
 
Canada commends Israel for publishing such a la rge number (2600) of standards and reducing the 
number of mandatory standards among its domestic  standards. However, the number of mandatory 
standards is still relatively high (604).   Could Israel indicate what proportion of its volunta ry standards are equivalent to international 
standards?  
  WT/TPR/M/157/Add.1 
 Page 7 
 
 
 Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (vii) 
Standards and other technica l requirements, Paragraph 41: 
 
Could Israel please clarify whether its policy is on e of using international standards or adopting 
standards, including “internationally accepted st andards”, developed by key trading partners?  
 
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (vii) 
Standards and other technica l requirements, Paragraph 42: 
 
Canada notes there is no mention of the role of  accreditation in the Israeli conformity assessment 
regime. We are aware that the Israel Laborat ory Accreditation Authority (ISRAC) runs a 
comprehensive laboratory accreditation program, whic h is a member of the International Laboratory 
Accreditation Cooperation (ILAC) MLA and has signe d a recognition agreement with the European 
Co-operation for Accreditation (EA) covering acceptance of test reports, as well as an agreement with 
the American Association for Laboratory Accr editation (A2LA) providing for recognition of 
assessments to A2LA requirements.  
 Canada would be interested in knowing why these ag reements have not been referenced in the TPR.  
We also note there is no indication of an accreditation program for product certification. 
 
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (vii) 
Standards and other technica l requirements, Paragraph 42: 
 
As a general comment, we believe Israel should be  commended for its stated policy of acceptance of 
certain foreign products without the need for rete sting, as well as the policy of assessing products 
according to the degree of risk, including acceptance of SDoC. This is an approach which assists 
countries in reducing conformity assessment-related trade barriers. 
 Could Israel please elaborate on the role of the Standards Mark Policy Board, specifically how it 
undertakes assessments to verify th e competence of foreign laboratories to issue the SII mark? 
 Are test facilities assessed in accordance with the application of ISO Guide 65? 
 
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (vii) 
Standards and other technica l requirements, Paragraph 45: 
 
We appreciate Israel's commitment to transparen cy in listing its MRAs and MOUs with foreign 
conformity assessment bodies (CABs), as only a few standards bodies follow this practice.  
 Could Israel specify whether it has signed any government-to-government MRAs and, if so, whether these agreements have been notified to the WTO?  
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (vii) 
Standards and other technica l requirements, Paragraph 45: 
 
Could Israel please provide details on its regime fo r the certification and labelling of products for the 
various Marks?  
Are foreign and domestic firms treated equally? 
 Is the regime based on th ird party verification? 
 WT/TPR/M/157/Add.1 
Page 8  
 
 Part III. Trade Policies and Practice by Measure,  (4) Measures Affecting Production and Trade, (v) 
Intellectual property rights, Paragraph 121: 
 
Canada understands that Israel allows  for the pre-patent expiry explo itation of a patented invention for 
the purposes of obtaining regulatory approval.   
 
Canada would be interested in  knowing what, if any, mechanisms are in place to prevent a 
pharmaceutical manufacturer operating under this provision from entering the market with an 
infringing version of the patented invention prior to patent expiry? 
 Part III. Trade Policies and Practice by Measure:  (4) Measures Affecting Production and Trade; (v) 
Intellectual property rights, Table III.18: 
 
Canada notes that for medicaments, patents "may be extended for up to an additional five years in 
appropriate circumstances".  
 
Would Israel be able to provide more informa tion on the circumstances that could warrant such 
extension?   Could Israel also provide more information on the procedure by which one would request an extension?   
 
Part III. Trade Policies and Practice by Measure:  (4) Measures Affecting Production and Trade; (v) 
Intellectual property rights, Table III.18: 
 
Canada notes that the duration of protection for indust rial designs is “up to 15 years from the date of 
application”.  
 Canada would be interested in knowing whether Is rael gives a minimum of 10 years of protection for 
industrial designs.  
Part III. Trade Policies and Practice by Measure:  (4) Measures Affecting Production and Trade; (v) 
Intellectual property rights, Table III.18:  
Canada notes that geographical indi cations and appellations of origin are protected in Israel “for as 
long as they are protected in the country of origin”.   
Could Israel provide more information on the scope  of protection given to geographical indications 
and appellations of origin?   
Part III. Trade Policies and Practice by Measure,  (4) Measures Affecting Production and Trade, (v) 
Intellectual property rights, Paragraph 128: 
 Canada notes that “unauthorized third party use of a patented invention is allowed in very limited 
circumstances and subject to remuneration. Accordin g to the authorities, the provisions dealing with 
compulsory licensing were scaled back following Isra el’s implementation of the TRIPS Agreement in 
1999”.    
Could Israel provide more information on its provisions related to compulsory licensing? 
  WT/TPR/M/157/Add.1 
 Page 9 
 
 
 Part III. Trade Policies and Practice by Measure,  (4) Measures Affecting Production and Trade, (v) 
Intellectual property rights, Paragraph 134:   
 
Canada notes that “the Government of Israel h as launched various public awareness programs in an 
effort to generate more effective IPR enforcemen t. For example, the Ministry of Justice provides 
regular education seminar for judges, prosecutors, government legal advisers, and customs agents”.  
 The Government of Canada welcomes this initiativ e and would like to know if Israel could provide 
more information on these programs.   Part III. Trade Policies and Practice by Measure,  (4) Measures Affecting Production and Trade, (v) 
Intellectual property rights, Paragraph 135: 
 
Canada notes that “copyrights and trade marks have been the areas most affected by infringement of 
IPR legislation during the period under review”.  
 
Could Israel provide more information on this issue?   
 
Part IV. Trade Policies by Sector, (5) S ervices, (ii) Financial Services, Paragraph 66: 
 
According to the Secretariat Report, investments in  the banking and insurance subsectors require prior 
government approval.   
 Could Israel elaborate on the criteria used to dete rmine whether the government grants approval to 
investments in the banking and insurance subsectors. Does the Government of Israel expect to further reduce its stake in Bank Leumi in the near future? 
 Part IV. Trade Policies by Sector, (5) S ervices, (ii) Financial Services, Paragraph 83: 
 
Paragraph 83 indicates that foreign-owned companies face the same legal obligations as Israeli-owned 
companies, while the footnote to Paragraph 83 highl ights that the reinsurance business in Israel does 
not face any restrictions. 
 
Could Israel please specify whether foreign reinsure rs must register in an Israeli Reinsurance 
Registrar?  Do domestic reinsurers face a similar requirement? Could Israel also explain what obtaining ‘C ertified Foreign Reinsurer’ status entails? 
 Part IV. Trade Policies by Sector, (5) Services,  (iv) Telecommunications and postal services, 
Paragraph 109: 
 
The Secretariat Report states that between 1999 an d 2004, competition was either introduced or 
increased in almost all telecommunications service segments. Paragraph 117 indicates, however, that in the domestic telephony subsector, the incumbent main tains more than 90% of the market share.   
 
Could Israel provide the percentage of market shar e maintained by the incumbent in other subsectors?  
 Could Israel indicate whether any of the telecomm unication operators are foreign service providers?  
 
Does Israel have any plans to further promote competition in this sector?  
 WT/TPR/M/157/Add.1 
Page 10  
 
 Part IV. Trade Policies by Sector, (5) Services,  (iv) Telecommunications and postal services, 
Paragraph 109: 
 
Israel’s current schedule of commitments for this sector includes various limitations due to the previous monopoly.   
 
Does Israel have plans to remove these limitations during the current round of services negotiations? 
 
Part IV. Trade Policies by Sector, (5) Services,  (iv) Telecommunications and postal services, 
Paragraph 111: 
 
The Secretariat Report states that Israel has pursued progressive liberalization and privatization in its communications and information technology subsector.    Could Israel provide details of the measures take n towards liberalizing the information technology 
subsector, including any measures take n to support electronic commerce? 
 
Part IV. Trade Policies by Sector, (5) Services,  (iv) Telecommunications and postal services, 
Paragraph 111: 
 
The Secretariat Report refers to the adoption of a regulatory regime suitable for a multi-operator 
environment.   
 Could Israel elaborate on the elements of this regime? 
 
Part IV. Trade Policies by Sector, (5) Services,  (iv) Telecommunications and postal services, 
Paragraph 112:  
The Secretariat Report states that regulatory functions are exercised by the Ministry of Communications.    Could Israel confirm that the Ministry is inde pendent from the service providers, as required in the 
reference paper on telecommunications? 
 
Part IV. Trade Policies by Sector, (5) Services,  (iv) Telecommunications and postal services, 
Paragraph 112: 
 The Secretariat Report states that according to Is rael’s Communications Law, any licence and change 
thereof must contribute to competition in the field of telecommunications.   Could Israel explain the criteria used in determin ing whether a licence will contribute to competition?  
 The Secretariat Report also states that a licensee mu st fulfil certain prerequisites, with requirements 
varying from one licensee to another.   
 Could Israel elaborate on what prerequisites must be  fulfilled, and how they are determined for each 
licensee?  
Paragraph 112 also states that licences may be revised or cancelled if an operator becomes anti-
competitive or unfit to handle telecommunications.    Could Israel specify what types of anti-competitiv e practices may result in a revised or cancelled 
licence?    WT/TPR/M/157/Add.1 
 Page 11 
 
 
  
Could Israel also detail the factors used to determine whether an operator is unfit to handle 
telecommunications?  
Part IV. Trade Policies by Sector, (5) Services,  (iv) Telecommunications and postal services, 
Paragraph 117:  
The Secretariat Report states that the pricing syst em for telecommunication services is divided into 
two categories, one of which is for the supervised market.    
Could Israel please explain what constitutes the “superv ised market”? Does this term refer exclusively 
to the incumbent, or does it include the notion of a major supplier, as defined in the reference paper? 
  
WRITTEN QUESTIONS BY JAPAN 
Report by ISRAEL (WT/TPR/G/157)
 
 
VI. INTELLECTUAL PROPERTY POLICY AND LEGISLATION 
 (Pages 10 and 11, paragraph 51) 
 
The Report by Israel raised the “Presentation of  a Bill in 2005 to enact anew and comprehensive 
copyright law, which will consolidate and modern ize existing copyright statutory and case law” as a 
change to its intellectual property legislation. 1. Please explain the specific content of this Bill, including the main points of amendments for the 
existing copyright law. 
2. Please indicate the specific views of Israel on maki ng this Bill consistent with the standards of the 
WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty. 
 Report by the Secretariat (WT/TPR/S/157)
 
 II. TRADE AND INVESTMENT REGIME (2) TRADE POLICY FORMULATION (Pages 9 and 10, paragraphs 5 to7) 
 3. Please indicate the specific views of Isr ael for the establishment of the GSP. 
 
(5) INVESTMENT REGIME 
(Page 12, paragraph 14) 
 
According to the Report by the Secretariat, forei gn-owned companies are entitled to own or lease land 
but they must receive prior approval. 4. Are there some regulations, such as receiving prior approval in cases where foreign companies, 
already approved to own land, sell their land? 
 
 (Page 12, paragraphs 16 to 17) 
 
According to the Report by the Secretariat, Isr ael encourages both local and foreign investment by 
offering a wide range of incentives and benefits. 5. In providing incentives for foreign investment, are there any requirements such as requiring exports 
of domestic goods?  If any, please indicate them. 
 WT/TPR/M/157/Add.1 
Page 12  
 
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) MEASURES DIRECTLY AFFECTING IMPORTS (iii) Tariffs 
(Page 26, paragraph 17)  
According to the Report by the Secretariat, the b ound tariff line of Israel remains at 73%. From the 
view point of promoting predictability in trade, Japan believes that all tariff lines should be bound in 
principle. 
6. In this regard, please indicate the specific views of Israel.  
(Page 26, paragraph 17) 
 
According to the Report by the Secretariat, the bound rate of non-agricultural goods is 170% at the 
maximum.  From the view point of promoting free trade and predictability in trade, Japan hopes that 
such a high tariff rate will be reduced. 7. In this regard, please indicate the specific views of Israel.  
(Page 26, paragraph 18) 
 
According to the Report by the Secretariat, the a pplied tariffs on 88 lines at the HS eight-digit level 
exceed bound rates. 8. In this regard, please indicate the latest status.  If there remain any applied tariff lines to exceed 
bound rates, please explain the reason for it.  (Page 27, paragraph 21) 
 
According to the Report by the Secretariat, Israel  offers duty-free imports to petroleum companies. 
9. In this regard, please provide more inform ation in detail, including the reason for it. 
 (iv) Other taxes and charges (Page 29, paragraph 24) 
 
According to the Report by the Secretariat, Israel’s  port authorities charge imports a wharfage fee of 
1.02% of the c.i.f. cost of imports into Israel for the use of ports. 
10. Does such a wharfage fee, wh ich exceeds the cost of services in ports, mean the import charges?  
Please indicate the specific views of Israel on how  such a wharfage fee conforms with the WTO 
Agreements.  
IV. TRADE POLICIES BY SECTOR 
(5) SERVICES 
(i) Main features (Page 75, paragraphs 58 to 59) 
 
With regard to the liberalization of the services sector, Japan recognizes that it will highly contribute 
to enhancing the competitiveness of the manufacturing sector to advance the efficiency of distribution 
services. 11. As for the liberalization of distribution services, please indicate the specific views of Israel. 
 
(Page 75, paragraphs 58 to 59) 
  
Israel does not make commitments for commission ag ents’ services and franchising in the initial offer. 
12. Does Israel plan to make commitments for commission agents’ services and franchising? 
  WT/TPR/M/157/Add.1 
 Page 13 
 
 
 (ii) Financial services 
(Page 76, paragraph 66) 
 
According to the Report by the Secretariat, the Government owns the Industrial Development Bank 
and holds 57% shares of the Israel Discount Bank and 25% shares of the Bank Leumi. 
13. Does Israel plan to further sell its own shar es for such banks and to further promote the 
liberalization of the banking sector?  If any, please indicate them.  
(iii) Transportation  
(Page 82 to 83, paragraph 106)  
According to the Report by the Secretariat, ther e are no restrictions on the supply of auxiliary 
services, which is open to Israeli and foreign companies.  However, Israel does not make commitments for any maritime transport services. 
14. Please explain the reason why Israel does not make commitments for any maritime services. 
  
QUESTION OF THE REPUBLIC OF KOREA 
Question 1 (WT/TPR/S/157, page 9, para 40)
 
 Foreign professionals seem to have  a hard time to move into Israel owing to the Israeli government's 
complicated permission standards.  Israel applies a very strict set of rules when a foreign professional 
attempts to obtain a visa to work in the country or  to extend an existing one.  Israel allows foreign 
executives to extend an existing visa only for 5 years.  What plans does the Israel government have to 
ease these standards or types of restrictions?  
  QUESTIONS OF THE EUROPEAN COMMUNITIES 
II. Trade and Investment Regime 
Trade Policy Objectives 
 How is the issue of trade being dealt w ith in Israel’s national strategies?  
 The EC considers that the WTO and multilateral liber alization is the most certain way for small and 
medium sized countries to promote their interests.  How does Israel judge the relative importance and weight of bilateral/FTA policies and further 
development of the WTO system in terms of  its own trade and development needs?  
 How does Israel see the development of its trade policies in the context of the multilateral system? 
Considering Israel’s relatively ad vanced level of development, 
 And the fact that Israel already successfully focu ses on high value sectors, have any strategies been 
divided to ensure continued growth and diversification? 
 Could Israel provide some information on the cr iteria underlying its developing country status? If 
possible, an assessment of the relative benefits and disadvantages of this status in the context of the 
WTO would also be of interest. 
 WT/TPR/M/157/Add.1 
Page 14  
 
 Sustainable development 
 
The EC welcomes Israel’s emphasis on sustainable economic growth and sust ainable development. 
Looking at the overall policies of  Israel: What plans does Israel have for adoption of po licy strategies in order to enhance sustainable 
development? 
 Does the issue of trade and sustainable development fit into Israel’s overall development strategies? 
 Israel has started to explore the link between tr ade policy and employment and social issues ( Israel’s 
Government Report, paragraphs 38-40 ), the importance of which was highlighted by the World 
Commission on the Social Dimension of Globalisati on. Have any policies already been elaborated 
and/or implemented that specifically address the social effects of trade liberalisation?  
Foreign investment regime 
 
Which economic fields has Israel identif ied to attract trade-related FDI?  
 WTO Secretariat’s Report, paragraph 22 : Israel has concluded investme nt protection agreements with 
29 countries. Would Israel please verify and confirm the accuracy of the list of countries with which it has 
concluded investment protection agreements? 
 
Qualifying Industrial Zones (QIZ) 
With reference to paragraph 4 of the Report by Israel :  
 
Could Israel indicate the preliminary results of the QIZ arrangement between Israel-Egypt and the US 
and between Israel-Jordan and the US?   How many industrial zones have been designated? How much investment h as the QIZ generated?  
 What is the amount of goods exported to the US under the QIZ arrangement? 
 
Trade Agreements 
Report by Israel, paragraph 57:  
Israel will continue to expand and update the network of international agreements.  
Which agreements does it seek to upgrade and with which countries in Asia and Latin America does it 
seek to conclude new agreements?   
III. Trade Policies and Practices by Measure 
Measures Affecting Production and Trade Government procurement 
 Taking into account the high economic status achieve d by Israel (in terms of gross domestic product 
at purchasing power parity per capita for the year of 2004, Israel ranks after The Netherlands and 
before South Korea), would Israel be willing to consider reducing, and at which pace: 
 
- the 5 to 15% price preferences it applies to in ternational tenders not covered by the GPA; 
- the preferences for local subcontracting (except for GPA tenders); - the 35% offset requirement for tenders above 5M $ (28% for the GPA tenders). 
  WT/TPR/M/157/Add.1 
 Page 15 
 
 
 In order to enhance transparency, would Israel please inform if there are any plans to publish a 
version of its Government Publications Office’s website, (http://michrazim.lapam.gov.il ) in other 
languages?   
QUESTION BY NEW ZEALAND 
It is stated in the Secretariat report that Israel c ontinues to apply high tariffs to agricultural products.  
We would be interested in hearing whether and how the Government of Israel intends to address this 
matter.  
ARGENTINA - PREGUNTAS TPR ISRAEL 
Respecto a los pagos realizados en caja verde, si podr ía aclarar bajo cuáles criterios de la caja verde se 
aplican los pagos a los Kibuttzin y Moshavim. ¿Cuá les son las medidas de ay uda que se implementan 
para estos programas? ¿Qué porcentaje de los pagos por caja verde corresponden a estos planes? 
 En relación a AGREXCO, mencionan que se maneja bajo criterios comerciales. ¿Tiene AGREXCO 
algún poder de exclusividad en la compra o ve nta de productos agrícolas? Siendo 50% de los 
productores y 50% del Estado, ¿cómo se dirime un even tual conflicto? ¿Cuánto ha sido el aporte del 
Estado de capital a esta empresa desde que fuera creada hasta la fecha? En su caso, ¿han notificado las 
ayudas concedidas a los exportadores como subsid ios a la exportación? ¿son los créditos a la 
exportación subsidios a la exportación?  QUESTIONS FROM THE UNITED STATES OF AMERICA 
Trade Policies and Practices by Measure – Tariffs
 
 According to paragraph 18, page 26 of the Secretar iat Report, some of Israel’s applied MFN tariffs 
may exceed their bound rates, depending on import pr ices.  Could Israel describe any procedures in 
place or under consideration to ensure that the MFN tariffs applied do not exceed bound rates?  
 Information in the Secretariat Report (including Ta bles AI.4 and AI.5 on pp. 98-99) suggests that a 
large portion of Israel’s trade is with de veloped and advanced developing countries. 
 
 Is Israel contemplating the potential establishmen t of a GSP regime as a means to diversify its 
sources of imports? 
 In the absence of a GSP regime, is Israel considering providing duty-free quota-free market 
access for imports from least-developed country Memb ers, consistent with the decision of the 
Hong Kong Ministerial Conference?  
 
Trade Policies and Practices by Measure – Other Taxes and Charges
 
 Paragraph 23 on page 28 of the Secr etariat Report tells us that the Ministry of Industry, Trade and 
Labor imposes a special levy on a number of imported  goods to “increase flexibility” in the tariff 
system.  Please tell us more about the administratio n of these charges.  How does the Ministry make a 
determination to impose a levy on  a particular product?  Are the levies a permanent or temporary 
measure?  If temporary, what is average length of a levy period?  What system does Israel use to 
notify trading partners?  WT/TPR/M/157/Add.1 
Page 16  
 
 Trade Policies and Practices by Measure - Import Prohibitions
 
 Remanufactured automotive parts are not included in Table III.3 of the Secretariat Report, the list of 
products subject to import prohibitions.  
 Has Israel lifted its prohibition on the impor tation of remanufactured automotive parts? 
 Does Israel ban the importation of any products  other than those listed in Table III.3? 
 Trade Policies and Practices by Measure - Import Licensing
 
  
The Secretariat Report (in paragraphs 27-34 on pp. 30-32) tells us that Israel uses import licensing 
for reasons of public safety, security, and the management of tariff quotas.  According to the Secretariat, such use spans roughly eight percent of tariff lines.  At the same time, we note that Israel 
is one of the few WTO Members never to have ma de a notification to the WTO Committee on Import 
Licensing Practices.  See the 2005 Report of the Committee in G/L/753, dated 2 November 2005, 
which notes that Israel has never notified its legisl ation, never filed the annual questionnaire, and 
never notified any changes in its import licensing regime.  We urge Israel to catch up with these required notifications as soon as possible.  
 In the absence of notifications, please comment on the scope and application of import 
licensing in Israel.  Is the list of products in Table AIII.4 complete?  To what 
extent are licensing requirements automatic or non-automatic? 
 When does Israel plan to submit the requ ired notifications to the Import Licensing 
Committee? 
 Trade Policies and Practices by Measure – Export Subsidies
 
 
According to the Secretariat Repor t, Israel is providing duty and tax drawbacks on imported inputs, 
raw materials and capital goods.  Drawback systems are to be used for inputs which are consumed in 
the production process.  
 Does Israel plan to elimin ate the availability of draw back for imported capital goods? 
 Does Israel maintain a verification system or procedure for the administration of the 
drawback system? 
 Trade Policies and Practices by Measure – Trade Remedies
 
 
According to the Secretariat Report, in June 2005, the Knesset passed a bill to amend the Trade 
Levies Law of 1991, which applies to antidumpi ng, countervailing and safeguards actions.  The 
authorities intend to notify the WTO once the legi slation has been translated into English. 
 
