Index of "1996 Country Commercial Guides"
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U.S. Department of State 
Israel Country Commercial Guide 
Office of the Coordinator for Business Affairs 
 
 
 
                            COUNTRY COMMERCIAL GUIDE 
                                  FOR ISRAEL 
                                   FY 1996 
 
                             prepared by the  
                        American Embassy, Tel Aviv 
                                 July 1995 
 
This Country Commercial Guide (CCG) presents a comprehensive look at 
Israel's commercial environment through economic, political and market 
analyses. 
 
The CCG's were established by recommendation of the Trade Promotion 
Coordinating Committee (TPCC), a multi-agency task force, to consolidate 
various reporting documents prepared for the U.S. business community.  
Country Commercial Guides are prepared annually at U.S. Embassies 
through the combined efforts of several U.S. government agencies. 
 
This document is a guide to doing business in Israel.  A separate 
Commercial Guide is available for the newly autonomous Palestinian 
Authority areas of Gaza and Jericho, and the West Bank although 
reference is made to these areas in some sections of the report.   U.S. 
firms interested in doing business in these areas should contact U.S. 
Government personnel and organizations listed at the end of this report. 
 
 
                             TABLE OF CONTENTS 
 
 
CHAPTER I.     EXECUTIVE SUMMARY  
 
CHAPTER II.     ECONOMIC TRENDS AND OUTLOOK  
            Major Trends and Outlook 
            Principal Growth Sectors 
            Government Role in the Economy 
            Balance of Payments Situation 
            Infrastructure Situation 
 
CHAPTER III    POLITICAL ENVIRONMENT  
            Nature of Political Relationship with the U.S. 
            Major Political Issues Affecting Business Climate 
            Brief Synopsis of Political System 
            Schedule for Elections 
            Orientation of Major Political Parties 
 
CHAPTER IV    MARKETING U.S. PRODUCTS AND SERVICES 
            Distribution and Sales Channels  
            Use of Agents and Distributors; Finding a Partner  
                 Franchising 
            Direct Marketing 
            Joint Ventures/Licensing 
            Steps to Establishing an Office 
            Selling Factors/Techniques 
            Advertising and Trade Promotion 
            Pricing Product  
            Sales Service/Customer Support 
            Selling to the Government  
            Protecting Your Product from IPR Infringement  
            Need for a Local Attorney  
 
CHAPTER V        LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT 
            Best Prospects for Non-Agricultural Goods and Services 
            Best Prospects for Agricultural Products 
            Significant Investment Opportunities 
 
CHAPTER VI    TRADE REGULATIONS AND STANDARDS 
            Trade Barriers 
            Customs Valuation 
            Import Licenses  
            Export Controls  
            Import/Export Documentation 
            Temporary Entry  
            Labeling, Marking Requirements 
            Prohibited Imports  
            Standards  
            Free Trade Zones/Warehouses 
            Special Import Provisions  
            Membership in Free Trade Arrangements 
 
CHAPTER VII    INVESTMENT CLIMATE  
            Openness to Foreign Investment 
            Conversion and Transfer Policies 
            Expropriation and Compensation 
            Dispute Settlement 
            Political Violence 
            Performance Requirements/Incentives 
            Right to Private Ownership and Establishment 
            Protection of Property Rights 
            Regulatory System 
            Bilateral Investment Agreements 
            OPIC and Other Investment Insurance Programs 
            Labor 
            Foreign Trade Zones/Free Ports 
            Capital Outflow Policy 
            Major Foreign Investors 
 
CHAPTER VIII    TRADE AND PROJECT FINANCING 
            Brief Description of Banking System 
            Foreign Exchange Controls Affecting Trade  
            General Financing Availability  
            Export Finance/Methods of Payment 
            Export Financing and Insurance  
            Project Financing  
            List of Banks with Correspondent U.S. Banking Arrangements  
 
CHAPTER IX    BUSINESS TRAVEL 
            Business Customs 
            Travel Advisory and Visas  
            Holidays  
            Business Infrastructure 
 
CHAPTER X        APPENDICES 
            A. Country Data  
            B. Domestic Economy - Statistics 
            C. Trade Statistics 
            D. Investment Statistics 
            E. U.S. and Country Contacts 
            F. Market Research 
            G. Trade Event Schedule  
 
I.EXECUTIVE SUMMARY 
 
The Peace Process is producing a new economic landscape in the Middle 
East.  The Israeli economy, already the second largest in the region, is 
well-positioned to benefit greatly from these changes. 
 
Two major factors influencing Israel's economy since the 1990's are the 
influx of nearly 600,000 immigrants from the former Soviet Union and the 
peace process.  Both have had positive effects on the Israeli economy, 
and Israel led the developed world with seven percent real GDP growth in 
1994.  Large foreign exchange reserves, the erosion of the Arab boycott 
and stabilization in unemployment set the stage for continued expansion 
through the rest of the decade.  Policies which lessen the government's 
role in the economy will in the future contribute to an environment more 
inviting to U.S. suppliers. 
 
The historic ties between the U.S. and Israel give distinct advantages 
to U.S. firms wishing to do business in Israel.  The U.S.-Israel Free 
Trade Area Agreement, fully implemented on January 1, 1995 is a key 
factor in keeping the U.S. as Israel's largest trading partner.  U.S. 
loan guarantees, a cheaper dollar, and programs which encourage joint 
research and development have helped maintain an advantage for U.S. 
firms.  Bilateral trade in 1994 surpassed the $10 billion mark.  Several 
trade barriers remain, which the U.S. and Israel are working together to 
remove.  These include technical trade barriers, IPR protection, 
packaging requirements and standards and some agricultural policy 
restrictions facing U.S. exporters of agricultural commodities. 
 
Opportunities for U.S. companies exist in virtually every sector of the 
Israeli economy.  Opportunities are particularly strong in 
telecommunications and power generation as government privatization 
plans continue to develop; hotel development and supply as tourism 
grows; and airport/ports and the environmental sector as investment in 
infrastructure continue.  Israel's leading edge high tech sectors 
(software, biotech etc.) beckons new partnerships and new products from 
the United States. 
 
Israel has an increasingly open, modern and sophisticated commercial 
environment with a well-educated population.  The market for U.S. goods 
and services exists now and will continue to expand.  U.S. firms should 
take advantage of these market factors and obtain their rightful share 
in the fruits of peace. 
 
Country Commercial Guides are available on the National Trade Data Bank 
on CD-ROM or through the Internet.  Please contact STAT-USA at 1-800-
STAT-USA for more information.  To locate country commercial guides via 
the Internet, please use the following world wide web address: www.stat-
usa.gov.  CCGs can also be ordered in hard copy of on diskette from the 
National Technical Information Service (NTIS) at 1-800-553-NTIS.   
 
 
II. ECONOMIC TRENDS AND OUTLOOK 
 
Major Trends and Outlook 
 
The two major factors influencing Israel's economy since 1990 are the 
influx of nearly 600,000 immigrants from the former Soviet Union and the 
peace process.  Both have been positive influences, leading to an 
average annual growth rate since 1990 of approximately 5 percent.  GDP 
growth in 1995 is expected to reach between 4.5-5 percent, on the heels 
of 7 percent GDP growth in 1994.  
 
Israel's economic growth continues to be primarily export-led.  The 
almost frenetic double-digit growth in exports which characterized the 
past few years as Israel took advantage of the erosion of the Arab 
boycott to penetrate new markets in Asia and East Europe is expected to 
slow in 1995.  Imports of both consumer and investment goods are rising 
rapidly -- 12.7 percent in 1994 and by an estimated 10.1 percent per 
annum in the first quarter of 1995, leading to a growing balance of 
payments deficit.  In 1994 the balance of payments deficit more than 
doubled, reaching $2.8 billion and is estimated to reach $4.5 billion by 
the end of 1995.  Given extraordinarily high foreign exchange reserves 
of over $9 billion and U.S. loan guarantees the balance of payment gap 
does not portend a crisis of macroeconomic proportions but remains a 
problematic issue for policymakers. Two way trade between the U.S. and 
Israel is slightly over $10 billion, with the balance in Israel's favor. 
 
Inflation reached 14.5 percent in 1994 but looks likely to return to 
near single digit rates in 1995.  In order to reach its goal of 8-11 
percent inflation in 1995, the Bank of Israel is employing a restrictive 
monetary policy which has slowed levels of economic growth and led to 
real interest rate levels of close to 5 percent. Unemployment stabilized 
at 7.8 percent in the last quarter of 1994-early 1995, after reaching 
over 12 percent in 1993.  Remarkably, since Israel's massive immigration 
wave began in 1990, more jobs have been created than new labor market 
entrants. 
 
The current positive trends in Israel's economy are expected to comtinue 
through the year 2000, as Israel's benefits from the fruits of peace, 
extensive investment in infrastructure and education and new immigrants 
continue their assimilation into Israel's economy.  Maintaining 
discipline in public sector spending, continuing economic deregulation 
and reducing the current balance of payments gap will be crucial to 
Israel's achievement of sustainable non-inflationary growth over the 
long run. 
 
Principal Growth Sectors 
 
In 1995 construction will be a leading growth sector due to the large 
number of proposed infrastructure projects.  Investment in 
infrastructure remains a high priority, especially in such sectors as 
power, ports/airports, housing, transportation and water.  The 
government alone will expend $750 million on infrastructure projects in 
1995.  Regional infrastructure projects under the peace process umbrella 
also present significant opportunities. 
 
The industrial manufacturing sector is expected to grow by 5-6 percent 
in 1995, led by the chemical and electronic industries.  Non-defense 
commodity imports of both capital and consumption goods are also 
expected to maintain an average growth rate of over 10 percent. 
 
The steady, ongoing rise in incoming tourism is driving growth in hotel 
services and tourism infrastructure.  It is expected that the number of 
tourists will triple during the next decade.   
 
Government Role in the Economy 
 
Despite a commitment to reduce the government's traditional, 
interventionist role in the economy, government involvement remains 
high.  In the trade area, the formation of three Free Trade Area 
Agreements (FTAA), including one with the U.S., has reduced government 
involvement, although government-imposed quotas and duties still heavily 
influence food and agricultural imports.  The Government of Israel (GOI) 
continues to set sourcing requirements (eg. country of origin) on the 
procurement of certain commodities such as wheat, feedgrains, and 
soybeans, although it has recently relinquished its monopoly on the 
importation of meat. 
 
The GOI has announced plans to sell off most of its holdings in 
government companies, including government shares in commercial banks.  
Privatization plans, however, proceed slowly.  El-Al (the national 
airline), Zim Maritime (national shipping company), Bezek (national 
telecommunications company), Tahal (national water planning company), 
Israel Electric Company (IEC) and the countries three leading banks are 
all still owned by the government.  There has been steady liberalization 
of the capital and foreign exchange markets. 
 
Balance of Payments Situation 
 
The government's large balance of payments deficit is significantly 
ameliorated by unilateral capital flows from the U.S. and other public 
and private sources.  In recognition that the U.S. indirectly finances 
Israel's trade deficit with Europe and Japan, the Prime Minister has 
called for a reorientation of Israel's trade relations in favor of the 
U.S., which offers better market access for Israeli goods and services, 
while continuing to seek increased market access with the European 
Union.   
 
Infrastructure Situation 
 
The Government of Israel is making large investments in infrastructure 
projects.  One of the top priorities is the improvement of public 
transportation, from the expansion of Israel's neglected railway system 
to the development of municipal lightrail/mass transit systems in Tel 
Aviv, Haifa and Jerusalem.  After years of neglect of the national road 
system, the construction of new roads forms a major government 
expenditure.  Expansion of Israel's air and sea ports is continuing and 
will receive additional impetus as a result of the peace negotiations.   
 
In the energy sector, the country's total generating capacity is to be 
increased by around 4,000 MW (almost 60 percent) by the end of the 
decade, in order to meet the needs of industry and a growing population.  
The GOI is also showing increasing interest in environmental projects, 
from the development of regional sanitary landfills and recycling 
systems to air pollution and waste water treatment.   
 
 
III.  POLITICAL ENVIRONMENT 
 
Bilateral Relationship with the United States 
 
Israel and the United States are bound closely by historic, religious, 
political and cultural ties as well as by many mutual interests.  
Continuing U.S. economic and security assistance is an acknowledgment of 
these ties and signals a strong and long-lasting U.S. commitment to 
Israel.  Relations between the U.S. and Israel have been strengthened in 
recent years by the establishment of bilateral cooperative institutions 
in many fields.  Foundations in the fields of science and technology 
include the Binational Science Foundation, the Binational Agricultural 
Research and Development Foundation, and the U.S. - Israel Science and 
Technology Commission.  The U.S.-Israel Education Foundation sponsors 
educational and cultural programs. 
 
The issue of Arab-Israeli peace has been a major focus in U.S. - Israeli 
relations.  On September 13, 1993, Prime Minister Yitzhak Rabin and PLO 
Chairman Yasser Arafat signed the Declaration of Principles which 
outlined a six-year timetable for peace between Israel and the 
Palestinians.  On May 4, 1994, Rabin and Arafat initialed an agreement 
implementing the first stage of the agreement: self-rule for Gaza and 
Jericho under the administration of a Palestinian Authority (PA).  
Israel and the PA are aiming to achieve the transfer of civil authority 
on the West Bank from the Israeli Civil Administration to the 
Palestinian Authority in the summer of 1995.  In this phase, partial 
redeployment of the Israeli Army from some West Bank cities will allow 
free and fair democratic elections to be held to elect Palestinian 
leaders from Gaza and the West Bank. 
 
On October 26, 1994, Israel and Jordan signed a Treaty of Peace which 
led to the immediate opening of two border crossings in addition to the 
Allenby Bridge.  Recent months have witnessed a series of first-ever 
public meetings between senior Israeli and Jordanian leaders, both 
abroad and at the Dead Sea, in Aqaba and Amman, and on the shores of 
Lake Kinneret.  The first Israeli tourists bearing Israeli passports 
have been welcomed to Jordan.  The Treaty addresses boundary 
demarcations, water issues, police cooperation, environmental issues, 
and border crossings.  Full diplomatic relations have been established 
and a wide range of contacts have flowed as normalization proceeds.  
Economic cooperation, one of the pillars of the peace, include 
agreements on free trade, investment, banking, industrial cooperation 
and labor, among other sectors. 
 
Israel is conducting negotiations with Syria to achieve a comprehensive 
peace.  Israel is willing to consider an element of withdrawal from the 
Golan Heights, in the context of a peace settlement which simultaneously 
addresses four key issues: territory, security arrangements, 
normalization of relations and the timetable for implementation.  In the 
summer of 1995, both Israeli President Ezer Weizman and Foreign Minister 
Shimon Peres have stated publicly that Israel should withdraw from the 
Golan.  United States efforts to complete a peace treaty between the 
parties have included President Clinton, Secretary of State Christopher 
and other high-ranking officials.  Prime Minister Rabin has promised 
that a final treaty with Syria would be put to a national referendum 
before it would be signed and implemented. 
 
Negotiations with Lebanon have been ongoing since the Madrid Conference 
of October of 1991, but currently no discussions are scheduled as the 
parties look to the outcome of the Israeli-Syrian negotiations before 
proceeding. 
 
Major Political Issues Affecting Business Climate 
 
Two main political issues affect the business climate in Israel: 
regional instability and terrorism.  These two issues have led some 
foreign business to move cautiously on investments in Israel.  It is 
expected that the recent historic agreements between Israel and her Arab 
neighbors will promote a climate conducive to business investment in the 
region. 
 
Many aspects of Israeli life are governed by religious law.  In 
observance of Shabbat (sundown Friday to sundown Saturday), most public 
transportation and Israel's national airline do not operate.  Most 
businesses and government offices are closed from Friday afternoon to 
Sunday morning.  Laws of Kashrut (kosher requirements for food) also 
restrict the importation and selling of certain foods and beverages in 
Israel. 
 
Political System  
 
Israel is a parliamentary democracy.  The president is elected by the 
Knesset, a unicameral parliament, for a five-year term.  Traditionally, 
the president has selected the leader of the party most able to form a 
government to become prime minister.  The prime minister exercises 
executive power.  A new law which will affect the 1996 elections calls 
for direct election of the prime minister rather than presidential 
selection.  This experiment is part of an effort to democratize even 
further Israel's political process. 
 
Ezer Weizman is the current president, and Yitzhak Rabin is prime 
minister.  Both Weizman and Rabin belong to the Labor Party. 
 
