AGREEMENT BETWEENJAPAN AND THE STATE OF ISRAELFOR THE LIBERALIZATION,PROMOTION AND PROTECTION OF INVESTMENT

AGREEMENT BETWEENJAPAN AND THE STATE OF ISRAELFOR THE LIBERALIZATION,PROMOTION AND PROTECTION OF INVESTMENT

The Government of Japan and the Government of theState of Israel respectively on behalf of Japan and theState of Israel (hereinafter referred to as “theContracting Parties”),
Desiring to further promote investment in order tostrengthen the economic relationship between theContracting Parties;
Intending to further create stable, equitable,favorable and transparent conditions for greater investment
by investors of one Contracting Party in the Territory of
the other Contracting Party;
Recognizing the growing importance of the progressive
liberalization of investment for stimulating initiative ofinvestors and for promoting prosperity in both Contracting
Parties; andRecognizing that these objectives can be achieved
without relaxing health, safety and environmental measuresof general application;
Have agreed as follows:
SECTION I
INVESTMENT
Article 1
Definitions
For the purposes of this Agreement:(a)the term “investment” means every kind of asset
made in accordance with applicable laws andregulations, owned or controlled, directly or
indirectly, by an investor, including:(i)an enterprise and a branch of an enterprise;(ii)

shares, stocks or other forms of equity
participation in an enterprise;- 1 -(iii)

bonds, debentures, loans and other forms of
debt;

(iv)

futures, options and other derivatives;(v)

rights under contracts, including turnkey,
construction, management, production orrevenue-sharing contracts;(vi)

claims to money and to any performance undercontract having a financial value;(vii)

intellectual property rights and goodwill;(viii)

concessions, licenses, authorizations,permits and similar rights conferred by laws
and regulations or under contracts,
including those for the exploration andexploitation of natural resources; and(ix)

any other movable and immovable property,
and any related property rights, such asleases, mortgages, liens and pledges;

An investment includes the amounts yielded by aninvestment, in particular, profit, interest,
capital gains, dividends, royalties and fees. Achange in the form in which assets are invested
does not affect their character as an investment.
Note:

For the avoidance of doubt in this
Article, an investment does not include:(i)public debt; or(ii)claims to money arising solely from:(A)

commercial contracts for the sale ofgoods or services by a national or an
enterprise in the Territory of aContracting Party to a national or an
enterprise in the Territory of theother Contracting Party; or(B)credits granted in relation with acommercial transaction under a contractreferred to in (ii)(A) of this note;

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(b)

the term “investment agreement” means a writtenagreement between the central or local government
or authority of a Contracting Party and an
investor of the other Contracting Party or its
investment that is an enterprise in the Territoryof the former Contracting Party, on which theinvestor or the investment relies in establishingor acquiring an investment in the former
Contracting Party;
Note:

Written agreement refers to an agreementin writing, executed by both parties,
whether in a single instrument or in
multiple instruments, that creates an
exchange of rights and obligations,binding on both parties.

For greater certainty:(i)a unilateral act of an administrative or
judicial authority, such as a permit,
license, concession or authorization issued
by a Contracting Party solely in its
regulatory capacity, or a decree, order, or
judgment, standing alone; and(ii)

an administrative or judicial consent decreeor order,shall not be considered a written agreement.
(c)the term “investor of a Contracting Party” means:
(i)

(ii)

(A)

with respect to Japan: a natural
person who is a national of Japan and
who is not also a national of the Stateof Israel; and(B)with respect to the State of Israel: anatural person who is a national or
permanent resident of the State ofIsrael and who is not also a nationalof Japan; oran enterprise of that Contracting Party,

that seeks to make, is making or has madeinvestments in the Territory of the other
Contracting Party;- 3 -(iii)

notwithstanding subparagraph (c)(i)(A), anatural person who is a national of Japanand who is also a permanent resident of theState of Israel shall not be a claimant;(d)the term “enterprise” means any legal person or
any other entity duly constituted or organizedunder the applicable laws and regulations,
whether or not for profit, and whether private or
government owned or controlled, including any
corporation, trust, partnership, sole
proprietorship, joint venture, association,organization or company;(e)the term “enterprise of a Contracting Party”
means an enterprise:(i)duly constituted or organized under theapplicable laws and regulations of thatContracting Party; and(ii)carrying out substantial business activities
in the Territory of the Contracting Party;(f)the term “investment activities” means
establishment, acquisition, expansion, operation,
management, maintenance, use, enjoyment and saleor other disposal of investments;(g)

the term “Territory” means:

(h)

(i)

with respect to Japan: the territory ofJapan, and the exclusive economic zone andthe continental shelf with respect to which
Japan exercises sovereign rights or
jurisdiction in accordance withinternational law; and(ii)

with respect to the State of Israel: theterritory of the State of Israel including
the territorial sea as well as thecontinental shelf and the exclusive economic
zone, over which the State of Israel
exercises sovereignty, sovereign rights or
jurisdiction in accordance withinternational law and the laws of the Stateof Israel;

the term “existing” means being in effect on thedate of entry into force of this Agreement;

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(i)

the term “freely usable currency” means freely
usable currency as defined under the Articles ofAgreement of the International Monetary Fund;(j)the term “the WTO Agreement” means the Marrakesh
Agreement Establishing the World Trade
Organization, done at Marrakesh, April 15, 1994;(k)

the term “the TRIPS Agreement” means theAgreement on Trade-Related Aspects ofIntellectual Property Rights in Annex 1C to the
WTO Agreement;(l)the term “claimant” means an investor of aContracting Party that is a party to an
investment dispute with the other Contracting
Party;(m)the term “disputing party” means either theclaimant or the respondent;(n)the term “disputing parties” means the claimant
and the respondent;(o)the term “ICSID” means the International Center
for Settlement of Investment Disputes;(p)

the term “ICSID Additional Facility Rules” means
the Rules Governing the Additional Facility for
the Administration of Proceedings by the
Secretariat of the International Center for
Settlement of Investment Disputes;(q)

the term “ICSID Convention” means the Convention
on the Settlement of Investment Disputes between
States and Nationals of Other States, done at
Washington, March 18, 1965;(r)

the term “New York Convention” means theConvention on the Recognition and Enforcement of
Foreign Arbitral Awards, done at New York, June
10, 1958;(s)

the term “respondent” means the Contracting Party
that is a party to an investment dispute; and(t)

the term “UNCITRAL Arbitration Rules” means the
Arbitration Rules of the United Nations
Commission on International Trade Law, as revisedin 2010.

- 5 -Article 2
National Treatment
Each Contracting Party shall in its Territory accord
to investors of the other Contracting Party and to theirinvestments treatment no less favorable than the treatment
it accords in like circumstances to its own investors andto their investments with respect to investment activities.
Article 3
Most–Favored–Nation Treatment
1.
Each Contracting Party shall in its Territory accord
to investors of the other Contracting Party and to theirinvestments treatment no less favorable than the treatment
it accords in like circumstances to investors of a nonContracting Party and to their investments with respect toinvestment activities.
2.
For greater certainty, the treatment referred to inthis Article does not encompass definitions andinternational dispute settlement procedures or mechanisms
under any international agreement or any written agreement
between a Contracting Party and an investor of a nonContracting Party or its investment that is an enterprisein the Territory of the former Contracting Party.
3.
The provisions of paragraph 1 shall not be construed
so as to oblige a Contracting Party to extend to theinvestors of the other Contracting Party and to theirinvestments the benefits of any treatment under any
bilateral or multilateral international agreement which was
in force prior to the date of entry into force of thisAgreement.
4.
The provisions of paragraph 1 shall not be construed
so as to oblige a Contracting Party to extend to investorsof the other Contracting Party and to their investments any
preferential treatment by virtue of any existing or future
customs union, economic or monetary union, free trade areaor similar international agreements to which the former
Contracting Party is a party or may become a party in the
future.

- 6 -Article 4
General Treatment
Each Contracting Party shall in its Territory accord
to investments of investors of the other Contracting Party
treatment in accordance with customary international law,
including fair and equitable treatment and full protection
and security.
Article 5
Access to the Courts of Justice
Each Contracting Party shall in its Territory accord
to investors of the other Contracting Party treatment noless favorable than the treatment which it accords in likecircumstances to its own investors or investors of a nonContracting Party with respect to access to the courts ofjustice and administrative tribunals and agencies in all
degrees of jurisdiction, both in pursuit and in defense ofsuch investors’ rights.
Article 6
Prohibition of Performance Requirements
1.
Neither Contracting Party may impose or enforce any of
the following requirements, or enforce any commitment or
undertaking, in connection with an investment or investment
activities of an investor of the other Contracting Party in
its Territory:(a)to achieve a given level or percentage ofdomestic content;(b)

to purchase, use or accord a preference to goods
produced or services provided in its Territory,or to purchase goods or services from a natural
person or an enterprise in its Territory;(c)

to relate in any way the volume or value ofimports to the volume or value of exports or to
the amount of foreign exchange inflows associatedwith an investment of the investor;(d)to restrict sales of goods or services in its
Territory that an investment of the investor
produces or provides by relating such sales inany way to the volume or value of its exports orforeign exchange earnings;(e)to restrict the exportation or sale for export;

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(f)

to export a given level or percentage of goods orservices;(g)to transfer technology, a production process orother proprietary knowledge to a natural person
or an enterprise in its Territory, except thoseundertaken in a manner not inconsistent with the
TRIPS Agreement;(h)to adopt:(i)

a given rate or amount of royalty under alicense contract; or(ii)

a given duration of the term of a license
contract,in regard to any license contract freely enteredinto between the investor and a natural person or
an enterprise in its Territory, whether it has
been entered into or not, provided that therequirement is imposed or the commitment or
undertaking is enforced by an exercise ofgovernmental authority of the Contracting Party;
Note:

A “license contract” referred to in thissubparagraph means any license contract
concerning transfer of technology, a
production process, or other proprietaryknowledge.

(i)to locate the headquarters of the investor for a
specific region or the world market in its
Territory;(j)to hire a given number or percentage of its
nationals;(k)to achieve a given level or value of research anddevelopment in its Territory; or(l)to supply one or more of the goods that theinvestor produces or the services that theinvestor provides to a specific region or theworld market, exclusively from its Territory.

2.
The provisions of paragraph 1 do not preclude either
Contracting Party from conditioning the receipt orcontinued receipt of an advantage, in connection with aninvestment or investment activities of an investor of theother Contracting Party in its Territory, on compliance
with:

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(a)

any requirement other than the requirements set
forth in subparagraphs 1(a) through 1(e);(b)

a requirement to locate production, supply or
acquire a service, train or employ workers,
construct or expand particular facilities, or
carry out research and development, in its
Territory; or(c)the requirements set forth in subparagraphs 1(a)and 1(b), when the requirements relating to thecontent of goods necessary to qualify for
preferential tariffs or preferential quotas are
imposed by an importing Contracting Party.

3.
Subparagraphs 1(g) and 1(h) shall not apply when therequirement is imposed or the commitment or undertaking is
enforced by a court of justice, administrative tribunal orcompetition authority to remedy an alleged violation ofcompetition laws.
4.
This Article does not preclude enforcement of any
commitment, undertaking or requirement between private
parties, where a Contracting Party did not impose or
require the commitment, undertaking or requirement.
Article 7
Senior Management and Board of Directors
1.
Neither Contracting Party may require that anenterprise of that Contracting Party that is an investmentof an investor of the other Contracting Party appoint tosenior management positions, or as senior executives, anatural person of any particular nationality.
2.
Without prejudice to paragraph 1, a Contracting Party
may require that a majority or less of the board of
directors, or any committee thereof, of an enterprise ofthat Contracting Party that is an investment of an investorof the other Contracting Party be of a particularnationality, or a resident in the Territory of the former
Contracting Party, provided that:(a)the requirement does not materially impair theability of the investor to exercise control overits investment; and(b)the nationality of members of the board orcommittee required thereunder is not of any nonContracting Party which does not maintain
diplomatic relations with the latter Contracting
Party.

- 9 -Article 8
Non–Conforming Measures
1.

Articles 2, 3, 6 and 7 shall not apply to:(a)any existing non-conforming measure that ismaintained by the central government of aContracting Party, as set out in the Schedule ofeach Contracting Party in Annex I;(b)any existing non-conforming measure that ismaintained by a local government of a Contracting
Party;(c)the continuation or prompt renewal of any nonconforming measure referred to in subparagraphs(a) and (b); or(d)an amendment or modification to any nonconforming measure referred to in subparagraphs(a) and (b), provided that the amendment or
modification does not decrease the conformity ofthe measure, as it existed at the date of theentry into force of this Agreement, with Articles
2, 3, 6 and 7.

2.
Articles 2, 3, 6 and 7 shall not apply to any measurethat a Contracting Party adopts or maintains with respect
to sectors, sub-sectors or activities set out in its
Schedule in Annex II.
3.
Neither Contracting Party shall, under any measure
adopted after the date of entry into force of thisAgreement and covered by its Schedule in Annex II, require
an investor of the other Contracting Party, by reason of
its nationality, to sell or otherwise dispose of aninvestment that exists at the time the measure becomes
effective.
4.
In cases where a Contracting Party makes an amendment
or a modification to any existing non-conforming measure
set out in its Schedule in Annex I or where a Contracting
Party adopts any new or more restrictive measure withrespect to sectors, sub-sectors or activities set out in
its Schedule in Annex II after the date of entry into forceof this Agreement, the Contracting Party shall upon request
by the other Contracting Party, as soon as possible
thereafter, provide characteristics of the measure to theother Contracting Party and hold discussions in good faithwith the other Contracting Party with a view to achieving
mutual satisfaction.