 Does Israel intend to notify this legislation in  time for review at the regular spring 2006 
meetings of the Committees on Antidumping Practices, Committee on Subsidies and 
Countervailing Measures and Committee on Safeguards? 
 According to the Secretariat Report, since January 1999, Israel initiated eight antidumping investigations and imposed defi nitive anti-dumping measures in five cases.  However, to our 
knowledge, Israel has not made any notifications  of antidumping determinations since 2001.  
 
 Please update the status of the WTO notifications  of antidumping determinations identified in 
paragraph 38 on page 35 of the Secretariat Report. 
  WT/TPR/M/157/Add.1 
 Page 17 
 
 
  Are official written reports of the determinati ons by administering agencies available on the 
internet?  If not, please advise where written copies can be obtained by the public. 
 Trade Policies and Practices by Measure – Government Procurement
 
 
Is Israel considering any initiatives to improve the transparency of its procurement process?  Has 
Israel considered creating a central website for a ll government procurements or the establishment of 
an ombudsman to act as a main point of contact for questions?  
 With regard to the statement in paragraph 105 of  the Secretariat Report that 767 exceptions were 
granted to the required procurement methods, please provide us with additional information about 
those exceptions including the number of exceptions by procuring entity, if available.  
 What percentage of procurements (by number and by value for each procuring entity) covered by the 
Government Procurement Agreem ent are conducted using 1) selec tive tendering or 2) limited 
tendering?  
 Trade Policies and Practices by Measure – St andards and Other Technical Requirements
 
 According to the Secretariat Report, Israeli author ities have noted difficulties in harmonizing Israel's 
standards with those of its two main trading partne rs - the European Union and the United States - that 
often apply different standards, and the absence of international standards in specific areas. 
 
 Can Israel please elaborate on its experience in  selecting between U.S. and EU standards, 
with an illustrative example? 
 What criteria does Israel consider when it deci des whether to adopt U.S. or EU standards? 
 Does Israel have an estimation of the percentage of Israeli standards that are EU standards 
and what percent represent U.S. standards? 
 According to the Secretariat Report, voluntary sta ndards are elaborated by Standards Institution of 
Israel (SII) technical committees.  
 What are the eligibility criteria for participati on on the technical committees?  Who ordinarily 
participates on these committees?  Is participa tion open to foreign interested parties? 
 Please outline the procedures to apply for pa rticipation on the technical committees. 
 According to the Secretariat Report, the Minist ry of Industry, Trade and Labor may declare a 
particular standard to be a mandatory standard, after consultation with representatives of producers 
and consumers, and consent of the Minister concerned.   
 Can Israel please provide details on the process by which Israeli standards are incorporated 
and/or referenced in technical regulations? 
 What initiates the consideration of making comp liance with a voluntary standard mandatory?  
How frequently does this happen? 
 Does Israel provide notification to the WTO of proposed technical regulations that 
incorporate and/or are based on voluntary Israeli standards? 
  According to the Secretariat Report, products with  an SII Standards Mark, certifying compliance with 
a certain standard, can enter Israel without being tested. 
 
 Please describe the procedure followed by the Standards Mark Policy Board to recognize 
laboratories.  Must these labs be accredited?  If so, by whom? WT/TPR/M/157/Add.1 
Page 18  
 
  Are foreign testing laboratories eligible to i ssue the SII Standards Mark?  If so, does this 
require accreditation and if so, by whom?  Do es Israel recognize accreditation performed by 
bodies located in other countries?  How many foreign laboratories have been recognized to 
issue the SII Standards Mark?   
 Please describe Israel’s accreditation procedures. 
 
PROTECTION OF INTELLECTUAL PRO PERTY RIGHTS – DATA PROTECTION
 
Regarding the protection of undisclosed data, the Secretariat Report (in paragraph 125) refers 
to recent amendments to the Pharmacist's Ordinan ce.  The Ordinance appears to have been amended 
to restrict the issuance of marketing permits in  Israel for new medical preparations based on 
confidential test data.  
 Given that TRIPS Article 39.3 obligates WTO Members to protect undisclosed data from 
unfair commercial use, please explain whether an y other uses of such data are permitted, and 
what those uses are (e.g., for the export of pharma ceuticals to foreign markets).  In addition, if 
any other uses are permitted, please explain how they can be seen to be in compliance with 
TRIPS Article 39.3. 
 
P
ROTECTION OF INTELLECTUAL PROPERTY RIGHTS - TRADEMARKS  
According to Table III.18 on page 54 of the Secretariat Report, Israel provides protection for 
geographical indications through its Appellations of Origin and Geographical Indications (Protection) 
Law, 1965 as amended and the Trade Marks Ordinan ce, 1972 as amended.  Upon a review of these 
laws, it is unclear to us if the laws address th e principles of priority and exclusivity between 
trademarks and geographical indications.  Specifically, it is unclear if Israel's laws would prevent the 
registration and protection of a GI if it conflicted with an earlier established and protected trademark. 
 
 Please confirm that the exclusive rights of trad emark owners, consistent with Articles 16(1) 
and 24(5) of the TRIPS Agreement, are protected  from confusingly similar and later in time 
geographical indications under Israel's laws  by providing the means to challenge the 
protection and or registration of a later established GI on the grounds that it is 
confusingly similar to the prior trademark. 
PROTECTION OF INTELLECTUAL PROPERTY RIGHTS - COPYRIGHT  
According to Paragraph 51 of the Government Report, Israel presented a Bill in 2005 "to enact a new 
and comprehensive copyright law, which will consolidate and modernize existing copyright statutory 
and case law." 
 
 Please provide an update on the status of that bill. 
 Will it provide a life-plus-70 term for phonograms and photographs? 
 When will Israel implement the WIPO Copyright Treaty and the WIPO Performances and 
Phonograms Treaty? 
 Does Israel intend to pass legislation defini ng the scope of liability for internet service 
providers? 
 According to the Government Report, “It should be noted that the protection of intellectual property 
rights is not only through specific intellectual pr operty law legislation, but also additional and 
overlapping protection can be obta ined, in appropriate circumstances, pursuant to other legislation 
such as the Commercial Wrongs Law, the Civil Torts Ordinance, the Law Against Unjust Enrichment 
and the Consumer Protection Law.”   WT/TPR/M/157/Add.1 
 Page 19 
 
 
  Please explain how these laws overlap with copyright law in particular. 
 P
ROTECTION OF INTELLECTUAL PROPERTY RIGHTS - ENFORCEMENT  
In Paragraph 123 of WT/TPR/S/157, there is a reference to the "passing off" provision in Israel's 
Commercial Torts Law.  What are the civil a nd/or criminal penalties for passing off under the 
Commercial Torts Law?  
Please indicate whether Israeli courts are empower ed to order the destruction of goods found to be 
pirated or counterfeited, without requiring that  any compensation be paid to the infringer(s). 
 
Are Israeli judicial authorities empowered to re quire accused infringers to produce evidence, as set 
forth in Article 43 of TRIPS?  If so, please provide copies of any statutes or other sources of such 
authority. 
 
Are Israeli judicial authorities empowered to order provisional measures, as set forth in Article 50 of 
TRIPS?  Please indicate whether prison sente nces have been imposed upon any trademark 
counterfeiters or copyright pirates in Israel, with any relevant statistics if available. 
 
May Israeli Customs authorities act ex officio  to prevent the importation into Israel of infringing 
goods?  If so, please provide copies of any statutes, regulations or other sources of such authority.  
May Israeli criminal authorities act ex officio  in cases of criminal copyright or trademark 
infringement?  If so, please provide copies of any statutes, regulations or other sources of such authority. 
 
We understand that a number of copyright infringemen ts committed as part of a "single group of acts" 
would constitute only one infringement under the Copy right Law.  Is this the case?  If so, please 
indicate whether Israel provides deterrent-level pe nalties in cases where multiple infringements are 
committed as part of a "single group of acts."  
Trade Policies and Practices By Sector – Services - Telecommunications
 
 Paragraph 112 on page 86 of the S ecretariat Report explains that the Ministry of Communications 
exercises all regulatory functions in the telecommunications sector.  
 
 Is Israel considering creation of an indepe ndent telecom regulator in the near future? 
 Paragraph 115 on page 86 pr ovides details on facilities-based fixed services operators. 
 
 Does Israel provide licenses to non-facilities based operators?  If so, for what services? 
 
 Is resale permitted?  If it is, is it allowed fo r both public and private voice telephone services? 
 
Intellectual property rights 
With reference to the WTO Secretar iat’s Report, paragraphs 117-135 :  
 
In our understanding, the March 2005 amendments  to the Pharmacists Ordinance (§125) which 
introduced legislative provisions for the protection of  confidential test data (mandated by Article 39.3 
of the TRIPs Agreement) have a ve ry limited scope since the term of protection (five and a half years) 
is “linked” to the date of first approval in a “recognized country”, thereby limiting the de facto 
protection to much less than five years. The Marc h 2005 amendments in addition allow the "reliance" 
on the registration data to produce certificates used by local generic producers for the export of their WT/TPR/M/157/Add.1 
Page 20  
 
 products. More recently (December 2005), new law am endments to the Patent Law were approved. 
These amendments have introduced a very restri ctive interpretation for granting a patent term 
extension; here also the maximum length of extens ion of protection is “linked” to the shortest 
extension period granted in a recognized country.  
Could Israel please explain how the “linkage”-m echanism is compatible with the principle of 
territorial nature of intellectual property rights.   WTO Secretariat’s Report, paragraph 121 :  
 
Patents are granted for 20 years from the date of filing and patents for medicaments may be extended 
for an additional five years. Would Israel agree that this new legislation on Pate nt Term Extension could narrow the possibility for 
international pharmaceutical companies to extend the patent protection period of their medicines in 
Israel, to additional 5 years, if it is conditioning to  a  parallel extension in a number of recognized 
countries? 
If so, what kind of measures do the Israeli authorities intend to take to preserve the rights of international pharmaceutical companies? Could Israel further clarify why allowing reliance for the export of generic products should not be 
considered “unfair commercial use” of the original  data (in line with the wording of Article 39.3 of 
the TRIPs Agreement). 
 
IV.  Trade Policies by Sector  
Agriculture 
Report by Israel, paragraph 44, :  
 
Given that Israel is a net-food importing country, does Israel fo resee further liberalisation of 
(processed) agricultural products?  Report by Israel, paragraphs 42-44 :  
 Israel’s agricultural sector is to a large degree dependent on external factors.  
Could Israel provide further de tails on how customs tariffs are used in these circumstances? 
 
Services 
Financial services Insurance 
WTO Secretariat’s Report,  paragraph 85 :  
 Except for the compulsory part of car insurance, wh ich has to be written in Israel, all other private 
insurance can be bought anywhere in the world.  Considering that Israel has not made full commitmen ts in Modes 1 and 2, could Israel please confirm 
that there are no longer any restrictions on insura nce provision under Modes 1 and 2, including for 
services auxiliary to insurance and including th e possibility to conduc t active marketing?  
Furthermore, according to footnote 20, reinsurance business is free of restrictions.  Could Israel please clarify whether it has introduced a ny registration requirements, and, if yes, what 
such registration entails? (The Israeli Schedule notes th at Israel intends to enact regulations requiring 
registration of Certified Foreign Reinsurers  in an Israeli Reinsurance Register.) 
  WT/TPR/M/157/Add.1 
 Page 21 
 
 
 Banking 
 
Could Israel please explain whether foreign-owned fi nancial institutions may engage in trading of 
derivative products, exchange rate a nd interest rate instruments and other negotiable instruments, and 
in pension fund management (considering these activities are not committed by Israel)? 
Could Israel please indicate whether residents may consume financial services abroad, and whether 
cross-border consumption is permitted for advi sory and other auxiliary financial services? 
 
Transport services 
WTO Secretariat’s Report, paragraph 86:   
 
Ground handling is undertaken by private operators.  Do any restrictions apply if foreign companies want to invest in this services activity?  
 
WTO Secretariat’s Report, paragraph 105:    
 
New reforms were recently introduced in the ma ritime transport area, which underlines the openness 
of the existing legislation in this area.  Would any existing legislation limit fo reign participation in the transport of cargo to and from Israel?  
  
WTO Secretariat’s Report, paragraph 106:    
 
Israel does not have any restrictions on foreign partic ipation, and all services are available to users on 
an equal basis, in the following activities in th e context of maritime transport: cargo-handling 
(CPC 741), storage/warehousing (CPC 742), a nd freight forwarding activities (CPC 748).  
Can Israel confirm that it grants full MA and NA-treatment for these activities? 
Which restrictions, if any, apply for these activiti es when used for all modes of transport?    
 
Telecommunication services 
WTO Secretariat’s Report, paragraph 117:    
 
“interconnection tariffs are generally supervised by the regulator”.  
Is there any obligation to ensure th e cost-orientation of such rates?  
If not, how can it be guaranteed that interconnection rates are not excessive esp. in connection with 
the market power that possibly a network ope rator would have in a particular market? 
In guaranteeing transparency of interconnection agre ements are there any obligations for making them 
publicly available/provided at the request of a party? 
 
WTO Secretariat’s Report, paragraph 113 :  
 The Communications Law was amended and a revi sed licensing regime was introduced in August 
2001. There is however no indication as to what types of licences are provided by the current 
regulatory framework in Israel.  
Could Israel specify? 
Could Israel clarify which is its definition of a "major supplier"? 
There is no reference to the allocation of scarce res ources and in particular to the procedures to be 
followed for such allocation.  Could Israel provide information on these points? 
 WT/TPR/M/157/Add.1 
Page 22  
 
 Postal services 
WTO Secretariat’s Report, paragraph 121-122:   
Could Israel specify the specific steps of the liber alisation plans of the postal services sector, which 
will lead to full liberalisation by 2010? 
 
WRITTEN QUESTIONS BY BRAZIL 
WT/TPR/G/157, IV (2), paragraphs 28, 29 
 
According to the report of the Israeli Government , a "comprehensive multiyear reform in its tax 
system" has been created in order to "reduce the tax burden on labor and expand the tax base on 
capital-generated income and income originati ng from overseas".  Could Israel provide updated 
information on this reform and its economic impact"  
WT/TPR/157, I (3)(i), paragraph 14 
 Is Israel pursuing any policies to reduce its trade deficit? 
 
WT/TPR/S/157, II (3), paragraph 10 
 
According to the Secretariat Report, Israel is expl oring the possibility of free-trade agreements with 
Latin America countries.  For the Israeli Government , what are the prospects for these agreements and 
for enhancing trade with Latin America?  
WT/TPR/S/157, IV (5)(ii), paragraph 64 
 
According to the Secretariat report, "Israel has recen tly initiated a set of reforms aimed at reducing the 
predominance of banks and opening the industry to greater competition...".  Could Israel give us an 
assessment of the progress achieved so far?  
WT/TPR/S/157, IV (3)(ii), paragraph 34 
 
The report highlights that the Israeli Government st arted preparations to open the electricity industry 
to competition by setting rules for co-generation of electricity by private companies.  Could Israel 
provide additional information on the re forms adopted to reach this objective? 
 
ADDITIONAL WRITTEN QUESTIONS BY BRAZIL 
WT/TPR/S/157, III, (2), (ii), paragraph 13 
 
The Secretariat report notes that the Israeli Tariff system contains 8,967 lines at the eight digit level, 
under the Harmonized Commodity Description and Coding System (HS), of which 99,4% carry ad 
valorem  duties.  Non ad valorem  tariffs comprise specific, mixed compound and other types of duty 
mostly applied to agricultural products.  Is Isra el considering the possibility of converting the 
remaining non ad valorem  tariffs into ad valorem ? 
 
WT/TPR/S/157, III (2), (iv), paragraph 23 
 
What is the legal basis, domestically and unde r the WTO, for applying different border taxes 
according to the country of origin (USA, EU a nd Romania are beneficiaries of lower taxes)? 
   WT/TPR/M/157/Add.1 
 Page 23 
 
 
 WT/TPR/S/157, III (1), paragraph 4 
 
Could Israel provide further details on the official support to foster R&D programmes? 
 
WT/TPR/S/157, IV (5) (i) 
 What is Israel's evaluation of the contribution of bilateral and regional trade agreements to liberalise 
trade in services?  
WT/TPR/G/157, VII, (4), paragraph 63 
 The report highlights that "Israel was among the first groups of countries that joined the Government 
Procurement Agreement (GPA) upon the establishment of  the WTO".  Could Israel provide us with a 
broader view of the Israeli experience under the GPA,  in particular regarding the use of offsets? 
 
 
  WT/TPR/M/157/Add.1 
Page 24  
 
 ANSWERS TO WRITTEN QUESTIONS 
 
PART I.  
Q
UESTION BY BRAZIL : I (2), PARAGRAPHS 28, 29 
According to  the report of the Israeli Government, a "comprehensive multiyear reform in its  tax 
system" has been created in order to "reduce the tax burden on labor and  expand the tax base on 
capital-generated income and income originating from  overseas". Could Israel provide updated 
information on this reform and its  economic impact " 
Answer: 
The comprehensive multiyear tax reform planned by Israel includes a number of action items: 
1. The reduction of direct tax rates (combined in come tax and social security contributions) for 
individuals to a maximum 44%  in 2010 (from 49% in 2005). 
The outline of the reduction of the maximum direct tax rate will be: 49% in 2006;  48% in 2007; 47% 
in 2008; 46% in 2009;  and 44% in 2010. 
2. The reduction of corporate tax rate to  25 % in 2010 (from 34% in 2005). 
3. Uniform tax rates on income from capital (capita l gains, interests and dividends), which will 
improve the efficiency of the tax system and simp lify the taxation of capital. The mobility of capital 
in a global world has already led many developed countries to adopt a uniform and relatively low tax 
rate for income from capital and for capital gains, in contrast to the progressive tax rates that are 
imposed on income from labor. After the establishment of  uniform rates, the Israeli tax rate on income 
from capital for individuals – 20% – will still be one  of the lowest in the world, taking into 
consideration the fact that this tax rate is im posed only on inflation-adjusted income and gains . 
4. Introduction of a "participation exempti on" which encourages the establishment of 
international management centers in Israel.  
5. Creation of real estate investment funds in Israel. 6. Tax exemption to foreign residents for the sale of shares in Israeli companies. 
7. Accelerated depreciation for a limited period, in order to encourage investment in industry, 
construction, tourism and agriculture. The plan stre sses the linkage between the reduction of tax rates 
and the widening of the tax base and the strengthe ning of enforcement, through a proposal for the 
taxation of trusts and for the st rengthening of the fight against aggressive tax planning.  The fiscal 
implications of this reform are as follows: The cost of the plan will reach 11.2 billion NIS in 2010.  
This cost is based on a static model which does not ta ke into consideration any change in the behavior 
of business enterprises, investors or consumers. Simila rly, the cost does not take into consideration the 
increased tax receipts that are exp ected because of the measures incl uded in the plan concerning the 
expansion of the tax base and th e strengthening of enforcement . 
The continuing economic growth, together with th e capping of additional p ublic expenditures will 
enable to finance the tax cuts along with th e gradual reduction of the debt to GDP ratio . 
Upon the completion of the tax reform  in 2010, Israel’s tax system w ill be simpler and more efficient, 
and will enable Israel to face the challenges of globalization . 
Question by Brazil : I (3)(i), paragraph 14 
Is Israel pursuing any polici es to reduce its trade deficit? 
Answer: 
Indeed, over the years Israel's trad e balance is in deficit, however other components of the balance of 
payment compensate for this deficit. Israel is co mmitted to market economy policies therefore it does  WT/TPR/M/157/Add.1 
 Page 25 
 
 
 not maintain any active monetary or macroeconomic policies to intervene in the reciprocal flow of 
goods and services. 
PART II.  TRADE AND INVESTMENT REGIME 
TRADE POLICY FORMULATION  
Question by Japan : (Pages 9 and 10, paragraphs 5 to7) 
Please indicate the specific views of I srael for the establishment of the GSP. 
 