The Knesset's 120 members are elected to four-year terms, although the 
prime minister may decide to call for new elections before the end of 
the term or the prime minister's government can fall on a vote of no-
confidence in the Knesset.  The president then has the option of asking 
the current prime minister to form a new government.  If he cannot, new 
elections take place for the Knesset.  A total of eleven political 
parties are currently represented in the 13th and current Knesset.  They 
include: Labor, Likud, Meretz, Tzomet, Shas, National Religious Party, 
United Torah Judaism, Hadash, Moledet, Yi'ud, and the Arab Democratic 
Party. 
 
Orientation of Major Political Parties 
 
Prime Minister Rabin has a minority government based on a plurality, not 
a majority in the Knesset.  Rabin's ruling coalition in the Knesset is 
composed of his own Labor Party (44 seats), Meretz (12 seats), and Yi'ud 
(2 seats) and on key votes includes the Arab Democratic Party (2 seats), 
Hadash (3 seats) and sometimes Shas (6 seats).  The political spectrum 
runs a wide gamut from the left-wing Hadash Party which is mainly 
composed of former communists, to the liberal Meretz Party (which is a 
compendium of three separate parties), left-middle and ruling Labor 
Party, right-middle and chief opposition Likud Party, the right-wing, 
libertarian Tsomet Party, the right-wing religious parties -- National 
Religious Parties, United Tora Judaism (also a mix of two separate 
parties), and the ultra right-wing Moledet Party.  Three parties are 
difficult to categorize: Shas, a religious party which has been in and 
out of the ruling coalition with Labor and Meretz; Yi'ud, a breakaway 
party from Tsomet but which now votes with the Labor coalition, and the 
Arab Democratic Party which is a vigorous defender of the rights of Arab 
Israeli citizens and the rights of Palestinians in the peace 
negotiations.   
 
Elections 
 
Elections for the 14th Knesset are scheduled to take place in October, 
1996, and will include separate direct election of the Prime Minister in 
two rounds if in the first round no candidate receives a majority.  If 
the government of Prime Minister Rabin should fall prior to that date, 
elections could be held earlier. 
 
IV.  MARKETING U.S. PRODUCTS AND SERVICES 
 
Distribution and Sales Channels 
 
Approximately 25 percent of Israel's 5.6 million population is 
concentrated in the Tel Aviv metropolitan area, Israel's commercial and 
financial center.  Another 15 percent of the population lives in Haifa, 
a major port and the center for most heavy industry.  Almost all goods 
are imported through Israel's two Mediterranean ports, Haifa in the 
north and Ashdod in the south.  They have good transportation links to 
the rest of the country.  Most companies are headquartered in the Tel 
Aviv or Haifa metropolitan areas; a growing number of firms also 
maintain branches, showrooms, or service facilities in other 
communities. 
 
Consumer malls have become an overnight success story in Israeli 
retailing.  Several large shopping malls now exist and others are 
planned. Trendy, specialized national chain stores and franchises have 
become increasingly popular, replacing traditional food and consumer 
goods monopolies.  The key to this success has been the increasing 
variety of new products and services offered to the Israeli consumer. 
 
Of more than nine billion US dollars spent on food, 30 percent are 
directed to the institutional market which includes the army, hospitals, 
factories as raw materials for processing, hotels and restaurants.  
Distribution is direct from manufacturers, importers or wholesalers. 
 
Of the remaining 70 percent which reaches the retail markets, 
approximately 35 percent is sold through supermarkets and similar retail 
chains.  Some 400 supermarkets are scattered throughout the country, 
with an average of 600 square meters.  Some of the larger stores have an 
area of 1,000 - 2,000 square meters.  Fifty percent of the volume is 
accounted for by two main retail chains: Supersol and the Blue Square 
Co-op. 
 
The rest of the food market is served by typical Middle Eastern open 
markets and small groceries.  In recent years specialty food stores 
which cater to the more affluent have developed in main metropolitan 
centers.   
 
Most U.S. exporters choose to market their products in Israel through 
agents/distributors who generally prefer to act as the exclusive 
representative of their foreign suppliers and maintain their own 
distribution networks.  Chain and department stores sometimes prefer to 
deal directly with overseas suppliers in order to cut middleman costs. 
 
Use of Agents and Distributors: Finding a Partner 
 
Good local representation is the key to success in the Israeli market.  
Reliability, loyalty, technical suitability, and after-sales-service 
capability are essential qualities which U.S. companies should seek in 
their agent/distributor. 
 
Some exporters prefer to use commission agents who conduct limited 
promotional campaigns and call on potential buyers, but do not import on 
their own account.  This approach is most commonly used by exporters of 
heavy industrial equipment. 
 
The most common approach used by exporters of light industrial or 
consumer goods is to obtain a local distributor.  A distributor usually 
imports on his/her own account, carries stocks sufficient to satisfy 
immediate demand or to use for demonstration, maintains his/her own 
sales organization, and supplies spare parts and service. 
 
In concluding a representation agreement U.S. companies should be sure 
to include the following elements: 
 
    -contract duration; 
    -exclusivity (if applicable); 
    -compensatory amount as a function of contract duration, in 
     case of termination of exclusivity; 
    -promotional input by agent and volume of sales; and a 
    -dispute settlement mechanism, either by arbitration, or by 
     assigning a tribunal (preferably U.S.). 
 
Once an adequate agreement is concluded, there is usually no need for 
the U.S. exporter to retain a local attorney.  Legal support should be 
provided by the local representative. 
 
The U.S. Commercial Service and the U.S. Foreign Agricultural Service 
(FAS) at the U.S. Embassy in Tel Aviv provide agent/distributor search 
and other services designed to assist U.S. companies to establish 
themselves in the Israeli market.  For information on these services 
interested firms should contact the USG contact personnel listed at the 
end of this report. 
 
Franchising 
 
Franchising is a relatively new concept in Israel, which has become very 
popular in a very short time, especially in the fast food restaurant 
industry.  Franchising has seen a 100 percent growth rate in three 
years, from $90 million in 1992 to an estimated $160 million by the end 
of 1995.  Due to the strong presence of such companies as Domino's Pizza 
and Pizza Hut, McDonald's, Kentucky Fried Chicken, Kenny Rodgers 
Roasters, Burger King, Ben and Jerry's and more recently, Haagen Dazs, 
the U.S. share of the Israeli fast food industry is now about 35 
percent. 
 
Franchising is slowly penetrating into other industry sectors.  ACE 
Hardware and Office Depot opened franchises in 1993/1994, and already 
operate branches in the main commercial centers of the country.  Toys R 
Us are expected to open their first outlet in the summer of 1995.  The 
key to success in Israel lies in strong management and good, ongoing, 
in-country training programs.  Those who have tried to establish 
themselves without these two factors have failed in their attempt to 
establish franchises in Israel.   
 
Direct Marketing 
 
Direct marketing has good marketing potential in Israel and is expected 
to show a steady annual growth of 20 percent for the next three years.  
Activity in this area only began in 1992.  The major credit card 
companies (Visa, Mastercard, Eurocard, American Express, and Diners) 
were among the first to introduce direct marketing in Israel primarily 
through direct mail campaigns.  There are six marketing companies which 
provide these services including telemarketing.  Cable television has 
been the real impetus behind the growing popularity of direct marketing.  
Computerized electronic marketing started activities in 1995.  Based on 
the success of this technique, demand for direct marketing services is 
expected to grow approximately 20 percent during 1995 and 1996. (Also 
see "Advertising and Trade Promotion".) 
 
Joint Ventures/Licensing 
 
Manufacturing under joint venture or licensing agreements is common in 
Israel and encouraged by the GOI.  U.S. companies wishing to invest in 
Israel will find detailed information in section "VII. Investment 
Climate". 
 
Israeli businesses usually prefer to negotiate licensing agreements for 
an initial five-year period, automatically renewable for another five 
years.  They also prefer agreements where the licensor takes equity with 
the licensee. 
 
The norm for royalties is 4-5 percent percent of turnover, although 
higher rates are common for luxury articles, for items that include 
author's fees, and for specialized machinery.  A withholding tax of 25 
percent on royalties and fees is withheld at the source.  Royalties can 
be transferred freely through an authorized bank upon producing 
statements from certified accountants.   Royalties and fee payments are 
deductible by the licensee in calculating income tax. 
 
Steps to Establishing an Office 
 
Most exporters prefer to sell to the Israeli market through a local 
agent or distributor.  The agent could be an exclusive or non-exclusive 
representative.  American companies who wish to bid on government 
tenders are generally required to appoint a local representative.  
American companies who wish to participate in government projects, 
however, are required to form a joint-venture partnership with an 
Israeli company in order to tender a bid. 
 
There are no restrictions on foreign ownership in an Israeli company or 
foreign investment in a partnership.  Foreign investment capital and 
profits can be freely repatriated.  A foreign company that wishes to 
establish an office in Israel is required to register with the Registrar 
of Companies, an agency of the Ministry of Justice.  The company must 
file a copy of the document by which it is incorporated and which states 
its objectives and rules, together with a list of its directors and the 
name of its representative in Israel.  If these documents are not in 
English, they must be accompanied by a Hebrew translation.  The company 
managers or directors are not required to be Israeli citizens or 
residents.  However, U.S. representatives assigned to manage the 
office/company must first obtain work permits from the Employment 
Service Division of the Ministry of Labor.  Clearance from the Ministry 
of Labor, and if applicable, the Investment Center, is necessary before 
the Ministry of Interior can issue a visa to begin employment in Israel.  
U.S. companies wishing to establish an office in Israel are advised to 
consult with a legal or accounting firm. 
 
Selling Factors/Techniques 
 
The appointment of a local agent to provide hands-on service, react to 
current market conditions and demands, and where applicable, deal with 
customs, standards, and licensing procedures, is advisable.  Quality, 
price, after-sales-service and customer support are essential factors 
for keeping an edge over competitors.  U.S. companies need to be 
aggressive in their pursuit of business opportunities and maintain an 
active in-country presence. 
 
Advertising and Trade Promotion 
 
Aggressive product promotion and advertising are effective tools in 
Israel, especially for consumer goods where brand image is important and 
U.S. products face competition from local and European suppliers.  The 
most effective means is through commercial television and radio.  To 
date, Channel 2 is the only Israeli TV station permitted by law to carry 
TV commercials.  The State-owned Kol Israel (the Voice of Israel) 
broadcasts commercial ads via two of its several channels.  In addition, 
several privately-owned authorized regional radio licensees are 
scheduled to go into operation shortly.  These regional stations will 
accept air commercials ads.  
 
Other effective avenues for advertising are:  Point-of-sale promotions 
in supermarkets, drugstores and malls, and advertising in major Hebrew 
newspapers, especially weekend editions, and professional business 
journals. 
 
The Israel Trade Fair Authority sponsors several major trade fairs each 
year, which are excellent promotional vehicles for introducing new 
products and services.  In addition, the U.S. Government, through 
programs of the Commercial Service, organize a variety of trade events 
each year.  For a listing of upcoming 1996 events, see "Appendix G". 
 
Major newspapers and business journals: 
 
English Language:  
The Jerusalem Post (daily) 
The Jerusalem Report (weekly) 
Link (monthly) 
Israel Business Today (monthly) 
 
Hebrew Language: 
Yediot Aharonot 
Maariv 
Haaretz 
Globes 
Telegraph 
 
Pricing Product 
 
Price is a key factor affecting purchasing decisions by Israeli 
companies and consumers.  Companies often use low, market penetration 
pricing during the introduction of a new product, followed by a price 
increase once market share and reputation are established.  Since most 
distributors prefer exclusivity, a special pricing clause may be 
incorporated into the contract.  Whenever a similar product is locally 
produced, U.S. companies should be careful of possible dumping 
ramifications. 
 
Sales Service/Customer Support 
 
The ability to provide proper after-sales-service and customer support 
is key to remaining competitive in the Israeli market, especially in 
sophisticated, high-tech areas.  U.S. firms should ensure that their 
local representatives receive adequate and ongoing training and 
technical support.  The "time between failure" and "time to repair" are 
major factors affecting purchasing decisions by Israeli companies and 
government-owned entities.  
 
Selling to the Government 
 
Since the enactment of the 1993 Public Procurement Law and Regulations, 
GOI entities and government-owned companies are required by law to 
procure by tender.  Open tenders are published in the local press.  
However, government-owned companies, whose tenders are of most interest 
to U.S. suppliers, often use selective bidding practices inviting only 
selected companies to submit bids.   
 
Lack of transparency in tendering procedures is an ongoing concern for 
U.S. companies, even though Israel is a signatory to the GATT government 
procurement code.  Additional concerns for U.S. companies are the 
recently enacted "Buy-Israel" regulations which award a 15 percent 
advantage to local companies, and the "National Priority Zones" 
regulations which give an additional 5-15 percent advantage to companies 
located in so-called national priority areas.  Where Israel's GATT or 
other international obligations conflict with the "Buy-Israel" and 
"National Priority Zones" regulations of the Public Procurement Law, the 
international obligations take precedence. 
 
Defense procurement is handled by the Ministry of Defense.  The Ministry 
maintains a 200-person purchasing mission in New York, which handles 
purchases of U.S. equipment including direct commercial contracts paid 
by FMS funds. 
 
In spring 1995 the Government of Israel enacted the "Industrial 
Cooperation" regulations, instructing Government of Israel entities, 
including government-owned companies, to include an offset requirement 
clause in their tenders.  Foreign companies making a sale to GOI 
entities of $500,000 or over are required to purchase local products or 
use local content for at least 35 percent of the cost of the awarded 
contract.  The Industrial Cooperation Authority (ICA) under the Ministry 
of Industry and Trade, administers the offset program.  U.S. companies 
interested in selling to the GOI are strongly advised to appoint a well-
connected local agent. 
 
Intellectual Property Rights Protection 
 
U.S. companies should take every measure possible to ensure that their 
intellectual property rights (IPR) are sufficiently protected in Israel.  
Israeli law provides for a broad range of ex parte enforcement measures 
for enforcement of rights with regard to any intellectual property.  
Consistent with Article 50 of GATT-TRIPS (Trade in Intellectual Property 
and Services), "Anton Pillar" orders are available and have been 
obtained in civil proceedings in Israel. 
 
Information on basic application procedures and enforcement provisions 
is provided below.  Background information on the legal/enforcement 
situation for patent, copyrights, and trademarks is contained in the 
"Investment Climate" section.  
 
Patents: 
-Application: 
The principal of "first to file" applies in Israel, which means that 
first or prior use of a patent does not protect an owner of a U.S. 
patent from infringement by someone else who applies first for a patent 
in Israel.  To apply for a patent, the owner of an invention must 
provide a local address.  The Government of Israel recommends that an 
applicant engage the services of a patent attorney or a legal advocate 
registered to practice in Israel.  The title of the patent must appear 
in both Hebrew and English but its specification may be in either 
English or Hebrew. 
 
Any new invention that is useful, capable of industrial or agricultural 
application, and possessing an inventive step may be patented.  A patent 
is deemed new unless it has been published in Israel or abroad prior to 
the application date.  A patent is granted for twenty years from the 
date of application, subject to the timely payment of renewal fees.  
Methods of medical treatments, plant or animal varieties, and computer 
programs are not, at present, patentable. 
 
As Israel is a member of the Paris Convention, foreign applicants may 
claim priority under the Convention by applying within 12 months of the 
earliest foreign application and including a priority claim.  Within 12 
months of the Israeli application, the foreign applicant should file a 
certified copy of the patent specification filed with the foreign 
application, including a priority claim.  Israel hopes to sign the 
Patent Cooperation Treaty within the next year. 
 
Israel currently protects designs under the Patents and Design 
ordinance.  For a design to be registered it must be novel and appealing 
to the eye.  A design can be protected for a term of five years with 
renewals of up to 15 years.  One can claim priority pursuant to the 
Paris Convention just as for patent protection, but must claim a 6 month 
priority date based on the foreign application.  Israel hopes to have a 
new Design law by the end of 1995. 
 
-Enforcement: 
A patent owner in an action for infringement is entitled to relief by 
way of injunction and damages (compensatory and punitive).  
 
Copyrights: 
-Application: 
As Israel is a member of the Berne Convention, no formal application is 
required to obtain copyright protection.  Computer software is protected 
under the general copyright laws as "Literary Works".  The Government of 
Israel advises authors to mark works with a copyright notice including 
the author's name and the date.  Copyright protection continues for the 
length of the author's life plus 50 years. 
 
-Enforcement: 
Civil remedies in Israel for copyright infringement include injunctions 
and damages, compensatory plus statutory damages ranging from 500 
shekels to 31,000 shekels (approximately $200-$10,000).  The criminal 
sanctions for infringement are imprisonment of up to three years and a 
fine of 315,000 shekels (over $100,000). 
 