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5.
Each Contracting Party recognizes the importance ofreviewing from time to time the non-conforming measures
specified in its Schedules in Annexes I and II exploring
the possibility for the reduction or elimination of the
non-conforming measures.
6.
Articles 2 and 3 shall not apply to any measure
covered by the exceptions to, or derogations from,obligations under Articles 3 and 4 of the TRIPS Agreement,as specifically provided in Articles 3 through 5 of the
TRIPS Agreement.
7.
Articles 2, 3, 6 and 7 shall not apply to any measurethat a Contracting Party adopts or maintains with respect
to government procurement.
8.
The Contracting Parties confirm their understanding
that, when a new sector, which does not exist at the timeof the entry into force of this Agreement, emerges in aContracting Party after the entry into force of thisAgreement and that Contracting Party, therefore, wishes toamend the Annexes to this Agreement, the Contracting
Parties shall, upon request by that Contracting Party,
enter immediately into discussion with a view to amending
the Annexes.
9.
When considering an amendment to the Annexes to thisAgreement, in accordance with paragraph 3 of Article 28,
the Contracting Parties shall take into account the effectof the amendment with regard to investments of investors of
the Contracting Parties. In the case of the absence ofsuch effect, the Contracting Parties will enter immediately
into discussions with a view to amending the Annexes.
10. The Contracting Parties confirm their understandingthat any requirement for nationality or residency imposedor enforced through non-discriminatory application of theirlaws with regard to junior or middle-level employees shallnot be regarded as a non-conforming measure to Article 2, 3
or 7.
11. The Contracting Parties confirm their understandingthat this Agreement does not apply to immigration or
migration matters, to measures that regulate the entry ofnatural persons of a Contracting Party into, or theirtemporary stay in, the Territory of the other Contracting
Party, or to movement of natural persons.

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Article 9
Transparency
1.
Each Contracting Party shall promptly publish, orotherwise make publicly available, its laws, regulations,administrative procedures, administrative rulings and court
decisions of general application as well as international
agreements which pertain to or affect the implementationand operation of this Agreement.
2.
Each Contracting Party shall, upon request by theother Contracting Party, promptly respond to specificquestions and provide that other Contracting Party withinformation on matters set out in paragraph 1.
3.
Paragraphs 1 and 2 shall not be construed so as tooblige either Contracting Party to disclose confidential
information, the disclosure of which would impede law
enforcement or otherwise be contrary to the public
interest, or which would prejudice privacy or legitimate
commercial interests.
Article 10
Special Formalities and Information Requirements
1.
Nothing in Article 2 shall be construed to prevent aContracting Party from adopting or maintaining a measurethat prescribes special formalities in connection withinvestment activities of investors of the other Contracting
Party in its Territory, such as compliance withregistration requirements or requirements that investors be
residents of the former Contracting Party, provided thatsuch special formalities do not impair the substance of therights of such investors under this Agreement.
2.
Notwithstanding Articles 2 and 3, a Contracting Party
may require an investor of the other Contracting Party or
its investments to provide information concerning its
investments solely for informational or statistical
purposes. The Contracting Party shall protect suchinformation that is confidential from any disclosure thatwould prejudice the competitive position of the investor of
the latter Contracting Party or its investments. Nothing
in this paragraph shall be construed so as to prevent aContracting Party from otherwise obtaining or disclosing
information in connection with the equitable and good-faithapplication of its law.

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Article 11
Expropriation and Compensation
1.
Neither Contracting Party shall expropriate or
nationalize an investment in its Territory of an investorof the other Contracting Party or take any measureequivalent to expropriation or nationalization (hereinafterreferred to as “expropriation”), except:(a)for a public purpose;(b)in a non-discriminatory manner;(c)upon payment of prompt, adequate and effective
compensation in accordance with paragraphs 2, 3
and 4;(d)in accordance with procedures established innational legislation of either Contracting Party
and fundamental internationally recognized rules;
and

(e)

provided that the investors affected have aright, under the law of the Contracting Party
making the expropriation, to prompt review, by ajudicial or other independent authority of thatContracting Party, of the legality of the
expropriation and of the valuation of theirinvestment, in accordance with the principles set
out in this Article.

2.
The compensation shall be equivalent to the fairmarket value of the expropriated investment immediately
before the expropriation was publicly announced or
immediately before the expropriation occurred, whichever isearlier. The fair market value shall not reflect any
change in value occurring because the expropriation had
become publicly known earlier.
3.
The compensation shall be paid without delay and shall
include interest at a commercially reasonable rate accrued
from the date of expropriation until the date of payment
and shall be effectively realizable and freelytransferable.
4.
Payments shall be made in a freely usable currency,
and the compensation paid shall include interest, at acommercially reasonable rate for that currency, accrued
from the date of expropriation until the date of payment.
5.
This Article does not apply to authorization of aContracting Party for use of intellectual property rights
in accordance with the TRIPS Agreement.

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Article 12Compensation for Losses or Damages
1.
Each Contracting Party shall accord to investors of
the other Contracting Party that have suffered loss ordamage relating to their investments in the Territory of
the former Contracting Party due to armed conflict or astate of emergency such as a revolution, insurrection,
civil disturbance or any other similar event in the
Territory of that former Contracting Party, treatment, asregards restitution, indemnification, compensation or any
other settlement, that is no less favorable than that which
it accords to its own investors or to investors of a nonContracting Party, whichever is more favorable to theinvestors of the other Contracting Party.
2.
Any payment as a means of settlement referred to inparagraph 1 shall be effectively realizable, freelytransferable and freely convertible at the market exchange
rate into freely usable currencies.
3.
Neither Contracting Party shall be derogated from its
obligation under paragraph 1 by reason of its measurestaken pursuant to paragraph 2 of Article 15.
Article 13
Subrogation
1.
If a Contracting Party or its designated agency makes
a payment to an investor of the Contracting Party pursuant
to an indemnity, guarantee or insurance contract pertaining
to an investment of that investor within the Territory of
the other Contracting Party, that other Contracting Party
shall recognize:(a)the assignment, to the former Contracting Partyor its designated agency, of any right or claimof the investor in respect of such investment,that formed the basis of such payment; and(b)

the right of the former Contracting Party or its
designated agency to exercise by virtue ofsubrogation such right or claim to the same
extent as the original right or claim of theinvestor.

2.
The former Contracting Party or its designated agency
shall be entitled in all circumstances to:- 14 -

(a)the same treatment in respect of the rights andclaims acquired by it by virtue of the assignment
referred to in paragraph 1; and(b)the same payments due pursuant to those rights
and claims,

as the investor referred to in paragraph 1 was entitled toreceive by virtue of this Agreement in respect of theinvestment.
Article 14
Transfers
1.
Each Contracting Party shall allow all transfers
relating to investments in its Territory of an investor of
the other Contracting Party to be made freely into and out
of its Territory without delay. Such transfers shall
include, in particular, though not exclusively:(a)the initial capital and additional amounts tomaintain or increase investments;(b)

profits, interest, capital gains, dividends,
royalties, fees or other current incomes accruing
from investments;(c)payments made under a contract including loan
payments in connection with investments;(d)proceeds of the total or partial sale or
liquidation of investments;(e)earnings and remuneration of personnel fromabroad who work in connection with investments in
the Territory of the former Contracting Party;(f)payments made in accordance with Articles 11 and
12; and(g)payments arising out of a dispute.

2.
Each Contracting Party shall further ensure that suchtransfers may be made without delay in freely usable
currencies at the market exchange rate prevailing on thedate of the transfer.
3.
Notwithstanding paragraphs 1 and 2, a Contracting
Party may delay or prevent a transfer through theequitable, non-discriminatory and good-faith application ofits laws and regulations relating to:- 15 -

(a)bankruptcy, insolvency or the protection of therights of creditors;(b)issuing, trading or dealing in securities,
futures, options or derivatives;(c)criminal or penal offenses;(d)reporting or record keeping of transfers ofcurrency or other monetary instruments whennecessary to assist law enforcement or financial
regulatory authorities; or(e)ensuring compliance with orders or judgments in
adjudicatory proceedings.
Article 15
General and Security Exceptions

1.
Subject to the requirement that such measures are notapplied by a Contracting Party in a manner which would
constitute a means of arbitrary or unjustifiable
discrimination against, or a disguised restriction on
investors of the other Contracting Party and theirinvestments in the Territory of the former Contracting
Party, nothing in this Agreement shall be construed so as
to prevent the former Contracting Party from adopting or
enforcing measures:(a)necessary to protect human, animal or plant lifeor health;
Note:

This exception includes environmental
measures necessary to protect human,
animal or plant life or health.

(b)necessary to protect public morals or to maintainpublic order, provided that the public order
exception may only be invoked where a genuine andsufficiently serious threat is posed to one of
the fundamental interests of society;(c)necessary to secure compliance with the laws or
regulations which are not inconsistent with theprovisions of this Agreement including thoserelating to:(i)the prevention of deceptive and fraudulent
practices or to deal with the effects of a
default on contract;- 16 -

(ii)the protection of the privacy of theindividual in relation to the processing anddissemination of personal data and theprotection of confidentiality of personal
records and accounts; or(iii)

safety;(d)

imposed for the protection of national treasuresof artistic, historic or archaeological value; or(e)relating to the conservation of living or nonliving exhaustible natural resources if suchmeasures are made effective in conjunction withrestrictions on domestic production or
consumption.

2.
Subject to paragraph 3 of Article 12, nothing in thisAgreement shall be construed to prevent a Contracting Party
from adopting or enforcing measures:
(a)

(b)

which it considers necessary for the protectionof its essential security interests:(i)taken in time of international or noninternational armed conflict, or otheremergency in that Contracting Party or ininternational relations; or(ii)relating to the implementation of national
policies or international agreements
respecting the non-proliferation of weapons;orin pursuance of its obligations under the United
Nations Charter for the maintenance ofinternational peace and security.
Article 16
Temporary Safeguard Measures

1.
A Contracting Party may adopt or maintain restrictive
measures with regard to cross-border capital transactions
as well as payments or transfers for transactions related
to investments:(a)in the event of serious balance-of-payments andthe external financial difficulties or threat
thereof; or- 17 -

(b)2.

in exceptional cases where movements of capitalcause or threaten to cause serious difficulties
for macroeconomic management, in particularmonetary and exchange rate policies.

Restrictive measures referred to in paragraph 1 shall:(a)be applied in such a manner that the other
Contracting Party is treated no less favorably
than any non-Contracting Party;(b)

be consistent with the Articles of Agreement of
the International Monetary Fund;(c)not exceed those necessary to deal with thecircumstances set out in paragraph 1;(d)be temporary and be phased out progressively as
the situation specified in paragraph 1 improves;(e)be promptly notified to the other Contracting
Party; and(f)avoid unnecessary damages to the commercial,economic and financial interests of the other
Contracting Party.

3.
The Contracting Party which has adopted any measures
under paragraph 1 shall, upon request, commence
consultations with the other Contracting Party in order toreview the restrictions adopted by it.
Article 17
Prudential Measures
1.
Notwithstanding any other provisions of thisAgreement, a Contracting Party shall not be prevented fromtaking measures relating to financial services forprudential reasons, including measures for the protectionof investors, depositors, policy holders or persons to whoma fiduciary duty is owed by an enterprise supplying
financial services, or to ensure the integrity andstability of its financial system.
2.
Where the measures taken by a Contracting Party
pursuant to paragraph 1 do not conform with this Agreement,
they shall not be used as a means of avoiding theobligations of the Contracting Party under this Agreement.

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Article 18Intellectual Property Rights
1.
The Contracting Parties recognize their rights andobligations under the TRIPS Agreement, and promote
efficiency and transparency in intellectual property
protection system. For this purpose, the Contracting
Parties shall promptly consult with each other at therequest of either Contracting Party. Depending on the
results of the consultation, each Contracting Party shall,in accordance with its laws and regulations, takeappropriate measures to remove the factors which arerecognized in the consultation as having adverse effects tothe investments of investors of the other Contracting
Party.
2.
Nothing in this Agreement shall affect the rights andobligations of the Contracting Parties under multilateralagreements in respect of protection of intellectual
property rights to which the Contracting Parties are
parties.
3.
Nothing in this Agreement shall be construed so as tooblige either Contracting Party to extend to investors of
the other Contracting Party and to their investments
treatment accorded to investors of a non-Contracting Party
and to their investments by virtue of any existing or
future bilateral or multilateral agreements in respect ofprotection of intellectual property rights, to which theformer Contracting Party is a party, provided that theformer Contracting Party complies with the TRIPS Agreement.
Article 19
Taxation Measures
1.
Nothing in this Section shall impose obligations withrespect to taxation measures except as expressly provided
in paragraph 3.
2.
Nothing in this Agreement shall affect the rights andobligations of either Contracting Party under any tax
convention. In the event of any inconsistency between thisAgreement and any such convention, that convention shallprevail to the extent of the inconsistency.
3.
Articles 4, 5, 9 and 11 shall apply to taxation
measures.