Question by United States : 
Information in the Secretariat Report (including Ta bles AI.4 and AI.5 on pp. 98-99) suggests that a 
large portion of Israel’s trade is with developed and advanced developing countries. 
 Is Israel contemplating the potential establishm ent of a GSP regime as a means to diversify 
its sources of imports? 
 In the absence of a GSP regime, is Israel considering providing duty-free quota-free market 
access for imports from least-developed country Me mbers, consistent with the decision of the 
Hong Kong Ministerial Conference?  
Answer: In general, Israel views positively the use of GSP schem es as a means to facilitate the participations of 
LDC's and developing countries in world trade. In this  context, it should be noted that Israel's applied 
MFN duties are already quite low (average genera l duty- 8.9%, NAMA- 5.1%). Furthermore, 48.5% 
of all tariffs lines are duty free. This has resu lted in an increase in the share of imports from 
developing countries into Israel over the last decade. 
Israel welcomes the decision reached in the Hong- Kong Ministerial conference to grant duty free and 
quota free treatment to products originating in LDC's. At present, Israel is studying this decision and the ways to implement it. In this context, Israel w ill be studying the implementation of this decision 
by developed as well developing WTO Members.  
T
RADE POLICY OBJECTIVES  
TRADE POLICY OBJECTIVES  
Question by the European Communities : 
− How is the issue of trade being dealt wi th in Israel’s national strategies?  
Answer: 
Israel's main trade policy strategies are as follows:  
 - Continued integration of the Israeli economy in to the global trading system, through the use of 
policy instruments that relate to trade in goods, services, investments, competition, environment, 
intellectual property, development and others. 
 - Promoting and maintaining Israel's exports co mpetitiveness by expanding and updating the network 
of international agreements designed to promote tr ade, facilitate market access, neutralize non-tariff 
barriers and achieve sustainable economic growth. 
 - Increasing the efficiency of resources' allocation, by enhancing reforms that aim at the introduction 
of greater competition and increased tran sparency in the domestic market.  
 - Creating an attractive climate for investors, businesspeople, consumers and the public as a whole. WT/TPR/M/157/Add.1 
Page 26  
 
 Questions by the European Communities : 
The EC considers that the WTO and multilateral liberaliz ation is the most certain way for small and 
medium sized countries to promote their interests.  
− How does Israel judge the relative importance and  weight of bilateral/FTA policies and further 
development of the WTO system in terms of  its own trade and development needs?  
− How does Israel see the development of its trade  policies in the context of the multilateral 
system? 
Question by Turkey : II.(3) (Page 10, para 10) 
WTO Secretariat report, para 10 reads that Israel is exploring the possibility of free trade agreements 
with newly industrialized countries in Asia and Lati n America and that further steps in this regard 
depend on development in the multilateral area. 
• Could Israel indicate what kind of developments  in the multilateral area is expected in that 
regard? 
Answer: Israel's trade policy is enhanced by a wide ra nge of international ag reements and commercial 
arrangements with countries and inte rnational bodies. In recent years, the Government of Israel has 
been pursuing its international trade policies in a we ll coordinated effort, al ong three paths in parallel: 
multilateral, bilateral and unilateral. Israel be lieves in the primacy of the multilateral trade 
negotiations as the prime tool for the expansion of  trade and global prosperity. At the same time, 
Israel believes that its regional and bilateral agreements, concluded within the framework of 
Article XXIV of GATT 1994, complement the mu ltilateral obligations and allow further trade 
liberalization and enhancement of political ties. Indeed, exposure to foreign competition through 
bilateral agreements has paved the way to the exte nsion of greater liberalization vis-à-vis other WTO 
member countries. 
Bearing in mind Israel’s commitment to greater lib eralization to be achieve d through the multilateral 
trading system Israel is interested to see meaningf ul and substantial tariff re ductions to be achieved in 
NAMA negotiations in the framework of the DDA. In pa rticular, Israel is interested to see meaningful 
reductions by developed as well as developing countries who still maintain high tariffs that prevent 
the expansion of trade. 
Question by Turkey: II.(3) (Page 10, para 10 ) 
WTO Secretariat report, para 10 reads that Israel is exploring the possibility of free trade agreements 
with newly industrialized countries in Asia and Lati n America and that further steps in this regard 
depend on development in the multilateral area. 
• Could Israel authorities explain if there is any ongoing bilateral process between Israel and any 
country in Asia or Latin America or if there is a plan to do so?  
Question by European Communities: 
Report by Israel, paragraph 57: Israel will continue to expand and update the network of 
international agreements.  
− Which agreements does it seek to upgrade and with which countries in Asia and Latin America 
does it seek to conclude new agreements?  
Question by Brazil:  II (3), paragraph 10  
According to the Secretariat Report, Israel is exp loring the possibility of free-trade agreements with 
Latin America countries.  For th e Israeli Government, what are th e prospects for these agreements 
and for enhancing trade with Latin America?  WT/TPR/M/157/Add.1 
 Page 27 
 
 
 Answer: 
In the bilateral agreements arena, Israel conti nues to explore new initiatives to expand its market 
access to other countries through either multilateral or  regional agreements. Recently, Israel has been 
focusing its attention on Asia and Latin America, in the light of the growing importance of these 
regions in world trade. Israel and MERCOSUR ha ve recently signed a Fr amework Agreement on 
Trade which is aimed at creating the conditions  and mechanism to negotiate a free trade area 
agreement. In addition, some preliminary contacts ha ve been made with a number of Asian countries 
which have not yet matured. 
Israel is continuously reviewing its  agreements with its trading part ners and updates them accordingly 
as circumstances necessitate and as agreed upon by the other party to these agreements.  
Question by the European Communities: Considering Israel’s relatively advanced level of development, 
− And the fact that Israel already successfully fo cuses on high value secto rs, have any strategies 
been divided to ensure continued growth and diversification? 
Answer: 
Israel has reached an advanced level of developm ent in the telecommunication and IT sector, however 
if one looks to the future there is  no doubt that industrial sectors such as biotechnology and 
nanotechnology will take a more central position in the global economic arena. 
Therefore, the Office of the Chief Scientist together  with the academic institutions in Israel have 
launched a program to establish  R&D centres in nano technology and biotechnology in universities, in 
order to create an academic infrastructure which w ill enable successful industries in these fields.  
D
EVELOPING COUNTRY STATUS  
Question by the European Communities: 
− Could Israel provide some information on the criteria underlying its developing country status? 
If possible, an assessment of the relative benefits and disadvantages of this status in the context 
of the WTO would also be of interest.  
Answer:  
Indeed, Israel has reserved the right to invoke de veloping country status in the WTO. However, 
experience has shown that Israel has invoked the rights granted to developing countries only on 
certain occasions. 
The geopolitical circumstances in our region necessitate  that Israel reserves the advantages to which 
developing countries are entitled.  The burden of  security expenses on the national budget, the 
vulnerability of our economy to political unrest in the region and its implications on our financial 
markets, industry, employment etc. require us to  maintain flexibilities afforded by "developing 
country status".  
Furthermore, Israel is unique in a number of characteristics that strongly effect its economy: 
- As reflected in the Secretariat Report (Chapt er 1 paragraph 1), Israel's demography is 
characterised by large inflows of immigrants arriving mainly from developing countries or from economies in transition. The absorption of these waves of immigration pose a major 
challenge to Israel's economy. 
- More than fifty percent of Israel's land is arid  and desert areas. The n eed to settle these areas 
because of strategic objectives and to ensure th e livelihood of their inhabitants pose another 
significant challenge to our economy. WT/TPR/M/157/Add.1 
Page 28  
 
 At the same time, Israel has already expressed its interest in joining the OECD. We believe that 
membership in the OECD will require Israel  to review its policy on this matter.  
S
USTAINABLE DEVELOPMENT  
Questions by the European Communities: 
The EC welcomes Israel’s emphasis on sustainabl e economic growth and sustainable development. 
Looking at the overall policies of  Israel: 
− What plans does Israel have for adoption of policy strategies in order to enhance sustainable 
development? 
Answer: 
On May 14, 2003, a government decision on Sustainable Development was taken 
determining that the policy of the Government of Israel would be based on the principles of 
sustainable development and would follow the Plan of Implementation, which was adopted 
at the Johannesburg World Summit.  
Main stages in implementation 
On August 30, 2004 the first report on the implemen tation of the government decision on sustainable 
development was presented to the government. In th is report all ministries identified which of their 
current activities promote sustainable development in order to reinforce these activities and grant 
them priority in resource allocation within the mini stry. In addition, each ministry identified barriers 
to promoting sustainable development so that ap propriate steps could be taken to remove these 
barriers. Finally, each ministry identified those areas  that had been neglected previously and require 
further action.   
The second report on the implementation of the gove rnment decision on sustainable development is 
currently in its final stages and will soon be presen ted to the government. This report moves forward 
from mapping and identifying activities promoting sustai nable development (as in the 2004 report), to 
detailing actions and policies that were take n to promote sustainable development.  
A copy of the government decision is available in English on the website of the Ministry of the 
Environment: http://www.environment.gov.il/english  in the Sustainable Development e-bulletin from 
October 2004. A copy of the publication "The Path  Toward Sustainable Development 2005" may be 
found on the same website within publica tions under sustainable development.  
− Does the issue of trade and sustainable devel opment fit into Israel’s overall development 
strategies? 
Answer: 
The Ministry of the Environment and the Ministry of  Trade, Industry and Labor plan to complete an 
analysis of the issue of trade and sustainable de velopment during the year 2006.  This examination 
will address how the subject fits in with Israel’s overall Sustainable Development  policy, within the 
framework of the SD strategies currently being prep ared, as mentioned in the answer to the above 
question.  
Question by the European Communities: 
Considering Israel’s relatively advanced level of development, 
− And the fact that Israel already successfully fo cuses on high value secto rs, have any strategies 
been divided to ensure continued growth and diversification? 
Answer: 
Israel believes that globalization of the world ec onomy and further liberalization of world trade will 
lead to economic growth and increased welfare. At  the same time, we should be minded to the  WT/TPR/M/157/Add.1 
 Page 29 
 
 
 concerns of those sectors of the society which may be negatively affected as a result of increased 
liberalization of world trade. While Israel is commi tted to the further liberalization of international 
markets, we are exploring ways and means to minimi ze the negative effects this could have on certain 
vulnerable segments in the Israeli society. We are st udying a number of avenues to facilitate structural 
adjustments such as improving retraining prog rams and employment incentives and promoting 
entrepreneurship in alternative employment sectors.   
INVESTMENT REGIME       
FOREIGN INVESTMENTS  
Question by the European Communities:  
− Which economic fields has Israel identifie d to attract trade-related FDI?  
Answer 
Israel welcomes and promotes investments in all fiel ds, and is aiding foreign investors in all sectors. 
Israel is actively seeking investments mainly in the high technology sectors where it has a relative 
advantage. These sectors can be divided into several categories, including: 
1) ICT –  Information Communications Technologies incl. 
A) Telecommunications Equipment ( regular line communications) 
B) Mobile Communication Systems 
C) Components for the telecommunications Industry 
D) Internet 
E) Storage Systems 
F) Security & Encryption 
G) Networking  Systems (Data communications) 
H) Multimedia 
I) Software 
2) Life Sciences  
A) Biotechnology 
B) Medical Devices 
C) Pharmaceuticals 
3) Water Technologies 
4) Semiconductors 
5) Nanotechnology 
6) Space & Aeronautics  
It should be noted that we are also keen to upgrade the more traditional industry sectors through 
different support programs. However we are not targ eting any specific traditional industries at this 
point. 
Question by the European Communities:  paragraph 22:  
Israel has concluded investment protection agreements with 29 countries. 
− Would Israel please verify and confirm the accu racy of the list of countries with which it has 
concluded investment protection agreements? 
Answer: Israel confirms the accuracy of the list of countri es with which it has concluded investment protection 
agreements. The list refers to agreements which we re signed and ratified, and were not officially 
annulled or adapted yet, due to EU enlargement. WT/TPR/M/157/Add.1 
Page 30  
 
 L
AND OWNERSHIP  
Question by Canada: The Secretariat report states that foreign-owned companies are entitled to own or lease land after 
receiving approval from the Israeli Land Administration.  The Report also indicates that "As of November 2005, the legal regime gover ning land rights was under review".  
Could Israel explain why this revi ew was initiated and how the outcom e of such a review may affect 
current and potential investors? 
Answer: 
The review of the legal regime governing land righ ts was initiated following the adoption by the 
government of recommendations made in a public  report (Ronen Report) in 1997.  The report 
contained a recommendation concerning the possibility of transferring ownership rights to lessees of 
certain land administered by the Israel Lands Administration. Such an issue necessitated a review of the legal status concerning the ownership rights of fo reigners as well.  The outcome of such a review 
will effect, all lessees of land administered by the Is raeli Land Administration, Israelis and foreigners, 
in the same way.   
Question by Japan  (Page 12, paragraph 14) 
According to the Report by the Se cretariat, foreign-owned compani es are entitled to own or lease 
land but they must receive prior approval. 
Are there some regulations, such as receiving prior approval in cases where foreign companies, 
already approved to own land, sell their land? 
Answer: 
There are no regulations pertaining to the sale of land by foreign companies that already own land. 
However it should be noted that Resolution NO. 371 of  the Israel Land Council provides  that in  the 
following cases the Israeli Land Administration may agree to bestow or to transfer rights of land to 
foreign controlled companies, when a recommendati on has been received from the 1) Minister of 
Finance or the Minister of Industry, Trade and La bor regarding cases being handled by the Investment 
Center or 2) the Minister of Industry Trade and Labo r regarding land for industry, labor or trade or 3) 
Minister of Tourism regarding land for hotels and tourism.  
L
AW OF ENCOURAGEMENT OF INVESTMENT  
The Israel Investment Center is the body re sponsible for administering the Law for the 
Encouragement of Capital Investment-1959. The Ce nter's main responsibility lies in the economic 
initiative within the Israeli industry. It caters to both the foreign and local cap ital investment aimed at 
expanding the production capacity of the economy thereby creating new employment opportunities in 
Israel. 
Question by Japan : (Page 12, paragraphs 16 to 17) 
According to the Report by the Secretariat, Israel  encourages both local and foreign investment by 
offering a wide range of incentives and benefits. 
In providing incentives for foreign investment, are there any requirements such as requiring exports 
of domestic goods?  If any, please indicate them. 
Answer: 
To qualify for an incentive, investment projects must meet certain criteria including: minimal 
designated investment, high added value, registration of the company in Israel and a need to prove 
economic viability. The standards are designed to in sure that incentives are available to companies 
that contribute to the financial independence of the Israeli economy and are competitive contributors  WT/TPR/M/157/Add.1 
 Page 31 
 
 
 to the gross national product.   The government, as any other investor, is interested in minimizing it 
risks when investing, therefore the project must s how that it is a viable one and has a potentially 
significant market. It should be noted that two sectors – nanotechnology and biotechnology, although 
known as high risk for investment purposes, have been designated for receiving incentives. In these 
areas Israel is ready to invest desp ite the risk factor involved sin ce in these fields Israel enjoys a 
comparative advantage. This means that in the lo ng run the economic risks involved are minimal.    
Question by Turkey : II(5) (Page 12, para 17) 
The Secretariat report states that Israeli Governme nt provides additional incentives to "approved" 
investors in addition to the benefits  available to all investors and the share of  "approved" investment 
is about 27%. 
Could Israel explain the sectoral coverage of approved investments? 
Answer: 
At the outset it should be noted that approved investments are not limited to certain sectors but open 
to all industrial sectors. Indeed, the sectors which ha ve so far benefited from the incentives are in fact 
extremely wide in scope. Approved investments have  been made in  the following fields: minerals, 
food and cool storage, textile, clothing and leather, wood and wood products, pa per, cartons and print, 
cement and construction materials,  glass and ceramics, plastic and rubber, chemicals, medicine and 
paints, metal machinery and transport vehicles, de licate mechanics, electricity, hotels and tourist 
projects. 
There are no sectors exempt from "approved" enterpri se status. The Law requires that the enterprise 
be an industrial one whose main ac tivity is manufacturing/production.  
Questions by Canada: Paragraph 17 
The Secretariat report indicates that the Governme nt of Israel provides additional incentives to 
"approved" investors.   
Could Israel specify which sectors, if any, are exempt from "approved" enterprise status?   
In addition, could Israel outline how investo rs are made aware of the application process for 
"approved" enterprise status?  
Answer: 
For the reply to the first question please see our r esponse to the question raised by Turkey above. 
Investors are made aware of the application pro cess for "approved" enterprise status through various 
channels. Besides the official publication of the La w and related regulations in the Official Gazette, 
the information is easily accessible on the internet si te of the Ministry of Industry, Trade and Labor 
(http://www.moital.gov.il/) either through the Investment Center or Investment In Israel. The Ministry 
of Finance also publishes information concerning "a pproved" enterprises on their website on the State 
Revenue Division page(http://www.mof.gov.il/). 
Seminars and workshops are frequently held in or der to inform various business circles about the 
incentives granted by the Law.  
(6) T RADE AGREEMENTS  
PROTOCOL ON ECONOMIC RELATIONS WITH THE PLO 
Question by Canada: Paragraphs 36, 37  
The Secretariat Report provides details on the Protoc ol on Economic Relations with the Palestine 
Liberation Organization.  WT/TPR/M/157/Add.1 
Page 32  
 
 In light of recent developments, including the pull-out from the Gaza Strip, Canada would be 
interested in knowing what, if any, changes there have been, or are expected , with respect to the 
application of this Protocol between Isra el and the Palestine Liberation Organization? 
Answer: 
So far no changes have been made, with respect to the application of the Protocol on Economic 
Relations with the Palestinian Authority in order to ensure the continued functioning of the customs 
envelope. This has been welcomed by all concerned parties. 
T
RADE AGREEMENTS WITH JORDAN AND EGYPT  
(i) Question by the European Communities :  
With reference to paragraph 4 of the Report by Israel:  
− How many industrial zones have been designated? How much investment has the QIZ generated?  
Answer: 
There are 11 qualified industrial zones in Jordan and in Egypt there are 3 major qualified industrial 
zones composed of several sub-zones.  
Question by Turkey : II(6) (iii) (b) (Page 19, para 38) 
The report by the Secretariat states that Israel signed an agreement with Jordan in 1997 and then a 
trade protocol with Egypt in 2004 to strengthe n economic cooperation and trade relations between 
Israel and respective countries. We understand that both agreements include provisions as a basis for 
establishing "qualified industrial zones". 
We would be grateful if Israel would inform us about the type of production in these regions.  
Besides, we would appreciate if Israeli authorities c ould inform us on the practical need to create 
"qualified industrial zones". 
Question by Turkey  (page 15, para 74) 
As it was also mentioned in the Secretariat report,  Government report para 74 states that Israel   
concluded   Qualified Industrial Zone (QIZ) Agree ments operating under the framework of the Israel-
US Free Trade Area Agreement with both Jordan and Egypt. 
We would appreciate if Israeli authorities could info rm us on the sectoral as well as product coverage 
of the QIZ Agreement signed with Egypt. In this regard, could Israeli aut horities also explain the 
timeframe set for the phasing out of tariffs and the ho w rules of origin operate in the said agreement? 
Answers: 
The QIZ is open for businesses in all sectors with no exceptions.  However, the data has shown that so 
far most business under the QIZ scheme is conduc ted in the textile and clothing sectors. 
The practical need to create QIZs: Our experience has shown that the QIZ agreements stand to serve 
as a catalyst for the creation of business and econom ic cooperation between Israel and its neighboring 
countries for the economic benefit of all the parti es involved. In addition, the QIZ initiatives support 
efforts to promote peace and stability in the region.  
The timeframe set for the phasing out of tariffs: As is mentioned in the ques tion, the QIZ is operating 
under the framework of the Israel-US Free Trade Ar ea Agreement. Since the Agreement has been in 
full operation since 1985 all tariff duties have already been phased out. 
Rules of origin in the QIZ agreement: The applicable rules of origin are those of the Israel-United 
States FTA. With regard to the origin of any text ile or apparel product that is processed in the 
Jordanian or Egyptian QIZ areas, regardless of the or igin or place of processing of any of its inputs or 
materials prior to entry into, or subsequent to withdrawal from these zones, are determined solely  WT/TPR/M/157/Add.1 
 Page 33 
 
 
 pursuant to the rules of origin for textile and apparel products set out in Section 334 of Uruguay 
Round Agreement Act, 19 U.S.C. 3592. 
(ii) Question by the European Communities :  
With reference to paragraph 4 of the Report by Israel:  
− Could Israel indicate the preliminary results of  the QIZ arrangement between Israel-Egypt and 
the US and between Israel-Jordan and the US?  
− What is the amount of goods exported to the US under the QIZ arrangement? 
Answer: 
The Israeli-Jordanian QIZ – preliminary results: Since the agreement was signed, in 1997, the 
Jordanian total export to the U.S grew from approxima tely 15 million U.S dollars (1997) to more than 
1 billion dollars (2004). 
The bilateral trade between Israel and Jordan grew more than 500 percent between the years 1997-
1999, and reached its peak in 2004 – to  approximately 180 million U.S. dollars. 
The Israeli-Egyptian QIZ - preliminary results:  The QIZ arrangement between Israel and Egypt was 
signed in December 2004 and entered into force on February 22nd, 2005. 
Even though it entered into force only in 2005, th e QIZ arrangement has had an enormous impact on 
the bilateral trade between Israel and Egypt. The e xports to Egypt, that we re approximately 29 million 
dollars in the year 2004, tripled themselves in 2005 , and reached more than 90 million U.S. dollars. 
Beyond the commercial direct results, the QIZ has led to the creation of tens of thousands of new jobs 
in Jordan, Egypt as well as in Israel, especially among the unskilled workforce.  The QIZ contributed 
to the significant growth of foreign investments (especially in Jordan).  
Furthermore, the QIZ agreements  with Jordan and Egypt became an important tool supporting 
stability and peace efforts in the region. 
Investments generated by the QIZ: The major investments in the QIZ have been made in Jordan and 
Egypt. Details of these investments should be refe rred to those respective countries. Investments in 
Israel have been made in several factories in or der to respond to the growing demand in trade as a 
result of the QIZ.  
The amount of goods exported to the US under the QIZ agreement: Data has shown that most of the 
finished products destined to the United Stat es under the QIZ are exported from Egypt and Jordan. 
Therefore, the relevant data is in their possession. Da ta regarding exports from Israel to Jordan and to 
Egypt under the QIZ has been provided above. 
PART III.  TRADE POLICIES AND PRACTICES BY MEASURE 
MEASURES DIRECTLY AFFECTING IMPORTS   
TARRIFS  
Questions by Japan : (Page 26, paragraph 17) 
According to the Report by the Secretariat, the bound  tariff line of Israel remains at 73%. From the 
view point of promoting predictability in trade, J apan believes that all tariff lines should be bound in 
principle. 
In this regard, please indicate the specific views of Israel. 
(Page 26, paragraph 17) WT/TPR/M/157/Add.1 
Page 34  
 
 According to the Report by the Secretariat, the bou nd rate of non-agricultu ral goods is 170% at the 
maximum.  From the view point of promoting free trade and predictability in trade, Japan hopes that 
such a high tariff rate will be reduced. 
In this regard, please indicate the specific views of Israel. Answer: 
Israel is ready to negotiate meaningful reductions in  its bindings as well as to fully bind its tariff lines 
in the framework of the DDA negotiations. In this c ontext it should be noted that Israel is highly 
interested in the negotiations on the liberalizati on of Non-Agricultural goods (NAMA). Indeed, Israel 
is of the view that all WTO Member countries, developed, as well as developing Members, should be 
ready to accept upon themselves new and meaningful market access commitments for non-
agricultural goods, to fully bind their tariff lines, as well as to eliminate non-tariff barriers.  
Oral Question by New Zealand :  
 
With respect to suspended ceili ngs (HS 7308.90.00), we note that  Israel’s import duty is 8%. 
However, due to numerous bilateral agreements, th e tariffs for products of certain Members amounts 
to 0. Could Israel comment on this MFN disadvantage?  
 Answer: 
 
Israel stands ready to discuss with other Members further market access liberalization in the context 
of the current NAMA negotiations, including thro ugh the request and offers approach.    
 