Trademarks: 
-Application: 
Any proprietor of a trademark used, or proposed to be used in Israel, 
may apply for registration of the mark.  Collective marks and 
certification marks are also entitled to registration.  Application may 
be made by the owner of the mark or by an agent of the owner.  The agent 
must work in Israel and must present written authorization by the owner.  
All applicants must present a local address, so that the Government of 
Israel generally advises foreign trademark owners to engage a local 
attorney to file their applications.  As of July 1, 1995, the fee for a 
trademark application is 550 NIS (approximately $175).  The term of 
protection for a trademark is seven years, which may be renewed 
indefinitely for periods of 14 years on payment of fees.  
 
Case law in Israel gives priority of registration to the first local 
user of the trademark.  Every application for trademark registration 
must specify goods falling within one class only, according to the 
International Classification of Goods and Services.  Under the terms of 
the Paris Convention, one who has made an application to register a 
trade or service mark in another signatory country has a right to claim 
priority for registration of the same trademark in Israel for the same 
use.  An application for registration of the trademark claiming such 
priority must be made within six months from the date of the first 
application in a Convention country.  A proposal on unfair competition 
law was issued in May 1995 which includes a substantial section on trade 
secrets. This section aims to clarify current ambiguities governing 
trade secrets as well as addressing appropriate remedies for their 
breech. 
 
-Enforcement: 
Injunction relief, damages, and forfeiture or destruction of the 
competing wares are all available remedies under Israeli civil law.  
Criminal sanctions include imprisonment of up to a year and a fine of 
14,000 shekels (approximately $4,700). 
 
The Israel Patent and Trade Mark Office can supply information to 
interested parties on patents, registered designs, and trademarks.  
Contact: Israel Patent and Trade Mark Office, P.O. Box 354, Jerusalem 
91002, Israel. 
 
Need for a Local Attorney 
 
U.S. companies should seek professional legal and/or accountancy advice 
whenever engaged in complicated contractual arrangements in Israel.  
Companies who wish to establish an office, invest, or apply for IPR 
registration in Israel should seek professional legal advice.  Companies 
may also wish to seek legal assistance when encountering trade or 
payment problems.  A list of local law firms is available from the 
Commercial Service, U.S. Embassy, Tel Aviv. 
 
 
V.  LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT 
 
Best Prospects for Non-Agricultural Goods and Services 
 
Note: Official GOI statistics are quoted in U.S. dollars.  Where needed 
the following exchange rate was used: USD - NIS 2.98.   
 
(USD million except where noted) 
 
1 - ELECTRICAL POWER SYSTEMS (EPS) 
 
Two factors assure the growth of the market for electrical power 
systems: Israel Electric Corporation (IEC) continues to invest $1 
billion annually in generation, transmission and distribution systems; 
the Ministry of Energy and Infrastructure plans to issue international 
tenders for the involvement of IPP's in electricity generation.  
Although European companies are making inroads in the sector, U.S. 
companies still hold the lead in the market, having supplied IEC since 
the company's establishment.  As of May 1995 IEC has accessed $970 
million of the 10 billion U.S. loan guarantees made available to the 
State of Israel.  
 
                            1994       1995       1996 
Total Market Size            300        340        390 
Total Local Production        89         95        102 
Total Exports                  9         10         12 
Total Imports                220        255        300 
Imports from the U.S.        110        140        170 
 
The above statistics are unofficial estimates. 
 
 
2 - POLLUTION CONTROL EQUIPMENT (POL) 
 
The Ministry of Environment (MOE) with support from the Ministry of 
Finance is providing grants to promote environmental investment in the 
local industry.  The use of EPA standards for air quality control, the 
high regard for U.S. technologies and services in the market, coupled 
with a lack of expertise and experience of the local companies provide 
U.S. environmental firms with a good market opportunity. 
 
                           1994        1995        1996 
Total Market Size            52          58          65 
Total Local Production       13          16          19 
Total Exports                 6           7           8 
Total Imports                45          49          54 
Imports from the U.S.        15          17          20 
 
The above statistics are unofficial estimates. 
 
3 - MEDICAL EQUIPMENT AND SUPPLIES (MED) 
 
Israel absorbed 600,000 immigrants since 1990 and its population is 
continuing to grow at an annual rate of 2.7 percent.  On January 1, 1995 
the National Health Insurance Law came into effect under which all 
citizens are entitled to universal medical care.  The medical sector 
will continue to expand to meet demands for medical services to those 
who were not previously insured and of the elderly who now comprise nine 
percent of the population.  There is a growing demand for high-quality 
medical equipment.  American equipment is highly regarded, but U.S. 
suppliers must continue to compete against a growing presence of 
European manufacturers. 
 
                            1994        1995        1996 
Total Market Size            397         429         463 
Total Local Production       430         498         553 
Total Exports                235         289         350 
Total Imports                202         220         260 
Imports from the U.S.         87         100         116 
 
The above statistics are unofficial estimates. 
 
4 - INFORMATION SERVICES (INF) 
 
The market for information services is rapidly expanding in the intense 
commercial and academic R&D environments.  During the last year local 
production has significantly increased.  U.S. manufacturers and service 
suppliers have to compete also with the European products that have been 
made available.  Best market prospects in this industry will be user-
friendly and specialized data-bases and commercial uses for the 
Internet.  
 
                           1994        1995        1996 
Total Market Size            23          27          43 
Total Local Production        -           1          10 
Total Exports                 -           -           4 
Total Imports                23          26          37 
Imports from the U.S.        20          25          29 
 
The above statistics are unofficial estimates. 
 
5 - COMPUTER SOFTWARE (CSF) 
 
U.S. products encounter fierce competition from the local production of 
computer software.  The Israeli high-tech industries have developed 
significantly in the past three years and computer software became a 
leading industry.  Best prospect markets for U.S. products are the 
multimedia field, which is growing at a startling pace, and 
"edutainment" since the Ministry of Education plans to make large 
investments in computerization of all education systems. 
 
                            1994        1995        1996 
Total Market Size            383         415         900 
Total Local Production       353         388         860 
Total Exports                180         195         450 
Total Imports                210         222         490 
Imports from the U.S.        145         159         178 
 
The above statistics are unofficial estimates. 
 
6 - ELECTRONIC COMPONENTS (ELC) 
 
Consumption of components manufactured under strict military 
specifications represent over 50 percent of the total market.  Other 
leading sector users are civil communication - 17 percent; computers and 
peripherals - 22 percent.  This market profile allows relatively small 
manufacturers to capture market share quickly if they can respond 
effectively to market demand.  The wide range and broad basis of the 
Israeli electronics industry, combined with fast growing export markets 
for the local electronics industry, provide electronic components with a 
buffer against a downturn in demand in any single end-user industry.  
Price reductions in many electronic product areas, combined with 
presence of most world manufacturers render the Israeli component market 
highly competitive. 
 
                            1994        1995        1996 
Total Market Size            620         710         810 
Total Local Production       255         290         330 
Total Exports                205         235         272 
Total Imports                570         655         752 
Imports from the U.S.        265         305         350 
 
The above statistics are unofficial estimates. 
 
7 - SPORTING GOODS (SPT) 
 
The number of people engaged in sports activities has doubled in the 
last five years due to several factors: the 12 percent growth in 
population due to immigration; the establishment of "Israel Sport for 
All Association" which fosters sports events for all ages; increasing 
awareness in fitness and health benefits derived from physical activity; 
involvement of city and town officials in development of recreational 
activities; establishment of private health clubs, country clubs and 
youth centers, and the continuing growth in the population at an annual 
rate of 2.7 percent.  Commercial type fitness equipment is being 
installed in almost all major hotel chains, hospitals, rehabilitation 
centers, sports facilities and private building complexes.  As the 
standard of living improves and leisure time increases, the demand for 
physical fitness and recreational equipment is expected to grow by 14 
percent annually. 
 
                           1994        1995        1996 
Total Market Size            23          26          30 
Total Local Production        5           5           6 
Total Exports                 1           2           2 
Total Imports                19          23          27 
Imports from the U.S.         4           5           6 
 
The above statistics are unofficial estimates. 
 
8 - INDUSTRIAL PROCESS CONTROL (PCI) 
 
Customers seem to prefer U.S.-manufactured process control equipment due 
to a traditional U.S. orientation in this area.  Major competition comes 
from Western Europe, mainly Germany and the U.K. who also benefit from a 
Free Trade Agreement with Israel.  Japan's import market share is 17 
percent.  There are no special regulations affecting imports.  In fact, 
most Israeli standards in this domain are compatible with the Instrument 
Society of American Standards. 
 
                            1994        1995        1996 
Total Market Size            208         235         270 
Total Local Production       110         130         155 
Total Exports                 82          98         115 
Total Imports                180         203         230 
Imports from the U.S.         91         103        117 
 
The above statistics are unofficial estimates. 
 
9 - HOTEL FURNISHINGS, FIXTURES AND EQUIPMENT (HTL) 
 
Israel has 33,000 rooms in 287 hotels.  3,500 rooms are currently under 
construction and an additional 8,000 rooms are in the planning stage.  
In 1994 2,2 million tourists entered Israel, an increase of 13 percent 
over 1993.  The first quarter of 1995 registered a 15 percent increase 
in incoming tourists over the same period in 1994.  In light of the 
peace process, the number of tourists to Israel is expected to double by 
the year 2000.  There is still a shortage of 30,000 rooms, requiring a 
budget of $2.5 billion. 
 
                            1994        1995        1996 
Total Market Size            130         138         149 
Total Local Production        39          41          45 
Total Exports                  0           0           0 
Total Imports                 91          97         104 
Imports from the U.S.         18          21          25 
 
The above statistics are unofficial estimates. 
 
10 - MACHINE TOOLS / METALWORKING EQUIPMENT (MTL) 
 
The domestic metalworking industry employs over 70,000 people and 
constitutes 22 percent of Israel's industrial output and 25 percent of 
its exports.  Growth in this market will be driven by demand for 
automation equipment and advanced machinery in high-tech defense 
industries and sophisticated export oriented businesses.  Israel has a 
well-understood need to stay in the technological forefront in the 
fields of metallurgy, missile systems, armor and avionics.  As a result, 
there is a receptive audience among users of metalworking equipment for 
all types of advanced devices and systems.  Germany, Italy and Japan are 
the strongest third country competitors.  There are no special 
regulations affecting imports. 
 
                            1994        1995        1996 
Total Market Size            170         190         215 
Total Local Production        90         100         113 
Total Exports                 39          42          44 
Total Imports                119         132         146 
Imports from the U.S.         27          30          34 
 
The above statistics are unofficial estimates. 
 
11 - TRUCKS, TRAILERS, BUSES (TRK) 
 
In 1994 $534 million worth of light and heavy trucks were sold in 
Israel, a growth of about 13 percent over 1993.  The U.S. share of the 
market was above 22 percent.  Continuing growth of the market is assured 
with the development of major national and regional infrastructure 
projects and with the imminent opening of the borders for transfer of 
goods between Jordan and Israel's Mediterranean ports.   
 
                            1994        1995        1996 
Total Market Size            566         639         717 
Total Local Production        36          38          42 
Total Exports                  4           4           5 
Total Imports                534         605         680 
Imports from the U.S.        120         136         157 
 
The above statistics are unofficial estimates. 
 
12 - CONSTRUCTION EQUIPMENT (CON) 
 
The GOI places a high priority on the development of the country's 
infrastructure.  In the transportation sector the construction of a 
number of major highways, tunnels, new intersections and bridge projects 
is currently underway.  Other major projects fueling the growing demand 
for construction equipment and services include: the new international 
airport terminal project, an underground/light rail system for the Tel 
Aviv metropolitan area, and several port expansion projects.  U.S. firms 
face fierce competition from European, East Asian and local companies. 
 
                            1994        1995        1996 
Total Market Size            135         160         197 
Total Local Production        17          20          24 
Total Exports                  2           3           3 
Total Imports                120         147         176 
Imports from the U.S.         23          26          31 
 
The above statistics are unofficial estimates. 
 
13 - TELECOMMUNICATIONS EQUIPMENT (TEL) 
 
Israel's telecommunications market offers good opportunities with the 
ongoing expansion of the national CATV network, the introduction of a 
second cellular telephone operator and the liberalization of the 
international calls market, in which two new operators will be licensed 
this year.  The elimination of the remaining 10-15 percent duty on 
January 1, 1995 made U.S. telecom products even more competitive. 
 
                            1994         1995         1996 
Total Market Size            638          638          800 
Total Local Production       910        1,040        1,200 
Total Exports                812          930        1,080 
Total Imports                540          605          680 
Imports from the U.S.        168          188          210 
 
The above statistics are unofficial estimates. 
 
14 - AUTOMOTIVE PARTS AND SERVICE EQUIPMENT (APS) 
 
There is a growing demand for U.S.-made cars and accessories due to 
their high safety standards and the reduction of the purchase tax levied 
on automobiles with large engines.  The increased sales of U.S. cars has 
resulted in growing market potential for U.S.-made accessories and spare 
parts.  However, U.S. manufacturers face stiff competition from Europe 
and the Far East.  The increasing number of vehicles over the past few 
years has created a strong demand for service equipment. 
 
                            1994        1995        1996 
Total Market Size            482         539         590 
Total Local Production       381         430         486 
Total Exports                 37          52          63 
Total Imports                138         152         167 
Imports from the U.S.         21          24          27 
 
The above statistics are unofficial estimates. 
 
15 - COMPUTERS & PERIPHERALS (CPT) 
 
U.S.-made computers and peripherals account for over 30 percent of the 
import market in this sector.  Israeli consumers have a preference for 
U.S. brand-name computers.  Defense related establishments prefer U.S.-
made computers, as they can be purchased with FMS funds.  However, this 
is a very competitive market and the presence of European firms and East 
Asian manufacturers is gaining strength every year. 
 
                            1994        1995        1996 
Total Market Size            616         665         765 
Total Local Production       332         361         415 
Total Exports                146         160         185 
Total Imports                430         464         510 
Imports from the U.S.        143         150         161 
 
The above statistics are unofficial estimates. 
 
16 - ADVERTISING SERVICES 
 (Direct Marketing) 
 
Direct Marketing has a good market potential in Israel and is expected 
to show a steady annual growth of 20 percent in the next three years.  
Israel knows three types of direct marketing: telemarketing, electronic 
marketing and catalogue sales. Telemarketing began in Israel in 1992 and 
shows an annual growth of 25 percent.  Market research shows that 0.2 
percent of the current retail sales are now handled through mail orders.   
 
Electronic marketing is also new to the Israeli market.  It started with 
cable T.V. and its growth for 1994 is estimated at 15 percent.  Interest 
is observed also in computerized marketing, which started in 1995.  The 
required infrastructure for electronic marketing already exists at a 
high level.  Since European companies have started operating in Israel, 
it is imperative for U.S. companies to penetrate this market.   
 
Catalogue marketing started this year with two European companies that 
opened local offices.  No figures are available on their sales. 
 
No statistics are available for this market. 
 
Best Prospects for Agricultural Products 
 
WHEAT - 0410000 
 
Israel has a growing demand for wheat and flour.  In 1994, for the first 
time the GOI licensed milling quality wheat imports from sources other 
than the U.S. but Hard Red Winter remains the preferred flour grain.  
Prospects exist for imports by Israeli merchants and brokers for sale to 
neighboring countries such as Jordan and Lebanon.  Israel's market for 
milling quality wheat is between 550 and 600 thousand metric tons. 
 
(Thousands of metric tons) 
                              1994        1995        1996 
Total Market Size            1,000         950         930 
Total Local Production         103         230         180 
Total Exports                    0           0           0 
Total Imports                  897         720         750 
Imports from the U.S.          600         500         600 
 
The above statistics are unofficial estimates and include consumption of 
150 and 200 thousand metric tons of wheat in the West Bank and Gaza. 
 
FEED GRAINS  
 
Israel produces virtually no feedgrains of its own.  Under the Economic 
Support Agreement which grants the government $1.2 billion in economic 
assistance funds annually Israel undertakes to import at least 1.6 
million metric tons of bulk agricultural commodities.  In the past four 
years performance has exceeded the commitment, in spite of the feedmill 
industry's high sensitivity to the price of the feed it imports.  Market 
share of US imports depends on grain price ratios of U.S. to (mainly) 
European suppliers.  
 
(Thousands of metric tons) 
                              1994         1995        1996 
Total Domestic Market        1,950        2,200       2,350 
Total Local                     15           15          15 
Total Exports                    0            0           0 
Total Imports                1,935        2,185        2,335 
Imports from the U.S.        1,200        1,500        1,700 
 
The above statistics are unofficial estimates. 
 