- 19 -

Article 20
Health, Safety and Environmental Measuresand Labor Standards
Each Contracting Party recognizes that it isinappropriate to encourage investment activities ofinvestors of the other Contracting Party and of a nonContracting Party by relaxing its domestic health, safety,
environmental and labor standards legislation.
Article 21
Denial of Benefits
1.
A Contracting Party may deny the benefits of thisAgreement to an investor of the other Contracting Party
that is an enterprise of such other Contracting Party andto investments of that investor if persons of a nonContracting Party own or control the enterprise and thedenying Contracting Party:

2.

(a)

does not maintain diplomatic relations with the
non-Contracting Party; or(b)adopts or maintains measures with respect to the
non-Contracting Party or a person of the nonContracting Party that prohibit transactions withthe enterprise or that would be violated or
circumvented if the benefits of this Agreement
were accorded to the enterprise or to its
investments.

For the purpose of this Article, an enterprise is:(a)“owned” by an investor if more than 50 percent of
the equity interest in it is beneficially ownedby the investor; and(b)“controlled” by an investor if the investor has
the power to name a majority of its directors orotherwise to legally direct its actions.
Article 22
Non Derogation

Nothing in this Agreement shall be construed so as toderogate from:(a)laws and regulations, administrative practices orprocedures, or administrative or judicial
decisions of either Contracting Party;- 20 -

(b)obligations under the international agreements
which are in force between the Contracting
Parties; or(c)obligations which either Contracting Party may
have entered into with regard to investments madeby an investor of the other Contracting Party,

that entitle investments and investment activities ofinvestors of the Contracting Parties to treatment morefavorable than that accorded by this Agreement.
SECTION IIDISPUTE SETTLEMENT
Article 23
Settlement of Dispute between the Contracting Parties
1.
Each Contracting Party shall afford adequate
opportunity for consultation, through diplomatic channels,
regarding any dispute with the other Contracting Party
concerning the interpretation or application of thisAgreement.
2.
Any dispute between the Contracting Parties as to theinterpretation and application of this Agreement, notsatisfactorily adjusted by diplomacy in accordance withparagraph 1 within a period of six months from notificationof the dispute, shall upon request by either Contracting
Party be referred for decision to an arbitration board.
3.
Unless otherwise provided for in this Article, or in
the absence of an agreement between the Contracting Parties
to the contrary, the UNCITRAL Arbitration Rules shall apply
mutatis mutandis to the proceedings of the arbitration
board. However, these rules may be modified by theContracting Parties or modified by the arbitrators
appointed pursuant to paragraph 4, provided that bothContracting Parties agree to the modification. The
arbitration board may, for its part, determine its own
rules and procedures.

- 21 -

4.
Within 60 days from the date of receipt by either
Contracting Party from the other Contracting Party of anote requesting arbitration of the dispute, each disputing
party shall appoint an arbitrator. The two arbitrators
shall select a third arbitrator who, upon approval by bothContracting Parties, shall be appointed as the Chairperson,
provided that the third arbitrator shall not be a nationalof either Contracting Party. The Chairperson shall be
appointed within 60 days from the date of appointment of
the other two arbitrators. All arbitrators shall benationals of States having diplomatic relations with bothContracting Parties. The UNCITRAL Arbitration Rules
applicable to appointing members of three-member panels
shall apply mutatis mutandis to other matters relating to
the appointment of the arbitrators of the arbitration board
provided that the appointing authority referenced in thoserules shall be the Secretary-General of the Permanent Courtof Arbitration at The Hague. If the Secretary-General is anational of either Contracting Party or otherwise prevented
from discharging the said function, the Deputy SecretaryGeneral shall be invited to make the appointment.
5.
Unless otherwise agreed by the Contracting Parties,
all submissions of documents shall be made and all hearings
shall be completed within a period of 180 days from thedate of selection of the third arbitrator. The arbitration
board shall decide the dispute by a majority of votes inaccordance with this Agreement and the rules ofinternational law applicable to the subject matter, within
60 days from the date of the final submissions of documentsor the date of the closing of the hearings, whichever isthe later. Such decision shall be final and binding.
6.
Each Contracting Party shall bear the cost of thearbitrator of its choice and its representation in thearbitral proceedings. The cost of the Chairperson of thearbitration board in discharging his or her duties and theremaining costs of the arbitration board shall be borne
equally by the Contracting Parties.
Article 24
Settlement of Investment Disputes
between a Contracting Party and an Investorof the Other Contracting Party
1.
In the event of an investment dispute between theclaimant and the respondent, they should initially seek toresolve the dispute through consultation and negotiation,
which may include the use of non-binding, third-party
procedures.

- 22 -

2.
In the event that an investment dispute cannot besettled by consultation and negotiation within six months
from the date on which the claimant requested in writing
the respondent for consultation and negotiation, theclaimant may submit to arbitration under this Article a
claim:(a)that the respondent has breached an obligation
under Section I, except an obligation under
Articles 9, 18 and 20; and(b)that the claimant has incurred loss or damage by
reason of, or arising out of, that breach.

3.
At least 90 days before submitting any claim toarbitration under this Article, a claimant shall deliver tothe respondent a written notice of its intention to submit
the claim to arbitration (hereinafter referred to as“notice of intent”). The notice of intent shall specify:(a)the name and address of the claimant;(b)

for each claim, the provision of Section I
alleged to have been breached and any otherrelevant provisions;(c)the legal and factual basis for each claim; and(d)the relief sought and the approximate amount ofdamages claimed.

4.
Provided that six months have elapsed since theclaimant requested in writing the respondent for
consultation and negotiation, the claimant may submit aclaim referred to in paragraph 2 to the arbitration:(a)under the ICSID Convention, provided that bothContracting Parties are parties to the ICSID
Convention;(b)under the ICSID Additional Facility Rules,
provided that either Contracting Party, but notboth, is a party to the ICSID Convention;(c)under the UNCITRAL Arbitration Rules; or(d)if the disputing parties agree, under any otherarbitration institution or arbitration rules.

- 23 -

5.
A claim shall be deemed submitted to arbitration under
this Article when the claimant’s notice of or request forarbitration:

6.

(a)

referred to in paragraph 1 of Article 36 of the
ICSID Convention is received by the SecretaryGeneral of ICSID;(b)referred to in Article 2 of Schedule C of the
ICSID Additional Facility Rules is received by
the Secretary-General of ICSID;(c)referred to Article 3 of the UNCITRAL Arbitration
Rules, together with the statement of claim
referred to in Article 20 of the UNCITRAL
Arbitration Rules, is received by the respondent;or(d)under any other arbitration institution or
arbitration rules selected under subparagraph4(d) is received by the respondent, unlessotherwise specified by such institution or insuch rules.

(a)Each Contracting Party hereby consents to thesubmission of a claim to arbitration under this
Article in accordance with this Agreement.

(b)

The consent under subparagraph (a) and thesubmission of a claim to arbitration under this
Article shall satisfy the requirements of:(i)

Chapter II of the ICSID Convention or the
ICSID Additional Facility Rules for writtenconsent of the parties; and(ii)

Article II of the New York Convention for anagreement in writing.

7.
Notwithstanding paragraph 6, no claim may be submitted
to arbitration under this Article if more than three years
have elapsed from the date on which the claimant firstacquired, or should have first acquired, knowledge of thebreach alleged under paragraph 2 and knowledge that theclaimant has incurred loss or damage.
8.
No claim may be submitted to arbitration under this
Article unless the claimant:(a)consents in writing to arbitration in accordancewith the procedures set out in this Article; and- 24 -

(b)waives in writing any right to initiate orcontinue before any administrative tribunal or
court of justice under the law of either
Contracting Party, or other dispute settlement
procedures, any proceedings with respect to any
measure alleged to constitute a breach referred
to in subparagraph 2(a) before any judgment oraward has been delivered on the subject matter ofthe dispute under the abovementioned mechanisms.

9.
The waiver provided pursuant to subparagraph 8(b)shall cease to apply where the arbitral tribunal rejects
the claim on the basis of a failure to meet therequirements of paragraph 3, 4, 7 or 8, or on any otherprocedural or jurisdictional grounds.
10. Notwithstanding subparagraph 8(b), the claimant may
initiate or continue an action that seeks interim
injunctive relief that does not involve the payment ofmonetary damages before an administrative tribunal or courtof justice under the law of the respondent.
11. An arbitral tribunal established under paragraph 4
shall decide the issues in dispute in accordance with thisAgreement and applicable rules of international law.
12. In an arbitration under this Article, the respondent
shall not assert, as a defense, counterclaim, right ofsetoff or otherwise, that the claimant has received or will
receive indemnification or other compensation for all orpart of the alleged damages pursuant to an insurance orguarantee contract.
13.

The arbitral tribunal may award only:(a)a judgment whether or not there has been a breachby the respondent of any obligation under Section
I with respect to the claimant and its
investments; and(b)

one or both of the following remedies, only ifthere has been such a breach:(i)monetary damages and applicable interest;
and

(ii)

restitution of property, in which case theaward shall provide that the respondent may
pay monetary damages and any applicableinterest, in lieu of restitution.

- 25 -

Without prejudice to the competence of the tribunal
referred to in subparagraph (a), the arbitral tribunal
shall not award a decision whether or not there has been abreach by the respondent of any obligation under thelegislation of the respondent with respect to the claimant
and its investments.
The arbitral tribunal may also award cost andattorney’s fees in accordance with applicable arbitration
rules.
14. The respondent may make available to the public in atimely manner all documents, including an award, submitted
to, or issued by, an arbitral tribunal established underparagraph 4, subject to redaction of:(a)confidential business information;(b)

information which is privileged or otherwise
protected from disclosure under the laws andregulations of either Contracting Party;(c)information which shall be withheld pursuant to
the relevant arbitration rules;(d)information the disclosure of which would impede
law enforcement; and(e)information the disclosure of which it considers
to be contrary to its essential security
interests.

15. Unless the disputing parties agree otherwise, theplace of arbitration shall be in a country that is a party
to the New York Convention.
16. The award rendered by the arbitral tribunal shall befinal and binding upon the disputing parties. This award
shall be executed in accordance with the applicable laws
and regulations, as well as relevant international law
including the ICSID Convention and the New York Convention,
concerning the execution of award in force in the country
where such execution is sought.
Article 25
Service of Documents
1.
Notices and other documents relating to arbitration
under this Section shall be served on a Contracting Party
by delivery to:- 26 -

(a)with respect to Japan, Economic Affairs Bureau,
the Ministry of Foreign Affairs; and(b)with respect to the State of Israel,
International Affairs Department, the Ministry of
Finance or its successors.

2.
A Contracting Party shall promptly make publicly
available and notify to the other Contracting Party any
change to the name of the authority referred to inparagraph 1.
3.
Each Contracting Party shall make publicly available
the address of its authority referred to in paragraphs 1
and 2.
SECTION III
JOINT COMMITTEE
Article 26
Joint Committee
1.
The Contracting Parties shall establish a Joint
Committee (hereinafter referred to as “the Committee”) witha view to accomplishing the objectives of this Agreement.
The functions of the Committee shall be:(a)to discuss and review the implementation andoperation of this Agreement;(b)

to review the non-conforming measures maintained,
amended or modified pursuant to paragraph 1 of
Article 8 for the purpose of contributing to the
reduction or elimination of such non-conforming
measures;(c)to discuss the non-conforming measures adopted or
maintained pursuant to paragraph 2 of Article 8
for the purpose of encouraging favorable
conditions for investors of the Contracting
Parties;(d)to exchange information on and to discuss
investment-related matters within the scope of
this Agreement which relate to improvement ofinvestment environment;(e)

to consider any issues raised by either
Contracting Party concerning investment
agreements; and- 27 -

(f)to discuss any other investment-related mattersconcerning this Agreement.

2.
The Committee may, as necessary, make appropriate
recommendations by consensus to the Contracting Parties forthe more effective functioning or the attainment of theobjectives of this Agreement.
3.
The Committee shall be composed of representatives of
the Contracting Parties. The Committee may, upon mutual
consent of the Contracting Parties, invite representativesof relevant entities other than the Governments of theContracting Parties with the necessary expertise relevantto the issues to be discussed, and hold joint meetings withthe private sectors.
4.
The Committee shall determine its own rules ofprocedure to carry out its functions.
5.
The Committee may establish sub-committees anddelegate specific tasks to such sub-committees.
6.
The Committee shall meet upon the request of either
Contracting Party.
SECTION IV
FINAL PROVISIONS
Article 27
Headings
The headings of the Sections and Articles of thisAgreement are inserted for convenience of reference onlyand shall not affect the interpretation of this Agreement.
Article 28
Final Provisions
1.
The Contracting Parties shall notify each other, inwriting through diplomatic channels, of the completion of
their respective internal procedures necessary for theentry into force of this Agreement. This Agreement shallenter into force on the 30th day after the latter of thedates of receipt of the notifications. It shall remain inforce for a period of 10 years after its entry into force
and shall continue in force unless terminated as provided
for in paragraph 2.