Question by the United States: According to paragraph 18, page 26 of the Secretaria t Report, some of Israel’s applied MFN tariffs 
may exceed their bound rates, depending on import prices.   Could Israel describe any procedures in 
place or under consideration to ensure that th e MFN tariffs applied do not exceed bound rates?  
Answer: Israel applies a balanced import policy and as a resu lt most of the applied MFN tariffs are well below 
their bound rates. 
According to the Secretariat Report, all agricultural tariff rates which have an element of fixed rate, 
are included in paragraph 18, page 26. This howev er, does not imply that these products exceed their 
bound rates.      
According to our statistics and based on the world import prices, tariffs for all of these products fall 
far below their bound rates.    
Israel constantly monitors world prices using worl d-known sources of information to ensure that the 
MFN tariffs applied do not exceed the bound rates. 
The following table includes several examples of products which are listed as products for which the 
MFN rate may be higher than the final bound rat es but the actual applied rates fall below the bound 
rates.  
Please note that the import prices used for the calcula ted applied rates for a ll products listed in the 
Secretariat report are the minimal
 import prices, thus insuring that  the actual applied rates are even 
lower than indicated.    
 
  WT/TPR/M/157/Add.1 
 Page 35 
 
 
 TL Description MFN duty rate Calculated 
applied 
rate Final bound rate 
07101000 Potatoes frozen cooked/uncooked… 12%  but not less than NIS 2.4 /kg 100% 153% 
07102190 Other frozen vegetables (garden beans)   12% but not less than NIS 1.2 /kg 60% 128% 
07102291 Beans 12% but not less than NIS 1.2 /kg 65% 128% 
07104000 Sweet corn- Cooked/ uncooked, frozen 12% but not less than NIS 1.6 /kg 30% 128% 
07109090 Mixture of preserved vegetables -frozen   12% but not less than NIS 1.5 /kg 20% 128% 
07114000 Cucumbers-preserved 12% but not less than NIS 0.6/kg 30% 120% 
20057000 Preserved olives … 12% but not less than NIS 0.7 /kg 25% 100% 
 
Question of Brazil - WT/TPR/S/157, III, (2), (ii), paragraph 13 
The Secretariat report notes that the Israeli Tariff sys tem contains 8,967 lines at the eight digit level, 
under the Harmonized Commodity Description and Coding System (HS), of which 99,4% carry ad 
valorem duties.  Non ad valorem tariffs compri se specific, mixed compound and other types of duty 
mostly applied to agricultural pr oducts.  Is Israel considering the possibility of converting the 
remaining non ad valorem tariffs into ad valorem?  
Answer: 
Tariffs are the main policy tool used by the Isr aeli government with respect to imports of goods. As 
mentioned in the question, non ad valorem tariffs ar e used in very few cases, mostly in respect to 
agricultural goods. The range of the prices for those ag ricultural products is very  wide and depends on 
external factors. In addition, those prices fluctu ate to a large degree. Therefore, a non ad valorem 
element is included in order to ensure the implem entation of Israel’s agricultural import policy for 
these particular products as well as introduce more  stability and predictability in the market. These 
duties do not exceed Israel’s WTO bound commitments. In the future, Israel may consider its current 
policy in light of further import developments.      
Question by Japan : (Page 26, paragraph 18) 
 According to the Report by the Secretariat, the appl ied tariffs on 88 lines at the HS eight-digit level 
exceed bound rates. 
In this regard, please indicate the latest status .  If there remain any applied tariff lines to exceed 
bound rates, please explain the reason for it. 
Question by Turkey : (Page 26, para 18) 
The Secretariat report para 18 states that as of October 2005, MFN applied rates on 88 tariff lines at 
the HS eight digit level exceed bound rates. 
We would appreciate if Israel could give  the rationale behind such an outcome. 
Answer: Israel is committed to its Schedule. We will take th e necessary steps in order to keep our MFN applied 
rate in line with our bindings. We have been looking closely at our Schedule to check the 88 tariff lines detailed in Table AIII2. After thorough research and consultations with the Secretariat we found 
that out of the 88 tariff lines which were claimed to not be in line with our commitments, there are 
only 11 tariff lines where, unintentionally, the applied ra te is slightly higher than our binding. This has 
occurred inadvertently and we will be ame nding our applied tariff rates accordingly. 
In this regard, we would like to thank the Secretar iat for working with us on this matter and for its 
clarification made at the outset of the TPR meeting. WT/TPR/M/157/Add.1 
Page 36  
 
 Question by Japan:  (Page 27, paragraph 21) 
According to the Report by the Secretariat, Israel  offers duty-free imports to petroleum companies. 
In this regard, please provide more informa tion in detail, including the reason for it. 
Answer: 
In order to promote the search for petroleum in Is rael, Israel grants some exemptions of customs 
duties on imports to companies whose operations c onsist of searching for petroleum, Petroleum 
Service Company Distillation Plant and companies hol ding a concession to the Petroleum Pipeline in 
Israel. The companies are monitored and checked in or der to verify that they do in fact comply with 
the restrictions and that the goods imported, are necessary for the operation of the companies. 
The exemptions granted to companies as stated above, are as follows: 
• Exemptions from customs on equipment for the sear ch of petroleum according to a list published 
by the Ministry of Energy.  
• Exemption from customs on inventory, material a nd other equipment, when proven that they are 
required and necessary for the use in those companies and plants.  
• Exemption on the import of kerosene and benzene, if these products are used for the operations of 
the company or for the business transportation purpose.  
(
IV) O THER TAXES AND CHARGES  
SAFEGUARD LEVIES  
Questions by the United States:  Paragraph 23 on page 28 of the Secretariat Report tells  us that the Ministry of Industry, Trade and 
Labor imposes a special levy on a number of import ed goods to "increase flexibility" in the tariff 
system.  Please tell us more about the administration of these charges.  How does the Ministry make a 
determination to impose a levy on a particular pro duct?  Are the levies a permanent or temporary 
measure?  If temporary, what is  average length of a levy period?  What system does Israel use to 
notify trading partners? 
Question by Turkey: (Page 20, para 2)  
It is stated in the Secretariat report that Isra el bound other duties and charges at zero. However it is 
understood that imported goods are subjected to a whar fage fee, whereas some items are subject to 
"safeguard levies". 
Could Israeli authorities inform us how these me asures could be justified within the meaning of 
Article VIII and XIX of the GATT 1994? 
Question by Canada : Paragraph 23 and Table III.6:   
Canada notes that Israel has bound other duties and charges at zero on all products covered by its 
tariff binding commitments. In the same paragraph, th e Secretariat notes that Israel charges a levy on 
a number of imported goods, which would appear to be contrary to Israel’s binding commitment. We 
also note that this special levy is applied at varying rates among WTO Members, which would appear 
to be contrary to the principle of Most Favoured Nation obligations.  
Could Israel please explain how its Trade Levies Law is consistent with its WTO obligations? If it is 
not consistent, what action will be taken to rem edy this situation? For example, Canada is very 
concerned about the levy for soya-be an, sunflower-seed and rape oils as it differs from 4% to 7%, the 
lower rate being for oils originating from the US and  the EU. Could Israel please explain this specific 
varying levy based on origin with respect to  consistency with WTO MFN principles?  WT/TPR/M/157/Add.1 
 Page 37 
 
 
 Question by Brazil: WT/TPR/S/157, III (2), (iv), paragraph 23 
What is the legal basis, dom estically and under the WTO, for applying different border taxes 
according to the country of origin (USA, EU  and Romania are beneficiaries of lower taxes)?  
Answer: 
Israel has not yet incorporated into its intern al legislation the provisions of the Agreement on 
Safeguards, therefore, Israel has never and does not presently apply safeguard measures within the 
meaning of Article XIX of GATT or the Agreemen t on Safeguards. Legislation is currently being 
prepared which will incorporate the provisions of the Agreement on Safeguards into internal 
legislation. Upon completion of the legislation it w ill be notified as required under Article 12 of the 
Agreement on Safeguards. 
The "safeguard levy" referred to in Chapter 2 para graph 23 of the Report, is  not a safeguard measure 
within the meaning of Article XIX of GATT or of  the Agreement on Safeguards, but it is rather a 
form of customs duty. The "levy" may be imposed after a report is submitted to the Minister of 
Industry, Trade and Labor addressing the need for temporary measures in the form of a duty. The duty does in fact require parliamentary approval.  Th e maximum period of imposition is two years .  The 
duty may not exceed the level of Israel's binding. This  "levy" is currently in force only on imports of 
varying types of edible oils imported into Israel from all sources on a MFN basis. Imports from certain countries, including Romania, the US and th e EU, have preferential rates, set in accordance 
with our Free Trade Area Agreements with these Members.  
Since this "safeguard levy" is in fact only a different form of a customs duty the Ministry of Industry, 
Trade and Labor together with the Customs Authority  have recently decided to translate the "levies" 
on oils and edible oils into customs duties. A draf t has been prepared to implement this decision and 
will enter into force after formal procedures have been completed. 
W
HARFAGE FEE 
Question by Japan : (Page 29, paragraph 24) 
According to the Report by the Secretariat, Israel’s  port authorities charge impor ts a wharfage fee of 
1.02% of the c.i.f. cost of imports into Israel for the use of ports. 
Does such a wharfage fee, which exceeds the co st of services in ports, mean the import charges?  
Please indicate the specific views of Israel on ho w such a wharfage fee conforms with the WTO 
Agreements. 
Questions by Canada : Paragraph 24  
Canada notes that Israel charges a wharfage fee and w ould like to know whether this fee is consistent 
with the fact that Israel has bound other duties and charges at zero. 
If the wharfage fee is, indeed, consistent with I srael’s binding, we would then note that GATT Article 
VIII requires that fees for services be based on the co st of the services provided and not on the value 
of the imported goods.  
Further, we note that Israel’s current practice of charging different wharfage fees for imports and 
exports would appear to be contrary to the GATT' s National Treatment provisions. We are therefore 
pleased to see that there is an intention to make the fee identical for both imports and exports.  
Could Israel inform us as to when this change  will occur and whether the wharfage fee will be 
adjusted at that time to reflect the cost of  service rather than the value of the goods? 
Questions by Turkey :(Page 20, para 2) 
It is stated in the Secretariat report that Isra el bound other duties and charges at zero. However it is 
understood that imported goods are subjected to a whar fage fee, whereas some items are subject to 
"safeguard levies". WT/TPR/M/157/Add.1 
Page 38  
 
 Could Israeli authorities inform us how these me asures could be justified within the meaning of 
Article VIII and XIX of the GATT 1994? 
Questions by Turkey  (page 29, para 24) 
Reading para 24 of the Secretariat Report, it is understood that the 1.02%  of the c.i.f  cost of imports 
is charged by Israeli port authorities  for the u se of ports  in importing  whereas exporters are 
demanded  to pay 0.2% on the f.o.b value  to benefit from a similar type of  service. 
We appreciate the intention of Israeli authorities to change the above mentione d charge to 0.3 % for 
both imports and exports.  
In this regard we would like to le arn from Israeli authorities when this  new pricing is planned to be 
started and if possible further details of its operatio n since the matter of question is important for our 
exporters’ interests.  
Answer: 
The Israeli port system has been undergoing reform  in the past year (during which the monopolistic 
Israel Port Authority ceased to exist and 4 sep arate entities were established). Following the 
application and implementation of this major reform , Israel is currently in the process of reforming 
the wharfage fee application system. This past year , the effect of the fee system on the ports and its 
customers has been studied, with the intention of establishing a new model of wharfage fee .  
The new regime will be based on the cost of servi ces provided which will lead to the elimination of 
differences in the criteria for payment of  fees paid by exporters and importers. 
The authorities are currently at an advance stage of formalizing the reform and it is estimated that the 
implementation of the new model will be initiated during the course of 2006. It should be noted that 
due to the extent of the changes, the reform will be implemented in stages. 
WCO'
S 2002 
(iii) Question by Canada: 
We see no mention in the documentation of whet her Israel has implemented the WCO's 2002 changes 
to the Harmonized System of tariff cl assification in its Tariff Schedule.  
Could Israel please inform us whether this has been done? If yes, when will Israel be updating the 
rules of origin in its free trade agreements to reflect these changes? 
Answer: 
Israel has indeed implemented the changes to the Harmonized System of tariff classification in its 
tariff schedule. 
Israel's Free Trade Agreements w ith the EU, EFTA and Mexico have been updated to reflect these 
changes.  
Regarding Israel's Agreements with Romania, Turk ey, and Jordan, Israel is  currently updating the 
rules of origin.  
Israel is currently reviewing the changes that ar e required in regards to our Free Trade Agreement 
with Canada and this shall be promoted in the near future. 
IMPORTS PROHIBITIONS , LICENSING AND AUTHORIZATIONS  
IMPORT PROHIBITION  
Questions by the United States: 
Remanufactured automotive parts are not included in Table III.3 of the Secretariat Report, the list of 
products subject to import prohibitions.  WT/TPR/M/157/Add.1 
 Page 39 
 
 
  Has Israel lifted its prohibition on the impor tation of remanufactured automotive parts? 
 Does Israel ban the importation of any products other than those listed in Table III.3? 
Answer: 
Drugs, and the products listed in Table III.8, ar e the only products for which importations are 
absolutely banned. Remanufactured automotive pa rts may be imported to Israel, subject to 
authorization by the Ministry of Transport (which reviews safety aspects of the parts) 
IMPORT LICENSING  
Questions by the United States: 
The Secretariat Report (in paragraphs 27-34 on pp. 30- 32) tells us that Israel uses import licensing 
for reasons of public safety, security, and the management of tariff quotas.  According to the 
Secretariat, such use spans roughly eight percent of tar iff lines.  At the same time, we note that Israel 
is one of the few WTO Members never to have made  a notification to the WTO Committee on Import 
Licensing Practices.  See the 2005 Report of the Committee in G/L/753, dated 2 November 2005, which notes that Israel has never notified its le gislation, never filed the annual questionnaire, and 
never notified any changes in its import licensing regim e.  We urge Israel to catch up with these 
required notifications as soon as possible.  
 In the absence of notifications, please comment on the scope and application of import 
licensing in Israel.  Is the list of products in Table AIII.4 complete?  To what extent are licensing requirements automatic or non-automatic? 
 When does Israel plan to submit the required  notifications to the Import Licensing 
Committee? 
Answers: Besides the management of tariff quotas, Israel uses  import licensing for reasons of public safety and 
security, i.e. general safety, public  health and protection of the environment. As the Secretariat 
reported, such use spans roughly eight percent of the tariff lines. The list of products in Table AIII.4 is 
complete. In fact, Israel continuously reviews the scope of import licensing with the aim of cancelling 
out-of-date licensing and making sure that licensing legislation and administrative procedures are 
transparent. Licensing requirements are non-automatic:  importers submit a request for a license to the 
relevant government authority and are subsequently issued an import license (the relevant authority 
when issuing an import license obviously takes into account aspects of public safety). 
Israel will do its utmost to submit its notifications to the Import Licensing Committee during the 
course of 2006. 
D
RAWBACKS  
Question by the United States: 
According to the Secretariat Report, Israel is pr oviding duty and tax dr awbacks on imported inputs, 
raw materials and capital goods.  Drawback systems are to be used for inputs which are consumed in 
the production process. 
 Does Israel plan to eliminate the availab ility of drawback for imported capital goods? 
 Does Israel maintain a verifica tion system or procedure fo r the administration of the 
drawback system? 
Answers: 
Drawbacks in Israel are granted on duties paid fo r the importation of raw materials and inputs which 
were used in Israel in the production process of  goods exported from Israel. Drawbacks are not given 
on capital goods or for final products consumed in Israel.  WT/TPR/M/157/Add.1 
Page 40  
 
 In order to ensure that the drawback system is properly used, a set number of exporters are audited 
annually, in predetermined branches of industry.  Inventory movements are inspected as well as 
bookkeeping and accounting documentation and records.  In addition, if suspicions arise, further 
inspections are conducted regarding specific exporters or cases.  
C
ONTINGENCY TRADE REMEDIES  
Questions by the United States: 
According to the Secretariat Report, in June 2005, the Knesset passed a bill to amend the Trade 
Levies Law of 1991, which applies to antidumpi ng, countervailing and safeguards actions.  The 
authorities intend to notify the WTO once the legi slation has been translated into English. 
 Does Israel intend to notify this legislation in time for review at the regular spring 2006 
meetings of the Committees on Antidumping Practices, Committee on Subsidies and 
Countervailing Measures and Committee on Safeguards? 
 According to the Secretariat Report, since January 1999, Israel initiated eight antidumping 
investigations and imposed definitive anti-dumping measures in five cases.  However, to our 
knowledge, Israel has not made any notifications of antidumping determinations since 2001.  
 Please update the status of the WTO notifications of antidumping determinations identified in 
paragraph 38 on page 35 of the Secretariat Report. 
 Are official written reports of the determinati ons by administering agencies available on the 
internet?  If not, please advise where wri tten copies can be obtai ned by the public. 
Answers: 
The Trade Levies Law was recently amended (July 2005) to fully reflect the provisions of the Anti 
Dumping and Subsidies Agreements of the WTO. Af ter being translated into English, we have 
forwarded to the Secretariat on January 17,  2006 the amended Law for circulation.  
Israel has consistently and in a timely manner submitt ed its semi annual notification to the Secretariat 
under its obligation pursuant to Article 16.4 of a ll anti dumping actions taken. The last notification 
was made in document G/ADP/N/ 132 and its corrigendum for the period of 1 January to 
30 June 2005.  
The following is an update of the anti dumping cas es reported on page 35 para graph 38 of the Report: 
There are currently 4 pending anti dumping investig ations: MDF from China- is in its final stages 
being deliberated by the Advisory Committee to the Minister of Industry, Trade and Labor; Dry Wall Tape from China - is awaiting approval by the Fina nce Committee of the Knesset before the Order is 
signed by the Minister of Industry, Trade and Labor ;  Cutting and Grinding Wheels from China-  is in 
its final investigation stage being carried out by  the Commissioner of Trade Levies; Nucleotides 
Oligos from the United States- is also in its final stage of investigation being carried out by the Commissioner. A contestation of the imposition of a provisional measure in the form of a temporary 
deposit, has been submitted to th e District Court in Jerusalem by the U.S exporter and Israeli 
importer. 
There are currently no anti dumping or countervailing duties in place.  
The  non confidential version of the official wr itten reports  of the de terminations made by 
administering authorities are available on the official website of the Ministry of Industry, Trade and Labor (http://www.moital.gov.il/
).  WT/TPR/M/157/Add.1 
 Page 41 
 