DRIED FRUITS 
 
Israel's annual raisin and prune imports are governed by quotas of 500 
and 600 metric tons respectively.  In 1994 the quantity was unofficially 
increased by 200 tons.  Domestic raisin production grows with the 
expansion of grape production for fresh exports.  However Israel's 
domestic raisin production is low quality.  Consumers demonstrate a 
revealed preference for U.S. Jumbo Golden Seedless raisins.  The import 
statistics below include apricots, figs etc., which originate mainly in 
Mediterranean countries such as Greece and Turkey.  Dried fruits other 
than raisins and prunes are not subject to import quotas. 
 
(Metric tons)  
                              1994        1995        1996 
Total Domestic Market        6,200       6,400       6,500 
Total Local Production       2,700       2,700       2,900 
Total Exports                    0           0           0 
Total Imports                3,500       3,700       3,400 
Imports from the U.S.        1,300       1,500       1,500 
 
The above statistics are unofficial estimates. 
 
TREE NUTS 
 
U.S. nuts enter Israel without quota restrictions and with a significant 
customs advantage.  As of January 1, 1995 all duties on imports from the 
U.S. have been cancelled while those from the European Union are close 
to 15 percent and from third countries (e.g. Turkey) as much as 22.5 
percent.  Market promotion by the California Walnut Commission 
demonstrated that a well-designed campaign can yield good dividends in 
market share and absolute quantities. Although there is a market of more 
than $13 million for pistachios, U.S. pistachio varieties which have 
been tried on the local market did not suit local taste which tends more 
to the Persian and Turkish varieties. 
 
(Metric tons, shelled basis) 
                               1994        1995         1996 
Total Domestic Market        12,250      12,500       12,750 
Total Local Production        1,100       1,100         1000 
Total Exports                   200         200          200 
Total Imports                11,250      11,500       11,550 
Imports from the U.S.         4,300       4,500        4,700 
 
The above statistics are unofficial estimates. 
 
HIGH QUALITY BEEF 
 
Late in 1993 the Government of Israel relinquished its monopoly on the 
importation of almost all types of meat.  At present, beef and lamb 
imports are in the hands of the private sector and several U.S. packing 
and cutting plants have been certified for exports to Israel.  By law, 
all imported meat must meet the kosher requirements of the Chief 
Rabbinate of Israel, including fresh and chilled meat.  The U.S. Meat 
Export Federation and the USDA are actively developing the market for 
high quality U.S. beef.  Estimates place the potential of this market at 
several thousand tons, once it is properly developed.  However primary 
demand, possibly as much as 80 percent of the total, is for kosher beef.  
Provided the necessary changes of the laws governing beef occur, the 
market for imported non-kosher, high quality beef could develop into 
three or four thousand tons within a few years.  Price will play an 
important role in determining the size of U.S. market share, although 
studies indicate that the Israeli consumer appreciates quality and is 
willing to pay up to 10 percent more for a high quality product.  In any 
case, there is need for an  investment in market development to educate 
the public which has been exposed for many years to inferior beef from 
South America. 
 
(Thousands of metric tons) 
                                1994          1995          1996 
Total Domestic Market        101,500       104,500       106,000 
Total Local Production        50,000        53,000        55,000 
Total Exports                      0             0             0 
Total Imports                 51,500        51,500        51,000 
Imports from the U.S.          2,000         2,500         3,500 
 
The above statistics are unofficial estimates. 
 
Significant Investment Opportunities 
      
Independent Power Producers (IPP's) 
In 1994 GOI made a strategic decision to have twenty percent of Israel's 
power demands met by IPP's, and the Ministry of Energy and 
Infrastructure is preparing international tenders for small power plans 
(up to 200-300 MW) driven by gas turbines, oil shale, diesel generator 
and possibly solar energy.  Currently, the Israel electricity system is 
operated by the Israel Electric Corporation (IEC), a government-owned 
company with an exclusive concession to generate, transmit and 
distribute electricity.  Israel's installed capacity of about 6,500 MW 
is expected to double by the year 2003, requiring an average annual 
investment of $1 billion over the next nine years.  While partial 
privatization will take place in the generation sector, rights for 
transmission and distribution will remain with IEC.  Generated 
electricity will be sold to IEC at a price to be determined by the GOI.  
Among the interested companies in these projects are ABB, General 
Electric, Amoco and Siemens. 
 
Telecommunications 
In the telecommunications sector the leading project is the 
liberalization of the long-distance calls market.  The Ministry of 
Communications will issue a tender for two additional operators once the 
High Court rules against the petitioners who are seeking to radically 
change the nature of the tender.  The successful long distance bidder 
will have a minimum of 26 percent Israeli participation and a maximum of 
74 percent of foreign firm investment.  A third cellular phone operator 
will be licensed within 3 - 5 years, once the number of subscribers 
reaches 500,000. 
 
Hotels 
Since the Madrid Peace Conference in November 1991, greater economic and 
political stabilization to the region have produced a strong rebound in 
both leisure and commercial travel.  In 1994 2.2 million tourists 
visited Israel compared to 1.65 million the previous year.  The number 
of tourists visiting Israel is expected to double by the year 2000.  In 
1994 Israel had 33,300 hotel rooms; according to the Department of 
Planning and Economics of the Ministry of Tourism the country requires 
an additional 30,000 rooms to absorb the expected flow of tourism.  
Approximately 3,500 rooms are currently in the building stage.   
 
Plans have been approved for 5,000 additional hotel rooms and 9,000 
rooms in non-hotel accommodations (hostels, guest houses, holiday 
apartments, camping) in Eilat only, which currently has over 6,000 hotel 
rooms.  Other concentrations of hotels are in Jerusalem (almost 7,500), 
Tel Aviv (almost 5,000) and Tiberias (almost 4,000), representing two-
thirds of all the available rooms.   
   
 
VI.  TRADE REGULATIONS AND STANDARDS 
 
Trade Barriers 
 
Under the U.S.-Israel Free Trade Area Agreement (FTAA), all remaining 
duties imposed on U.S.-made products were eliminated on January 1, 1995.  
As Israel also maintains FTAA's with the EU and EFTA, U.S.-origin 
products compete on a par with most European Community and EFTA goods 
and have a substantial market access advantage over suppliers from the 
Far East, Japan, Canada, and other countries.  As Israel's FTAA with the 
EU does not include agriculture, the duties paid on food of European 
origin partially offset the increased transportation expenses which add 
to the cost of U.S. products.  (See "Membership in Free Trade 
Agreements" below.) 
 
Although import duties have been eliminated for U.S. imports into 
Israel, they are still subject to value added taxes and, for some 
products, purchase taxes as described in the next section. 
  
Customs Valuation 
 
Israel maintains a customs practice known as "harama" (Hebrew for 
uplift).  For purposes of computing customs duties, the Israeli Customs 
Services uplift the value of virtually all products which exclusive 
agents import into Israel by some 2-8 percent and the value of other 
products by up to 10 percent.  This effectively increases the rate of 
indirect taxes payable by U.S. importers resulting in higer-priced U.S. 
products in the Israeli market.  In recent bilateral negotiations, the 
Government of Israel indicated its intention to become a signatory to 
the GATT valuation code and to eliminate the practice of "Harama" within 
in the next two years. 
 
Israel levies a 17 percent value added tax (VAT) on virtually all 
products sold in Israel including imports, with the exception of fresh 
fruits and vegetables.  The VAT is levied on the CIF landed cost plus 
uplift (if applicable) plus purchase tax.  VAT is recovered by the 
importer upon resale of the goods and is ultimately paid by the consumer 
on the basis of the retail price. 
 
Israel levies purchase tax on some products, primarily luxury and 
consumer items.  Calculation for the tax is based on the wholesale price 
of domestic products and on the CIF landed value plus "Tama"  (the 
Hebrew acronym for "additional rate of increase").  Tama was designed to 
artificially raise the declared value of an imported product for 
purposes of calculating purchase taxes.  The Tama system results in 
higher taxation on imported goods than on domestic products.  The U.S. 
and Israel Governments have agreed upon an "optional Tama track", under 
which a U.S. exporter can declare the real wholesale price of a product 
for purchase tax calculation.  The purchase tax is then applied to the 
adjusted price.  Interested U.S. companies should contact the U.S. 
Department of Commerce Israel Desk for further information on this 
system. 
 
Import Licenses 
 
All import licensing requirements for U.S.-made consumer and industrial 
goods have been eliminated under the FTAA.  However, licensing 
requirements and quantitative restrictions still exist for a wide range 
of food and agricultural products.  Information on these requirements is 
available from FAS. (Also see "Prohibited Products".) 
 
Licensing Procedures for Medical Equipment 
 
As of January 1, 1995, all medical devices and equipment, imported and 
manufactured locally, are subject to supervision by the Ministry of 
Health.  Companies wishing to export medical equipment or devices to 
Israel should request a letter of acceptance from the Ministry of Health 
in accord with the export provisions contained in Section 801(e) of the 
U.S. Federal Food, Drug & Cosmetic (FD&C) Act.  The request should be 
accompanied by one of the following documents:  510(k), Pre-Market 
Approval (PMA) or Investigational Device Exemption (IDE).  Since medical 
devices are classified according to FDA classification, registration 
procedures for American companies are facilitated. 
 
Implantable medical devices require mandatory labeling in the patient's 
file.  The labels must contain the following information: 
 
Name and address of the manufacturer 
Name and address of the importer 
Type of implant 
Sub-type of implant 
Size 
Serial number 
Batch number 
Reused implant 
Medication element needed 
 
The registration authority is 
 
Ministry of Health 
Pharmaceutical Division 
Medical Device Department 
P.O.B. 1176 
Jerusalem 91010 
Tel: 972-2-705089 
Fax: 972-2-793765 
Contact: Dr. Avi Livnat, Deputy Head, Pharmaceutical Department, 
Mr. Philip Hubert, Coordinator, Medical Device Department 
 
Export Controls 
 
Israel maintains very few export controls; those that do exist are 
primarily targeted against internationally controlled substances and/or 
designed to protect national security. 
 
Israel is not a member of COCOM, but does maintain export controls on a 
variety of military and sensitive technologies destined for certain 
proscribed countries.  U.S. export licenses are required for exports to 
Israel of high-technology, defense equipment/technologies and 
chemical/biological warfare.  U.S. exporters should ensure that they are 
in compliance with export control regulations as administered through 
the U.S. Department of Commerce Bureau of Export Administration and U.S. 
Department of State Office of Defense Trade Controls.    
 
Import/Export Documentation 
 
Shipping documentation: 
U.S. exporters to Israel must follow U.S. Government requirements 
regarding export control documentation.  The Israeli Customs Services 
prefer that exporters use their own commercial invoice forms containing 
all required information including name and address of supplier, general 
nature of the goods, country of origin of the goods, name and address of 
the customer in Israel, name of the agent in Israel, terms, rate of 
exchange (if applicable), Israel import license number (if applicable), 
shipping information, and a full description of all goods in the 
shipment including shipping marks, quantity or measure, composition of 
goods (by percentage if mixed), tariff heading number, gross weight of 
each package, net weight of each package, total weight of shipment, 
price per unit as sold, and total value of shipment.  The total value of 
the shipment includes packing, shipping, dock and agency fees, and 
insurance charges incurred in the exportation of the goods to Israel.  
The commercial invoice must be signed by the manufacturer, consignor, 
owner, or authorized agent.  U.S. exporters should also double-check 
with their freight forwarder, shipping company or importer what other 
documentation, including bill of lading and packing list, is required. 
 
U.S. Certificates of Origin for Exporting to Israel: 
In order to benefit from the provisions of the FTAA, a special "U.S. 
Certificate of Origin for Exporting to Israel" (CO) must be presented to 
Israel Customs.  The certificate does not need to be notarized or 
stamped by a Chamber of Commerce, if the exporter is also the 
manufacturer.  Instead, the exporter should make the following 
declaration in box 11 of the certificate: 
 
    "The undersigned hereby declares that he is the producer of the 
goods covered by this certificate and that they comply with the origin 
requirements specified for those goods in the U.S.-Israel Free Trade 
Area Agreement for goods exported to Israel". 
 
The actual forms are printed by a number of commercial printing houses 
in the U.S.  For further information on how to obtain them, U.S. 
exporters may wish to contact the U.S. Department of Commerce Israel 
Desk Officer. 
 
It is possible for exporters to apply for a blanket CO, or "Approved 
Exporter" status.  An "approved exporter" needs only present an invoice 
which substitutes for the CO, and which contains an "approved exporter" 
number and a declaration that the goods comply with the origin 
requirements.  Certification and notarization are not necessary. 
 
    Authorization Procedures for "Approved Exporter" Status: 
 
    a) A manufacturer or exporter who wishes to become an "Approved 
Exporter" should complete a declaratory form and present it to: Export 
Department, Israel Customs Services, 32 Agron Street, P.O. Box 320, 
Jerusalem.  Potential candidates are U.S. firms with total annual 
exports to Israel of at least $20 million who have a clean record with 
the Israel Customs Services. 
 
    b) Israel Customs will examine whether or not the manufacturer or 
exporter complies with the criteria and grant approval for "Approved 
Exporter" status.  The approved exporter will be given an identity 
number to be stamped on all invoices.  The approval is valid for six 
months after which the exporter should receive an automatic extension 
from Israel Customs.  If the exporter does not receive an extension 
notice he/she must terminate use of the approval. 
 
    Compliance Procedures for Approved Exporters:   
 
    a) The "Approved Exporter" should stamp the invoice with his/her 
identify number and add the following declaration: 
 
    "The undersigned hereby declares that the goods listed in this 
invoice were prepared in the United States of America and they comply 
with the origin requirements specified for those goods in the U.S.-
Israel Free Trade Area Agreement for goods exported to Israel." 
 
    b) Invoices involving mixed goods: separate invoices must be 
prepared for goods which do not comply with origin requirements and/or 
for which approval to operate as an "Approved Exporter" has not been 
granted. 
 
Temporary Entry 
 
Temporary entry of U.S.-made goods may be effected either with an "ATA 
Carnet" issued by a U.S. Chamber of Commerce, or through payment of a 
deposit, which is reimbursed upon re-export. 
 
Labeling/Marking Requirements 
 
Israel has strict marking and labeling requirements which frequently 
differ from those of other countries.  It is recommended that U.S. 
exporters consult with their Israeli importer prior to shipping. 
 
All imports into Israel must have a label indicating the country of 
origin, the name and address of the producer, the name and address of 
the Israeli importer, the contents, and the weight and volume in metric 
units.  In all instances, Hebrew must be used; English may be added 
provided the printed letters are no larger than those in Hebrew.  Food 
products sold in Israel must be packaged according to standard uniform 
weights and volumes, usually metric.  Nutritional labeling is compulsory 
on all packaged foods.  Specific information on these standards is 
available from: Director, Department of Weights and Measures, Ministry 
of Industry and Trade, 30 Agron Street, Jerusalem 94190. 
 
Marking should be done by printing, engraving, stamping, or any other 
means, on the package or the goods themselves.  If marking is not 
possible, a label should be well-sewn or stuck to the goods or package.  
Marking details should be clear, legible, easy to trace, and in a 
different color from the background in order to be clearly 
distinguishable.  Printing dyes and other marking materials should not 
affect merchandise quality.  The marking should not be blurred. 
 
On a multi-layered package, the external layer should be marked.  If the 
external layer is transparent the marking should be done underneath that 
layer, provided it is still clear and legible.  On a package containing 
subpackages, the labeling should specify: the number of subpackages, the 
net content of a subpackage, and the overall net weight of the package.  
An aerosol container should indicate the net quantity weight unit for 
semi-solid or powder products, and volume unit for liquids.  For 
products that tend to lose weight under regular marketing/commercial 
conditions, the maximum quantity of expected depletion should be 
mentioned. 
 
Specific labeling regulations apply to some consumer goods, paper 
products, handbags, musical recordings, fertilizers, insecticides, 
chemicals, pharmaceuticals, some food products, seeds, and alcoholic 
beverages.  In addition, special packaging requirements apply to fruit, 
plants and meat.  Outside and inside containers of dangerous articles, 
such as poisons, insecticides, drugs, flammable goods, ammunition, 
explosives, reptiles, insects, bacteria and radioactive materials should 
be clearly marked.  For information on food labeling and packaging 
contact: Israel Ministry of Health, Food Inspection Service, 12-14 
Ha'Arba'a Street, Tel Aviv 61070; Tel: 972-3-5634782; Fax: 972-3-
5619549. 
 