- 28 -

2.
A Contracting Party may, by giving one year’s advancenotice in writing to the other Contracting Party, throughdiplomatic channels, terminate this Agreement at the end of
the initial 10 year period or at any time thereafter.
3.
Upon the request of either Contracting Party, theContracting Parties may agree on any amendment to thisAgreement. Any amendment shall be approved by theContracting Parties in accordance with their respective
internal procedures and shall enter into force on such dateas the Contracting Parties may agree, and shall thereafter
constitute an integral part of this Agreement.
4.
This Agreement shall also apply to all investments ofinvestors of either Contracting Party made in the Territoryof the other Contracting Party in accordance with the laws
and regulations of that other Contracting Party prior to
the entry into force of this Agreement.
5.
In respect of investments made prior to the date of
termination of this Agreement, the provisions of thisAgreement shall continue to be effective for a period of 10
years from the date of termination of this Agreement.
6.
This Agreement shall not apply to disputes arising outof events which occurred prior to its entry into force.
7.
The Annexes to this Agreement shall form an integral
part of this Agreement.
IN WITNESS WHEREOF, the undersigned, being duly
authorized by their respective Governments, have signed
this Agreement.
DONE, in duplicate at Tokyo, on this first day of
February, 2017 in the English language.

FOR THE GOVERNMENT
OF JAPAN ON BEHALF
OF JAPAN:

FOR THE GOVERNMENTOF THE STATE OF ISRAELON BEHALF OF THE STATEOF ISRAEL:

岸田文雄‎ ‫ כחלון‬.‫מ‬- 29 -

Annex I
Existing Non-Conforming Measures referred toin subparagraph 1(a) of Article 8
1.
The Schedule of a Contracting Party sets out, pursuant
to subparagraph 1(a) of Article 8, its existing measuresthat are not subject to some or all of the obligations
imposed by:

2.

(a)

Article 2;(b)

Article 3;(c)

Article 6; or(d)Article 7.

Each Schedule entry sets out the following elements:(a)“Sector” refers to the sector for which the entry
is made;(b)“Sub-Sector”, where referenced, refers to thespecific sub-sector for which the entry is made;(c)“Industry Classification”, where referenced, andonly for transparency purposes, refers to theactivity covered by the non-conforming measure,according to domestic or international industry
classification codes;(d)“Obligations Concerned” specifies the obligations
referred to in paragraph 1 that, pursuant to
subparagraph 1(a) of Article 8, do not apply tothe listed measure(s);(e)“Measures” identifies the laws, regulations orother measures for which the entry is made. A
measure cited in the “Measures” element:

(f)

(i)

means the measure as amended, continued or
renewed as of the date of entry into forceof this Agreement, and(ii)

includes any subordinate measure adopted or
maintained under the authority of andconsistent with the measure; and“Description” sets out the non-conforming measureor provides a general non-binding description of
the measure for which the entry is made.

- 30 -

3.
In the interpretation of an entry, all elements of theentry shall be considered. An entry shall be interpreted
in the light of the relevant provisions of this Agreement
against which the entry is taken, and the “Measures”
element shall prevail over all the other elements.
4.
For the purposes of this Annex, the term “JSIC” means
Japan Standard Industrial Classification set out by the
Ministry of Internal Affairs and Communications, andrevised on October 30, 2013.

- 31 -

Schedule of Japan1

Sector:Agriculture, Forestry and Fisheries,
and Related Services (except
Fisheries within the Territorial Sea,
Internal Waters, Exclusive Economic
Zone and Continental Shelf provided
for in the entry No. 8 in the
Schedule of Japan in Annex II)

Sub-Sector:
Industry
Classification:

JSIC 01

Agriculture

JSIC 02

Forestry

JSIC 03

Fisheries, except
aquaculture

JSIC 04

Aquaculture

JSIC 6324

Agricultural
cooperatives

JSIC 6325

Fishery and fisheryprocessing cooperatives

JSIC 871

Agriculture, forestry
and fisheries
cooperative
associations, n.e.c.

Obligations
Concerned:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3- 32 -

Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in agriculture, forestry
and fisheries, and related services(except fisheries within the
territorial sea, internal waters,
exclusive economic zone andcontinental shelf provided for in
the entry No. 8 in the Schedule ofJapan in Annex II) in Japan.

- 33 -

2

Sector:Finance

Sub-Sector:

BankingIndustry
Classification:

JSIC 622

Banks, except central
bank

JSIC 631

Financial institutions
for small-businesses

Obligations
Concerned:

National Treatment (Article 2)

Measures:

Deposit Insurance Law (Law No. 34
of 1971), Article 2

Description:

The deposit insurance system only
covers financial institutions whichhave their head offices within thejurisdiction of Japan.
The deposit insurance system does
not cover deposits taken by branchesof foreign banks.

- 34 -

3

Sector:Heat Supply

Sub-Sector:
Industry
Classification:

JSIC 3511

Heat supply

Obligations
Concerned:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3

Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in the heat supply
industry in Japan.

- 35 -

4

Sector:Information and Communications

Sub-Sector:

Telecommunications

Industry
Classification:

JSIC 3700

Head offices primarily
engaged in managerial
operations

JSIC 3711

Regional
telecommunications,
except wired broadcast
telephones

JSIC 3731

Services incidental totelecommunications

Obligations
Concerned:

National Treatment (Article 2)

Measures:

Law concerning Nippon Telegraph andTelephone Corporation, etc. (Law
No. 85 of 1984), Articles 6 and 10

Description:

1.
Nippon Telegraph and Telephone
Corporation may not enter the nameand address in its register ofshareholders if the aggregate of theratio of the voting rights directly
and/or indirectly held by the
persons set forth in subparagraphs(a) through (c) reaches or exceeds
one-third:

Senior Management and Board of
Directors (Article 7)(a)a natural person who does nothave Japanese nationality;(b)a foreign government or its
representative; and(c)a foreign legal person or aforeign entity.

2.
Any natural person who does nothave Japanese nationality may notassume the office of member of theboard of directors or auditor of
Nippon Telegraph and Telephone
Corporation, Nippon Telegraph andTelephone East Corporation andNippon Telegraph and Telephone West
Corporation.

- 36 -

5

Sector:Information and Communications

Sub-Sector:

Telecommunications and Internet
Based Services

Industry
Classification:

JSIC 3711

Regional
telecommunications,
except wired broadcast
telephones

JSIC 3712

Long-distancetelecommunications

JSIC 3719

Miscellaneous fixed
telecommunications

JSIC 3721

Mobiletelecommunications

JSIC 401

Services incidental toInternet

Note:

The activities covered bythis entry under JSIC 3711,
3712, 3719, 3721 or 401 arelimited to the activities
which are subject to theregistration obligation
under Article 9 of theTelecommunications Business
Law (Law No. 86 of 1984).

Obligations
Concerned:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3

Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in telecommunications
business and internet based services
in Japan.

- 37 -

6

Sector:Manufacturing

Sub-Sector:

Drugs and Medicines Manufacturing

Industry
Classification:

JSIC 1653

Obligations
Concerned:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27

Biological preparations

Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3
Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in biologicalpreparations manufacturing industry
in Japan. For greater certainty,“biological preparations
manufacturing industry” deals witheconomic activities in an
establishment which mainly produces
vaccine, serum, toxoid, antitoxin orsome preparations similar to theaforementioned products, or blood
products.

- 38 -

7

Sector:Manufacturing

Sub-Sector:

Leather and Leather Products
Manufacturing

Industry
Classification:

JSIC 1189

Textile apparel andaccessories, n.e.c.

JSIC 1694

Gelatine and adhesives

JSIC 192

Rubber and plastic
footwear and its
findings

JSIC 2011

Leather tanning andfinishing

JSIC 2021

Mechanical andindustrial leather
products, except gloves
and mittens

JSIC 2031

Cut stock and findings
for leather footwear

JSIC 2041

Leather footwear

JSIC 2051

Leather gloves andmittens

JSIC 2061

Baggage

JSIC 207

Handbags and small
cases

JSIC 2081

Fur skins

JSIC 2099

Miscellaneous tanningleather products

JSIC 3253

Sporting and athletic
goods

Note 1:

The activities covered bythis entry under JSIC 1189
or 3253 are limited to theactivities related toleather and leather
products manufacturing.

- 39 -

Note 2:

The activities covered bythis entry under JSIC 1694
are limited to theactivities related toanimal glue (nikawa) andgelatine manufacturing.

Obligations
Concerned:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3

Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in leather and leather
products manufacturing industry inJapan.

- 40 -

8

Sector:Matters Related to the Nationalityof a Ship

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Measures:

Ship Law (Law No. 46 of 1899),
Article 1

Description:

The Japanese nationality shall begiven to a ship whose owner is aJapanese national, or a company
established under Japanese laws andregulations, of which all the
representatives and not less than
two-thirds of the executives
administering the affairs are
Japanese nationals.

Senior Management and Board of
Directors (Article 7)- 41 -

9

Sector:MiningSub-Sector:
Industry
Classification:

JSIC 05

Obligations
Concerned:

National Treatment (Article 2)

Measures:

Mining Law (Law No. 289 of 1950),
Chapters 2 and 3

Description:

Only a Japanese national or aJapanese legal person may havemining rights or mining leaserights.

- 42 -

Mining and quarrying ofstone and gravel

10

Sector:Oil Industry

Sub-Sector:
Industry
Classification:

Obligations
Concerned:

JSIC 053

Crude petroleum andnatural gas production

JSIC 1711

Petroleum refining

JSIC 1721

Lubricating oils andgreases (not made inpetroleum refineries)

JSIC 1741

Paving materials

JSIC 1799

Miscellaneous petroleum
and coal products

JSIC 4711

Ordinary warehousing,
except refrigerated
warehousing

JSIC 4721

Refrigerated
warehousing

JSIC 5331

Petroleum

JSIC 6051

Gasoline stations

JSIC 6052

Fuel stores, except
gasoline stations

JSIC 9299

Miscellaneous businessservices, n.e.c.

Note 1:

The activities covered bythis entry under JSIC 1741,
1799, 4711, 4721 or 6052
are limited to thoserelated to oil industry.

Note 2:

The activities covered bythis entry under JSIC 9299
are limited to thoserelated to liquefied
petroleum gas industry.

National Treatment (Article 2)- 43 -

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3

Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in the oil industry inJapan. All organic chemicals such as
ethylene, ethylene glycol andpolycarbonates are outside the scopeof the oil industry. Therefore, theprior notification under the Foreign
Exchange and Foreign Trade Law is
not required for the investments inthe manufacture of these products.

- 44 -

11

Sector:

Security Guard Services

Sub-Sector:
Industry
Classification:

JSIC 923

Guard services

Obligations
Concerned:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3

Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in security guard
services in Japan.

- 45 -

12

Sector:Transport

Sub-Sector:

Air Transport

Industry
Classification:

JSIC 4600

Head offices primarily
engaged in managerial
operations

JSIC 4611

Air transport

Obligations
Concerned:

National Treatment (Article 2)
Most-Favored-Nation Treatment(Article 3)
Senior Management and Board of
Directors (Article 7)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3
Civil Aeronautics Law (Law No. 231
of 1952), Chapters 7 and 8

Description:

1.
The prior notification
requirement under the Foreign
Exchange and Foreign Trade Law
applies to foreign investors who
intend to make investments in airtransport business in Japan.
2.
Permission of the Minister ofLand, Infrastructure, Transport andTourism for conducting air transportbusiness as a Japanese air carrier
is not granted to the following
natural persons or entities applying
for the permission:(a)a natural person who does nothave Japanese nationality;(b)a foreign country, or a foreign
public entity or its
equivalent;- 46 -

(c)a legal person or other entity
constituted under the laws of
any foreign country; and(d)a legal person represented by
the natural persons or entities
referred to in subparagraph(a), (b) or (c); a legal personof which one-third or more of
the directors are composed of
the natural persons or entities
referred to in subparagraph(a), (b) or (c); or a legal
person of which one-third or
more of the voting rights areheld by the natural persons or
entities referred to in
subparagraph (a), (b) or (c).

In the event that an air carrier
becomes a natural person or anentity referred to in subparagraphs(a) through (d), the permission willlose its effect. The conditions forthe permission also apply tocompanies such as holding companies,
which have substantial control over
the air carriers.
3.
A Japanese air carrier or acompany having substantial control
over such air carrier, such as aholding company, may reject therequest from a natural person or anentity set forth in subparagraphs2(a) through 2(c), who owns equity
investments in such air carrier orcompany, to enter its name andaddress in the register ofshareholders, in the event thatsuch air carrier or company becomesa legal person referred to in
subparagraph 2(d) by accepting such
request.
4.
Foreign air carriers are
required to obtain permission of the
Minister of Land, Infrastructure,
Transport and Tourism to conduct
international air transportbusiness.

- 47 -

5.
Permission of the Minister ofLand, Infrastructure, Transport andTourism is required for the use offoreign aircraft for airtransportation of passengers or
cargoes to and from Japan for
remuneration.
6.
A foreign aircraft may not be
used for a flight between points
within Japan.