 
 STANDARDS AND OTHER TECHNICAL REQUIREMENTS  
ADOPTION OF STANDARDS  
Question by the United States: 
According to the Secretariat Report, Israeli author ities have noted difficulties in harmonizing Israel's 
standards with those of its two main trading partners - the European Union and the United States - 
that often apply different standards, and the absence of international standards in specific areas. 
 Can Israel please elaborate on its experience in selecting between U.S. and EU standards, 
with an illustrative example? 
 What criteria does Israel consider when it d ecides whether to adopt U.S. or EU standards? 
 Does Israel have an estimation of the percentage  of Israeli standards that are EU standards 
and what percent represent U.S. standards? 
Questions by Canada : Paragraph 41:  
Could Israel please clarify wheth er its policy is one of using international standards or adopting 
standards, including "internationally accepted standards", developed by key trading partners? 
Answers: 
The Standards Law refers to intern ational standards and the Standards Institution of Israel’s  (SII) 
policy is to adopt international standards (ISO or IEC), or in their absence or when they are not 
internationally recognized, to search for other accepte d standards, i.e., European, American or other 
national standards.  
In the absence of an International Standard (ISO or IEC) or when the International Standard is not 
widely used the Israeli Standards Committees will look at the European Standards (ENs) and the 
American Standards (preferably ANS but also  standards produced by American SDOs).  
One of the recent amendments to the Standards La w allows for the adoption of alternate standards 
when different standards exist in developed countries.   This is on condition that every standard so set 
be completely based on an existing one.  The importa nce of this feature becomes apparent in instances 
where American and European st andards for a specific good differ critically one from the other.  
Because of the significant share th ese two trading partners account for in Israel’s foreign trade, it 
becomes necessary to adopt simulta neously the standards enforced by both suppliers.  Otherwise, 
competition will be limited to the detriment of th e Israeli consumers. For example, recently, the 
standard: SI 1107 – Child restraint systems for motor vehicles, was amended.  Following the 
standard’s revision, the product now conforms to th e Israel Standard if it meets the requirements of 
the European ECE R44/03 or of the American FMVSS 213. 
There are no written criteria whether to adopt U.S. or EU standards, however in  general, consideration 
is given to ease of use, technical content and trad e. Our experience is that the technical committees in 
which government influence is limite d prefer ENs due to the similariti es in their structure with those 
of Israel.  The EU also encourages the adoption of its standards without any IP restrictions, whereas 
this is not the case with some of American SDOs. 
Out of the Israeli standards, approximately 11% are European standards (CEN, CENELEC and ETSI), 
and approximately 2.5% are American standards (ANS and American SDOs). 
Question by Canada:  Paragraph 40  
Canada commends Israel for publishing such a la rge number (2600) of standards and reducing the 
number of mandatory standards among its domestic  standards. However, the number of mandatory 
standards is still relatively high (604).  WT/TPR/M/157/Add.1 
Page 42  
 
 Could Israel indicate what proportion of its voluntary standards are equivalent to international 
standards? 
Answer: 
43% of the Israeli voluntary standards are identical  or equivalent (with national deviations) to 
international or other foreign standards. 
I
NCORPORATION OF STANDARDS AND NOTIFICATION  
Question by the United States:  
According to the Secretariat Report, the Minist ry of Industry, Trade and Labor may declare a 
particular standard to be a mandatory standard, aft er consultation with representatives of producers 
and consumers, and consent of the Minister concerned.  
 Can Israel please provide details on the process by which Israeli standards are incorporated 
and/or referenced in technical regulations? 
 What initiates the consideration of making comp liance with a voluntary standard mandatory?  
How frequently does this happen? 
 Does Israel provide notification to the WTO of proposed technical regulations that 
incorporate and/or are based on voluntary Israeli standards? 
Answers: 
The process by which Israeli standa rds are incorporated and/or referenced in technical regulations 
begins with the ministry responsible for the tec hnical regulations presenting the draft regulations to 
the government ministries that have responsibilities re lated to the subject, including the Ministry of 
Justice and the Ministry of Finance.  After receivi ng comments, the ministry transfers the revised draft 
regulations to the appropriate parliamentary comm ittee.  Usually this is the Economics Committee but 
could also be the Committee for the Interior and Environmental Protection or others, where deliberations are conducted prior to approval of the new regulations.  Representatives of all sectors of 
the public with a stake in the issue – economic, consum er, environmental or other - are invited to offer 
their comments: in writing prior to the convening of the committee and orally during the committee 
deliberations.  The representatives invited to atte nd the committee meetings and to comment include 
manufacturers, importers and representatives of consumer organizations.  
If the Minister of Industry, Trade and Labor, afte r conferring with representatives of the consumers 
and the producers, concludes that proclaiming th e standard is necessary, under the Standards Law – 
1953, he has the authority to do so.  The Law requires that, among others, the following main purposes be served by the change:  (1) ensuring public  health; (2) ensuring public safety; (3) ensuring 
the quality of the environment.  
Frequency:  Approximately 20 standards per year are declared mandatory.  At the same time, following a review of existing mandatory standards,  an average of ten each year are returned to 
voluntary status.  In taking the decisions, public heal th and public safety issues are the main factor.  
Often the Ministry depends on information received from developed countries on dangerous or faulty 
products.  As an example, Israel  receives information from the U.S. CPSC with whom it signed a 
Declaration of Intent on January 23 of this year, formalizing the longstanding  cooperation between the 
two countries on this matter.   
Additional Oral Question by the United States: 
How are voluntary standards transformed into mandatory standards? How are international standards implemented in Israel?  WT/TPR/M/157/Add.1 
 Page 43 
 
 
 Answers: 
Preparation of standards is carried out in the St andardization Committees of the Standards Institution 
of Israel according to the "Rules for Preparing St andards" (Declaration of Israel Standards, 5751-
1991) which the Minister of Industry, Trade and Labor authorizes.     
An Israel Standard declared by the Standards Ins titution of Israel is voluntary.  The Minister of 
Industry, Trade and Labor may, following consulta tions with representatives of the manufacturers and 
the consumers, declare all or part of a given standa rd, to be mandatory.  This is done by publishing the 
decree in "Reshumot", the Official Gazette.  The Mi nister creates such mandatory standards if he 
finds it is necessary in order to achieve one of the following objectives: 
 Ensuring public health 
 Ensuring public safety 
 Ensuring environmental protection 
The purposes of declaring mandatory standards were approved by the Knesset, Israel’s parliament, in 
January of 1998 and th e Standards Law was amended accordingly. 
By law, declaration of mandatory status for a sta ndard, or its cancellation, requires consultation with 
representatives of the manufacturers and the consumers.   An identical procedure is employed in the 
case of the revision of a mandatory standard (new versions, correction sheets etc.).  
In order to preserve transparency, these consulta tions include, in addition to manufacturers’ and 
consumers’ representatives, also representatives of the importers, of the appropriate sector, such as the Building Contractors’ Association and pertinent government ministries.   
 
At the consultation stage the Commissioner of St andardization announces that the Minister of 
Industry, Trade and Labor intends to change the sta ndard’s status or to authorize an amendment to a 
mandatory standard and sets a time period, us ually four weeks, within which comments or 
reservations with respect to the Minister’s action may be submitted. 
 
At the end of 1999 the Knesset adopted an additiona l amendment to the Standards Law according to 
which, as a rule, in setting standards the Standards Institution should adopt the international standards 
employed in developed countries and keep in mind the nature of Israel’s trade with the rest of the 
world.  
Where various standards exist in the developed countries, the Institution may adopt alternative 
standards on condition that any one standard thus set will be based in its entirety on an existing 
standard.    Under exceptional circumstances, when it has been de termined necessary to do so because of unique 
conditions in Israel, the Standards Institution may ch ange certain conditions w ithin an international 
standard it adopts, offering in the explanatory notes attached to the standard, detailed explanations for 
doing so.    
Question by Canada : Paragraph 7: 
The Secretariat report indicates that "consultati ons with representatives of consumer organizations, 
manufacturers, and importers are carried out by th e Standards Commissioner before any change in 
compulsory standards."   
Could Israel outline the notification process, indicating whether and how information relating to a 
change in compulsory standards is available to investors? WT/TPR/M/157/Add.1 
Page 44  
 
 Answer: 
Israel provides notification to the WTO of standards,  including of proposed technical regulations that 
incorporate and/or are based on voluntary standards. The notification process is executed by Israel’s WTO/TBT Inquiry Point in the Standardization 
Administration of the Ministry of Industry, Trade and Labor. All information is available by 
addressing queries to the e-mail address: Bernadette@moital.gov.il
  
At the beginning of the public review of the compulsory standard, and before approving it, a 
notification is forwarded to the inquiry point,  and from there to the WTO head quarters.   
Although the WTO recommendation is for notification to be given 60 days in advance, in fact Israel 
provides notification much earlier, often as much as 90 days ahead of changes.   
Israel always responded positively in those instan ces when requested by WT O members to extend the 
comment period on notified changes. Israel’s inquiry point responds to queries from the WTO 
Secretariat or individual queries from foreign manuf acturers/exporters concerning Israel’s technical 
requirements.   
SII'S FUNCTIONS  
Question by Canada: Paragraph 39:  
Could Israel explain how SII ensures independe nce between its role as a standards development 
organization and a conformity assessment organization?  
Answer: 
SII ensures independence between its role as a st andards development organi zation and a conformity 
assessment organization through the total separati on between the standards development activity and 
the conformity assessment activities. The standard s development activity of Israel is operated 
according to the Rules of Standardization (Prepa ration of Israeli Standa rds), 1991, a document 
approved by the Minister of Industry and Trade a ccording to clause 7 of the Standards Law – 1953. 
The Rules describe the hierarchy of the various  Standards Committees and the procedures for the 
preparation of standards. The Standards Committees are made up of representatives from all sectors of 
the economy and they decide all aspects of the sta ndardization work including: policy, annual work 
program, and approval of standards. This structur e ensures that the conformity assessment activities 
have no influence over the standards development activity. 
To clarify, the Ministry of Industry, Trade and Labor, and specifically, by the Commissioner of 
Standardization, determine the types of products  that undergo mandatory conformity assessment.   
VOLUNTARY AND COMPULSORY STANDARDS  
Question by Canada : Paragraph 39: 
What procedures do other government departments follow in the development and enforcement of 
standards? Are such standards mandatory or voluntary?  
Answer:  
Other government departments use the national standa rds infrastructure in the Standards Institution of 
Israel to prepare Israeli standards in those areas where they believe there is need for technical 
requirements. In some cases these standards remain voluntary and in some cases these standards are 
referred to in legislation. Each government depa rtment decides on the en forcement scheme as the 
regulatory authority.   WT/TPR/M/157/Add.1 
 Page 45 
 
 
 THE SII STANDARDS COMMITTEES  
Question by the United States: 
According to the Secretariat Report, voluntary stand ards are elaborated by St andards Institution of 
Israel (SII) technical committees. 
 What are the eligibility criteria for partic ipation on the technical committees?  Who 
ordinarily participates on these committees?  Is participation open to foreign interested 
parties? 
 Please outline the procedures to apply for par ticipation on the technical committees. 
Answer: 
The structure of SII’s Standards Committees is described in the Rules of Standardization (Preparation 
of Israeli Standards), 1991, a docum ent approved by the Minister of Industry and Trade according to 
clause 7 of the Standards Law – 1953. The Rules describe the hierarchy of the various Standards Committees and the procedures for the preparation of standards. The creation of a Technical Committee (TC) is by the Central Committee (CC) a bove it. According to the Rules, TCs have only 
12 members, who represent the various sectors of the economy that have interest in the specific TC. 
Membership is not by name but rather by organi zation. For example, a TC could be made up of 3 
representatives from the relevant manufacturers asso ciations, 2 representatives from the builders and 
contractors association, 1 representative from the Chamber of Commerce, 1 representative from the engineers association, 2 representatives from the c onsumer organizations, and 3 representatives from 
the relevant government ministries. Each one of th ese organizations is responsible for appointing its 
representative. Two basic principles must be upheld wh en creating a TC – that there is representation 
from the manufacturers, consumers and government, and th at no sector has more than 1/3 of the seats 
on the TC. Foreign interested parties may be represented by the Chamber of Commerce (where the importers are associated), or can contribute to the work at the Working Group level as observers. 
L
ABORATORIES APPROVAL  
Question by Canada : (paragraph 39): 
Could Israel elaborate on the role of the Ministry of Industry Trade and Labour (MOITAL) in 
"standards enforcement and approval of testi ng laboratories"? Are these activities based on 
accreditation and the application of inte rnational standards and guides? 
Answer: 
Under the authority of the Standards Law - 1953, the Commissioner of Standardization in the 
Ministry of Industry, Trade and Labor has the author ity to approve testing laboratories responsible for 
the assessment of the conformity to standards.  The approval criteria have been prepared by the 
Ministry of Industry, Trade and Labor and have been in force since November 1, 1998.  They involve economic, legal and ethical considerations. 
The main laboratory approval criteria include: (a) Lack of conflict of interest, including with re spect to products linked to the laboratory or its 
owners.   
(b) Lack of dependence of the laboratory.  A la boratory will be considered  to be dependent if 
revenues from a single client exceed 25 percen t of its total income in any year.   
(c) The laboratory must possess a certificate of accr editation issued according to ISO/IEC 17025.     WT/TPR/M/157/Add.1 
Page 46  
 
 L
ABORATORIES RECOGNITION AND ACCREDITATION  
Question by the United States: 
According to the Secretariat Report, products with an SII Standards Mark, certifying compliance with 
a certain standard, can enter I srael without being tested. 
 Please describe the procedure followed by th e Standards Mark Policy Board to recognize 
laboratories.  Must these labs be accredited?  If so, by whom? 
 Are foreign testing laboratories eligible to issu e the SII Standards Mark?  If so, does this 
require accreditation and if so, by whom?  Does Israel recognize accreditation performed by 
bodies located in other countries?  How many  foreign laboratories ha ve been recognized to 
issue the SII Standards Mark?   
 Please describe Israel’s accreditation procedures. 
Questions by Canada: Paragraph 42: 
Canada notes there is no mention of the role of accreditation in the Israeli conformity assessment 
regime. We are aware that the Israel Labor atory Accreditation Authority (ISRAC) runs a 
comprehensive laboratory accreditation program, whic h is a member of the International Laboratory 
Accreditation Cooperation (ILAC) MLA and has sign ed a recognition agreement with the European 
Co-operation for Accreditation (EA) covering accept ance of test reports, as well as an agreement 
with the American Association for Laboratory Accreditation (A2LA) providing for recognition of 
assessments to A2LA requirements.  
Canada would be interested in knowing why these agreements have not been referenced in the TPR.  
We also note there is no indication of an accreditation program for product certification.  
As a general comment, we believe Israel should be commended for its stated policy of acceptance of 
certain foreign products without the need for retest ing, as well as the policy of assessing products 
according to the degree of risk, including accepta nce of SDoC. This is an approach which assists 
countries in reducing conformity assessment-related trade barriers. 
Could Israel please elaborate on the role of the Standards Mark Policy Board, specifically how it 
undertakes assessments to verify th e competence of foreign laborato ries to issue the SII mark? 
Are test facilities assessed in accordance with the application of ISO Guide 65? 
Answers: 
SII’s laboratories are the official labs for the SII St andards Mark. Use of other labs is at the discretion 
of the Director General of SII, and requires compliance to ISO/IEC Guide 17025 and an assessment by SII personnel. No external accreditation is required. 
Foreign laboratories are not eligible to issue the S II Standards Mark. Foreign laboratories test reports 
and certificates may be used as part of the confor mity assessment process only after an agreement is 
signed between SII and the foreign laboratory and only after an assessment of that laboratory is 
performed in accordance with ISO/IEC 17025.  
Laboratory accreditation in Israel takes place accord ing to the National Laboratory Accreditation Law 
of 1997.  A detailed explanation in English of th e accreditation procedures is available on the ISRAC 
website www.israc.gov.il
  .   
ISRAC is a member of the International Labor atory Accreditation Cooperation (ILAC) – MLA and 
has signed a recognition agreement with the Europe an Co-operation for Accreditation (EA) covering 
acceptance of test reports, as well as an agreement with the American Association for Laboratory 
Accreditation (A2LA) providing for recognitio n of assessments to A2LA requirements.   WT/TPR/M/157/Add.1 
 Page 47 
 
 
 ISRAC accredited 70 calibration and testing labs in  various engineering fields, environment and 
public health, according to guidelines of ILAC-MRA. 
It should be noted that voluntary accreditation is a tool to support regulators in their designation of 
conformity assessment bodies (CABs). 
There is no indication of an accreditation program for product certification as one does not exist. 
Since ISRAC currently is only a labor atory accreditation authority this is  not within the scope of their 
responsibility. More importantly, there is only one of ficial product certification system in Israel that 
was set up by the Standards Law – 1953. This system operates according to the Standards Regulations 
(Standards Mark and Supervision Mark), 1982, a docum ent approved by the Minister of Industry and 
Trade. 
As stated in ISO Guide 65, test facilities are assessed accordin g to ISO/IEC 17025 (then ISO/IEC 
Guide 25). 
Question by Canada:  Paragraph 45: 
Could Israel please provide details on its regime for the certification and labelling of products for the 
various Marks? 
Answer:  
The Standards Mark scheme is basically based on ISO/IEC Guide 28, i.e., model system N°5. 
Question by Canada: , Paragraph 45: 
Are foreign and domestic firms treated equally? Answer:  
Foreign and local firms are treated equally. 
Question by Canada: , Paragraph 45: 
Is the regime based on third party verification? Answer:  
The regime is based on th ird party notification. 
M
UTUAL RECOGNITION AGREEMENTS  
Question by Canada: Paragraph 45: 
We appreciate Israel's commitment to transparen cy in listing its MRAs and MOUs with foreign 
conformity assessment bodies (CABs), as only a few standards bodies follow this practice.  
Could Israel specify whether it has signed any government-to-government MRAs and, if so, whether 
these agreements have been  notified to the WTO? 
Answer: 
No government-to-government mutual recognition ag reements (MRAs) have been signed yet. There 
are, however, a number of initiatives in that directi on, for example, with the EU on the signing of an 
ACAA (Agreement on Conformity Assessment and Acceptance of industrial products). A draft 
agreement concerning IT and telecommunication equi pment has also been di scussed with the United 
States.    WT/TPR/M/157/Add.1 
Page 48  
 
 S
ANITARY AND PHYTOSANITARY MEASURES  
Question by Turkey: (page 37, para 48)  
Kosher certification that is required for exporting cert ain foods particularly meats to Israel is a real 
source of concern that our exporters face with. As pointed out in the Secretariat report the costly and 
complex procedures sought in granting those certificates   pose challenges to exporters. 
From this point of view, we would appreciate Israeli authorities to inform us   if there is any intention 
to simplify this procedure and make it less costly. 
Answer: 
Regarding kosher certificates, the Chief Rabbinate is  the competent authority for the certificates. The 
Chief Rabbinate issues a list of Rabbis located in  many countries whose certificates are recognized; 
the fees for such certificates are est ablished by each Rabbi. If an importer requests a certificate from 
the Chief Rabbinate in Israel, the charge is based on the costs of sending the inspector the premises of 
the manufacturer and included flight, accommodation and a per diem fee. 
Israel is doing its utmost to simplify the proce dure while at the same time adhering to the rules 
governing kosher food.  
For information concerning these matters please refer to the internet site of the Chief Rabbinate of 
Israel (in Hebrew) at www. religions.gov.il/kashrut/kashrut . We would also like to inform Members 
that direct contact with this office can also be made. 
(4)  M EASURES AFFECTING PRODUCTION AND TRADE  
INCENTIVES  
Question by Brazil: WT/TPR/S/157, III (1), paragraph 4 
Could Israel provide further details on th e official support to foster R&D programmes?  
We would like to refer to Chapter III (4) paragraphs  69-77 of the Secretariat Report where a full and 
detailed description of Israel’s programmes to foster  R&D can be found. We also refer to the website 
of the Ministry of Industry, Trade and Labor: www.moital.gov.il  under research and development.  
 G
OVERNMENT PROCUREMENT  
Question by the United States: Is Israel considering any initiatives to improve th e transparency of its procurement process?  Has 
Israel considered creating a central website for a ll government procurements or the establishment of 
an ombudsman to act as a main poi nt of contact for questions?  
Answer: 
The Israeli government is in the midst of assimilating an ERP (Enterprise Resource Planning) system 
throughout the government ministries and their s ubsidiary divisions.  The system includes three 
central modules – finance, human resources, and logistics.  The government purchasing process is 
handled as a part of the logistics module. 
In addition, we are preparing to begin using th e SRM (Supplier Resource Management) system which 
will help us with developing contact s with suppliers, with the electronic transfer of information and 
with respect to online access to government tenders.   
A website for the Government Purchasing Operations  Administration is also being developed.  All 
government ministries tenders will be published on this website, along with guidance regarding the 
submission of bids, an e-mail address for submitting questions to the Administration, etc.  WT/TPR/M/157/Add.1 
 Page 49 
 
 
 It should be noted that the Government Purchasi ng Operations Administration was established within 
the Accountant General’s office during 2004, and part  of its function is to be a central address for 
questions from suppliers regard ing government procurement. 
Question by the United States: 
With regard to the statement in paragraph 105 of  the Secretariat Report that 767 exceptions were 
granted to the required procurement methods, please  provide us with additional information about 
those exceptions including the number of excep tions by procuring entity, if available. 
Answer: 
With regard to the statement in paragraph 105 of  the Secretariat Report that 767 exceptions were 
granted to the required procurement methods, please  find details in the  table below: 
Procuring Exemptions in the Government (By Procuring Entity) Awarded by the Ministry of Finance According to the Law (2004) - 
excluding the Defence System 
Number of exceptions   
Procuring Entity  
76 Ministry of Construction & Housing 
73 Ministry of Education, Culture & Sports 
52 Ministry of Welfare 
46 Ministry of Immigrant Absorption 
44 Ministry of Industry, Trade & Labor 
42 Ministry of Interior 
39 Ministry of Health 
37 Ministry of Finance 
37 Ministry of Finance - Accountant General 
35 Ministry of National Infrastructure 
33 Ministry of Transportation 
31 Public Works Department 
30 Police 
28 Ministry of Finance - Government Housing 
22 Prime Minister's Office 
22 Ministry of Agriculture 
16 Ministry of Finance - Customs Division 
15 Water Commission 
14 Ministry of Foreign Affairs 
12 Ministry of Environment 
8 Prisons Authority 
7 Israel Land Authority 
6 Ministry of Tourism 
5 Government Companies Authority 
5 Ministry of Finance - Income Tax Division 
5 Ministry of Construction & H ousing - Israel Mapping Center 
4 Courts Administration 
3 Ministry of Finance - Taxes Computers Services 
3 Government Advertisement Office 
3 Civil Service Commission 
3 Ministry of Communication 
2 Ministry of Home Land Security 
2 Ministry of Science & Technology 
2 Ministry of Justice 
5 Other Government Entities 
767 Total  WT/TPR/M/157/Add.1 
Page 50  
 