Prohibited Imports 
 
Israel maintains extensive restrictions on agricultural imports ranging 
from quotas, licensing restrictions and variable levies to outright 
prohibitions.  U.S. meat exports face an especially difficult 
environment due to the enactment of a complete ban on non-kosher meat 
imports at the end of 1994.  The U.S.-Israel FTAA allows either country 
to maintain quantitative restrictions and prohibitions on agricultural 
products based on agricultural policy considerations. 
 
The only other product prohibitions are targeted against internationally 
controlled substances and/or are designed to protect public morals, 
human, animal or plant health, or national security. 
 
Standards 
 
It is the declared policy of the Government of Israel to adopt 
international standards wherever possible, and to implement mandatory 
standards related only to safety, health, and the environment.  In 
practice, however, many products are still subject to mandatory 
standards some of which were designed to favor domestic producers over 
importers.  These local standards often specify in terms of design 
rather than performance.    
 
The Standards Institute of Israel (SII) is the agency responsible for 
the development of most product standards, compliance testing, and 
certification of products and industry quality assurance systems.  For 
further information, interested firms should contact:  The Standards 
Institute of Israel, 42 Levanon Street, Tel Aviv 69977; Tel: 3-6465154; 
Fax: 3-6419683. 
 
Israel has not officially adopted ISO-9000 standards, although there is 
a growing preference for ISO-9000 standard products among Israeli 
importers. 
 
Most imported food products are subject to metric system size 
requirements which may exclude standard sizes used by U.S. companies, 
thereby requiring them to package products especially for export to 
Israel.   Although the metric system is not mandatory for other product 
areas, metric standards are preferred by Israeli importers as non-
conformity may affect marketability.  The electrical standard is 220V, 
50Hz. 
 
The Government of Israel requires that food and health products be 
registered with the Ministry of Health before they can be sold in the 
country.  FDA approval for food and healthcare products is not 
mandatory, but it is preferred by Israeli importers as it accelerates 
the product registration process and import license approval.  Product 
registration normally takes from 4-6 weeks if all documentation is in 
order. 
 
Free Trade Zones/Warehouses 
 
Israel has one free trade zone, the Red Sea port city of Eilat.  In 
addition to the Eilat Free Trade Zone, there are three free ports:  
Haifa Port (including Kishon); Port of Ashdod; and the Port of Eilat.  
The Israeli parliament passed legislation in May 1994 authorizing 
creation of free processing zones (FPZ's).  (See "VII. Investment 
Climate" for further information.) 
 
The Israeli government has plans to expand and upgrade the major ports 
of Haifa (in the north) and Ashdod (in the south).  There is good 
quality warehousing in all of the major ports and trade zones, but 
current capacity is inadequate in the face of growing demand. 
 
Special Import Provisions 
 
There are no special import provisions. 
 
Free Trade Agreements 
 
Israel has adopted a liberal import policy, and has thus far concluded 
Free Trade Area Agreements (FTAAs) with the European Union (EU), the 
United States, and EFTA. 
 
Israel signed its first FTAA in 1975 with the EEC (now the EU) which was 
fully implemented by 1989.  A second FTAA was concluded with the U.S. in 
1985, under which all duties were eliminated on January 1, 1995.  A 
third FTAA was signed in 1992 with the EFTA countries. 
 
VII.  INVESTMENT CLIMATE 
 
Openness to Foreign Investment 
 
The Israeli government places a high priority on encouraging foreign 
investment in the Israeli economy.  There are generally no restrictions 
for foreign investors doing business in Israel and, except in certain 
departments of the defense industry which are closed to outside 
investors for reasons of national security, there are no restrictions on 
foreign investment in the private sector.  Investments in regulated 
industries (e.g. banking or insurance) require prior government 
approval.  There are no regulations regarding acquisitions, mergers, and 
takeovers that differ for foreign investors. 
 
The registration and screening mechanisms for foreign investment are 
routine and non-discriminatory.  The one exception is the purchase of 
land which is carefully screened to prevent its control by elements 
considered "hostile" to Israel.  Otherwise, there is no formal 
screening.  At the same time, problems can, and do, arise affecting both 
prospective and current investment.  These difficulties are usually 
based on bureaucratic inefficiency or non-transparency regarding the 
application of regulations; similar problems are encountered by domestic 
investors. 
 
The Israeli government offers incentives for investment in specified 
regions of the country and in certain economic sectors, such as tourism 
and agriculture, to both residents and foreign investors.  All benefits 
available to Israelis are available to foreign investors, and there is 
specific legislation to encourage foreign investment which gives the 
foreign investor certain advantages, such as reduced tax rates for 
longer periods of time (up to ten years, instead of seven) than for 
residents.  If a foreign investor elects not to accept grants, a tax 
holiday is provided, also for up to ten years.  Projects which meet 
relevant criteria are given the status of "approved enterprise" by the 
Israeli Investment Center, enabling investors to take advantage of 
investment incentive options.  Details on the government's investment 
incentives are provided below in the section on performance requirements 
and incentives. 
 
Various international agreements are in effect to finance research and 
development (R&D) jointly with Israel on a national treatment basis.  
The Government of Israel actively encourages industrial research and 
development, and the Office of the Chief Scientist at the Ministry of 
Industry and Trade offers R&D grant incentives for a wide variety of 
projects.  The Israel-United States Binational Industrial Research and 
Development Foundation (BIRD) promotes commercial cooperation in R&D, 
and the United States-Israel Science and Technology Commission has 
recently been established to foster the commercialization of technology 
in the two countries.  Specific R&D incentives are discussed in the 
Performance Requirements and Incentives section. 
 
Israel accords foreign investors national treatment.  Foreign investors 
are actively encouraged to participate in the ongoing Israeli 
privatization program, and there is no discrimination against foreign 
investors either at the time of the initial investment or after it is 
made.  There is no discrimination regarding work permits, other than the 
standard procedure for foreign workers.  Non-governmental groups are 
critical of the slow pace of the privatization program; however, they 
have no difficulties with foreign investors. 
 
For discussion of trade barriers, see chapter 6. 
 
Conversion and Transfer Policies 
 
In principle, foreign exchange transactions and holdings in Israel are 
controlled.  Foreign residents and recent immigrants can maintain 
unrestricted, freely transferable accounts (called "Patah" nonresident 
accounts) with Israeli commercial banks.  Once the "Patah" account is 
established, foreign investors can open a shekel account which allows 
them to freely invest in Israeli companies and securities.  These shekel 
accounts are fully convertible into foreign exchange.  Foreign residents 
can invest in real estate or Israeli securities or enterprises; they 
cannot invest in partnerships.  Nonetheless, it is critical that a 
foreign investor be informed regarding currency control regulations, 
especially as the government moves to liberalize some of the more 
restrictive regulations. 
 
When investing, foreign residents should make sure they comply with 
certain formalities that will enable them to repatriate their funds or 
place them in freely convertible accounts.  In every case, it is 
recommended that qualified professional advice be obtained on how to 
invest, on what kind of approvals are required, and what records should 
be kept.  Most transactions are conditional upon their performance being 
carried out through an authorized dealer.  An authorized dealer is a 
banking institution licensed to arrange, inter alia, foreign currency 
transactions for its clients.  The authorized dealer operates in 
accordance with the procedural instructions of the Comptroller of 
Foreign Exchange and the operations of authorized dealers are subject to 
the directives of the Examiner of Banks. 
 
Israel is currently liberalizing foreign exchange controls.  There are 
no restrictions on repayment of loans.  Local banks will readily provide 
loans to foreign investors.  Collateral, if required, must be in assets 
which may be converted into foreign currency. 
 
There is no delay in remitting investment returns.  The investor, 
however, can take out only what has been brought into Israel, plus 
profits, and must work through the "Patah" account. 
 
The estimated annual U.S. dollar value of local currency likely to be 
used by the embassy in 1995 is USD 14 million, which the embassy 
purchases at the prevailing exchange rate.  The planned devaluation path 
for the shekel is 6 percent against a basket of currencies of Israel's 
major trading partners.  Given the steady decline in the dollar, against 
the world's major currencies, a much slower rate of depreciation against 
the dollar is anticipated. 
 
Expropriation and Compensation 
 
There have been no expropriatory actions affecting businesses in the 
recent past.  Public authorities have expropriated land, but rarely, 
although they will do so in the near future, with compensation, for the 
construction of a new highway which will run through the northern third 
of the country.  Property would only be expropriated if the possibility 
had been indicated in a contract or as a result of a court order.  Such 
an event remains unlikely, but, if it should occur, adequate payment, 
with interest from day of expropriation until final payment, is 
prescribed by law. 
 
Dispute Settlement 
 
In recent years, there has been one significant investment dispute 
involving three U.S. construction firms.  The cases concern compensation 
for housing construction contracts cancelled by the Government of 
Israel.  The companies negotiated a compensation package with the 
Israeli government only to have those packages withdrawn by the 
government.  Two of the companies have filed suit in the Israeli court 
system while the other has not as of yet made a legal claim.  High-
ranking Israeli officials have assured the United States government that 
the Government of Israel is working toward a fair and rapid resolution 
of this issue. It is important to note that these cases do not reflect a 
pattern of investment disputes. 
 
Israel has a modern legal system based on mandate and British case law.  
Effective means exist for enforcing property and contractual rights.  
Courts are independent; there is no government interference in the court 
system.  Israeli civil procedures provide that judgments of foreign 
courts may be accepted and enforced by the local courts. 
 
Israel has a written and consistently applied commercial law based on 
the British Companies Act of 1948 as amended over time.  The Government 
of Israel is currently modernizing this law through a series of 
parliamentary legislation.  Israel's commercial law contains standard 
provisions governing company bankruptcy and liquidation.  Personal 
bankruptcy is covered by a separate bankruptcy ordinance.  Monetary 
judgements are always awarded in local currency. 
 
Secured interests in property, both chattel and real, are recognized and 
enforced by the Israeli judicial system.  A recognized and reliable 
system of recording such security interests exists. 
 
The Government of Israel accepts binding international arbitration of 
investments disputes between foreign investors and the State.  Israel is 
a member of the International Center for the Settlement of Investment 
Disputes (ICSID) and the New York Convention of 1958 on the recognition 
and enforcement of foreign arbitral awards. 
 
Political Violence  
 
Israel is a parliamentary democracy with a stable environment and with 
few public disturbances within its pre-1967 borders.  While there has 
been a history of politically motivated violence within the occupied 
territories (the "intifada"), these incidents have not infringed 
significantly on daily life within pre-1967 Israel.  Since the signing 
of the Gaza/Jericho accord between the Israelis and the Palestinians in 
May 1994, individual incidents involving Palestinians and Israelis have 
dropped sharply both within pre-1967 Israel and the occupied 
territories. 
 
Israel's relations with its neighbors have improved dramatically, 
contributing to a growing stability in the region and opening a window 
of opportunity for expanded investment throughout the area.  Israel and 
Jordan signed a peace agreement in October 1994, marking an end to 
forty-seven years of belligerency and war. Syria, while technically 
remaining in a "state of war" with Israel, is participating in 
negotiations aimed at securing a peace agreement.  It is important to 
note that over the past few years, no incidents involving politically 
motivated damage to projects or installations within pre-1967 Israel 
have occurred. 
 
Performance Requirements and Incentives 
 
There are no universal performance requirements for investors in Israel; 
however, performance requirements are sometimes included in contracts 
with the government, particularly, from time to time, relating to 
exports. 
 
Two basic laws provide the framework for investment incentives in 
Israel: the Encouragement of Capital Investments Law -- 1959 (with 
subsequent amendments), and the Encouragement of Industry (Taxes) Law -- 
1969.  In addition, there are the Encouragement of Industrial Research 
and Development Law -- 1984, and the Law for the Encouragement of 
Investments (Capital Intensive Companies) -- 1990.  The Law for the 
Encouragement of Investments expires December 31, 1997.  
 
Foreign investors do not need government approval to invest in Israel.  
To receive investment incentives from the Israeli government, however, 
such investors must apply for status as an approved enterprise.  They 
are required to submit an application to the Investment Center, Ministry 
of Industry and Trade, including physical and financial details of the 
projected investment; background information on the investors; sources 
of financing; forecasts of sales, operating results, cashflow, and 
"breakeven point"; and projected manpower requirements.  Companies 
seeking "approved enterprise" status must have paid-up capital equal to 
30 percent of the total required investment in the enterprise.  
Government approval for the incentives program is not given if 
investment in a proposed area is considered saturated. 
 
There are certain restrictions applying to foreign investments that need 
to be taken into account.  Certain criteria are applied by the Israeli 
government in the case of guaranteed loans as described elsewhere, e.g., 
investment in development zones identified by the government as 
particularly worthy for new business.  There are no special local 
conditions or ones that differ from those for a national.  If foreign 
nationals are brought in to work on an enterprise, certain conditions 
are imposed.  There are no enforcement procedures for performance 
requirements; if an investor is willing to pay local corporate taxes, 
there is no limit on the investment.  However, there is a limit to the 
industries and activities that are encouraged by the government.  For 
technology, there are limitations dependent on whether or not the 
government invested in the enterprise, in which case, the resulting 
technology cannot be transferred abroad without the approval of the 
Chief Scientist.  Investors are required to disclose proprietary 
information to the government. 
 
To encourage foreign investors, Israel offers a package designed to 
provide higher leverage for lower costs and risks, as well as increased 
profits.  The incentives package is easily adaptable to many types of 
investment projects or business plans in a broad range of economic 
sectors including manufacturing, real estate, and tourism.  In general, 
preference is given to industrial and tourism projects with the 
potential to inject foreign currency into the economy and provide 
employment opportunities in defined areas.  The benefits offered are 
government investment grants, tax benefits, and government loan 
guarantees; the extent of the benefits is determined by the geographic 
location, or zone, of the enterprise.  In addition to a central area, 
there are two priority areas, priority area "A" and priority area "B," 
with higher grants for priority area "A." 
 
All of the incentives require an equity investment; grants require an 
investment equal to 30 percent of the project's physical assets 
(buildings, equipment, etc.) and loan guarantees require an investment 
equal to 30 percent of the "total investment program" (physical assets, 
intangible assets, working capital, marketing investments, etc.)  The 
amounts of the grants and loans are also based on a percentage of the 
enterprise's physical assets.  Some of the investment incentives 
available for industrial enterprises are listed below. 
 
                    TAX RATES FOR INVESTMENT IN ISRAEL 
                         NON-APPROVED ENTERPRISE 
 
                                            Percentage 
 
Taxable Income                                     100 
Corporate Tax Rate                                  37 
Balance                                             63 
Income Tax Rate                                      0 
Tax Rate on Undistributed Income                    37 
Tax Rate on Dividends (25 percent of balance)    15.75 
Total Effective Tax Rate on Distributed Income   52.75 
 
On January 1, 1996, the corporate tax rate for non-approved investments 
is scheduled to fall to 36 percent. 
 
Tax Benefits 
 
                APPROVED ENTERPRISE - LOCALLY OWNED 
 
                                            Percentage 
 
Taxable Income                                     100 
Corporate Tax Rate                                  25 
Balance                                             75 
Income Tax Rate                                      0 
Tax Rate on Undistributed Income                    25 
Tax Rate on Dividends (15 percent of balance)    11.25 
Total Effective Tax Rate on Distributed Income    36.25 
 
         APPROVED ENTERPRISE - OWNED BY FOREIGN INVESTORS 
 
Percentage of Foreign Ownership    49-73.9    74-89.9    90+  
                                  ---------------------------- 
                                    Percentage 
 
Taxable Income                        100        100        100 
Corporate Tax Rate                     20         15         10 
Balance                                80         85         90 
Income Tax Rate                         0          0          0 
Tax Rate on Undistributed Income       20         15         10 
Tax Rate on Dividends 
  (15 percent of balance)              12      12.75       13.5 
Total Effective Tax Rate on 
  Distributed Income                   32      27.75       23.5 
 
    GOVERNMENT INCENTIVES FOR INVESTMENT IN ISRAEL 
 
    Grant Plan 
 
                        Government 
Area              Grant          Guarantee           Tax Benefits 
----              -----          ------------        ------------ 
 
Area A           38 percent         N/A                See 
Area B           20 percent         N/A                Last 
Central Israel    0 percent         N/A                Page 
 
    Government Guarantee Plan 
 
                                  Guarantee as Proportion of 
Area         Approved Project      Tax Exemption       Grant 
----        ----------------      -------------        ----- 
 
Area A            85 percent        10 years            N/A 
Area B            85 percent         6 years            N/A 
Central Israel    85 percent         2 years            N/A 
Central Israel  Guarantee waiver     4 years            N/A 
 
    Combined Plan - Including Grant and Guarantee 
 
                                             Guarantee as Proportion of 
Area Grant          Grant          Approved Project  
----------          -----          -------------------- 
 
Area A            25 percent    45 percent    10 years 
Area B            10 percent    60 percent     6 years 
Central Israel           N/A           N/A         N/A 
 
 
Research and Development: 
The Israeli Government is particularly interested in research and 
development (R&D) and provides grants of up to 66 percent of approved 
R&D expenditures through the Ministry of Industry and Trade's Office of 
the Chief Scientist (OCS).  This is a highly active office, providing 
most of the R&D monies spent to develop Israel's infrastructure.  Its 
grants take various forms, from the 66 percent available to start-up 
companies, to the 60 percent for those investing in Development Area 
"A", to the 50 percent for standard R&D projects, to the 20 percent 
available for foreign subcontractors.  There are also specific tax 
benefits and credits available for R&D investors; these may be amended 
in 1994.  Overhead expenses are provided for as an agreed-upon 
percentage of direct R&D expenditure, usually around 45 percent of 
sanctioned gross salaries.  If a grant-supported R&D project results in 
a commercial project, repayment of the grant is usually stipulated, 
generally through royalty paybacks at a set rate.  Repayment is not 
required for projects that do not achieve commercialization. 
 