- 48 -

13

Sector:Transport

Sub-Sector:

Air Transport

Industry
Classification:

JSIC 4600

Head offices primarily
engaged in managerial
operations

JSIC 4621

Aircraft service,
except air transport

Obligations
Concerned:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27

Senior Management and Board of
Directors (Article 7)

Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3
Civil Aeronautics Law (Law No. 231
of 1952), Chapters 7 and 8
Description:

1.
The prior notification
requirement under the Foreign
Exchange and Foreign Trade Law
applies to foreign investors who
intend to make investments in aerial
work business in Japan.
2.
Permission of the Minister ofLand, Infrastructure, Transport andTourism for conducting aerial workbusiness is not granted to thefollowing natural persons or
entities applying for thepermission:(a)a natural person who does nothave Japanese nationality;(b)a foreign country, or a foreign
public entity or its
equivalent;(c)a legal person or other entity
constituted under the laws of
any foreign country; and- 49 -

(d)a legal person represented by
the natural persons or entities
referred to in subparagraph(a), (b) or (c); a legal personof which one-third or more of
the directors are composed of
the natural persons or entities
referred to in subparagraph(a), (b) or (c); or a legal
person of which one-third or
more of the voting rights areheld by the natural persons or
entities referred to in
subparagraph (a), (b) or (c).

In the event that a person
conducting aerial work businessbecomes a natural person or anentity referred to in subparagraphs(a) through (d), the permission willlose its effect. The conditions forthe permission also apply tocompanies, such as holding
companies, which have substantial
control over the person conducting
aerial work business.
3.
A foreign aircraft may not be
used for a flight between points
within Japan.

- 50 -

14

Sector:Transport

Sub-Sector:

Air Transport (Registration of
Aircraft in the National Register)Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Measures:

Civil Aeronautics Law (Law No. 231
of 1952), Chapter 2

Description:

1.
An aircraft owned by any of thefollowing natural persons or
entities may not be registered in
the national register:Senior Management and Board of
Directors (Article 7)(a)a natural person who does nothave Japanese nationality;(b)a foreign country, or a foreign
public entity or its
equivalent;(c)a legal person or other entity
constituted under the laws of
any foreign country; and(d)a legal person represented by
the natural persons or entities
referred to in subparagraph(a), (b) or (c); a legal personof which one-third or more of
the directors are composed of
the natural persons or entities
referred to in subparagraph(a), (b) or (c); or a legal
person of which one-third or
more of the voting rights areheld by the natural persons or
entities referred to in
subparagraph (a), (b) or (c).

2.
A foreign aircraft may not beregistered in the national register.

- 51 -

15

Sector:Transport

Sub-Sector:

Freight Forwarding Business(excluding Freight Forwarding
Business Using Air Transportation)

Industry
Classification:

JSIC 4441

Collect-and-deliver
freight transport

JSIC 4821

Freight transport,
except collect-anddeliver freighttransport

Obligations
Concerned:

National Treatment (Article 2)
Most-Favored-Nation Treatment(Article 3)
Senior Management and Board of
Directors (Article 7)

Measures:

Freight Forwarding Business Law(Law No. 82 of 1989), Chapters 2
through 4
Enforcement Regulation of Freight
Forwarding Business Law (Ministerial
Ordinance of the Ministry ofTransport No. 20 of 1990)

Description:

The following natural persons or
entities are required to beregistered with, or to obtain
permission or approval of, theMinister of Land, Infrastructure,
Transport and Tourism for conducting
freight forwarding business using
international shipping. Suchregistration shall be permitted, orsuch permission or approval shall be
granted, on the basis ofreciprocity:(a)a natural person who does nothave Japanese nationality;(b)a foreign country, or a foreign
public entity or its
equivalent;- 52 -

(c)a legal person or other entity
constituted under the laws of
any foreign country; and(d)a legal person represented by
the natural persons or entities
referred to in subparagraph(a), (b) or (c); a legal personof which one-third or more of
the directors are composed of
the natural persons or entities
referred to in subparagraph(a), (b) or (c); or a legal
person of which one-third or
more of the voting rights areheld by the natural persons or
entities referred to in
subparagraph (a), (b) or (c).

- 53 -

16

Sector:Transport

Sub-Sector:

Freight Forwarding Business (only
Freight Forwarding Business Using
Air Transportation)

Industry
Classification:

JSIC 4441

Collect-and-deliver
freight transport

JSIC 4821

Freight transport,
except collect-anddeliver freighttransport

Obligations
Concerned:

National Treatment (Article 2)
Most-Favored-Nation Treatment(Article 3)
Senior Management and Board of
Directors (Article 7)

Measures:

Freight Forwarding Business Law(Law No. 82 of 1989), Chapters 2
through 4
Enforcement Regulation of Freight
Forwarding Business Law (Ministerial
Ordinance of the Ministry ofTransport No. 20 of 1990)

Description:

1.
The following natural persons
or entities may not conduct freight
forwarding business using airtransportation between points within
Japan:(a)a natural person who does nothave Japanese nationality;(b)a foreign country, or a foreign
public entity or its
equivalent;(c)a legal person or other entity
constituted under the laws of
any foreign country; and- 54 -

(d)a legal person represented by
the natural persons or entities
referred to in subparagraph(a), (b) or (c); a legal personof which one-third or more of
the directors are composed of
the natural persons or entities
referred to in subparagraph(a), (b) or (c); or a legal
person of which one-third or
more of the voting rights areheld by the natural persons or
entities referred to in
subparagraph (a), (b) or (c).

2.
The natural persons or entities
referred to in paragraph 1 arerequired to be registered with, orto obtain permission or approvalof, the Minister of Land,
Infrastructure, Transport andTourism for conducting freight
forwarding business using
international air transportation.
Such registration shall bepermitted, or such permission orapproval will be granted, on thebasis of reciprocity.

- 55 -

17

Sector:Transport

Sub-Sector:

Railway Transport

Industry
Classification:

JSIC 421

Railway transport

JSIC 4851

Railway facilities
services

Obligations
Concerned:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3

Description:

1.
The prior notification
requirement under the Foreign
Exchange and Foreign Trade Law
applies to foreign investors who
intend to make investments inrailway transport industry in Japan.
2.
The manufacture of vehicles orparts and components for the railway
transport industry is not included
in railway transport industry.
Therefore, the prior notification
under the Foreign Exchange andForeign Trade Law is not required
for the investments in the
manufacture of these products.

- 56 -

18

Sector:Transport

Sub-Sector:

Road Passenger Transport

Industry
Classification:

JSIC 4311

Obligations
Concerned:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27

Common omnibus
operators

Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3
Description:

1.
The prior notification
requirement under the Foreign
Exchange and Foreign Trade Law
applies to foreign investors who
intend to make investments inomnibus industry in Japan.
2.
The manufacture of vehicles orparts and components for omnibus
industry is not included in omnibus
industry. Therefore, the priornotification under the Foreign
Exchange and Foreign Trade Law is
not required for the investments inthe manufacture of these products.

- 57 -

19

Sector:Transport

Sub-Sector:

Water Transport

Industry
Classification:

JSIC 452

Coastwise transport

JSIC 453

Inland watertransport

JSIC 4542

Coastwise ship leasing

Obligations
Concerned:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3

Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in the water transportindustry in Japan. For greatercertainty, “water transportindustry” refers to oceangoing/
seagoing transport, coastwisetransport (i.e. maritime transport
between ports in Japan), inland
water transport and ship leasing
industry. However, oceangoing/
seagoing transport industry and shipleasing industry excluding coastwise
ship leasing industry are exemptedfrom the prior notification
requirement.

- 58 -

20

Sector:Transport

Sub-Sector:

Water Transport

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Measures:

Ship Law (Law No. 46 of 1899),
Article 3

Description:

Unless otherwise specified in laws
and regulations of Japan, orinternational agreements to which
Japan is a party, ships not flying
the Japanese flag are prohibitedfrom entering ports in Japan which
are not open to foreign commerce andfrom carrying cargoes or passengers
between ports in Japan.

Most-Favored-Nation Treatment(Article 3)- 59 -

21

Sector:

Water Supply and Waterworks

Sub-Sector:
Industry
Classification:

JSIC 3611

Water for end users,
except industrial users

Obligations
Concerned:

National Treatment (Article 2)

Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3

Description:

The prior notification requirement
under the Foreign Exchange andForeign Trade Law applies to foreign
investors who intend to makeinvestments in water supply andwaterworks industry in Japan.

- 60 -

Schedule of the State of Israel
1

Sector:

Veterinary Medicine

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Measures:

Veterinarians Law, 1991, Articles 5
and 17

Description:

1.
Nationality or permanent
residency of the State of Israel(hereinafter referred to in thisSchedule as “Israel”) is required
for licensure as a veterinarian.
2.
Foreign veterinarians, who are
not nationals or permanent residentsof Israel, shall obtain a permit
from the Ministry of Agriculture foradvising, teaching and research inveterinary medicine.

- 61 -

2

Sector:Transportation

Sub-Sector:

Motor Vehicle

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Measures:

Supervision Order on Commodities andServices (Imports of Motor Vehicle
and Services to Motor Vehicle),
1978, Article 3
Law of Licensing of Services andProfessions in the Motor Vehicle
Sector, 2016, Articles 2, 20, 41,
42, 44, 68, 97, 98, 136, 143 and 149
Companies Law, 1999, Article 1

Description:

1.
License is required in order tocommercially import motor vehicles.
The director general and at least
one interested party as defined in
Article 1 of the Companies Law,
1999, of a corporation applying forlicensure, shall be nationals orpermanent residents of Israel.
2.
License is required in order tomanufacture and market motor
vehicles or to trade in motor
vehicles and the license holder mustbe:(a)a national or permanent
resident of Israel who is asole proprietor; or(b)a registered corporation in
Israel whose director generaland at least one interested
party as defined in Article 1of the Companies Law, 1999, arenationals or permanent
residents of Israel.

- 62 -

3.
License is required in order tobrokerage in motor vehicle private
import and the license holder mustbe:(a)a national or permanent
resident of Israel who is asole proprietor; or(b)an employee of a registeredcorporation in Israel whose
director general and at least
one interested party as definedin Article 1 of the Companies
Law, 1999, are nationals orpermanent residents of Israel.

4.
License is required in order tomanufacture traffic products, as
defined in Article 2 of the Law ofLicensing of Services andProfessions in the Motor Vehicle
Sector, 2016, and the license holder
must be:(a)a sole proprietor; or(b)a registered corporation in
Israel the director general andat least one interested party
as defined in Article 1 of theCompanies Law, 1999, of which
are nationals or permanent
residents of Israel.

5.
Israel may determine thatcertain traffic products, as definedin Article 97 of the Law ofLicensing of Services andProfessions in the Motor Vehicle
Sector, 2016, are made for marketingin the Israeli market alone.
6.
Nationality or permanent
residency of Israel is required forlicensure as a motor vehicle
appraiser.

- 63 -

7.
Nationality or permanent
residency of Israel is required forlicensure as a professional manager
of a motor vehicle service center(garage) and at least one licensed
professional manager is required to
be available on the premises inorder to operate a motor vehicle
garage.
Note 1:“Traffic‎Product”‎as‎defined in Article 2 of the
Law of Licensing ofServices and Professions in
the Motor Vehicle Sector,
2016, is an accessory, apart, system of parts, anappliance with the
exception of an appliancethat is a work tool used bygarages or manufacturers
only, a device or substancethat is a liquid, solid orgas, that is used ordesigned to be used for
assembly, maintenance or
the proper operation of a
motor vehicle or for
ensuring the safety of a
motor vehicle or for
ensuring user safety or forhis convenience.

Note 2:For the purposes of thisSchedule, it is understoodthat director general is anequivalent position tochief executive officer.

Note 3:For the purposes of thisSchedule,‎“interested‎
party”,‎as‎defined‎in‎
Article 1 of the Companies
Law, 1999, is:(a)a substantial shareholder;(b)a person with the power toappoint one or more members of
the board of directors or the
director general; or- 64 -

(c)a person who serves in theenterprise as a member of theboard of directors or as adirector general.

- 65 -

3

Sector:Transportation

Sub-Sector:

Driving Licenses and Road Transport
Services, including Passenger
Transportation Services and Motor
Vehicle Mechanics Safety Officer

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Measures:

Road Transport Regulations, 1961,
Articles 175-190, 213-213H, 216,
221, 221A, 247, 251, 531, 567, 567B
and 582

Prohibition of Performance
Requirements (Article 6)

Road Transport Ordinance, Article 14
Supervision Order on Commodities andServices (Purchase, Installation and
Maintenance of Taxi Meters), 1984
Companies Law, 1999, Article 1
Description:

1.
Nationality or permanent
residency of Israel is required toobtain certain types of driving
licenses, in accordance with
Articles 175-185, 189 and 190 ofRoad Transport Regulations, 1961.
2.
Nationality or permanent
residency of Israel is required forlicensure as a driving instructor.
3.
Nationality or permanent
residency of Israel is required forlicensure as a taxi operator.