  
Question by the United States: What percentage of procurements (by number and by  value for each procuring entity) covered by the 
Government Procurement Agreement are conducted using 1) selective tendering or 2) limited 
tendering? 
Answers: The Israeli government, as mentioned, is in the midst of assimilating an ERP system throughout the 
government ministries and their subsidiary division s. As part of the back  office project (known as 
MERKAVA), the possibility of aggregating the re quested data according to the aforementioned 
classification is being examined. Currently, the data  as requested does not exist under our files.  
Questions by the European Communities: Taking into account the high economic status achieved  by Israel (in terms of gross domestic product 
at purchasing power parity per capita for the year of 2004, Israel ranks after The Netherlands and 
before South Korea), would Israel be willing to consider reducing, and at which pace : 
• the 5 to 15% price preferences it applies to in ternational tenders not covered by  the GPA; 
• the preferences for local subcont racting (except for GPA tenders); 
• the 35% offset requirement for tenders above 5M $ (28% for the GPA tenders). 
In order to enhance transparency, would Israel please inform if there are any plans to publish a 
version of its Government Publications Offic e’s website, (http://m ichrazim.lapam.gov.il
) in other 
languages?  
Answers: 
Chapters 2 and 3 of the Mandatory Tenders Re gulations (Preference for Israeli Products and 
Mandatory Business Cooperation) of 1995, which c oncern the price preferences and preferences for 
local subcontracting applied to international te nders not covered by the GPA, are periodically 
reviewed due to the importance that the government  attaches to public procurement as a development 
tool especially in the less developed regions in Israel. Nevertheless, since Israel is a member of the GPA, we are ready to engage in discussions with other WTO members on mutual arrangements 
allowing for MFN and national treatme nt in government procurement. 
As for the issue of offset requirements, Israel ha s expressed in the context of discussions within the 
Committee of Government Procurement, the importa nce of this mechanism to Israel's economy as a 
development tool due to the main features of the st ructure of the economy, namely, the fact that the 
vast majority of firms in Israel are small and medium size enterprises. Our experience has shown us 
that the offset mechanism serves as an importa nt vehicle for the creation of business cooperation 
between small and mediums sized Israeli en terprises and multinational major suppliers. 
In light of our position on this matter, Israel  is not presently considering reducing the offset 
requirement for tenders not covered by the GPA. It s hould also be noted that at this point in time the 
use of offsets is widespread amongst many WTO Members. 
With respect to the question regarding enhanced tr ansparency we refer to our reply to the first 
question raised by the US under Government Procurement.  
Question by Brazil: WT/TPR/G/157, VII, (4), paragraph 63 
 
The report highlights that "Israel was among the first  groups of countries that joined the Government 
Procurement Agreement (GPA) upon the establishment of the WTO".  Could Israel provide us with a 
broader view of the Israeli experience under the G PA, in particular regarding the use of offsets?  WT/TPR/M/157/Add.1 
 Page 51 
 
 
  
Israel signed the GPA, a plurilateral agreement, the accession to which is not mandatory to WTO 
member countries, in order to promote the following national policy goals:  (a) To gain meaningful market access opportuniti es for  Israeli suppliers, goods and services in 
public tenders abroad and to allow them to particip ate and win bids in public tenders conducted by 
government entities covered by the GPA. 
(b) To strengthen industrial cooperation between  Israeli and foreign enterprises as well as 
technology transfer through the offset mechanism.  
(c) To increase efficiency of the public procuremen t system in Israel, in line with government 
policies which highlight non-discrimination, co mpetitiveness and economic development as important 
principles of its procurement system.  
Our experience so far has shown that Israel’s par ticipation in the GPA has not led to a meaningful 
increase in participation of Israeli enterprises in pub lic tenders abroad nor in bids awarded. At the 
same time, the offset provisions have proven to be the most beneficial mechanism, as a significant 
development instrument for Israeli small and medium sized companies. 
 The importance of the offset mechanism for Israel resides in the fact that the Israeli industry is 
predominantly composed of small and medium size enterprises that play a major role in the Israeli 
economy, in terms of their contribution to the GDP  as well as to employme nt. As such, the vast 
majority of Israeli enterprises, due to their size, are incapable of bidding as prime contractors in most 
of the public tenders issued by the GPA member countries.   
 At the same time, Israeli enterprises have proved to be successful in acting as sub-contractors in such tenders. Hence, a development oriented instrument, such as the offsets, is essential in creating the 
opportunities for industrial cooperation between foreig n prime contractors and Israeli companies. Our 
experience has shown that industrial cooperation be tween foreign and Israeli enterprises has led to 
long term business relationships for the benefits of both sides involved. 
 Indeed, the offset mechanism has allowed variou s Israeli enterprises to benefit from industrial 
cooperation partnerships with top level international enterprises. 
Those partnerships have proven to be mutually beneficial. Israeli industries are exposed to the 
practices, standards and methods of leading global companies. Foreign enterprises, which are awarded governmental c ontracts in Israel, have been introduced to the 
capabilities and innovative technologies of the Israeli industry. In fact, several foreign enterprises 
which have been awarded public contracts in Isr ael have recognized the importance of maintaining 
the offsets at its current level as a means for developing industrial cooperation.    
 
I
NTELLECTUAL PROPERTY RIGHTS  
Question by the European Union:  
With reference to the WTO Secr etariat’s Report, paragraphs 117- 135: In our understanding, the 
March 2005 amendments to the Pharmacists Or dinance (§125) which introduced legislative 
provisions for the protection of confidential t est data (mandated by Article 39.3 of the TRIPs 
Agreement) have a very limited scope since the term of protection (five and a half years) is "linked" to 
the date of first approval in a "recognized country", thereby limiting the de facto protection to much less than five years. The March 2005 amendments in addition allow the "reliance" on the registration 
data to produce certificates used by local generi c producers for the export of their products. More 
recently (December 2005), new law amendments  to the Patent Law were approved. These 
amendments have introduced a very restrictive interp retation for granting a patent term extension; WT/TPR/M/157/Add.1 
Page 52  
 
 here also the maximum length of extension of protection is "linked" to the shortest extension period 
granted in a recognized country. 
− Could Israel please explain how the "linkage"-m echanism is compatible with the principle of 
territorial nature of intellectual property rights. 
Answer: 
Under the TRIPS Agreement there is no requirement to  grant patent term extens ions and that principle 
has been confirmed by a dispute panel of the WTO. Paradoxically, the idea for creating an international linkage system for factoring the lengt h of extension orders was initiated in 1998 by the 
innovator pharmaceutical industry that today purports to oppose such a linkage. During the recent hearings that industry reconfirmed their acceptance of a linkage mechanism. Pursuant to the Bill 
published in 1997 the period of the extension in Isr ael was to have been factored in relation to 
registration related events occurring solely within  Israel. Nevertheless, in 1998 the Knesset accepted 
the innovator drug industry's preference for an international linkage mech anism which was intended 
to create lengthier extension terms than might otherw ise have arisen under the provisions of the Bill. 
The linkage mechanism is not new and appear s in the 1999 TPR report (document WT/TPR/S/58 
paragraph 126).  
Article 4bis of the Paris Convention relates to pate nts "as regards their normal duration" and not to 
supplemental protection periods. No tably such supplemental periods are not required by the TRIPS 
Agreement. Moreover, internati onal linkage mechanisms are cons istent with the principle of 
territoriality and can be readily observed in the natio nal laws of many countries. Indeed, patent term 
extensions in the EU are factored on the basis of an  international linkage mech anism to the date of the 
first national marketing authorization granted in either  the EU or in the EEA. Additionally, in the field 
of international copyright, the term of prot ection is often set in accordance with the Berne 
Convention's "rule of the shorter term" such that the term of protection in one country is linked to the 
term of protection in another count ry. Similarly, trademarks regist ered through the Madrid Agreement 
and patents registered through the European Patent Convention are subject to "central attack" through 
which a cancellation of rights in one forum may a ffect a concurrent cancellation of rights in other 
countries. Hence, it can not be said that internatio nal linkage mechanisms are inconsistent with the 
territorial nature of intellectual property rights. 
Question by the United States: 
According to the Government Report, "It should be noted that the protection of intellectual property 
rights is not only through specific intellectual pr operty law legislation, but also additional and 
overlapping protection can be obtaine d, in appropriate circumstances, pursuant to other legislation 
such as the Commercial Wrongs Law, the Civil Tort s Ordinance, the Law Against Unjust Enrichment 
and the Consumer Protection Law." Please explain how these laws overlap with copyright law in particular. 
Answer: 
In addition to dedicated intellectual property legisl ation, the courts, where deemed appropriate, may 
rely on other legislation, such as the Law Agai nst Unjust Enrichment, to provide additional or 
overlapping protection. For example, in 1997 the Israel Supreme Court held that in certain circumstances authors of registerable designs w ill be entitled to protection against copying even 
where the author failed to seek registration of his design.  
Question by the European Communities:  paragraph 121:  
Patents are granted for 20 years from the date of  filing and patents for medicaments may be extended 
for an additional five years. 
− Would Israel agree that this new legislation on Patent Term Extension could narrow the 
possibility for international phar maceutical companies to extend the patent protection period of  WT/TPR/M/157/Add.1 
 Page 53 
 
 
 their medicines in Israel, to additional 5 years, if it is conditioning to a parallel extension in a 
number of recognized countries? 
− If so, what kind of measures do the Israeli aut horities intend to take to preserve the rights of 
international pharmaceutical companies? 
Answer: 
No. The recent amendment of the Patents Law restor es the legislator's 1998 original intent, albeit with 
two notable exceptions added by the Knesset in the c ourse of parliamentary debate. In the first, which 
was made at the behest of the innovator pharmac eutical industry, the list of potential reference 
countries, both with respect to foreign marketing a pprovals and extension term s, have been narrowed 
from all WTO member states to a finite list of 21 industrially developed countries. This narrowing of 
the list of reference countries was done at the requ est of the innovator pharmaceutical companies and 
will, inter alia, reduce administrative hurdles and, in some instances, lead to longer  extension terms 
than would have been possible under the 1998 law. Also at the request of the innovator 
pharmaceutical companies the time period in which to submit an extension application was significantly increased.  
The second change is largely procedural and requ ires that as a precondition for making an extension 
term application in Israel that the application makes reference to corresponding extension orders 
granted in the United States and in one European  Union member state (that was a member as of 
2004). Such precondition is dependent upon that the pharmaceutical product with respect to which the 
supplementary protection is sought  was approved for marketing in those countries. Where such 
approval was granted in only one of those countri es it would be sufficient to reference only that 
country in order to make an application for extens ion in Israel. The objective of this change was to 
minimize the instances in which drugs will still be pr oprietary in Israel, while generic versions of 
those same drugs may already be available in a reference country. Initially, the public health 
authorities and the generic drug industry had demand ed a system which ensured, in all cases, that 
generic versions of drugs would be  available in Israel simultaneou sly with their earliest introduction 
anywhere outside of Israel or at the very least with their earliest introduction in an industrialized 
country. That demand was vigorously debated in th e Knesset and ultimately rejected. Consequently, 
there will be instances in which drugs will be proprie tary in Israel while generic versions of those 
same drugs are already available outside of Israel including in industrialized countries. 
Question by Canada:  Paragraph 121: 
Canada understands that Israel allows for the pre- patent expiry exploitation of a patented invention 
for the purposes of obtaining regulatory approval.   
Canada would be interested in knowing what, if  any, mechanisms are in place to prevent a 
pharmaceutical manufacturer operating under this pr ovision from entering the market with an 
infringing version of the patented invention prior to patent expiry? 
Answer: 
Israel patent law does not permit stockpiling of product during the pa tent term for commercialization 
subsequent to the expiration of the patent. Section 54A provides as follows:  
"54A. An experimental act, which is part of an effort to obtain a license to market the product 
does not constitute "exploitation of an inven tion", if the following two conditions are 
met: 
(1) the effort to obtain a license is made in order to obtain a license in 
Israel or in a country in which an experimental act on a patent protected 
invention for the purpose of obtaining a li cense is permitted before the patent 
lapses; and 
 WT/TPR/M/157/Add.1 
Page 54  
 
 (2) any product produced under the terms of this section is not used – 
both while the patent is in effect or thereafter - for any purpose other than obtaining a license as aforesaid; 
for the purposes of this section, "license" means certification permit or any other 
document required under Law in order to market the product." 
 
Question by Canada:  Table III.18:  
Canada notes that for medicaments, patents "may be extended for up to an additional five years in 
appropriate circumstances".  
Would Israel be able to provide more informa tion on the circumstances that could warrant such 
extension?  
Answer: 
Patent term extensions in Israel are available, for a term of up to five years, provided that a foreign 
corresponding patent has been extended in the Un ited States and one of  EU reference countries 
designated in the statute. Such precondition is de pendent upon that the pharmaceutical product with 
respect to which the supplementary protection is sought was approved for marketing in those 
countries. Where such approval was granted in only one of those countries it would be sufficient to 
reference only that country in order to make an a pplication for extension in Israel. The patent term 
extension granted in Israel will e xpire no later than the expiration of the earliest corresponding foreign 
patent term extension granted in any reference c ountry and no later than 5 years from grant or 14 
years from the date the drug, subject of the patent term extension, was first approved for marketing in 
a reference country.  
Question by Canada:  
Could Israel also provide more information on the procedure by which one would request an 
extension?   
Answer: 
Applications for patent term exte nsions shall be submitted within 90 days from the date of registration 
in Israel of the drug which is covered by the patent. The time for filing the application may be 
extended where circumstances beyond the applicant's control prevented timely filing.   
Questions by Canada: Table III.18:   
Canada notes that the duration of protection for industr ial designs is "up to 15 years from the date of 
application".  
Canada would be interested in knowing whether Israel gives a minimum of 10 years of protection for 
industrial designs. 
Answer: 
The maximal period of protection for design regist ration is 15 years. The period of protection is 
divided into renewable five year terms.  
Questions by Canada: Table III.18:   
Canada notes that geographical indications and appellations of origin are protected in Israel "for as 
long as they are protected in the country of origin".  
Could Israel provide more information on the scope  of protection given to geographical indications 
and appellations of origin? 
  WT/TPR/M/157/Add.1 
 Page 55 
 
 
 Answer: 
Protection for Appellations of Origin is in accord ance with the Lisbon Arrangement for the Protection 
of Appellations of Origin and Th eir International Registration. Protection is provided as against 
imitation even if the true origin of the product is i ndicated or if the appellation is used in translated 
form or accompanied by terms such as 'kind', 't ype', 'make', 'imitation' or the like. Geographical 
Indications are protected in accordance with the pr ovisions of Section 3 of the TRIPS Agreement. 
Questions by Canada : Paragraph 128:   
Canada notes that "unauthorized third party use of a patented invention is allowed in very limited 
circumstances and subject to remuneration. According to the authorities, the pr ovisions dealing with 
compulsory licensing were scaled back following Isra el’s implementation of the TRIPS Agreement in 
1999".   
Could Israel provide more information on its  provisions related to compulsory licensing? 
Answer: 
The scope and grounds for compulsory licensing  were conformed to Article 31 of the TRIPS 
Agreement in 1999. In particular, lack of local manufacture is no longer deemed grounds for 
obtaining a compulsory license, and product produced pursuant to a compulsory license must be 
primarily for the supply of the domestic market.  
COPYRIGHT  
Questions by Japan: (Pages 10 and 11, paragraph 51) 
The Report by Israel raised the "Presentation of  a Bill in 2005 to enact a new and comprehensive 
copyright law, which will consolidate and moderni ze existing copyright statutory and case law" as a 
change to its intellectual property legislation. 
Please explain the specific content of this Bill, including the main points of amendments for the 
existing copyright law. 
Please indicate the specific views of Israel on maki ng this Bill consistent with the standards of the 
WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty. 
Answer: 
The pending copyright bill follows the Anglo-American  tradition with respect to copyright law and is 
substantially similar to Israel's existing copyright law. The Bill passed its fi rst reading in the Knesset 
in 2005 and has been assigned to the Knesset's Economics Comm ittee for public hearings and 
consideration. Those hearings are expected  to continue over a long period of time.  
No formal decision has yet been made regard ing whether to accede to the WIPO 1996 treaties. 
Nevertheless the subject is under review. 
Question by the United States: 
According to Paragraph 51 of the Government Report,  Israel presented a Bill in 2005 "to enact a new 
and comprehensive copyright law, which will consoli date and modernize existing copyright statutory 
and case law." 
 Please provide an update on the status of that bill. 
 Will it provide a life-plus-70 term  for phonograms and photographs? 
 When will Israel implement the WIPO Cop yright Treaty and the WIPO Performances and 
Phonograms Treaty? 
 Does Israel intend to pass legislation defini ng the scope of liability for internet service 
providers? WT/TPR/M/157/Add.1 
Page 56  
 
 Answer:  
The pending copyright bill has passed  its first reading in the Knesset plenum and has been assigned to 
the Knesset's Economics Committee for public debate and consideration. The public hearings are 
likely to commence in the summer of 2006. It is exp ected that that the hearings will be lengthy and 
continuing.  
The Bill provides that photographs will be entitled to a term of protection of "life plus 70". 
Phonograms will be protected for a term of 50 ye ars from the date of the making of the master 
recording.  
No date has yet been set for implementation, nor has a formal decision been made to accede to the 
WIPO 1996 treaties. The subject is under review. 
Yes. Earlier this year a Proposal for a Bill for the Regulation of Electronic Commerce was published 
for comment. That Proposal for a Bill contains prov isions dealing with the scope of liability for 
internet service providers. The proposal is likely to develop further in response to comments that will 
be received.  
D
ATA PROTECTION  
Question by the United States: Regarding the protection of undisclosed data,  the Secretariat Report (in paragraph 125) refers 
to recent amendments to the Pharmacist's Ordinan ce.  The Ordinance appears to have been amended 
to restrict the issuance of marketing permits in Israel for new medical preparations based on 
confidential test data. 
Given that TRIPS Article 39.3 obligates WTO Members to protect undisclosed data from unfair 
commercial use, please explain whet her any other uses of such data  are permitted, and what those 
uses are (e.g., for the export of pharmaceuticals to foreign markets).  In addition, if any other uses are 
permitted, please explain how they can be seen to  be in compliance with TRIPS Article 39.3. 
Answer: In late March 2005 the Israel Knesset (Parliament ) enacted legislation to further enhance rights 
relating to confidential test data submitted to the Mi nistry of Health in connection with an application 
seeking regulatory approval for medicines that contain a "new chemical entity." The amendment to the Pharmacists Ordinance will provide drug innovators  with substantially enhanced rights relating to 
drugs containing new chemical entities and sets a leve l of protection for those drugs that significantly 
exceeds that which is required pursuant to Article 39(3) of the TRIPS Agreement. The new provisions 
came into force on July 1, 2005.  
Under the new law, confidential data submitted to  the Health Authority cannot be relied upon to 
approve an equivalent subsequent entry (generic) drug product for marketing in Israel, without the 
originator's permission, for a period of five and a half years from the date that such drug was first 
approved for use in a "recognized country"
1 or five years from date of re gistration in Israel, whichever 
comes first. During the exclusivity period the Hea lth Authorities will not issue a marketing approval 
which approval is a precondition for marketing in  Israel, regardless of whether the product is 
registered or not. The new amendment does not prohibit the export, during the exclusivity term, of equivalent drug products that have not yet been approved for marketing in Israel. Export permits do 
not rely on information from registrant's file, nor on the existence of that registration and are 
concerned primarily with certifying good manufacturing practices used by the manufacturer. No reliance is made of confidential test data in the i ssuance of an export permit, nor is that information 
relevant to the application for an export permit. Wh ere a Certificate of Phar maceutical Product (CPP) 
                                                     