For joint ventures between Israeli and American firms, research funding 
is also available through the Israel-United States Bilateral Industrial 
Research and Development Fund (BIRD).  BIRD funding is in the form of 
conditional grants of up to 50 percent of approved R&D costs over a two- 
to three-year period.  These grants are repayable if a project supplies 
commercial revenues, usually at an agreed-upon rate of gross sales.  
Because BIRD encourages R&D projects, it tends to more readily support 
new programs than the private sector. The recently established United 
States-Israel Science and Technology Commission also has the objective 
of commercializing technology. 
 
"Capital Intensive" Investments: 
In 1990, the Israeli parliament passed the Law for the Encouragement of 
Investments (Capital Intensive Companies), providing further tax 
benefits for investors qualifying as "capital intensive companies."  A 
company may be qualified as a "capital intensive company" by the 
Minister of Finance if: 
 
    a) It has paid up capital of no less than 30 million dollars, of 
which at least 75 percent is channelled into qualifying activities; 
 
    b) share ownership is restricted to non-residents, and; 
 
    c) the aim of the company is to either a) conduct business in Israel 
in areas of activity which have been designated as "qualifying 
activities"; or b) invest in Israeli companies whose primary activities 
are "qualifying activities." 
 
"Qualifying activities" include the establishment or expansion of 
businesses in areas such as industry, agriculture, tourism, 
transportation, construction, water, energy, communications, computers, 
etc. 
 
Benefits to the company include: 
 
    a) Real capital gains from the sale of shares or fixed assets 
(including real estate) which were used in qualifying activities are 
taxed at the rate of 25 percent, lower than the standard rate of 
taxation for businesses. 
 
    b) Revenue income of the company derived from these activities is 
taxed at 25 percent. 
 
    c) Revenue income which the company derives from dividends paid from 
a "qualified investment" is taxed at 15 percent. 
 
Right to Private Ownership and Establishment 
 
The Israeli legal system protects the right of both foreign and domestic 
entities to establish and own business enterprises, as well as the right 
to engage in remunerative activity.  Private enterprises are free to 
establish, acquire, and dispose of interests in business enterprises.  
As part of its current privatization efforts, the Israeli government 
actively promotes foreign investment in government-owned entities. 
 
Both the Ministry of Industry and Trade and the Ministry of Finance are 
concerned with fair trade, and there is a law against unfair 
competition.  It is Israeli government policy to equalize competition 
between private and public enterprises, although there are problems with 
competition because of the existence of monopolies and oligopolies in 
several sectors in Israel.  In the case of monopolies, prices are 
controlled by the government. 
 
Protection of Intellectual Property Rights 
 
While Israel has a legislative framework to ensure the protection of 
intellectual property rights (IPR), enforcement is a problem, because of 
inadequate penalties and scarce policing resources.  The U.S. Trade 
Representative, in recognition of problems in the context of generally 
good protection, cited Israel for a "special mention" in 1994's Special 
301 Report. 
 
The Government of Israel plans to address the problems listed by the 
U.S. Trade Representative -- those of an old statutory framework for 
copyright law and inadequate enforcement -- through revision of IPR in 
the areas of patents, copyrights, trademarks, design, and computer 
microchip design.  Progress in the committees convened to draft new 
legislation is varied, with legislation nearly ready for introduction 
into the Knesset, Israel's legislative body, in the area of design, but 
with other committees one to two years from completion.  All legislation 
will be based on the guidelines of the World Intellectual Property 
Organization's (WIPO) model legislation.  In addition, as a signatory of 
the GATT Uruguay Round and World Trade Organization (WTO) agreements, 
including Trade in Intellectual Property and Services (TRIPS), Israel 
will make the revisions necessary to meet all GATT TRIPS requirements. 
 
Currently, there available to right owners are the full range of 
criminal and administration relief, including injunctive relief, 
damages, seizure and destruction of infringing goods provisional relief, 
customs border controls and criminal and/or civil sanctions against 
infringers.  In addition, the Government of Israel does adhere to the 
major IP agreements such as the Berne Convention for the Protection of 
Literary and Artistic Works, the Paris Convention for the Protection of 
Industrial Property, and the Geneva Phonograph Convention. 
 
Patents: 
Patent protection is available comprehensively, including product as 
well as process protection for pharmaceuticals.  Israel employs 
compulsory licensing in limited circumstances:  for medicines, for a 
dependent patent (i.e., an earlier patent on which use of a later patent 
is dependent), in case of abuse of monopoly, where the Arab boycott 
precludes use of the patent, or where necessary to protect the public 
interest.  Patent protection is provided for twenty years from filing. 
 
Under the revised patent law, which is expected to be drafted within the 
next one to two years, compulsory licensing for medical purposes is 
likely to be eliminated.  There have been no discernible complaints by 
American businesses regarding compulsory licensing. 
 
Copyrights: 
Israel's present copyright law is based on the United Kingdom Copyright 
Act of 1911, with subsequent amendments.  Protection includes the 
exclusive right to (a) copy or reproduce the work;  (b) translate or 
otherwise adapt the work; (c) distribute copies of the work; and (d) 
publicly communicate the work.  There is no explicit protection for 
derivative works, but protection would be granted, provided that the 
derivative work includes sufficient elements of originality. 
 
At present, there is no separate statutory protection for computer 
software, which is protected under the general copyright law, as 
"literary works."  Rental rights for software will be included under the 
new draft copyright act, currently being prepared for introduction into 
the Knesset. 
 
Sound recordings are protected under the present copyright act while 
rental rights for sound recordings are not.  The latter are included in 
the new draft.  
 
Trademarks: 
Trademarks are protected under the Trade Marks Ordinance, and 
appellations of origin are protected under the Appellations of Origin 
(Protection) Law. 
 
Trade Secrets: 
There is no protection for trade secrets under the rubric of 
intellectual property law in Israel.  Trade secrets are classified as 
privileged information under the Evidence and Civil Procedure Law, and 
the Penal Law provides that an employee with express knowledge of a 
trade secret who reveals it may be imprisoned for up to six months.  In 
addition, a tort action may be brought against an individual who 
divulges a trade secret under Israeli tort law.  There is no limitation 
on the length of time for classifying an item as a trade secret. 
 
Semi-Conductor Chip Layout/Design: 
At present, there is no protection for semi-conductor chip design.  The 
Microchip Topography Committee, operating under the auspices of the 
Ministry of Justice, is drafting legislation for integrated circuits 
topography, which it hopes to submit to Israel's parliament in 1995.  
The legislation will meet all requirements of GATT-TRIPS and the 
Washington treaty on semi-conductor chips. 
 
Regulatory System 
 
Problems with competition are evident in Israel, although it is 
government policy to encourage increased competition through market 
liberalization and deregulation.  Tax, labor, health, and safety laws 
are frequently an impediment to the foreign investor in Israel, mostly 
because of high levels of regulation.  Although there is a current trend 
towards greater deregulation, Israel's bureaucracy can still be 
difficult to navigate, especially for the foreign investor unfamiliar 
with the system. 
 
Efficient Capital Markets and Portfolio Investment 
 
There are no significant obstacles to the free flow of financial 
resources.  Credit in Israel is allocated on market terms. Various 
credit instruments are available to the private sector, and foreign 
investors can receive credit on the local market.  Legal, regulatory, 
and accounting systems are transparent and conform with international 
norms.  The regulatory framework for portfolio investment is currently 
being tightened in light of rapid growth of non-trading scandals.  The 
government hopes to provide a more effective regulatory environment and 
supervision to help encourage continued expansion of capital markets in 
a competitive and fair atmosphere. 
 
The Israeli banking system is financially sound. As a result of a 1982 
crisis in bank shares, the government owns the majority of shares of the 
country's leading banks.  A program to privatize the banks is underway.  
Three large banks -- Bank Hapoalim, Bank Leumi, and Israel Discount Bank 
-- dominate Israel's capital markets,  controlling well over 80 percent 
of industry assets.  The government is currently undertaking a 
comprehensive bank reform to enhance competition and improve regulation 
of the banking industry.  As of December 1994, the total assets of 
Israel's five major banks amounted to an estimated 118 billion U.S. 
dollars. 
 
Most Israeli firms are not publicly traded and many of the dominant 
firms that are traded publicly are controlled through integrated holding 
companies.  In the case of publicly traded firms where ownership is 
widely dispersed, the practice of "cross-shareholding" and "stable 
shareholder" arrangements to prevent mergers and acquisitions is common, 
but not directed in particular at preventing potential foreign 
investment.  Hostile takeovers are a virtually unknown phenomenon in 
Israel, given the high concentration of ownership of most firms and the 
fairly high share prices which have characterized the domestic capital 
market in recent years.   
 
Israel has no laws or regulations regarding the adoption by private 
firms of articles of incorporation or association which limit or 
prohibit foreign investment, participation, or control.  No practices 
exist in which private firms restrict foreign investment participation 
or control in/of domestic enterprises. 
 
Standards have traditionally been a non-tariff barrier to trade in 
Israel.  In 1993, Israel committed to undertake a comprehensive review 
of its standards, adopting international standards as appropriate, and 
eliminating those standards which were not imposed for safety or health 
reasons.  There has been little or no foreign participation in 
standards-setting consortia and organizations.  
 
Bilateral Investment Agreements 
 
Israel has bilateral investment agreements with Bulgaria, Estonia, 
France, Germany, Hungary, Latvia, Lithuania, Poland, Romania, and 
Ukraine.  It is currently negotiating agreements with Albania, 
Argentina, Armenia, Belarus, Belgium, Britain, Canada, China, Columbia, 
Cyprus, Czech Republic, Georgia, Greece, India, Italy, Kirgistan, Malta, 
Mexico, Moldova, Peru, Portugal, Russia, Slovenia, Switzerland, Turkey, 
Turkmenistan, and Uzbekistan.  Other bilateral investment agreements are 
being investigated as Israel continues to develop diplomatic relations 
with more nations. 
 
OPIC and Other Investment Insurance Programs 
 
OPIC offers a full range of programs in Israel and currently insures 
American direct investment in Israel against political risk.  OPIC is 
also active in financing projects sponsored by U.S. investors in Israel.  
Israel is a member of the Multilateral Investment Guarantee Agency 
(MIGA). 
 
Labor 
 
Israel's 1994 labor force numbered 2,031,000.  Highly skilled and well-
educated, the Israeli labor force continues to be a major asset to the 
economy.  Those working in professional, technical, scientific, and 
academic positions account for 25 percent of the workforce.  Skilled 
workers make up another 24 percent.  Approximately 38 percent of the 
workforce have more than 13 years of education and over 17 percent have 
16 or more years of education.  More than 30 percent of university 
students specialize in fields with high industrial R&D potential--
engineering, mathematics, physical sciences, and medicine. 
 
The Israeli labor market has also successfully absorbed a significant 
portion of the over 630,000 immigrants who have arrived since 1989. 
Among them are well-trained scientists, physicians, and academics from 
the former Soviet Union.  Israel has some labor shortages in unskilled 
labor, particularly in the agricultural and construction sectors which 
has traditionally relied heavily on Palestinian workers from the 
territories occupied by Israel.  In 1994, unemployment dropped to 7.8 
percent from 10 percent in 1993; projections for 1995 put unemployment 
at 7 percent. 
 
Most Israeli workers are organized by the national labor federation, 
Histadrut.  1994 was a year of fundamental change for the Histadrut 
organization. The traditional Labor party leadership of the Histadrut 
was challenged from within and consequently, the Labor party was forced 
to relinquish its majority control of the union for the first time in 
its history.  Under its new leadership, the Histadrut will concentrate 
on its core trade-union activities and the provision of services related 
to employment. In addition, the organization will expand to include 
small businesses and factories, including those in which collective 
bargaining agreements do not presently exist.  
 
In the private sector, most collective bargaining negotiations take 
place at the factory or industry level, while most public sector 
negotiations are conducted on a national level between the Ministry of 
Finance and Histadrut.  Strikes and workers' sanctions in the private 
sector are relatively rare, but occur more frequently in government-
owned enterprises, including the defense industry.  The Government and 
Histadrut cooperate to ensure the protection of worker rights as defined 
by the International Labor Organization (ILO).  Traditionally, the 
Histadrut opposes privatization due to the loss of jobs incurred in the 
process. 
 
Israel strictly observes the Friday afternoon to Saturday afternoon 
Sabbath, and special permits must be obtained from the government 
authorizing Sabbath employment.  Generally, firms have been able to 
obtain the permits with little difficulty.  At the age of 18, most 
Israelis are required to perform 2-3 years of national service.  Until 
the age of 50, Israeli males are required to perform 30-50 days of 
military reserve duty annually, during which time they are compensated 
by the National Insurance Institute. 
 
Foreign Trade Zones/Free Ports 
 
Free Trade Zones: 
The southern port city of Eilat is a free-trade zone.  Businesses and 
consumers in Eilat are exempt from Value Added Tax (VAT), and employers 
receive refunds of up to 20 percent of wages paid to employees, not to 
exceed the amount automatically deducted as employee tax by the 
government.  Foreign-owned firms have the same investment opportunities 
as host country entities in free trade zones.  Israeli residents also 
receive tax credits of up to 10 percent on taxable income from 
employment or businesses in Eilat. 
 
Free Port Zones: 
In addition to the Eilat Free Trade Zone, the government of Israel has 
three free ports, in accordance with the Free Port Zone Law (1969):  
Haifa Port (including Kishon); Port of Ashdod; and Port of Eilat.  
Enterprises in these ports which export all production qualify as 
"authorized entrepreneurial enterprises," receive special tax benefits, 
and are exempt from indirect taxation. 
 
Free Processing Zones: 
On May 20, 1994, the Israeli parliament passed legislation authorizing 
creation of free processing zones (FPZ's). 
 
Qualifying companies operating in the FPZ's will be exempt from direct 
taxation for a twenty-year period, and imported inputs will not be 
subject to import duties or tariff or most health and safety regulations 
generally in effect throughout Israel.  Companies will also be exempt 
from collective bargaining and minimum-wage requirements, although 
subject to other labor regulations.  The legislation was originally 
intended to create new incentives for investment in primarily export-
related industries, to improve Israel's balance of trade.  The wording 
of the legislation, as passed, does not limit applicant companies to 
exporters or providers of services to overseas clients. 
 
The legislation authorizes creation of a Free Zone Council (FZC) to 
select concessionaires and manufacturers/service providers from among 
applicants, with broad discretionary powers.  Companies currently 
operating within Israel may apply to the FZC.  If they move operations 
to the free zone, they may not receive other government subsidies or 
benefits.  Such firms must return any  
benefits or subsidies to the government obtained previously. 
 
Capital Outflow Policy 
 
Israel has foreign exchange controls.  Both individuals and companies 
can invest in financial assets abroad but must do so according to 
regulations in place.  There are no incentives for investment abroad. 
 
Israeli residents (or "households") can invest in securities outside of 
Israel but are restricted regarding the securities in which they can 
invest.  Israeli residents are not allowed to give loans to foreign 
investors. 
 