- 66 -

4.
Nationality or permanent
residency of Israel is required
for an individual working ininstallation or maintenance of taxi
meters and an enterprise operating
in installation or maintenance oftaxi meters must have at least one
interested party, as defined in
Article 1 of the Companies Law,
1999, who is a national or permanent
resident of Israel.
5.
Nationality or permanent
residency of Israel is required forauthorization to work as a motor
vehicle mechanics safety officer.

- 67 -

4

Sector:Transportation

Sub-Sector:

Road Haulage Services

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Measures:

Freight Services Regulations, 2001,
Articles 2 and 24

Prohibition of Performance
Requirements (Article 6)

Law of Transport Services, 1997
Description:

1.
Individuals applying for a
haulage license and the operator of
the haulage shall be nationals orpermanent residents of Israel.
2.
The professional manager of
haulage shall be a national or
permanent resident of Israel.

- 68 -

5

Sector:Transportation

Sub-Sector:

Maritime Transport

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Measures:

Shipping Law (Sea Vessel), 1960

Prohibition of Performance
Requirements (Article 6)

Ports Ordinance, 1971
Ports Regulations (Safety ofNavigation), 1982
Shipping Law (Seafarers), 1973
Maritime Regulations (Seafarers),
2002
Maritime Regulations (Seafarers)(Staffing of Vessels and Tugboats
with Israeli Seafarers), 2016
Shipping and Ports Authority Law,
2004
Shipping Law (Foreign Sea Vessel
under Israeli Control), 2005
Description:

1.
In order to register in the
Israeli vessel registry and carry an
Israeli flag, a majority ownershipof a vessel by a national of Israelor an enterprise incorporated in
Israel or by Israel is required(“Israeli Vessel”).
2.
A foreign vessel that iscontrolled by a national or
permanent resident of Israel or by
an enterprise incorporated in Israel
shall be registered in Israel inaccordance with Shipping Law(Foreign Sea Vessel under Israeli
Control), 2005 (“Foreign Vessel”).

- 69 -

3.
Israeli seafarers are requiredin order to operate an Israeli
vessel or a foreign vessel referred
to in paragraph 2.
4.
Seafarer certificate requires
nationality of Israel. Providing acertificate to non-residents is
subject to prior approval by the
Administrator of Shipping and Ports.

- 70 -

6

Sector:Transportation

Sub-Sector:

Air Transport and Air Cabotage

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Measures:

Air Navigation Law, 2011

Prohibition of Performance
Requirements (Article 6)

Aviation Services Licensing Law,
1963
Airports Authority Law, 1977
Air Navigation Regulations(Operating of Aircraft and Rules of
Flight), 1981
Description:

1.
A license to operate an Israeli
airline or aircraft is given to:(a)a permanent resident of Israelwith no main business
operations outside of Israel;(b)a national of Israel with amain business operations in
Israel; or(c)an enterprise incorporated in
Israel which is directly
controlled by a national or
permanent resident of Israel orby an enterprise whose control
and ownership is in accordancewith an international aviation
treaty that Israel is a partyto.

2.
Air cabotage is operated byIsraeli aircrafts only.

- 71 -

7

Sector:Electronic Signature

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Measures:

Electronic Signature Law, 2001,
Articles 11 and 22

Description:

1.
Registration as a “foreignissuer of electronic certificate”
may be subject to additional
conditions as set out in theElectronic Signature Law, 2001.
2.
Registration as an issuer ofelectronic certificate other than a“foreign issuer of electronic
certificate” requires to be anational or permanent resident ofIsrael or an enterprise incorporated
in Israel and having its main
operations and center of business in
Israel.

- 72 -

8

Sector:Tourism

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

Prohibition of Performance
Requirements (Article 6)

Measures:

Tourism Services Regulation (Tour
Guides), 1967, Article 2
Tourism Services Law, 1976,
Article 3

Description:

Nationality or permanent residencyof Israel is required for licensure
as a tour guide.

- 73 -

9

Sector:Agriculture

Sub-Sector:

Fishery

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Measures:Fishery Regulation, 1937,
Articles 2-3

Description:

Issuance, continuation and amendmentof fishery license requireauthorization by the Ministry ofAgriculture. Israel reserves theright not to issue a fishery license
for foreign nationals or enterprises
under Fishery Regulation, 1937.

- 74 -

10

Sector:Communications

Sub-Sector:

Domestic Fixed Line Services,
International Communications
Services and Radio and Mobile
Telephone Services

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Measures:Communications Regulations(Telecommunications andBroadcasting) (Procedures andConditions for Obtaining a General
License for the Provision ofDomestic Fixed-Line
Telecommunication Services), 2000,
Article 11

Senior Management and Board of
Directors (Article 7)

Communication Law(Telecommunications andBroadcasting), 1982, Articles 4-4Hand 6-7
Communications Regulations(Telecommunications andBroadcasting) (Procedures andConditions for Obtaining a Unified
General License), 2010, Article 10
Description:

1.
In an enterprise supplying
domestic fixed line services:(a)foreign holding is limited to
80 percent;(b)

75 percent of the members of
the board of directors shall benationals of Israel who areresidents of Israel; and(c)the director general shall be anational of Israel who is a
resident of Israel.

- 75 -

2.
In an enterprise supplying
international communications
services:(a)foreign holding is limited to74 percent;(b)majority of the members of theboard of directors shall benationals of Israel who areresidents of Israel;(c)the director general shall be anational of Israel who is a
resident of Israel; and(d)the enterprise shall beincorporated in Israel and haveits main operations and centerof business in Israel.

3.
In an enterprise supplying
radio and mobile telephone services:(a)foreign holding is limited to
80 percent;(b)majority of the members of theboard of directors shall benationals of Israel who areresidents of Israel; and(c)the enterprise shall beincorporated in Israel and haveits main operations and centerof business in Israel.

- 76 -

11

Sector:Communications

Sub-Sector:

Broadcasting

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Measures:

Broadcasting Authority Law, 1965,
Articles 44C-44F
Communication Law(Telecommunications andBroadcasting), 1982, Articles 4-4Hand 6-7
Communications Regulations (Terms
and Conditions for Satellite
Broadcasting License), 1998,
Articles 13, 20 and 21
Second Authority for Television andRadio Law, 1990, Articles 41 and 59
Public Broadcasting Law, 2014,
Article 64

Description:

1.
In an enterprise that holds alicense for cable broadcasting atleast 26 percent of the means ofcontrol in the enterprise shall beheld by nationals of Israel who areresidents of Israel. The license
shall not be granted to an
enterprise in which a foreign
government holds shares, but the
Minister of Communications may
authorize an indirect holding in thelicensee of up to 10 percent by suchan enterprise.
2.
In an enterprise that holds alicense for satellite broadcasting:- 77 -

(a)at least 26 percent of themeans of control in theenterprise shall be held by
nationals of Israel who areresidents of Israel;(b)

its main operations and centerof business are located in
Israel;(c)a majority of its members of
the board of directors and any
persons in equivalent positions
shall be nationals of Israel
who are residents of Israel;
and

(d)

its director general or any
persons in equivalentmanagement position shall be anational of Israel who is a
resident of Israel.

3.
At least 51 percent of themeans of control in a holder of aconcession for operating commercial
television broadcasting or regional
radio broadcasting must be held by
nationals of Israel who areresidents of Israel.
4.
In television broadcasting,including satellite and cablebroadcasting, each broadcasting
enterprise operating under license
or concession is committed to spend
a certain amount of its annual
budget for local production, as
defined in the legislation listed in
the “Measures” element and to
broadcast it.

- 78 -

12

Sector:Legal Services

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Measures:

Bar Association Law, 1961,
Articles 20, 42 and 98-98M

Description:

1.
A branch of a foreign law firm
may be established in Israel only if
it employs either at least one
Israeli licensed lawyer or one
foreign lawyer, as defined in the
Bar Association Law, 1961, andsubject to the conditions set forth
therein.

Prohibition of Performance
Requirements (Article 6)

2.
Nationality, permanent
residency or temporary residency ofIsrael is required for licensure asan Israeli lawyer.

- 79 -

13

Sector:Investigation Services

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Measures:

Private Investigators and Security
Services Law, 1972, Articles 4,9-11 and 13

Description:

1.
Nationality or permanent
residency of Israel is required forlicensure as a private investigator.
2.
Ownership of an investigationenterprise may be held only by alicensed private investigator.

- 80 -

14

Sector:Financial Services

Sub-Sector:

Tax Consultant, Customs Agent,
Insurance, Non-Banking Credit
Institutions, Acceptance of Deposits
and Other Repayable Funds from the
Public, Payment Services

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Measures:

Customs Agents Law, 1964, Article 4

Senior Management and Board of
Directors (Article 7)

Supervision of Financial Services
Law (Consultancy, Marketing andClearing for Pension), 2005,
Articles 5 and 6
Regulation of Representation by Tax
Consultants Law, 2005, Article 10
Supervision of Financial Services
Law (Regulated Financial Services),
2016
Description:

1.
Nationality or permanent
residency of Israel is required forlicensure as a tax consultant.
2.
Nationality or permanent
residency of Israel is required forlicensure as a customs agent.
3.
Nationality or permanent
residency of Israel is required forlicensure as a pension insurance
consultant or agent.

- 81 -

4.
Individual suppliers andindividual licensees of financial
services in the following subsectors shall be nationals orpermanent residents of Israel and an
enterprise which is a licensee offinancial services in the following
sub-sectors shall appoint at least
one position holder who is anational or permanent resident ofIsrael:(a)non-banking credit services;(b)

acceptance of deposits andother repayable funds from thepublic including keeping andmanagement of financial assets;
and

(c)

payment services including
remittance and currency
conversion.

Note:

For the purposes of thisSchedule, except for entry
No. 16, “position holder” isthe director general, chiefbusiness officer, deputy
director general, vicedirector general or any
persons in equivalent
positions, member of theboard of directors or otherofficers who directly reportto the director general, as
defined in Article 1 of theCompanies Law, 1999.

- 82 -

15

Sector:Financial Services

Sub-Sector:

Settlement and Clearing Services

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Measures:

Securities Law, 1968
By-Laws of the Tel-Aviv Stock
Exchange Clearing House Ltd.,Part One, Chapter 2, Article 2

Description:

1.
Settlement and clearing
services for the Tel-Aviv Stock
Exchange (TASE) must be supplied
through an enterprise which is amember of TASE and incorporated in
Israel.
2.
Foreign TASE membership (remotemembership) is possible when meeting
relevant regulatory requirements.
3.
Remote members of the TASE
cannot supply settlement andclearing services for the TASE.

- 83 -

16

Sector:Postal, Courier and Financial
Services

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Measures:

Post Law, 1986, Articles 1-1H, 5A-5C
and 88-88U
Israel Postal Company Ltd. General
License, 2015, Article 42 andAppendix c

Description:

Majority of the members of the boardof directors and position holders as
defined in Appendix c to Israel
Postal Company Ltd. General License,
2015, in a licensee operating
postal, courier and financial
services under the Israel Postal
Company Ltd. General License, 2015,
shall be nationals of Israel who areresidents of Israel and hold asecurity clearance.

- 84 -

17

Sector:Land Survey

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Measures:

Land Surveyors Regulations, 1982,
Article 3
Survey Ordinance, 1929, Article 3

Description:

Israeli nationality is required forlicensure as a land surveyor.

- 85 -

18

Sector:All

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

Senior Management and Board of
Directors (Article 7)

Measures:

Companies Law, 1999, Articles 239
and 240

Description:

A public enterprise or an enterprisethat has issued debt securities tothe public (hereinafter referred toas “debenture enterprise”) shallappoint on its board of directors atleast two outside directors who arenationals or permanent residents of
Israel. However, a public enterpriseor a debenture enterprise whose
shares or debt, or part of them,were offered to the public outside
Israel, or that is registered in a
stock exchange outside Israel, may
appoint outside directors who are
not nationals or permanent residentsof Israel.

- 86 -

19

Sector:All

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

Prohibition of Performance
Requirements (Article 6)

Measures:

Bankruptcy Ordinance, 1980
Companies Law, 1999, Articles 350351
Companies Ordinance, 1983

Description:

1.
When an investor or aninvestment is declared bankrupt or
insolvent and subject to debt
restructuring proceedings, Israel
may demand a transfer of technology,
a production process or otherproprietary knowledge to the extent
necessary for the proceedings.
2.
When an investor or aninvestment is party to a license
contract, as referred to in
subparagraph 1(h) of Article 6 ofthis Agreement, with an enterpriseor individual which is declaredbankrupt or insolvent and subject todebt restructuring proceedings,
Israel may require the continuationof a duration of the license
contract and the cancelation or
rejection thereof.

- 87 -

20

Sector:All

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Measures:Law for Hazardous Substances, 1993

Prohibition of Performance
Requirements (Article 6)

Law for the Prevention of Asbestos
Hazards and Damaging Dust, 2011
Law of Environmental Treatment ofElectrical and Electronic Equipment
and Batteries, 2012
Water Law, 1959
Hazardous Substances Regulations(Import and Export of Hazardous
Substances), 1994
Law for the Regulation of thePractice of Pest Control, 2016
Law for the Treatment of Packing
Material, 2011
Description:

1.
Nationality or permanent
residency of Israel is required forhazardous substances handler permit.
2.
A refuse disposal enterprisefor environmental treatment ofelectrical and electronic equipment
and batteries shall employ only
nationals or permanent residents of
Israel.
3.
Nationality or permanent
residency of Israel is required forlicensure as a pest exterminator.
4.
Nationality or permanent
residency of Israel is required toobtain a permit for collection andtreatment of asbestos.