 
1  A "recognized country", as defined in the Phar macists Regulations (Pharmaceutical Products)(1986), 
includes any one of the following countries: United States, Canada, the EU member states, Norway, 
Switzerland, Iceland, Japan, Australia and New Zealand.  WT/TPR/M/157/Add.1 
 Page 57 
 
 
 will be required by the importing country, the regula tory authorities in Israel will issue a CPP in 
accordance with the regulations of the World H ealth Organization and its model format. Said 
documentation will indicate that the export product is not  authorized for marketing in Israel. Since the 
exported product does not require ma rketing approval, nor registration in Israel, as a condition of its 
export there is no reliance on test data and no  commercial use at all of the test data.  
The statute also does not prohibit the submission of an application for the registration of a generic 
product nor its processing during the exclusivity peri od. Marketing approval for such products will 
not be issued until after the expiration of the underlying data protection period.   
Question by European Communities: 
− Could Israel further clarify wh y allowing reliance for the export of generic products should not 
be considered "unfair commercial use" of the orig inal data (in line with the wording of Article 
39.3 of the TRIPS Agreement). 
Answer: The recent amendments to the Pharmacists Ordinan ce do not permit reliance on existing registrations 
for purposes of export of a generic product during the period of protection. Since the exported 
product does not require marketing approval, nor registr ation in Israel as a condition of its export 
there is no reliance on test data and no  commercial use at all of the test data. 
T
RADEMARKS  
Question by the United States: According to Table III.18 on page 54 of the Secret ariat Report, Israel provides protection for 
geographical indications through its Appellatio ns of Origin and Geographical Indications 
(Protection) Law, 1965 as amended and the Tr ade Marks Ordinance, 1972 as amended.  Upon a 
review of these laws, it is unclear to us if the laws address the principles of priority and exclusivity 
between trademarks and geographical indications.  Sp ecifically, it is unclear if Israel's laws would 
prevent the registration and protection of a GI if it conflicted with an earlier established and 
protected trademark. 
 Please confirm that the exclusive rights of trademark owners, consistent with Articles 16(1) 
and 24(5) of the TRIPS Agreement, are protected  from confusingly similar and later in time 
geographical indications under Israel's laws by providing the means to challenge the 
protection and or registration of a later established GI on the grounds that it is 
confusingly similar to the prior trademark. 
Answer: 
Exclusive rights of trademark owners have been cons istent with Articles 16(1) and 24(5) of the TRIPS 
Agreement since 2000. The relevant legislation creat es a "first in time, first in right" principle for 
resolution of conflicts between confusingly sim ilar trademarks and geogr aphical indications.  
E
NFORCEMENT  
Question by the United States: 
In Paragraph 123 of WT/TPR/S/157, there is a referen ce to the "passing off" provision in Israel's 
Commercial Torts Law.  What are the civil and/or criminal penalties for passing off under the 
Commercial Torts Law? 
Answer: 
Passing off is a civil tort remediable by civil damages including, where appropriate, statutory 
damages. The Commercial Torts Law does not provide for criminal liability. Where deceit is involved 
unregistered marks may, in some circumstances be entitled to criminal remedies pursuant to the 
Merchandise Marks Ordinance or the Consumer Protection Law. To the extent that the trademark is WT/TPR/M/157/Add.1 
Page 58  
 
 registered criminal remedies are available pursuan t to the Trademarks Ordinance. Administrative 
remedies are also available in appropriate cas es, including seizure by the Customs authorities. 
Question by the United States: 
Please indicate whether Israeli courts are empowered  to order the destruction of goods found to be 
pirated or counterfeited, without requiring that any compensation be paid to the infringer(s). 
Answer: 
Yes. Israeli courts may order the destruction of  pirated and counterfeited goods without requirement 
of compensation to the infringer. 
Question by the United States: Are Israeli judicial authorities empowered to requi re accused infringers to produce evidence, as set 
forth in Article 43 of TRIPS?  If so, please provide copies of any statutes or other sources of such 
authority . 
Answer: 
Yes. Case law provides that defendants may be required to produce financial ledgers and other 
financial documents. 
Question by the United States: 
Are Israeli judicial authorities empowered to order pr ovisional measures, as set forth in Article 50 of 
TRIPS?  Please indicate whether prison sen tences have been imposed upon any trademark 
counterfeiters or copyright pirates in Israel , with any relevant statistics if available. 
Answer: 
Yes. The provisional measures set out in article 50 are provided for in Israeli law. Inter alia, 
provisional civil search and seizure measures are av ailable for the preservation of evidence and pre 
trial injunctions are available.  
While no formal statistics are kept on criminal enforcement of intellectual property rights, at least 15 
persons have served jail sentences ranging from several  months to two years in connection with the 
criminal infringement of copyrights and trademarks. 
Question by the United States: 
May Israeli Customs authorities act ex officio  to prevent the importation in to Israel of infringing 
goods?  If so, please provide copies of any statutes, regulations or other sources of such authority. 
Answer: 
Yes. Pursuant to section 200A et seq. of the Cu stoms Ordinance, the Customs authorities act, ex 
officio, to prevent the importation into Israel of infringing copies of copyrighted works and registered 
trademarks.  
Question by the United States: 
May Israeli criminal authorities act ex officio  in cases of criminal copyright or trademark 
infringement?  If so, please provide copies of any statutes, regulations or other sources of such 
authority. 
Answer: Yes. The police are empowered to, and regularly do, ta ke action, ex officio, against criminal copyright 
and trademark infringement. Nevertheless, follow up  cooperation is needed from rights holders in 
identifying infringing goods and providing expert testimony to that end. In addition there are special 
IP police units trained in the area of IP crimes.    WT/TPR/M/157/Add.1 
 Page 59 
 
 
 Question by the United States: 
We understand that a number of copyright infringement s committed as part of a "single group of acts" 
would constitute only one infringement under the Copyri ght Law.  Is this the case?  If so, please 
indicate whether Israel provid es deterrent-level penalties in ca ses where multiple infringements are 
committed as part of a "single group of acts." 
Answer: 
As a general rule multiple copies of a single work  made in the course of a non-continuing act of 
infringement, will be deemed as a "single infringem ent" for purposes of statutory damages that does 
not prevent the copyright owner from proving his full and entire damage with respect to each and 
every infringing act. Where the infringement constitu tes a criminal act the law provides for severe 
penalties, including up to five years imprisonment and pre trial detention, in order to create an 
effective deterrence to copyright piracy.  
Questions by Canada: Paragraph 134:   Canada notes that "the Government of Israel has launched various public awareness programs in an 
effort to generate more effective IPR enforcemen t. For example, the Ministry of Justice provides 
regular education seminar for judges, prosecutors,  government legal advisers, and customs agents".  
The Government of Canada welcomes this initiative and would like to know if Israel could provide 
more information on these programs. 
Answer: 
Criminal enforcement is coordinated through the in tegration of diverse resources connected with the 
enforcement process. The main institutional entiti es responsible for IPR enforcement include the 
Police, the Customs Authority, the State Prosecutor’s Office, the Minist ry of Justice's Legislation and 
Legal Advising Division and the Tax Authoriti es. While each of these entities has its specific 
function, integrating and coordina ting those functions and instituti ons has been achieved through the 
establishment of an inter-ministerial Enforcement Forum. 
The Forum members meet regularly to exchange in formation, experiences and to find solutions to 
legal and administrative problems that arise from time  to time. The strength of the Forum has resulted 
from its synergistic ability to better coordinate the diverse actors involved in enforcement of IPRs and 
to continually build on their respec tive cumulative experiences. The ability  to detect in real time, and 
find solutions for, unexpected enforcement problems adds great flexibility and effectiveness to the 
work of the Forum. Experience is a key factor to  achieving better results and the Enforcement Forum 
helps to ensure that accumulated experience is co nstantly being reinvested into the enforcement 
infrastructure.  
Raising awareness of IPR generally, and IPR crimes in particular, plays an integral part in changing 
public behavior as well as in changing judicial a ttitudes. Unlike other areas of law, intellectual 
property law tends to be conceptual ly more amorphous hence there has b een a need to raise levels of 
understanding of basic concepts of intellectual propert y law and in particular its criminal law aspects. 
The Ministry of Justice takes a leading role in providing on-going continuing legal education seminars 
for prosecutors, police, customs agents and governme nt legal advisers. The judiciary too engages in 
specially designed annual IPR continuing legal edu cation programs. In addition, the Ministry of 
Justice IP legal advisers lecture before Bar Associ ation groups and other re lated professional and civic 
organizations.  IPR awareness raising has been an im portant tool in sensitizing judicial and public 
attitudes to the gravity of IPR crimes.  
Question by Canada: Paragraph 135:  
Canada notes that "copyrights and trade marks have been  the areas most affected by infringement of 
IPR legislation during the period under review".  WT/TPR/M/157/Add.1 
Page 60  
 
 Could Israel provide more information on this issue?   
Answer: 
It appears that these are the areas most susceptible to large scale counterfeiting.  
PART IV TRADE POLICIES BY SECTOR 
A
GRICULTURE  
Question by the European Communities:  Report by Israel, paragraph 44 : 
Given that Israel is a net-food importing c ountry, does Israel foresee further liberalisation of 
(processed) agricultural products? 
Answer: 
Agriculture is indeed a very sens itive sector in Israel like in many ot her countries. However,   since 
the conclusion of the UR and throughout the impl ementation period, Israel has carried out a very 
practical and sensible import policy which led to liberalization of both, processed and fresh agriculture products beyond its commitments. Israel inte nds to continue with this policy in the future 
based on the circumstances. 
Question by the European Communities:  Report by Israel, paragraph 42-44 : 
Israel’s agricultural sector is to a larg e degree dependent on external factors.  
− Could Israel provide further details on how cu stoms tariffs are used in these circumstances? 
Answer: 
Israel would like to emphasize th at in the absence of meaningful domestic support in Israel, 
agricultural customs tariffs are the main policy tool used  to level the playing field. This is to allow for 
fair competition and equal to a certain degree, the co sts of imports to those of the producers in Israel 
who operate in difficult production conditions in remote areas which are of strategic importance.             
More specifically, changes in the agricultural customs tariff are made based on the world market 
prices of different products, the supply and demand curves in the domestic market and on the 
producer's profitability.         
Question by New Zealand: 
It is stated in the Secretariat report that Israel c ontinues to apply high tariffs  to agricultural products.  
We would be interested in hearing whether and how the Government of Israel intends to address this 
matter. 
Answer: 
Since the conclusion of the UR, all agricultural tariffs are bound and reduced according to Israel’s 
schedule. Some of our agriculture tariffs are ind eed high but never above their bound rates. However, 
most of the tariff items included in HS Chapters 1 to 24 are low and in many cases lower than the 
bound rates.     
• Tariffs are the main policy tool used to level the playing field to allow fair competition and 
equal, to a certain degree, the costs of imports to those of the producers in Israel who operate 
in difficult production conditions in remote areas which are of strategic importance.             
Israel does not intend to change the import policy. However; we do examine this policy from time to 
time and when needed in view of the domestic produ ction and the world markets. In this regard, it is 
worth mentioning that the current applied tariff ra tes for many agricultural products fall way below 
their bound rates.   WT/TPR/M/157/Add.1 
 Page 61 
 
 
 Israel is a net-food importing country with agricultu ral imports that have reached 60% of the total 
agriculture production value and maintains a very bala nced agricultural policy to secure this important 
sector and its many challenges, using tariffs as the main policy tool.   
Questions by Argentina: 
Respecto a los pagos realizados en caja verde, si podría  aclarar bajo cuáles criterios de la caja verde 
se aplican los pagos a los Kibuttzin y Moshavim . ¿Cuáles son las medidas de ayuda que se 
implementan para estos programas ? ¿Qué porcentaje de los pagos  por caja verde corresponden a 
estos planes? 
Answer: 
With regard to the green box expenditure and crite ria for support to Kibbutzim and Moshavim- this 
support measure complies with the basic requirement of the green box since this support measure does 
not have effects on production. It is provided through a publicly-funded government program, not 
involving transfer from consumers and the support do es not have the effect of providing price support 
to producers.      
This support program was created at the end of the nineties to assist the Kibbutzim and Moshavim in 
certain geographical regions with a definable economic and administrative identity. These are 
payments under regional assistance programmes that  do not relate to, nor are based on, the type or 
volume of production.  The amount of these payments in  any given year does not relate to, or is based 
on domestic or international price therefore they  fall under Annex 2 Paragr aph 13 to the Agreement 
on Agriculture. 
This governmental financial assist ance program has now re ached its final stage and will be terminate 
in the near future.  
The percentage of this measure out of the to tal green box expenditure was around 37% in 2003. 
En relación a AGREXCO, mencionan que se maneja bajo criterios comerciales. ¿Tiene AGREXCO 
algún poder de exclusividad en la compra o ven ta de productos agrícol as? Siendo 50% de los 
productores y 50% del Estado, ¿cómo se dirime un even tual conflicto? ¿Cuánto ha sido el aporte del 
Estado de capital a esta empresa desde que fuera cr eada hasta la fecha? En su caso, ¿han notificado 
las ayudas concedidas a los exportadores como s ubsidios a la exportación? ¿son los créditos a la 
exportación subsidios a la exportación? 
Answer: 
Regarding AGREXCO – this export entity doesn’t have any exclusive power in purchasing or selling 
of agricultural products. The fact that it is owne d 50/50 by the government and the growers, doesn’t 
create hypothetical or practical conflict since te ns of other exporters operate very successfully 
alongside AGREXCO, representing exporters from differe nt part of Israel and producers of a wide 
variety of products (fruit, vegetable , flower etc.).  
During the last decade, the government hasn’t exte nded any exclusive capital or financial assistance 
program to AGREXCO on the contrary, the government  promoted a legislative procedure to enable 
tens of exporting companies to export.   
Exporting companies such as AGRIOR, MEHADRIN, and PRI-OR, ARAVA etc. are operating very 
lucratively as a result.   
With regard to export credit and export subsidi es- Israel does not have export credit scheme or 
program and export subsidies when given, are given to producers and notified to the WTO 
accordingly. These amounts fall far  below Israel’s commitments and are very small in relative or 
absolute terms .                      WT/TPR/M/157/Add.1 
Page 62  
 
 M
INING AND ENERGY  
Question by Brazil: IV (3)(ii), paragraph 34 
The report highlights that the Israeli Government star ted preparations to open the electricity industry 
to competition by setting rules for co-generation of electricity by private companies.  Could Israel 
provide additional information on the reforms adopted to reach this objective? 
Answer: 
In December 2004, the Minister of National In frastructures promulgated new regulations – The 
Electricity Sector Regulations (Co-generation) 2004 – under which the "vital services provider" (the 
utility or after electricity sector reform the transm ission or a distribution company) is required to 
purchase a certain percentage of the electricity pr oduced by a co-generation unit of a independent 
power producer (IPP), should the said producer wish to  sell to it. The concept is to provide a safety 
net for the IPP should it be unable to sell all the elect ricity it produces to an end user (or consume it 
by itself).  The scope of the "safety net" depends  upon the power line to which the co-generator is 
connected: 100% for high tension; between 20% an d 70% for super high, depending upon the period 
of purchase obligation (70% if 12 years, 50% if 18  years) and the time of purchase (the foregoing 
percentages for peak and shoulder, 20% for other times). 
SERVICES  
Question by Brazil: WT/TPR/S/157, IV (5) (i) 
What is Israel's evaluation of the contribution of  bilateral and regional trade agreements to liberalise 
trade in services? 
 
Israel’s bilateral and regional trade agreements main ly cover liberalization in trade in goods. Trade in 
services within the framework of those agreements is covered by the GATS. 
Questions by Japan : 
With regard to the liberalization of the services sector, Japan recognizes that it will highly contribute 
to enhancing the competitiveness of the manufacturing  sector to advance the efficiency of distribution 
services. 
As for the liberalization of distribution services, please indicate the specific views of Israel. 
(Page 75, paragraphs 58 to 59)  
 Israel does not make commitments for commissi on agents’ services and franchising in the initial 
offer. 
 Does Israel plan to make commitments fo r commission agents’ services and franchising? 
(Page 82 to 83, paragraph 106) According to the Report by the Secretariat, th ere are no restrictions on the supply of auxiliary 
services, which is open to Israeli and foreign companies.  However, Israel does not make 
commitments for any maritime transport services. 
Please explain the reason why Israel does not make commitments for any maritime services. 
Answer: 
Israel is committed to further liberalization of th e world services markets.  Israel was one of the 
members that submitted their initial offer in time a nd is now ready to negotiate further commitments, 
in the light of developments in the DDA as a whole.  We are satisfied with the fact that request and 
offer approach remains as the core method for the conduct of ne gotiations. We received several 
questions from Japan regarding our offer. We feel th at the suitable forum for negotiating Israel's offer 
in the services sector is through bilateral c onsultations and negotiati ons conducted under the  WT/TPR/M/157/Add.1 
 Page 63 
 
 
 framework of the Council for Trade in Services. We are ready and willing to meet with Japan and 
discuss their interests in Israel's offer bilaterally.  
Having said that, we would like to note that in th e liberalization of distribution services, which we 
agree could enhance the competitiveness of the manuf acturing sector, we would prefer to relate to 
distribution visa-a- vis specific manufacturing secto rs and in terms of the differing levels of 
distribution. The CPC is actually set out in th at way since each sector has its own regulatory 
characteristics and it would be difficult to bind across the board for all distribution services and at all levels of distribution. 
F
INANCIAL SERVICES : 
BANKING  
Questions by the European Communities: 
− Could Israel please explain whether foreign-owne d financial institutions may engage in trading 
of derivative products, exchange rate and in terest rate instruments and other negotiable 
instruments, and in pension fund management  (considering these activities are not committed by 
Israel)? 
Answer: A commercial bank in Israel is permitted to engage  in the trading of derivative products, exchange 
rate and interest rate instruments and other ne gotiable instruments (subject to adherence to the 
germane laws and directives) and there is no di scriminative treatment be tween a foreign-owned  
financial institution and a domestically -owned fi nancial institution in th is regard. Pension fund 
management is not a permissible activity for dome stic banks and hence neither for a foreign-owned 
bank. 
Generally speaking, foreign-owned fi nancial institutions are able to e ngage in the trade of securities 
and derivatives. For most securities market activities (including derivatives) foreign institutions are on 
equal footing with local counterparts. There are no restrictions on these institutions from dealing on 
their own account. Subject to the relevant prosp ectus regulations (which apply to domestic and 
foreign issuers alike), they can offer and list new products on the Tel Aviv St ock Exchange to Israeli 
and foreign investors. In addition, if they issu e instruments that qualify as securities of a company 
listed on in the NYSE, AMEX, NASDAQ (National Ma rket and Capital Market Lists) or London 
Stock Exchange Main Market they may enjoy dual listing relieves. Foreign banks are eligible to 
acquire a seat on the Tel Aviv Stock Exchange. To da te, they are required to establish a local branch. 
However measures to enable remote membership ar e currently in process. Currently UBS, Deutsche 
Bank and HSBC are members of the Tel Aviv Stock Ex change. In order for a foreign bank to engage 
in retail investment advice, financial product marke ting or portfolio management, it must establish a 
company incorporated in Israel with at least one employee licensed by the Israel Securities Authority 
to engage in investment advice, investment market ing or portfolio management in Israel. Should the 
financial institution wish to set up an exchange fo r derivatives or other fina ncial products or offer 
direct public access to online exchang es, this will require licensing by the Israel Securities Authority.  
Israel's Ministry of Justice has drafted legislation that is expected to enhance the market for SWAPs 
and REPOs. Accordingly, the opportunities for forei gn players in this field are likely to experience 
accelerated growth. 
Regarding pension fund management, anyone wishing to hold more than 5% of the means of control a 
pension plan management company, must first obt ain a permit from the Insurance Commissioner. The 
same criteria for obtaining such a permit apply to  both residents and non-residents of Israel.   
− Could Israel please indicate whether reside nts may consume financial services abroad, and 
whether cross-border consumption is permitte d for advisory and other auxiliary financial 
services? WT/TPR/M/157/Add.1 
Page 64  
 
 Answer: 
Residents may consume financial ser vices abroad without any limitations of foreign currency control 
as we have lifted all these restrictions. Cross-borde r consumption is permitted for advisory and other 
auxiliary financial services. 
Question by Japan: IV (5)(ii), paragraph 64 
According to the Secretariat report, "Israel has rece ntly initiated a set of reforms aimed at reducing 
the predominance of banks and opening the industry to  greater competition...".  Could Israel give us 
an assessment of the progress achieved so far? 
Answer: 
One of the central provisions of the Bachar legislati on of July 2005 instructed  the banks to sell off the 
provident funds and mutual funds which they owned and managed.  The size of such provident funds 
and mutual funds has reached approximately 265 b illion shekels (approximately 60 billion dollars). 
This amount constitutes approximately 10% of the public’s assets in the State of Israel and 
approximately 21% of the public’s assets which ar e managed by other parties (i.e., other people’s 
money).   The legislation requires that these assets are to be sold off within three to eight years 
(depending on whether the asset being sold is a mutual fund or a provident fund, or whether the selling party is a large or small bank).  In practice, within a few months it appeared that most of the 
assets held by the Israeli banks had been sold to insurance companies and a smaller portion had been 
sold to foreign investors (the York investment fund and the Markstone investment fund).  The sales 
agreements are currently being completed, and cont acts have been made regarding the sale of all the 
assets.  It is estimated that by the end of the first half of 2006, all the sales will be finalized, due to the 
banks’ interest in entering, for the first time, the fi eld of pension consulting. (The legislation provides 
that the issuance of pension consulting licenses to banks will be conditioned on their having sold off 
their provident fund and mutual fund assets, as well as holdings of insurance companies).  
Question by Canada: Paragraph 66: According to the Secretariat Report, investments in the banking and insurance subsectors require 
prior government approval.   
Could Israel elaborate on the criteria used to det ermine whether the government grants approval to 
investments in the banking and insurance subsectors.  
Answer: As part of the "Bachar" capital market reforms that were recently enacted, a single set of criteria apply 
to persons wishing to invest in banks, insuran ce companies, provident fund management companies 
and pension plan management companies Investme nt that exceeds 5% of the insurer's or the 
management companies' shares, will warrant license by the Commissioner of Insurance in Israel.   
Such criteria relate to suitability of the person to  hold means of control of such institutions, past 
business experience, other business interests,  financial strength and integrity.  
Investments in the banking sector do not require prio r government approval as noted in this question. 
An investment that exceeds 5% of the bank's shares  will warrant a license issued by the Governor of 
the Bank of Israel. Financial investments under this  amount are permissible without the need for a 
permit. The Bank of Israel sets the crite ria for investing in the banking sector.  
Question by Canada: Does the Government of Israel expect  to further reduce its stake in Bank Leumi in the near future? 
Answer:  
In November 2005 the government sold 9.99% of Bank Leumi shares with an option for another 
10.01% to be exercised within 18 months conti ngent upon the buyer's ability to gain the necessary  WT/TPR/M/157/Add.1 
 Page 65 
 
 
 regulatory approvals. After this sale, the government  is currently holding approximately 14.78% of 
the bank's shares. Given that the option would be exer cised and that about 3.87% would be sold to the 
employees of the bank with a 25% discount (as usually  done in bank's privatizations in Israel), the 
government's remaining shares would equal less than 1% of the bank's capital. 
Question by Japan: (Part IV, Page 76, paragraph 66) 
According to the Report by the Secretariat, the Government owns the Industrial Development Bank 
and holds 57% shares of the Israel Discount Ba nk and 25% shares of the Bank Leumi. 
Does Israel plan to further sell its own shares for such banks and to further promote the liberalization 
of the banking sector?  If any, please indicate them. 
Answer: 
With regards to Israel Discount Bank (IDB) -in Ja nuary 2005 the Government has sold 26% of the 
shares of IDB with an option for another 25%. Given that the option would be exercised, the 
Government will hold some 6% of the Bank's shares. It is expected that the remaining shares will be 
sold through the market in the future. 
With regard to Bank Leumi - a share package that cons ists of  9.99% of the share capital has been sold 
by the Government to a private investment fund. An option to purchase an additional 10.01% of the 
share capital was extended to the aforementioned pa rty and can be exercised within 180 days from 
date of sale with a clause permitting an extension of another 12 months.  
With regards to the Industrial Development Bank ("the bank") - resolutions nos. 26 & 173 of the 
Ministerial Committee of Economy and Social Affairs,  determined that the bank's activity be reduced 
and that  all the bank assets, will gradually be sold , to a full reduction of the activities until 31.7.2008. 
Oral Question by the People’s Republic of China: What are the procedures for the estab lishment of a foreign bank in Israel? 
Answer: 
The establishment of a bank, a branch or a subsidia ry by a national or a foreigner requires a license 
from the Governor of the Bank of Israel. The speci fic requirements are listed in Chapter 4 (ii) 
paragraph 72. More detailed in formation can be found on the we bsite of the Bank of Israel: 
www.bankisrael.gov.il. 
 INSURANCE  
Questions by Canada: Paragraph 83: Paragraph 83 indicates that foreign-owned companies face the same legal obligations as Israeli-
owned companies, while the footnote to Paragraph 83 highlights that the reinsurance business in 
Israel does not face any restrictions. 
Could Israel please specify whether foreign reins urers must register in an Israeli Reinsurance 
Registrar?  Do domestic rein surers face a similar requirement? 
Answer: 
There is no Israeli Reinsurance Registrar. However, ceding Israeli insurers must report periodically to 
the Insurance Commissioner regarding th eir exposure to every reinsurer.  
Could Israel also explain what obtaining ‘Certifie d Foreign Reinsurer’ status entails? The Insurance 
Commissioner neither defines nor uses the stat us of ‘Certified Foreign Reinsurer’.  
Answer: 
The choice of reinsurer lies entirely in the ha nds of the ceding Israeli insurance company. 
 WT/TPR/M/157/Add.1 
Page 66  
 