Israeli enterprises can invest in real estate and in business 
subsidiaries without any limit and can hold foreign securities of up to 
10 percent of their equity or 5 percent of their annual sales (whichever 
is higher). In most cases, these investments must go through an 
authorized dealer (defined as a banking institution or special broker). 
Mutual funds can invest up to 10 percent of their assets overseas, in 
case of funds specializing in foreign exchange, the ceiling is 50 
percent of assets. Provident funds are allowed to invest up to 2 percent 
of their total assets in foreign securities. 
 
Major Foreign Investors 
 
Foreign investment is a small portion of total investment in Israel.  In 
the past, outside investors shied away from Israel because of several 
factors:  high inflation in the mid-1980s, frequent changes in rules and 
regulations, and government intervention in the economy.  Other factors 
influencing investors included questions about political risk and the 
Arab boycott; these still play a role, although considerably diminished.  
In the past few years, Israel has more actively pursued and encouraged 
foreign investment, particularly because of the critical role such 
investment plays in creating jobs for new immigrants, a primary 
consideration for Israel.  Also, the signing of the Gaza/Jericho accord 
in May 1994 and the ongoing peace process have opened Israel to more 
trade and investment with countries formerly reluctant to do business in 
Israel. Since the beginning of the Madrid Peace Process, foreign 
investment in Israel has grown from $293 million in 1991 to $776 million 
in 1993. There is little doubt that opportunities in Israel for 
countries looking for foreign investment have expanded; government 
officials report an increase in inquiries concerning potential 
investment in Israel. 
 
Statistics compiled by the Bank of Israel show foreign investment 
transactions in the stock exchange registered through the banking system 
totaling $210 million this year, through March 31, 1994.  Last year's 
(1993) registered foreign investment in the stock exchange totaled $167 
million. 
 
The Bank of Israel's statistics on inflow of direct foreign investment 
and realization (or outflow) of foreign investment for 1994 are: 
 
    Inflow of Investment 
    (In millions of US dollars) 
    ------------------------ 
 
    Real Estate                    330 
     
    Tradeable Securities           967 
     
    Ownership Loans                123 
 
    Non-Tradeable Securities       210 
 
    Capital Raised Abroad           93 
 
    Total                        1,723 
 
 
    Realization (Outflow) of Investment 
    (In millions of US dollars) 
    ----------------------------------- 
 
    Real Estate                    175 
 
    Tradeable Securities           759 
 
    Paid Ownership Loans           162 
 
    Non-Tradeable Securities        54 
 
    Total                        1,150 
 
     
    Total Net Investment 
    (In millions of US dollars) 
    ----------------------------------- 
 
    Real Estate                    155 
     
    Tradeable Securities           208 
     
    Ownership Loans                -39 
 
    Non-Tradeable Securities       156 
 
    Capital Raised Abroad           93 
 
    Total                          573 
 
 
There are no direct foreign investment figures available which are tied 
directly to country of origin or to industry sector destination. 
 
There are no reliable figures available on foreign direct investments by 
U.S. companies or by other nations' companies. 
 
VIII.  TRADE AND PROJECT FINANCING 
 
Brief Description of Banking System 
 
Israel has a modern and sophisticated banking system, based on the 
European "universal" banking model.  The government currently owns, and 
is in the process of privatizing, several of Israel's largest banks, as 
the result of a bank shares crisis in the early 1980's.  Despite its 
ownership, the government does not interfere in the day-to-day 
management of the banks.  Most types of loans and project financing 
traditionally available in industrialized countries are available in 
Israel.  (Also see "VII. Investment Climate, Capital Outflow Policy".)     
 
Foreign Exchange Controls Affecting Trade 
 
Israel does maintain foreign currency controls.  Residents, including 
companies that conduct business in Israel, may purchase foreign currency 
for routine trade transactions but may not transfer capital abroad or 
hold foreign assets without permits from the Comptroller of Foreign 
Exchange of the Bank of Israel. 
 
Two types of permit are available.  The "general permit" authorizes 
Israeli residents or non-residents to conduct current transactions in 
foreign currency and with foreign residents through an authorized 
dealer, or most commercial banks.  Specific permission for individual 
transactions is not required upon receipt of this permit.  Included in 
this permit are normal commercial transactions for the import and export 
of merchandise and the receiving or granting of normal credit associated 
with these transactions.  Non-residents must open a non-resident (patah) 
account with a commercial bank to which the foreign currency from abroad 
can be transferred.  A "specific permit" is required for non-routine 
transactions, such as establishing a subsidiary or a branch in a foreign 
country. 
 
General Financing Availability 
 
There is no scarcity of capital or trade financing in Israel.  There are 
no unusual rules or regulations concerning export financing, apart from 
the foreign currency regulations noted above.  Loans at market interest 
rates are available from commercial banks to finance the production of 
exports including the imports of raw materials and components for export 
products.  Loan terms vary depending upon the raw material requirements, 
cost of conversion and collection timeframe.   
 
Export Finance/Methods of Payment 
 
Israeli business people have a reputation for reliability and for making 
quick and on-time payments for goods and services.  In many cases, 
including the purchase of agricultural commodities, payments are made 
without any recourse to financing.  However, as there are always 
exceptions to the rule, U.S. businesses should take common precautionary 
measures when doing business in Israel. 
 
The most common method of payment is by Letter of Credit (L/C).  
Collection without a L/C is not unusual, however.  Cash Against 
Documents (CAD) is the most common mechanism preferred by Israeli 
importers.  Since there is no guarantee of payment, as there is in a L/C 
transaction, some exporters prefer to collect an advance payment, or an 
irrevocable bank guarantee on a certain portion of the sale.  This 
practice is appropriate and recommended when there is no past 
relationship and experience with the buyer.  A combination of L/C and 
CAD issued for the same Bill of Lading is also acceptable to most local 
banks. 
 
When substantial investment and engineering (as required for custom-made 
products) are involved, it is not unusual for exporters to demand 
advance payment/s of a certain portion of the selling price.  The Bank 
of Israel authorizes advance payment/s of up to 35 percent or $200,000, 
whichever is lower.  The $200,000 limitation does not exist for import 
of equipment. 
 
Payment schedules vary.  For raw materials, components and semi-finished 
goods, credit is usually limited to 60 days.  For equipment and 
machinery more extended schedules range from six months to two years. 
 
The local banking system provides sources of short and long-term credit 
and access to venture capital.  Due to the relatively high interest 
rates for local currency loans, many importers prefer to seek U.S. 
Export-Import Bank financing.  EXIM has most of the leading Israeli 
banks as correspondents and may supplement private sources of export 
financing with medium and long-term loans.   
 
Export Financing and Insurance 
 
Export financing and insurance for trade with Israel is available 
through commercial sources, from City/State-sponsored export financing 
and loan guarantee programs, and from the Small Business Administration 
(SBA) in cooperation with the U.S. Export-Import Bank, which can provide 
U.S. exporters with export credit insurance, pre-export financing and 
working capital guarantees.  EXIM Bank can also provides Israeli buyers 
with fixed-rate financing for their purchases from U.S. exporters.  EXIM 
Bank's Environmental Export Insurance Policy provides enhanced short-
term insurance for medium and long-term loans and guarantees for 
environmental exports, projects and services.  No special credit 
instruments are available to U.S. exporters of agricultural commodities, 
nor does Israel receive PL-480 or similar program commodity grants. 
 
Project Financing 
 
There are several U.S./Israeli Government-funded organizations which 
provide financing for joint U.S./Israel R&D and research projects.  
These include: the U.S. Israel-Science and Technology Commission and the 
BIRD Foundation which finance commercially viable R&D projects in 
selected high-tech areas; the BARD Foundation which finances 
agricultural R&D; and the Binational Science Foundation which finances 
joint research projects. 
 
The U.S. Overseas Private Investment Corporation (OPIC) provides medium 
and long-term financing and investment insurance for projects in Israel.  
Direct loans are available to projects sponsored by U.S. small 
businesses.  For larger projects, OPIC will guarantee loans to projects 
sponsored by US investors, starting at $2 million per project.  OPIC can 
also provide fee-based feasibility studies to companies considering 
overseas investments.   
 
EXIM Bank provides project finance through its Project Finance Division, 
established in June, 1994.  Upon completion of a favorable evaluation, 
within 45 days from the commencement of the evaluation by the Bank and a 
contracted financial consultant, a preliminary project letter will be 
issued indicating the bank's willingness to move forward on the 
financing offer.  For more information on financing opportunities, 
interested U.S. companies should contact these organizations directly. 
("Appendix C: U.S. and Country Contacts") (Also see "VII. Investment 
Climate" for other investment financing opportunities and incentives.)  
 
Correspondent Banking Arrangements 
 
Israel's three leading banks - Bank Leumi, Bank Hapoalim, and the Israel 
Discount Bank -, as well as the Mizrahi Bank and the First International 
Bank of Israel, maintain correspondent relationships with major U.S. 
banks and have their own subsidiaries in major U.S. cities.  Interested 
parties should contact their U.S. banker or these Israeli banks directly 
for more detailed information on their respective services. 
 
Major Correspondent Banks: 
 
    Bank Hapoalim 
    Bank Leumi Le-Israel 
    First International Bank of Israel 
    Israel Discount Bank 
    United Mizrahi Bank 
 
 
IX.  BUSINESS TRAVEL 
 
Business Customs 
 
Israel has a professional and westernized business environment in which 
most U.S. business persons will feel at home.  Israelis arrive well-
prepared for meetings, come straight to the point and are very direct.  
Appointments can be made on fairly short notice, but punctuality is 
desired.  Business cards are recommended.  Business suits are 
appropriate for meetings with private sector companies and government 
officials, but business travelers will find business dress in both 
private sector and government offices to be much less formal than in the 
United States, especially during the summer months.  English is widely 
spoken in the business community and in government offices. 
 
Israel is two hours ahead of Greenwich Mean Time (GMT) except during 
March - September, when local time is advanced by one hour.  Working 
hours are generally 40-45 hours per week, usually a five and half day 
week.  An increasing number of businesses are moving towards a five-day 
working week of Sunday through Thursday.  Common office hours are from 
8:00 am to 4:00 pm Sunday to Thursday, 8:00 am to 1:00 pm Friday.  Some 
retail stores are closed one afternoon during the week.  Banks and 
government offices have varying hours of business but are usually open 
in the morning Sunday through Thursday. 
 
Travel Advisory and Visas 
 
Israel occupied the lands known as the "Occupied Territories" (the West 
Bank, Gaza Strip, Golan Heights, and East Jerusalem) as a result of the 
1967 war.  Pursuant to the September 13, 1993, Israel-PLO Declaration of 
Principles on interim self-government arrangements (DOP); the May 4, 
1994, Cairo Agreement on the Gaza Strip and Jericho Area; and the August 
29, 1994, agreement on preparatory transfer of powers and 
responsibilities, certain powers and responsibilities for the Gaza 
Strip, Jericho Area and the West Bank have been transferred to the 
Palestinian Authority.  The DOP provides that Israel will retain 
responsibility during a five-year transitional period for external 
security and for internal security and public order of settlements and 
Israelis.  During this transitional period, definitive information on 
entry and customs requirements, arrests, and other matters may not be 
available, or may change without prior notice.  Should questions arise 
in the West Bank, including the Jericho area, U.S. citizens may 
telephone the U.S. Consulate General in Jerusalem for assistance 
(telephone: 972-2-253288).  For questions concerning the Gaza Strip, 
U.S. citizens may telephone the U.S. Embassy in Tel Aviv (telephone: 
972-3-519-7575) or the U.S. Citizen Services Section directly (972-3-
519-7524 or 519-7453 or 519-7454). 
 
Entry Requirements:  Passports, an onward or return ticket, and proof of 
sufficient funds are required for entry to Israel and the occupied 
territories.  A three-month visa may be issued for no charge upon 
arrival, and may be renewed.  (Visitors who plan to travel to Arab 
countries with no diplomatic relations with Israel may request to have 
their Israeli entry visas stamped on a separate form at the port of 
entry).  Anyone who has been refused entry or experienced difficulties 
with his/her visa status during a previous visit, or who has overstayed 
a visa, can obtain information from the Israeli Embassy or nearest 
consulate regarding the advisability of attempting to return to Israel.  
Permission must be obtained from Israel for anyone attempting to claim 
the status of a returning resident in Gaza or the Jericho Area.  At 
present, U.S. citizens may enter and exit Gaza and the Jericho area on a 
U.S. passport, without obtaining visas from either Israel or the 
Palestinian Authority.  Private vehicles frequently encounter long 
delays entering or leaving Gaza.  Only cars with special permits are 
allowed to cross the checkpoints. 
 
International crossing points are now in operation between Israel and 
Jordan at Arava (Wadi Al-Arabah) crossing in the South, and the Jordan 
River crossing (Sheikh Hussein Bridge) in the North.  Prior visas are 
not necessary for American citizens using these two crossing points.  
According to a recent agreement between the Jordanian and Israeli 
governments border crossings in both directions in private vehicles will 
be allowed as of mid-August 1995.  Crossing procedures for the Allenby 
Bridge, linking Jordan and the occupied West Bank, remain unchanged.  
Prior visas and bridge crossing permits are required to cross the 
Allenby Bridge. 
 
Procedures for all crossings into Jordan are subject to frequent 
changes.  Travelers wishing the most up-to-date border crossing 
information should contact the U.S. Embassy in Tel Aviv or the U.S. 
Consulate General in Jerusalem.  For further entry information, 
travelers may contact the Embassy of Israel, 3514 International Drive, 
N.W., Washington, D.C. 20009, telephone (202) 364-5500, or the nearest 
Israeli Consulate General in Los Angeles, San Francisco, Miami, Atlanta, 
Chicago, New Orleans, Boston, New York, Philadelphia, Houston. 
 
1995-6 Holidays 
 
The following is a list of official Jewish and American holidays 
observed by the American Embassy, Tel Aviv: 
 
1995 
September 25    *Rosh Hashana (New Year - first day) 
September 26    *Rosh Hashana (New Year - second day) 
October 4       *Yom Kippur (Day of Atonement) 
October 9       *Succot (Feast of Tabernacles) 
October 16      *Simhat Tora (Rejoicing of the Law) 
November 10      Veterans Day 
November 23      Thanksgiving Day 
December 25      Christmas Day 
 
1996 
January 1        New Year's Day 
January 15       Martin Luther King's Birthday 
February 19      President's Day 
April 4         *Passover (first day) 
April 10        *Passover (last day) 
April 24        *Israeli Independence Day 
May 24          *Shavuot (Pentecost) 
May 27           Memorial Day 
July 4           Independence Day 
September 2      Labor Day 
September 14    *Rosh Hashana (New Year - first day) 
September 15    *Rosh Hashana (New Year - second day) 
September 23    *Yom Kippur (Day of Atonement) 
September 28    *Succot (Feast of Tabernacles) 
October 5       *Simhat Torah (Rejoicing of the Law) 
October 14       Columbus Day 
November 11      Veterans Day 
November 28      Thanksgiving Day 
December 25      Christmas Day             
 
*  Jewish and Israeli Holidays: All businesses in Israel are closed 
 
Jewish holidays commence at sunset, the day before.   
Many Israeli businesses are closed for the duration of Passover (7 days) 
and Succot (8 days). 
   
Business Infrastructure 
 
Languages: 
Hebrew and Arabic are the two official languages of Israel.  English is 
the second and principal international language.  Most signs in public 
places are in all three languages.  Due to the diversity of the 
immigrant population, most Israelis are multilingual.   
 
Transportation: 
Israel has advanced inland and international transportation facilities.  
An extensive road network links the entire country.  The railway system 
provides limited passenger services to the center and the north between 
Jerusalem, Tel Aviv and Haifa, and more extensive freight services from 
the north to the Beer Sheva region in the south.  Israel is connected 
internationally by means of air and waterways.  Ben Gurion International 
Airport is the center of air passenger and cargo operations.  Internal 
air services connect the major cities of Tel Aviv, Haifa and Jerusalem 
to Eilat in the south and to the Galilee region in the north.  The three 
main ports located in Haifa, Ashdod and Eilat offer full freight 
services for international shipping.   
 
Communications: 
Israel's national and international telecommunications systems are being 
constantly improved and upgraded to cater to increasing demands.  Many 
Israeli high-tech companies operate in the data communications sector, 
providing an immediate business link both domestically and 
internationally.  About 150,000 are subscribers to cellular phones.  The 
number of subscribers is increasing annually at a rate of 10 percent.  
The major telephone credit cards are: AT&T, MCI and Sprint. 
 
Hotels and Restaurants: 
Israel has a variety of good business hotels and restaurants that offer 
a wide variety of international cuisine.  Most places accept 
internationally recognized credit cards such as Visa, Mastercard, 
Eurocard, American Express, and Diners Club.  Food and water is 
generally safe, although bottled water is often preferred.  Visitors 
should be careful of roadside food in hot weather. 
 