- 88 -

5.
At least one employee of anasbestos contractor, that performs
dismantling and removal of asbestos,shall be a national or permanent
resident of Israel.
6.
Export of packaging material
waste is limited to 20 percent of
the recycling objective inaccordance with the Law for theTreatment of Packing Material, 2011.
7.
Obtainment of permit for exportof hazardous substances requires
authorization by the Ministry ofEnvironmental Protection.

- 89 -

21

Sector:

Employment Contractors Services

Sub-Sector:

Building Cleaning Services

Industry
Classification:
Obligations
Concerned:

Senior Management and Board of
Directors (Article 7)

Measures:

Law of Employment of Workers by
Private Employment Contractors, 1996
Companies Law, 1999, Article 1

Description:

A private employment contractor
enterprise for employment of workers
in the building cleaning services
shall appoint at least one position
holder who is a national or
permanent resident of Israel.

- 90 -

Annex II
Non-Conforming Measures referred toin paragraph 2 of Article 8
1.
The Schedule of a Contracting Party sets out, pursuant
to paragraph 2 of Article 8, the specific sectors, subsectors or activities for which that Contracting Party may
maintain existing, or adopt new or more restrictive,
measures that do not conform with obligations imposed by:

2.

(a)

Article 2;(b)

Article 3;(c)

Article 6; or(d)Article 7.

Each Schedule entry sets out the following elements:(a)“Sector” refers to the sector for which the entry
is made;(b)“Sub-Sector”, where referenced, refers to thespecific sub-sector for which the entry is made;(c)“Industry Classification”, where referenced, andonly for transparency purposes, refers to theactivity covered by the non-conforming measure,according to domestic or international industry
classification codes;(d)“Obligations Concerned” specifies the obligations
referred to in paragraph 1 that, pursuant toparagraph 2 of Article 8, do not apply to thesectors, sub-sectors or activities listed in theentry;(e)“Description” sets out the scope or nature of thesectors, sub-sectors or activities covered by theentry; and(f)“Existing Measures”, where specified, identifies,
for transparency purposes, a non-exhaustive listof existing measures that apply to the sectors,
sub-sectors or activities covered by the entry.

3.
In the interpretation of an entry, all elements of theentry shall be considered. The “Description” element shallprevail over all other elements.

- 91 -

4.

For the purposes of this Annex:(a)the term “JSIC” means Japan Standard Industrial
Classification set out by the Ministry ofInternal Affairs and Communications, and revisedon October 30, 2013; and(b)the term “CPC” means Provisional Central Product
Classification (Statistical Papers Series M
No. 77, Department of International Economic andSocial Affairs, Statistical Office of the United
Nations, New York, 1991).

- 92 -

Schedule of Japan1

Sector:All

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Description:

When transferring or disposing of
its equity interests in, or theassets of, a state enterprise or agovernmental entity, Japan reserves
the right to:

Senior Management and Board of
Directors (Article 7)(a)prohibit or impose limitations
on the ownership of suchinterests or assets byinvestors of the State ofIsrael or their investments;(b)

impose limitations on theability of investors of theState of Israel or theirinvestments as owners of suchinterests or assets to control
any resulting enterprise; or(c)adopt or maintain any measure
relating to the nationality of
executives, managers or membersof the board of directors of
any resulting enterprise.

Existing
Measures:- 93 -

2

Sector:All

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Description:

In the event where the supply oftelegraph services, postal services
and betting and gambling services,manufacture of tobacco products,
manufacture of Bank of Japan notes
and minting and sale of coinage inJapan, which are restricted todesignated enterprises orgovernmental entities, areliberalized to those other than thedesignated enterprises orgovernmental entities, or in theevent where such designatedenterprises or governmental entities
no longer operate on a noncommercial basis, Japan reserves theright to adopt or maintain any
measure related to those activities.

Senior Management and Board of
Directors (Article 7)

Existing
Measures:- 94 -

3

Sector:All

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

Most-Favored-Nation Treatment(Article 3)

Description:

Japan reserves the right to adopt ormaintain any measure that accords
differential treatment to countries
under any bilateral or multilateralagreement involving:(a)aviation;(b)fisheries; or(c)maritime matters, including
salvage.

Existing
Measures:- 95 -

4

Sector:All

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Description:

National Treatment and Most-FavoredNation Treatment may not be accorded
to investors of the State of Israel
and their investments with respect
to subsidies.

Most-Favored-Nation Treatment(Article 3)

Existing
Measures:- 96 -

5

Sector:Aerospace Industry

Sub-Sector:

Aircraft Industry
Space Industry

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

Japan reserves the right to adopt ormaintain any measure relating to theinvestment in aircraft industry andspace industry.

Existing
Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Articles 27 and 30
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Articles 3 and 5- 97 -

6

Sector:Arms and Explosives Industry

Sub-Sector:

Arms Industry
Explosives Manufacturing Industry

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

Japan reserves the right to adopt ormaintain any measure relating to theinvestment in the arms industry andexplosives manufacturing industry.

Existing
Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Articles 27 and 30
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Articles 3 and 5- 98 -

7

Sector:EnergySub-Sector:

Electricity Utility Industry
Gas Utility Industry
Nuclear Energy Industry

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

Japan reserves the right to adopt ormaintain any measure relating toinvestment in the energy industry
listed in the “Sub-Sector” element.

Existing
Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Articles 27 and 30
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Articles 3 and 5- 99 -

8

Sector:Fisheries

Sub-Sector:

Fisheries within the TerritorialSea, Internal Waters, Exclusive
Economic Zone and Continental Shelf

Industry
Classification:

JSIC 031

Marine fisheries

JSIC 032

Inland water fisheries

JSIC 041

Marine aquaculture

JSIC 042

Inland wateraquaculture

JSIC 8093

Recreational fishingguide business

Obligations
Concerned:

National Treatment (Article 2)
Most-Favored-Nation Treatment(Article 3)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

Japan reserves the right to adopt ormaintain any measure relating toinvestment in fisheries in the
territorial sea, internal waters,
exclusive economic zone andcontinental shelf of Japan.
For the purposes of this entry, theterm “fisheries” means the work oftaking and cultivation of aquatic
resources, including the following
fisheries related activities:(a)investigation of aquatic
resources without taking such
resources;(b)luring of aquatic resources;(c)preservation and processing offish catches;- 100 -

Existing
Measures:(d)transportation of fish catches
and fish products; and(e)provision of supplies to othervessels used for fisheries.

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3
Law for Regulation of Fishing
Operation by Foreign Nationals (Law
No. 60 of 1967), Articles 3, 4 and 6
Law concerning the Exercise ofSovereign Rights concerning
Fisheries in the Exclusive Economic
Zones (Law No. 76 of 1996), Articles
4, 5, 7, 8, 9, 10, 11, 12 and 14- 101 -

9

Sector:Information and Communications

Sub-Sector:

Broadcasting Industry

Industry
Classification:

JSIC 380

Establishments engaged
in administrative or
ancillary economic
activities

JSIC 381

Public broadcasting,
except cablecasting

JSIC 382

Private-sector
broadcasting, except
cablecasting

JSIC 383

Cablecasting

Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

Japan reserves the right to adopt ormaintain any measure relating toinvestment in broadcasting industry.

Existing
Measures:

Foreign Exchange and Foreign
Trade Law (Law No. 228 of 1949),
Article 27
Cabinet Order on Foreign Direct
Investment (Cabinet Order No. 261
of 1980), Article 3
Radio Law (Law No. 131 of 1950),
Chapter 2
Broadcast Law (Law No. 132 of 1950),
Chapters 5 and 8- 102 -

10

Sector:Land Transaction

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Description:

With respect to the acquisition orlease of land properties in Japan,
prohibitions or restrictions may be
imposed by Cabinet Order on foreign
nationals or legal persons, where
Japanese nationals or legal persons
are placed under identical orsimilar prohibitions or restrictionsin the foreign country.

Existing
Measures:

Alien Land Law (Law No. 42 of 1925),
Article 1

Most-Favored-Nation Treatment(Article 3)- 103 -

11

Sector:Public Law Enforcement andCorrectional Services and Social
Services

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Most-Favored-Nation Treatment(Article 3)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

Japan reserves the right to adopt ormaintain any measure relating toinvestment in public law enforcement
and correctional services, and insocial services such as income
security or insurance, social
security or insurance, social
welfare, primary and secondary
education, public training, healthand child care.

Existing
Measures:- 104 -

12

Sector:Transport

Sub-Sector:

Air Transport

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

Japan reserves the right to adopt ormaintain any measure with respect toinvestment in airports or airport
operation services.
For the purposes of this entry, theterm “airport operation services”
means the supply of air terminal,
airfield and other airport
infrastructure operation services ona fee or contract basis. Airport
operation services do not include air
navigation services.

Existing
Measures:- 105 -

Schedule of the State of Israel
1

Sector:Land and Real Estate

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Description:

The acquisition of rights to land
and real estate by foreign nationals
or enterprises controlled by foreign
nationals is subject to the priorapproval by the Israel Land
Authority Council.

Existing
Measures:

Israel’s Land Law, 1960

- 106 -

2

Sector:Transportation

Sub-Sector:

Airports and Ports

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

The State of Israel (hereinafterreferred to in this Schedule as“Israel”) reserves the right toadopt or maintain any measure withregard to airports and ports,
including construction, groundhandling services and services
supplied or operated in airport andports and including subjecting ports
development and assets companies,
port companies and authorizedcompanies, as defined in the
Shipping and Ports Authority Law,
2004, to an order of essential stateinterests, or to any otherrestrictions.

Existing
Measures:

Shipping and Ports Authority Law,
2004
Ports Ordinance, 1971
Shipping and Ports Order(Announcement on Essential State
Interests in Eilat Port Company
Ltd.), 2012
Airports Authority Law, 1977

- 107 -

3

Sector:Transportation

Sub-Sector:

Light Rail Transit

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

Israel reserves the right to adopt
or maintain any measure with regard
to light rail transit, including
manufacturing and services related
to light rail transit.

Existing
Measures:

Railroad Track Ordinance, 1972

- 108 -

4

Sector:Transportation

Sub-Sector:

Supporting Services for Road
Transport and Passenger
Transportation

Industry
Classification:

CPC 744

Supporting services forroad transport

CPC 7121

Other scheduled
passenger
transportation

Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

Israel reserves the right to adopt
or maintain any measure with regard
to supporting services for roadtransport and passenger
transportation. This entry does notinclude manufacturing of omnibus andcomponents for omnibus.

Existing
Measures:- 109 -

5

Sector:Transportation

Sub-Sector:

Maritime Cabotage

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Description:

Israel reserves the right to adopt
or maintain any measure with regard
to maritime cabotage involving
national treatment or employment ofseafarers on vessels performing
cabotage.

Existing
Measures:

Law of Cabotage (Permit for a
Foreign Sea Vessel), 2005

Prohibition of Performance
Requirements (Article 6)

Cabotage Ordinance (Permit for a
Foreign Sea Vessel) (Request for
Permit), 2012

- 110 -

6

Sector:Human Health, Education, Law
Enforcement and Correctional
Services and Social Services

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

Israel reserves the right to adopt
or maintain any measure with regard
to human health including healthinstitutions, equipment, services,
data exchange and products,
education, law enforcement andcorrectional services and, to theextent they are established or
maintained for a public purpose,social services including income
security or insurance, social
security or insurance, social
welfare, public housing and childcare.

Existing
Measures:- 111 -

7

Sector:Distribution Services

Sub-Sector:
Industry
Classification:

CPC 62112

Sales on a fee orcontract basis of foodproducts, beverages andtobaccoCPC 62113

Sales on a fee orcontract basis offuels, metals, ores,
timber, building
materials andindustrial andtechnical chemicals

CPC 62117

Sales on a fee orcontract basis ofpharmaceutical andmedical goods andcosmetics

CPC 62226

Wholesale tradeservices of beverages

CPC 62228

Wholesale tradeservices of tobacco
products

CPC 6225

Wholesale tradeservices ofpharmaceutical andmedical goods andcosmetics

CPC 6227

Wholesale tradeservices ofintermediate products,
other thanagricultural; wholesaletrade services of waste
and scrap and materials
for recycling

CPC 63107

Retail sales ofbeverages not consumedon the spot

- 112 -Obligations
Concerned:

CPC 63108

Retail sales of tobacco
products

CPC 6321

Retail sales ofpharmaceutical andmedical goods andcosmetics

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

Israel reserves the right to adopt
or maintain any measure with regard
to distribution services asfollowing:
(a)

(b)

(c)

commission agents’ services
for:
(i)

alcoholic beverages andtobacco products;(ii)

fuels; or(iii)

pharmaceutical and medical
goods and cosmetics;

wholesale trade services for:(i)

alcoholic beverages;(ii)

tobacco products;(iii)

pharmaceutical and medical
goods and cosmetics; or(iv)

intermediate products
other than agricultural;
waste and scrap andmaterials for recycling;food retailing services for:(i)

alcoholic beverages; or(ii)tobacco products; and- 113 -

(d)non-food retailing services forpharmaceutical and medical
goods and cosmetics.