 Questions by European Communities:  WTO Secretariat’s Report, paragraph 85:  
Except for the compulsory part of ca r insurance, which has to be written in Israel, all other private 
insurance can be bought anywhere in the world.  
− Considering that Israel has not made full commitm ents in Modes 1 and 2, could Israel please 
confirm that there are no longer any restrictions  on insurance provision under Modes 1 and 2, 
including for services auxiliary to insuran ce and including the possibility to conduct active 
marketing?  
Answer: 
A foreign insurer that wishes to operate in Israel must establish a corporate presence in Israel which in 
turn must obtain a license to provide insurance servi ces.  That is to say that cross-border supply of 
insurance services in Israel, including active marketing,  is not currently permitted.   A resident of 
Israel is permitted to acquire insurance from a fore ign insurer in a transaction made outside of Israel.  
Furthermore, according to footnote 20, re insurance business is free of restrictions.  
− Could Israel please clarify whether it has intr oduced any registration requirements, and, if yes, 
what such registration entails? (The Israeli Schedule notes that Israel intends to enact 
regulations requiring registration of Certified Foreign Reinsurers in an Israeli Reinsurance 
Register.)  
Answer: Reinsurance companies are not subject to registration or licensing requirements in order to operate in 
Israel. An Israeli insurer that cedes insurance oblig ations to reinsurance companies must report to the 
Insurance Commissioner regarding the exte nt of its exposure to each reinsurer.  
T
RANSPORTATION  
Questions by the European Communities:  
WTO Secretariat’s Report, paragraph 86: Ground hand ling is undertaken by private operators.  
− Do any restrictions apply if foreign companies want to invest in this services activity?  
Answer: 
There are no restrictions on foreign companies regarding investment in ground handling.  However, 
there are criteria to be met, such as experience and minimum volume of operation (these criteria apply 
to local companies as well).  In addition, securi ty clearance must be obtained from the relevant 
authority. 
WTO Secretariat’s Report, paragraph 105:  New reforms were recently intr oduced in the maritime 
transport area, which underlines the openness of the existing legislation in this area.  
− Would any existing legislation limit foreign partici pation in the transport of cargo to and from 
Israel?   
Answer: There are no limitations on foreign participation in  the transport of cargo to and from Israel.  
WTO Secretariat’s Report, paragraph 106:  Isra el does not have any restrictions on foreign 
participation, and all services are available to users on an equal basis, in the following activities in 
the context of maritime transport: cargo-handling (CPC 741), storage/warehousing (CPC 742), and 
freight forwarding activities (CPC 748).  
− Can Israel confirm that it grants full MA and NA-treatment for these activities? 
− Which restrictions, if any, apply for these activities when used for all modes of transport?     WT/TPR/M/157/Add.1 
 Page 67 
 
 
 Answer: 
Due to physical constraints, limitations on acc ess to ground handling activities in ports (CPC741) 
apply both to foreign and local companies as well. The criteria used to allocate such limited access are 
the same as provided above. 
Israel grants full market access and national treat ment to storage/warehousing (CPC742) and freight 
forwarding activities (CPC748) once certain professional and security criteria are fulfilled. 
TELECOMMUNICATION AND POSTAL SERVICES  
Questions by Canada: Paragraph 109: The Secretariat Report states that between 1999 a nd 2004, competition was either introduced or 
increased in almost all teleco mmunications service segments. Paragraph 117 indicates, however, that 
in the domestic telephony subsector, the incumbent maintains more than 90% of the market share.   
Could Israel provide the percentage of market share maintained by th e incumbent in other 
subsectors?  
Answer: 
In mobile services incumbency is not relevant, as th ere has always been structural separation between 
Bezeq, the domestic fixed line incumbent, and its m obile subsidiary, Pelephone , which currently holds 
approximately 30% of the market. 
In the subscriber, multi-channel TV market, the in cumbent cable operator HOT, which was formed by 
the merger of the 3 former regional incumbents, currently holds approximately 70% of the market, 
with the other 30% held by the satellite provi der YES, which is a subsidiary of Bezeq. 
In international telephony and the provision of high-speed internet, there has been structural 
separation between Bezeq and its subsidiary, Bezeq  International, since 1997, when competition was 
first introduced in the international telephony mark et. In these markets there is vigorous competition, 
with Bezeq International holding approximately on e third of the market for international telephony 
and approximately 40% of the market for high-speed internet. 
Could Israel indicate whether any of the teleco mmunication operators are Foreign Service providers?  
Answer: 
At various times, Israeli operators have been held by foreign companies (including BellSouth, 
Telecom Italia, and others). Today, Partner Communi cations is materially held by Hutchinson, which 
owns mobile providers worldwide.  Foreign capital is heavily invest ed in Bezeq and international 
operator X-Phone.  
Does Israel have any plans to further promote competition in this sector?  Answer: 
Yes. The Israeli Regulator continues to maintain a pro-competition policy in the telecommunications 
sector. The Israeli Regulator has lowered entry barrier s in the domestic fixed line market by adopting 
a Specialized Domestic Telephony Provider License, which does not require the operator to provide 
universal service. The STDP License was inaugurated  in 2004 and, the first license was issued in 
December 2005. Several additional applications for STDP Licenses have already been filed and are 
under consideration by the Regulator . Israel is also in the process of introducing number portability, 
which should be inaugurated by the end of the 2006.  In addition, the Israeli Regulator plans to 
leverage the technological maturity of Voice-Ov er-Broadband (VoB) services, along with the wide 
adoption of broadband internet, in order to en courage new entrants to the wireline market. WT/TPR/M/157/Add.1 
Page 68  
 
 Question by Canada: Paragraph 109: 
Israel’s current schedule of commitments for th is sector includes various limitations due to the 
previous monopoly.   
Does Israel have plans to remove these limitations during the current round of services negotiations? 
Answer: 
Israel believes that the suitable forum for negotiating Israel's offer in the telecommunications sector is 
through bilateral consultations and negotiations conducted under the framework of the Council for 
Trade in Services. Israel is ready to look carefully  at requests from its trading partners, but Israel's 
readiness to take on further obligations is depe ndent on the benefits it will derive from the 
negotiations.  
Questions by Canada: Paragraph 111: The Secretariat Report states that Israel has pursu ed progressive liberalization and privatization in 
its communications and informa tion technology subsector.   
Could Israel provide details of the measures ta ken towards liberalizing the information technology 
subsector, including any measures taken to support electronic commerce? 
Answer: In Israel, the Ministry of Communications regulates telecommunications services, the Ministry of 
Industry, Trade and Labor deals with the information technology subsector and the Ministry of Finance is responsible for the implementation of E- Government services, which are now utilized at a 
significant and increasing rate. Due to the high pene tration of broadband internet, the already high 
level of information technology in the Israel economy,  and the fact that Israelis tend to be "early 
adapters" of new technologies few specific regulator y measures have been needed to support the use 
of IT in Israel.  
Several laws exist dealing with the subject of e- commerce: the Consumer Protection Law of 1983 
contains provisions regarding c onsumer to business relations for "distance sales transactions", which 
include transactions concluded by electronic means.  
 The Electronic Signature Law of 2001 covers certain legal aspects of the use of electronic signatures.  
In addition, a bill entitled the Electronic Commerce La w has recently been prepared by the Ministry 
of Justice, which comprehensively deals with  civil law aspects of e-commerce including the 
enforceability of electronic contracts, liability of in ternet service providers, protection of privacy etc. 
Questions by Canada: Paragraph 111 : 
The Secretariat Report refers to the adoption of a regulatory regime suitable for a multi-operator 
environment.   
Could Israel elaborate on the elements of this regime? Answer: 
Telecommunications competition in Israel was alre ady based on independent infrastructures. The 
regulation for multi-channel, subscriber TV was revi sed allowing cable TV networks to be used for 
the transmission of telecommunications services and a license was issued to Bezeq subsidiary YES 
for satellite broadcasting.  Experimental VOB-tel ephony licenses have been issued, the first SDTP 
license has been issued and additional applications ha ve been filed, regulations have been updated to 
allow for mandated interconnection between wi reline providers, as we ll as to mandate non-
discriminatory policies by the incumbent.   WT/TPR/M/157/Add.1 
 Page 69 
 
 
 Questions by Canada: Paragraph 112: 
The Secretariat Report states that regulatory functions are exercised by the Ministry of 
Communications.   
Could Israel confirm that the Ministry is independe nt from the service providers, as required in the 
reference paper on telecommunications? 
Answer: The Israel Ministry of Communications is entirely independent from service providers and functions 
solely in the public interest. Bezeq, Israel’s  fixed line domestic monopolist was established as a 
government corporation in 1984. In 2005 the Govern ment of Israel completed the privatization of 
Bezeq, selling 30% of the company to private inte rests, who have an option to purchase another 
10.66% of the company, leaving the Government with  a 1.01% stake in Bezeq.  Subject to the above, 
the Government of Israel does not hold an interest , financial or otherwise, in any service provider.  
The Secretariat Report states that according to  Israel’s Communications Law, any licence and 
change thereof must contribute to competition in the field of telecommunications.  
Could Israel explain the criteria used in de termining whether a licence will contribute to 
competition?  
Answer: 
The Israeli Regulator takes a wide view of the requirement to foster competition, and generally 
believes that new entrants will increase effec tive competition in the sector. Exceptions include 
significant players in one market (wireline, mobile ) attempting to expand into much smaller markets 
(international, ISP, etc.) where they are likel y to dominate and threaten existing operators.  
The Secretariat Report also states that a licensee must fulfil certain prerequisites, with requirements 
varying from one licensee to another.   
Could Israel elaborate on what prerequisites must be  fulfilled, and how they are determined for each 
licensee? 
Answer: 
Prerequisites for each license are determined in  Regulations issued by the Minister of 
Communications by virtue of his authority under the Communications Law. Prerequisites typically include adequate financial resources, ownership rest rictions (various license holders are not allowed 
to hold multiple licenses or different types of li censes), as well as possession of the technical ability 
and experience necessary to provide services.  
Paragraph 112 also states that licences may be revised or cancelled if an operator becomes anti-
competitive or unfit to handle telecommunications.   
Could Israel specify what types of anti-compe titive practices may result in a revised or cancelled 
licence?   
Answer: 
Anti-competitive practices, as defined by the releva nt legislation, include discriminatory pricing, 
failure to interconnect, forced bundling, use of rest rictive agreements, and other such practices. The 
Regulator has a number of different sanctions ava ilable to it in order to deal with anti-competitive 
practices, and has not yet had to make use of the most severe sanction at its disposal, namely its authority to cancel a license.   
Could Israel also detail the factors used to  determine whether an operator is unfit to handle 
telecommunications? WT/TPR/M/157/Add.1 
Page 70  
 
 Answer: 
The fitness of a Licensee to provide telecommunicati ons services is generally evaluated on the basis 
of its upholding the provisions of its license, including technical standards of quality (uptime, completed calls, etc.) as well as standards of cu stomer service and support (support calls answered 
promptly, billing statements which c onform to relevant standards, etc). 
Question by the United States: Paragraph 112 on page 86 of the Secretariat Repor t explains that the Ministry of Communications 
exercises all regulatory functions in the telecommunications sector.  
 Is Israel considering creation of an independent  telecom regulator in the near future? 
Answer: 
There are long-standing plans to create an indepe ndent Israel Communications Authority. A bill to 
this effect was recently prepared by the Finan ce Minister and brought before the Ministerial 
Committee on Legislation, where it awaits approval,  before being submitted to the K’nesset by the 
Government. We should point out that aside from a 1.01% stake in Bezeq, which the Government will 
hold after the realization of all options granted as  part of the Bezeq privatization, the Israeli 
government does not hold an interest in any telecomm unications operator, financ ial or otherwise, and 
therefore, although the telecommunications regulator in Israel is a government ministry, the Ministry of Communications is entirely independent of industry players. 
Question by the European Communities: 
WTO Secretariat’s Report, paragraph 113: The Communications Law was amended and a revised 
licensing regime was introduced in August 2001. The re is however no indication as to what types of 
licenses is provided by the current regulatory framework in Israel.  
− Could Israel specify? 
− Could Israel clarify which is its  definition of a "major supplier"? 
There is no reference to the allocation of scarce res ources and in particular to the procedures to be 
followed for such allocation.  
− Could Israel provide information on these points? 
Answer: 
The Israeli regulatory framework recognizes (gener ally) 6 types of "General" licenses for the 
provision of telecommunications or broadcasting services:  
• DTP – Domestic Telephony Provider (fixed line), which includes a universal service 
requirement. 
• SDTP – Specialized Domestic Telephony Provider (fixed line) – this license does not require 
the operator to provide universal service. 
• MTP – Mobile Telephony Provider. 
• ITP – International Telephony Provider. 
• BL – Broadcasting License (for cable and sate llite subscriber, multi-channel  television). 
In addition, "Special" licenses are issued for the provision of specific telecommunications services, 
including, for example, internet access (t he Internet Service Provider license).  
Due to the structure of the various markets, Israel has not felt a need to develop rigid rules in order to 
define what constitutes a "Major Supplier". In the mobile market, for instance, there is competition 
between equals, with each supplier holding approxim ately 33% of the market, whereas in the fixed  WT/TPR/M/157/Add.1 
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 line market the incumbent is defined as a monopoly by  the Israel Antitrust Authority, and is therefore 
deemed to have significant market power. As co mpetition in the fixed line segment increases, the 
Israeli Regulator will develop a more formal SMP scheme. 
The Israeli Regulator allocates scarce resources, such as spectrum and numbering, in various ways. 
Wireless bandwidth is usually allocated by auc tion, and incurs relatively low annual usage fees. 
Numbering is dispensed by the Regulator on an "as needed" basis in acco rdance with the National 
Numbering Plan, with lotteries used to dete rmine priority when conflicts arise.  
Questions by the United States: 
Paragraph 115 on page 86 provides details on facilities- based fixed services operators. 
 Does Israel provide licenses to non-facilities based operators?  If so, for what services? 
Answer: Pursuant to the report of the Public Commission on the Introduction of Competition in Wireline 
Services 2002 (the "Kroll Commission"), competition in Israel is based on independent facilities, 
including "last mile" infrastructure. Local loop unbundling has not  been mandated, owing to 
geographical and demographic factors. However, the incumbent must offer data lines and other 
services to competing operators at non-discriminatory pr ices, for use as internal elements in their own 
network.  
 Is resale permitted?  If it is, is it allowed fo r both public and private voice telephone services? 
Answer: 
Resale (without a license) is permitted in internationa l dialing, as well as voice services on mobile 
networks. A special type of license exists ("CPE License"), which allows for the provision of 
consumer premise equipment as well as resale of landline services.  
Question by the European Communities: 
WTO Secretariat’s Report, paragraph 117:  "interc onnection tariffs are generally supervised by the 
regulator".  
− Is there any obligation to ensure the cost-orientation of such rates?  
− If not, how can it be guaranteed that interc onnection rates are not excessive esp. in connection 
with the market power that possibly a network operator would have in a particular market? 
− In guaranteeing transparency of interconnecti on agreements are there any obligations for 
making them publicly available/prov ided at the request of a party? 
Answer: 
In Israel, interconnection tariffs for the most common  types of interconnection are set at fixed prices 
by the regulator, and are not subject to negotiations  between operators. The regulator sets tariffs using 
cost-oriented methodologies, specifically, a bottom-up LRIC model (developed by the regulator, with 
the assistance of a consultant) for cellular interconnection, and a cost model based on historical cost 
accounting for landline services.  
There is no obligation to make interconnection agreements public, however, interconnection tariffs 
are set in regulations, issued by the Minister of Communications by virtue of his authority under the 
Communications Law, and are thus in the public domain. 
 
 
 WT/TPR/M/157/Add.1 
Page 72  
 
 Question by Canada: Paragraph 117: 
The Secretariat Report states that the pricing system  for telecommunication services is divided into 
two categories, one of which is for the supervised market.   
Could Israel please explain what constitutes the "s upervised market"? Does this term refer exclusively 
to the incumbent, or does it include the notion of a major supplier, as defin ed in the reference paper? 
Answer: Currently, the "supervised market" includes onl y the incumbent, in areas where significant 
competition has not materialized, namely: Bezeq, whic h has more than  90% of the market share in 
domestic fixed-line telephony and a roughly 66% share in the provision of high-speed internet, and HOT, which has a 70% market share in multi-channel,  subscriber TV. If and when other players are 
recognized as being "major suppliers", remedi es including price controls, may be considered. 
P
OSTAL SERVICES  
Question by European Communities: 
− WTO Secretariat’s Report, paragraph 121-122: Co uld Israel specify the specific steps of the 
liberalisation plans of the postal services sector, which will lead to full liberalisation by 2010? 
Answer: The schedule for the liberalization of the postal services sector is as follows: 
 In March of 2006 one half of the bulk mail segment will be opened to competition, with the division 
being based on industry groups (banks, government offices, etc.) 
• At the end of 2007 all bulk mail will be open to competition. 
• At the end of 2009 additional segments (services,  smaller lots) will be opened to competition 
as well. 
 As part of the postal service liberalization scheme, Israel’s Postal Authority, currently a statutory 
Authority, is due to be reorganized as a government  corporation in the near future. 
M
OVEMENT OF FOREIGN EXECUTIVES , MANAGERS AND SPECIALISTS  
Question by Korea: 
Foreign professionals seem to have a hard time to move into Israel owing to the Israeli government's 
complicated permission standards.  Israel appli es a very strict set of rules when a foreign 
professional attempts to obtain a visa to work in the country or to extend an existing one.  Israel 
allows foreign executives to extend an existing visa  only for 5 years.  What plans does the Israel 
government have to ease these standards or types of restrictions?  
Answer: 
Israel conducts its policy of entry of foreign worker s in line with its WTO obligations and in fact in 
many cases allows for more flexibility than its GATS committment. 
Subject to Israel’s commitments under the GATS, there are no limitations on the temporary entry of 
executives and managers as intra-corporate transfers;  and work permits to intra-corporate specialists 
are issued in compliance with labour  market tests.  Furthermore, in  the last few years Israel has 
established special procedures applicable to fore ign executives, managers and specialists, seeking 
work permits in Israel. To ensure easy entry, applications regarding executives and professionals of 
international firms are forwarded by the Foreign Wo rkers Unit in the Ministry of Industry Trade and 
Labor (MOITAL) to the Foreign Trade Admini stration at MOITAL for recommendations. The 
Foreign Workers Unit director personally approves app lications. All this information is available in 
English on the web site of Israel's Investment  Promotion Center: http://www.investinisrael.gov.il.  WT/TPR/M/157/Add.1 
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 Concerning the extension of visas for 5 years, curre nt law allows for extension of such visas for 
foreign executives and professionals in special cas es, and the relevant ministries are considering 
regulations which will automatically allow certa in categories of executives and professionals to 
extend working visas for additional periods. 
  
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