Existing
Measures:- 114 -

8

Sector:Planning and Construction

Sub-Sector:

Construction

Industry
Classification:
Obligations
Concerned:

Most-Favored-Nation Treatment(Article 3)

Description:

Israel reserves the right to adopt
or maintain any measure that accords
certain advantages with regard toenterprises in the construction
sector.

Existing
Measures:- 115 -

9

Sector:Financial Services

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

Israel reserves the right to adopt
or maintain any measure with respect
to the following financial services:(a)cooperative financial
associations providing credit
and accepting deposits (Credit
Unions);(b)no interest credit and deposit
institutions for mutual
assistance;(c)credit card issuers andprocessors;(d)payment service providers(PSP);(e)platforms for crowd funding;(f)credit information database(credit bureau); or(g)

broker-dealers of financial
instruments. A broker-dealer
is a person or a firm in thebusiness of buying and sellingsecurities, operating as both abroker and a dealer.

- 116 -

Note:“A no interest credit anddeposit institution” is an
institution that is
authorized to accept 30 ormore depositors and toprovide deposit services andloans both with no interest
rate.

Existing
Measures:- 117 -

10

Sector:Postal and Courier Services

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

Israel reserves the right to adopt
or maintain any measure with respect
to postal and courier services forany item below 500 gram.

Existing
Measures:- 118 -

11

Sector:Technical Testing and Analysis
Services
Water Transmission
Services Incidental to Forestry and
Logging
Non-Human Health Services
Exploration and Exploitation, Useand Sale of Hydrocarbons, Minerals,
Stone and Aggregates
Communications
Transportation
Energy, including the Natural Gas,
Oil and Electricity

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

Prohibition of Performance
Requirements (Article 6)

Description:

1.
Israel reserves the right toadopt or maintain any measure,excluding measures involving
subparagraph 1(h) of Article 6 ofthis Agreement, with regard to the
granting of concessions or licenses
in the sectors listed in the“Sector” element, except energy
sector.
2.
Israel reserves the right toadopt or maintain any measure withregard to the granting ofconcessions or licenses in theenergy sector.

Existing
Measures:- 119 -

12

Sector:All

Sub-Sector:

Privatization

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

1.
When transferring or disposingof its equity interests in, or theassets of, a state enterprise or agovernmental entity, Israel reserves
the right to:(a)prohibit or impose limitations
on the ownership of suchinterests or assets byinvestors of Japan or theirinvestments;(b)

impose limitations on theability of investors of Japanor their investments as ownersof such interests or assets tocontrol any resulting
enterprise;(c)adopt or maintain any measure
relating to the nationality or
permanent residency of membersof the board of directors,
position holders or certain
officers of any resulting
enterprise; or(d)impose limitations on thelocation of management, main
operations and center ofbusiness of any resulting
enterprise.

- 120 -

Note:For the purposes of thisSchedule,‎“position‎holder”‎
is the director general,
chief business officer,
deputy director general, vicedirector general or any
persons in equivalent
positions, member of theboard of directors or otherofficers who directly reportto the director general, as
defined in Article 1 of theCompanies Law, 1999. Further
it is understood that
director general is anequivalent position to chief
executive officer.

2.
In the event where the supplyof services, which is restricted todesignated enterprises orgovernmental entities, isliberalized to those other than thedesignated enterprises orgovernmental entities, or in theevent where such designatedenterprises or governmental entities
no longer operate on a noncommercial basis, Israel reserves
the right to adopt or maintain any
measure related to those activities.
Existing
Measures:

Government Companies Law (includingSpecial State Share), 1975
Government Companies Order(Announcement on Essential State
Interests in Ashot Ashkelon
Industries Ltd.), 2005
Government Companies Order(Announcement on Essential State
Interests in Oil Refineries Ltd.),2007
Government Companies Order(Announcement on Essential State
Interests in Oil Refinery – AshdodLtd.), 2006

- 121 -Government Companies Order(Announcement on Essential State
Interests in El-Al Israel AirlinesLtd.), 2004
Government Companies Order(Announcement on Essential State
Interests in IMI Systems Ltd.), 2016
Special State Share in Israel
Chemicals Ltd. and in its Subsidiary
Companies
Special State Share in Zim
Integrated Shipping Services Ltd.
Special State Share in El-Al Israel
Airlines Ltd.

- 122 -

13

Sector:All

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Description:

Israel reserves its right to adopt
or maintain measures to promote
policy objectives for the benefit ofsocially or economicallydisadvantaged groups, including
minorities, disabled persons,military veterans and first-degree
family members of Israeli fallen
soldiers and the development of its
peripheral areas.

Prohibition of Performance
Requirements (Article 6)

Existing
Measures:- 123 -

14

Sector:Communications

Sub-Sector:

Satellite Broadcasting
Cable Broadcasting
Television and Radio Broadcasting
Satellite Telecommunications
Services

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

1.
Members of the boards of
directors and position holders in alicensee of satellite broadcasting,cable broadcasting, television
broadcasting or radio broadcasting
are required to be nationals of
Israel who are residents of Israel
in some cases with security
clearance and are subject toapproval by the relevant regulator.
2.
Israel reserves the right toadopt or maintain any measure withregard to licensing of satellite
communications facilities for thetransmission of voice, data, text,
sound and full motion picture video
between network termination points
and with regard to licensing ofservices for the transmission of
television and radio programs to theconsumer by a satellite system.

Existing
Measures:- 124 -

15

Sector:All

Sub-Sector:

Subsidies and Grants

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Most-Favored-Nation Treatment(Article 3)
Senior Management and Board of
Directors (Article 7)

Description:

Israel reserves the right to adopt
or maintain any measure with regard
to subsidies or grants, including agovernment-supported loan, guarantee
or insurance.

Existing
Measures:Law for Encouragement of Research,
Development and TechnologicalInnovation in Industry, 1984
Law for Encouragement of Capital
Investments, 1959
Law for Encouragement of Capital
Investments in Agriculture, 1980

- 125 -

16

Sector:All

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

Most-Favored-Nation Treatment(Article 3)

Description:

Israel reserves the right to adopt
or maintain any measure that accords
differential treatment to countries
under any bilateral or multilateralagreement or arrangement regarding:(a)aviation;(b)maritime matters, including
search and rescue and salvage;(c)co-production and distribution
in film, video and television;(d)mutual recognition in different
fields; or(e)cooperation in aeronautics andspace.

Existing
Measures:- 126 -

17

Sector:Defense Industry

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Most-Favored-Nation Treatment(Article 3)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

Israel reserves the right to adopt
or maintain any measure with regard
to the defense industry sector.

Existing
Measures:Defense Export Control Law, 2007
Defense Corporations Law, 2005

- 127 -

18

Sector:Communication Services

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

Israel reserves the right to adopt
or maintain certain safeguards withregard to essential communication
services, as defined in theCommunication Law(Telecommunications andBroadcasting), 1982.
Such safeguards may include measuresdealing with:

Existing
Measures:(a)control, means of control or
the ability to appoint a
position holder in a licensee;(b)location of management, main
operations and center ofbusiness; and(c)members of the board of
directors, position holders andcertain officers.

Government Companies Law, 1975
Communication Law(Telecommunications andBroadcasting), 1982
Telecommunications Order(Determination of Essential Service
Provided by “Bezeq” the Israel
Telecommunication Corp, Ltd.), 1997

- 128 -

19

Sector:All

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

1.
Members of the board of
directors, position holders andcertain officers in public bodies as
defined in Security of Public Bodies
Law, 1998, and persons in certain
positions with cyber security
responsibilities, are required to benationals or permanent residents of
Israel and to hold appropriate
security clearances.
2.
Israel reserves the right todemand the imposition or enforcementof the purchase or use of goods
produced or services provided in its
Territory, when the demand is mainly
related to cyber security and is inconformance with national cybersecurity policy.

Existing
Measures:

Security of Public Bodies Law, 1998
Government Decision 2443 of 2015
Government Decision 2444 of 2015

- 129 -

20

Sector:Agriculture

Sub-Sector:

Dairying including Cattle, Goats andSheep Dairying
Poultry and Eggs
Honey including Beekeeping
Groundnuts

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)

Description:

Israel reserves the right to adopt
or maintain any measure relating toagriculture sectors listed in the“Sub-Sector” element.

Prohibition of Performance
Requirements (Article 6)

Existing
Measures:- 130 -

21

Sector:Mining including Phosphates Mining,
Quarrying and Services Incidental to
Mining and Quarrying

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

Israel reserves the right to adopt
or maintain any measure with regard
to mining including phosphates
mining, quarrying and services
incidental to mining and quarrying.

Existing
Measures:

Mining Ordinance- 131 -

22

Sector:EnergySub-Sector:

Gas including Natural Gas
Oil

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

1.
Israel reserves the right toadopt or maintain any measure withregard to the natural gas sector andto essential services in the oil
sector.
2.
Israel may require a petroleum
right holder, as defined in the Oil
Law, 1952, to supply certain amountof oil or oil products for domestic
consumption and usage.
3.
Israel reserves the right toadopt or maintain any measure
involving national treatment or
performance requirements, withregard to oil distillates and oil
refineries and with regard topipeline transport of oil andnatural gas including crude orrefined oil and oil products.
4.
Israel reserves the right toadopt or maintain any measure withregard to storage of liquids orgases and bulk storage services ofliquids (oil or liquefied gas) orgases and with regard to oil and gas
exploration and production.

- 132 -

Existing
Measures:

Government Decision 442 of 2013
Government Decision 476 of 2015
Government Decision 1465 of 2016
Natural Gas Sector Law, 2002
Gas Law (Safety and Licensing), 1989
Oil Law, 1952
Oil Supervisor’s Guidelines forLicensing of Onshore Oil Exploration- 133 -

23

Sector:EnergySub-Sector:

Liquefied Petroleum Gas (LPG)

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

1.
Nationality and residency ofIsrael are required for a natural
person applying for licensure as agas supplier, gas agent or a gas
technician/engineer.
2.
Members of the board of
directors, position holders andcertain officers in an LPG licensedenterprise are required to benationals of Israel who areresidents of Israel, in some caseswith security clearance.
3.
Foreign ownership in an LPG
licensed enterprise may be
restricted.
4.
Foreign LPG technicians may besubject to time limited license.
5.
Israel reserves the right toadopt or maintain any measure
involving performance requirements,
with regard to LPG marketing andexporting.

Existing
Measures:

Gas Law (Safety and Licensing), 1989
Natural Gas Sector Law, 2002

- 134 -

24

Sector:EnergySub-Sector:

Electricity

Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

1.
A licensee as a supplier of anelectricity service who provides anessential service, as defined in theElectricity Market Law, 1996, shallbe subject to the following
conditions:(a)the licensee shall becontrolled by nationals of
Israel who are residents of
Israel;(b)

the maximum rate of means ofcontrol in the licensee to beheld, directly or indirectly,
by non-residents of Israel, issubject to a determination by
the Minister of National
Infrastructures; and(c)members of the board of
directors, position holders andcertain officers in thelicensee are required to benationals of Israel who areresidents of Israel, in somecases with security clearance.

2.
Members of the board of
directors, position holders andcertain officers in an enterpriselicensed to transmit, distribute,
supply or produce electricity are
required to be nationals of Israel
who are residents of Israel, in somecases with security clearance.

- 135 -

3.
Foreign ownership in anenterprise licensed to transmit,
distribute, supply or produce
electricity may be restricted.
4.
Nationality of Israel isrequired for licensure of a natural
person to transmit, distribute,
supply or produce electricity.
5.
Approval of guarantees of aforeign bank to a licensee forselling electricity is subject tothe consideration of the Electricity
Authority.
Existing
Measures:

Electricity Market Law, 1996
The Electricity Authority Book ofStandards- 136 -

25

Sector:Identity Management, BiometricTechnology, Biometric Information
and Databases

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

1.
Israel reserves the right toimpose or enforce any of thefollowing requirements, with regard
to identity management, biometrictechnology and biometric informationand databases:(a)to restrict the exportation orsale for export;(b)

to purchase or use goods
produced or services provided
in its Territory; and(c)to transfer technology, a
production process or otherproprietary knowledge to anatural person or an enterprisein its Territory.

2.
Members of the board of
directors, position holders andcertain officers in an enterprise
responsible for identity management
and/or managing of a biometric
information and database may berequired to be nationals orpermanent residents of Israel, insome cases with security clearance
and the enterprise may be required
to be incorporated in Israel andhave its main operations and centerof business in Israel.
Existing
Measures:- 137 -

26

Sector:Treatment of Waste

Sub-Sector:
Industry
Classification:
Obligations
Concerned:

National Treatment (Article 2)
Prohibition of Performance
Requirements (Article 6)
Senior Management and Board of
Directors (Article 7)

Description:

Israel reserves the right to adopt
or maintain any measure with regard
to treatment of hazardous waste andwith regard to the development ofdomestic treatment capacities ofwaste.

Existing
Measures:- 138 -