Medical facilities: 
Modern medical care and medicines are available in Israel.  However, 
some hospitals in Israel and hospitals in the Gaza Strip and the West 
Bank, including Jericho Area, fall below U.S. standards.  Travelers can 
find information written in English about emergency medical facilities 
and after-hours pharmacies in the "Jerusalem Post" newspaper.  Doctors 
and hospitals often expect immediate cash payment for health services.  
U.S. medical insurance is not always valid outside the United States.  
Supplemental medical insurance with specific overseas coverage has 
proven useful.  The international traveler's hotline at the Center for 
Disease Control, telephone (404) 332-4559, has additional health 
information. 
 
X. APPENDICES 
 
Appendix A. - Country Data 
 
Profile 
-Population                                   5.6 million 
-Population Growth Rate                              2.7% 
-Religions            Judaism, Islam, Christianity, Druze 
-Government                       Parliamentary Democracy 
-Languages          Hebrew, Arabic, English widely spoken 
-Work Week                              Sunday - Thursday 
 
 
Appendix B. - Domestic Economy  
 
(USD millions except where noted) 
 
                               1994            1995            1996 
                                              (est)            (est) 
 
-GDP (current dollars)     73,548.9        84,757.2        97,801.3 
-GDP real growth rate (%)       6.7               4             4.9 
-GDP per capita (a)          13,660          15,447          17,468 
-Government spending 
      (as % of GDP)              54              52              51 
-Inflation (%)                 14.5            10.0            10.0 
-Unemployment (%)               7.8             7.5             7.8 
-Foreign Exchange Reserves    7.07b            8.0b             n/a 
-Average Exchange        
      (for USD 1.00)            3.1             3.2             3.5 
-Foreign Debt                39,960          41,000          42,000 
-Debt Service Ratio (%)*       37.5             n/a             n/a 
-U.S. Economic/            1.2 econ        1.2 econ        1.2 econ 
    Military Assistance     1.8 mil         1.8 mil         1.8 mil 
 
*Ratio of principal/interest payments on foreign debt to foreign income. 
 
 
Appendix C. - Trade  
 
(USD millions except where noted): 
                            1994            1995                1996 
                                            (est)              (est) 
-Total Israeli Exports    16,884          18,200              19,711 
-Total Israeli Imports    23,775          26,152              28,244 
-U.S. Export                4.3b            5.1b                 n/a 
-U.S. Imports               5.2b            5.6b                 n/a 
-U.S. Share of Israel's 
      Imports              18.1%           19.5%                 n/a 
 
Imports of Manufactured Goods: 
(HS Chapters 28-40,42,46,48-97,less 71) 
 
                              1994            1995                1996 
                                             (est)               (est) 
 
-Total (from World)         14,491          15,941              17,535 
-From the U.S.               3,260           3,586               3,945 
-U.S. Share of Manufactured 
      Imports (%)             22.5            22.5                22.5 
-Manufactured Goods Trade 
      Balance with U.S.        505             556                 612 
-Exports of Israeli Manufactured 
      goods to U.S.          2,755           3,030               3,333 
 
-Projected Average Annual Growth Rate from World through 1996:  10% 
-Projected Average Annual Growth Rate from U.S. through 1996:  10% 
 
Imports of Agricultural Goods: 
(HS Chapters 1-24) 
                                1994        1995             1996 
                                            (est)           (est) 
 
-Total (from World)            1,679       1,846            2,032 
-From the U.S.                   415         457              502 
-U.S. Share of Agricultural 
 Imports (%)                    24.7        24.8             24.7 
-Agricultural Goods Trade 
      Balance with U.S.       -334.8       -368.8            -405 
-Agricultural Exports to U.S.   80.2         88.2              97 
 
Israel's Trade Balance with Four Leading Partners in 1995: 
 
Country        Imports            Exports                    Balance 
 
U.S.             4,988              5,390                       +402 
Germany          2,974                987                     -1,988 
U.K.             2,370              1,002                     -1,369 
Japan              961              1,217                       +256 
___________________ 
b=billion 
n/a = not available 
(a) differences in exchange and inflation rates may distort figures 
converted into dollars 
 
Principal U.S. Exports: 
 
84.71        Computers 
85.42        Integrated Circuits 
88.03        Aircraft Parts 
10.01        Wheat 
87.03        Automobiles 
 
Principal U.S. Imports: 
 
71.02        Diamonds 
71.13        Jewellery 
85.42        Integrated Circuits 
84.42        Printing Machinery 
85.25        Telecommunications Equipment 
 
Sources:  Central Bureau of Statistics, Bank of Israel, International 
Monetary Fund 
 
Appendix D. - Investment 
 
There are no direct foreign investment figures available which are tied 
directly to country of origin or to industry sector destination.  Nor 
are there reliable figures available on direct foreign investments by 
U.S. companies or by other nations' companies.  (See "VII. Investment 
Climate".) 
 
Appendix E. - U.S. and Country Contacts 
 
Government Agencies 
 
Ministry of Industry & Trade 
Contact:  Mr. Yossi Snir 
Director General 
30 Agron Road 
Jerusalem 94190 
Tel:  972-2-243-981 
Fax:  972-2-259-274 
 
Ministry of Industry & Trade 
Contact:  Mr. Zohar Peri 
Deputy Director General 
30 Agron Road 
Jerusalem 94190 
Tel:  972-2-750-311 
Fax:  972-2-243-005 
 
Ministry of Industry & Trade 
Contact:  Mr. Noah Shani 
Director, Center for Business Promotion 
30 Agron Road 
Jerusalem 94190 
Tel:  972-2-220-601/2 
Fax:  972-2-236-303 
 
Ministry of Industry & Trade 
Contact:  Director, North American Division 
Foreign Trade Administration 
30 Agron Road 
Jerusalem 94190 
Tel:  2-2-220-335 
Fax:  972-2-243-005 
 
Ministry of Industry & Trade 
Contact:  Dr. Yehoshua Gleitman 
Chief Scientist 
4 Mevo Hamatmid Street 
Jerusalem 91021 
Tel:  972-2-256-368 
Fax:  972-2-248-159 
 
Ministry of Industry & Trade 
Contact:  Mr. Menachem Biala 
Director, Chemical Products Division. 
30 Agron Road 
Jerusalem 94190 
Tel:  972-2-220-186 
Fax:  972-2-241-987 
 
Ministry of Industry & Trade 
Contact:  Mr. Yoram Levy 
Director, Consumer Goods Division 
30 Agron Road 
Jerusalem 94190 
Tel:  972-2-220-473 
Fax:  972-2-220-499 
 
Industrial Cooperation Authority (ICA) 
Contact:  Mr. Shoham 
Director 
P.O. Box 33231 
Tel Aviv 61331 
Tel:  972-3-696-2172 
Fax:  972-3-696-7432 
 
Ministry of Agriculture 
Contact:  Mr. Yonathan Bassi 
Director General 
P.O. Box 7011 
Hakirya, Tel Aviv 61070 
Tel:  972-3-691-6811 
Fax:  972-3-697-1516 
 
Ministry of Agriculture 
Contact:  Mr. Zvi Alon 
Director, Foreign Trade Center 
P.O. Box 7011 
Hakirya, Tel Aviv 61070 
Tel:  972-3-697-1704 
Fax:  972-3-697-1681 
 
Ministry of Agriculture 
Contact:  Ms. Dalia Harel 
Deputy Director General (Production) 
P.O. Box 7011 
Hakirya, Tel Aviv 61070 
Tel:  972-3-691-6811 
Fax:  972-3-697-1516 
 
Ministry of Agriculture 
Contact:  Dr. Emanuel D'layahu 
Director Comprehensive Planning and Policy 
P.O. Box 7011 
Hakirya, Tel Aviv 61070 
Tel:  972-3-697-1807 
Fax:  972-3-697-1516 
 
Ministry of Agriculture 
Contact:  Mr. Eldad Landes 
Director Plant Protection and Inspection Service 
P.O. Box 78 
Bet Dagan 50250 
Tel:  972-3-960-4891 
Fax:  972-3-968-1507 
 
Ministry of Agriculture 
Contact:  Professor Arnon Shimshony 
Director Israel Veterinary Services and Animal Health 
P.O. Box 12 
Bet Dagan 50250 
Tel:  972-3-968-1681 
Fax:  972-3-968-1641 
 
Ministry of Science and the Arts 
National Committee for Information Technology and Infrastructure 
Contact:  Prof. Danny Dolev 
Chairman Institute of Computer Science 
Hebrew University 
Jerusalem 
Tel:  972-2-584-116 
Fax:  972-2-585-439 
 
Ministry of Finance 
Contact:  Ms. Tamar Ben David 
Director General Israel Government Companies Authority 
Treasury Building, Room 741 
1 Kaplan Street 
Jerusalem 91007 
Tel:  972-2-317-597/ 638-330 
Fax:  972-2-617-028 
 
Ministry of Defense 
Contact:  Mr. David Ivri 
Director General 
Hakirya, Tel Aviv 61909 
Tel:  972-3-697-5774 
Fax:  972-3-691-9918 
 
Ministry of Construction and Housing 
Contact:  Mr. Amos Rudin 
Director General 
P.O. Box 19110 
Jerusalem 91180 
Tel:  972-2-847-106 
Fax:  972-2-847-688 
 
Ministry of Transportation  
Contact:  Mr. David Ben Abu 
Director General 
95 Jaffa Road 
Jerusalem 91000 
Tel:  972-2-319-221 
Fax:  972-2-249-133 
 
Ports and Railways Authority 
Contact:  Mr. Shoresh Lerer 
Director General 
P.O. Box 20121 
Tel Aviv 61201 
Tel:  972-3-561-6488 
Fax:  972-3-561-7142 
 
Ayalon Highways Co. Ltd. 
Contact:  Mr. Doron Balasha 
Managing Director 
Al Parashat Drachim Street 
Tel Aviv 61181 
Tel:  972-3-695-4775 
Fax:  972-3-693-1270 
 
The Israel Electric Corp. Ltd. 
Contact:  Mr. Rafi Peled 
General Manager 
P.O. Box 8810  
Haifa 31086 
Tel:  972-4-548-200 
Fax:  972-4-548-203 
 
Bank of Israel 
Contact:  Ms. Miki Eran 
Foreign Exchange Department 
Kiryat Ben Gurion 
1 Kaplan Street 
Jerusalem 91007 
Tel:  972-2-552-501 
Fax:  972-2-535-516 
 
The Israeli Defense Mission to the U.S.A. 
Contact:  Deputy Head of Mission 
850 Third Avenue 
New York, NY 10022 
Tel:  212-755-3448 
Fax:  212-940-9434 
 
Trade Associations and Chambers of Commerce 
Federation of Israeli Chambers of Commerce 
Contact:  Mr. Dan Gillerman 
President 
P.O. Box 20027 
Tel Aviv 61200 
Tel:  972-3-561-1010 
Fax:  972-3-561-9027 
 
Israel-America Chamber of Commerce & Industry 
Contact:  Mrs. Nina Admoni 
Executive Director 
P.O. Box 33174 
Tel Aviv 61333 
Tel:  972-3-695-2341 
Fax:  972-3-695-1272 
 
Manufacturers' Association of Israel 
Contact:  Mr. Dan Proper 
President 
Industry House 
29 Hamered Street 
Tel Aviv 68125 
Tel:  972-3-512-8832 
Fax:  972-3-510-3154 
 
Manufacturers' Association of Israel 
Contact:  Mr. Moshe Nahum 
Director 
Dept. of Foreign Trade & International Relations 
Industry House 
29 Hamered Street 
Tel Aviv 68125 
Tel:  972-3-512-8814-5 
Fax:  972-3-662-026 
 
Association of Contractors and Builders in Israel 
Contact:  Mr. Amos Bar-Am 
General Manager 
18 Mikve Israel Street 
Tel Aviv 65115 
Tel:  972-3-560-4701 
Fax:  972-3-560-8091 
 
Market Research Firms 
 
Mitsuv Ltd. 
Contact:  Prof. Michael Peri 
General Manager 
12 Bialik Street 
Tel Aviv 63324 
Tel:  972-3-525-5522 
Fax:  972-3-525-5523 
 
Gitam/BBDO Ltd. 
Contact:  Mr. Rami Hassman 
Director, Research & Strategy Department 
1 Jabotinsky Street 
Ramat Gan 52520 
Tel:  972-3-576-5757 
Fax:  972-3-752-5496 
 
Romiglobe Ltd. 
Contact:  Mr. Eitan Margalit 
Senior Consultant and Managing Director 
4 Rahavat Ilan Street 
Givat Shmuel 54056 
Tel:  972-3-532-5027 
Fax:  972-3-532-5338 
 
MAP Market Analysis & Planning Ltd. 
Contact:  Prof. Igal Ayal 
Managind Director 
49 Ibn Gevirol Street 
Tel Aviv 64361 
Tel:  972-3-696-9710 
Fax:  972-3-691-6073 
 
I.M.D.E. International Marketing Development Enterprises Ltd. 
Contact:  Mr. Uri Ovnat 
2 Shifon Street 
Ramat Hasharon 47404 
Tel:  972-3-540-2890 
Fax:  972-3-540-0754 
  
Dun and Bradstreet (Israel) Ltd. 
Contact:  Mr. David Bondi 
General Manager 
27 Hamered Street 
Tel Aviv 68125 
Tel:  972-3-5103355 
Fax:  972-3-5103397 
 
Teldan Information Systems Ltd. 
Contact:  Mr. Dan Carmi 
General Manager 
7 Derech Hashalom Street 
Tel Aviv 67892 
Tel:  972-3-695-0073 
Fax:  972-3-695-6359 
 
MS&P 
Contact:  Mr. Yuval Bar Ner  
General Manager 
88 Gordon Street 
Tel Aviv 64389 
Tel:  972-3-522-1058 
Fax:  972-3-522-2774 
 
Simar Consulting Ltd. 
Contact:  Mr. Jacques Rozenbaum 
General Manager 
16 Pinsker Street 
Rehovot 76308 
Tel:  972-3-537-1770 
Fax:  972-3-537-1765 
 
Zenovar 
Contact:  Mr. Haim Zaban 
General Manager 
3 Tfutsot Yisrael Street 
Givatayim 53583 
Tel:  972-3-571-9693 
Fax:  972-3-573-2150 
             
Commercial Banks 
 
Bank Hapoalim B.M. 
Contact:  Mr. Moshe Amit 
Joint Managing Director 
50 Rothschild Boulevard 
Tel Aviv 66883 
Tel:  972-3-567-3380 
Fax:  972-3-567-3149 
 
Bank Leumi Le-Israel B.M. 
Contact:  Ms. Galia Maor 
General Manager 
P.O. Box 2 
Tel Aviv 61000 
Tel:  972-3-514-8111 
Fax:  972-3-514-8177 
 
The First International Bank of Israel Ltd. 
Contact:  Mr. Shlomo Pjoterkovsky 
General Manager 
9 Ahad Ha'am Street 
Tel Aviv 65251 
Tel:  972-3-519-6111 
Fax:  972-3-510-0316 
 
Industrial Development Bank of Israel 
Contact:  Mr. Arie Sheer 
Chairman of the Board 
2 Dafna Street 
Tel Aviv 64928 
Tel:  972-3-691-6412 
Fax:  972-3-265-956 
 
Israel Discount Bank Ltd. 
Contact:  Mr. Avraham Asheri 
General Manager 
27 Yehuda Halevi Street 
Tel Aviv 65546 
Tel:  972-3-514-5513 
Fax:  972-3-514-5155 
 
United Mizrahi Bank 
Contact:  Mr. Yaacov Dior 
General Manager 
13 Rothschild Boulevard 
Tel Aviv 66881 
Tel:  972-3-567-9211 
Fax:  972-3-560-4780 
 
Binational Foundations/Commissions 
 
BARD Foundation 
Contact:  Prof. Yoash Vaadia 
Executive Director 
P.O. Box 6 
Bet Dagan 50250 
Tel:  972-3-968-3230 
 
Binational Science Foundation 
Contact:  Zeev Rotem 
Executive Director 
2 Alharizi Street 
Jerusalem 91076 
Tel:  972-2-617-314 
Fax:  972-2-633-287 
 
BIRD Foundation 
Contact:  Dan Vilenski 
Executive Director 
3 Tevuot Ha'aretz Street 
P.O. Box 39140 
Tel Aviv 61390 
Tel:  972-3-647-0710 
Fax:  972-3-498-341 
 
U.S. Embassy Trade Personnel 
 
Commercial Service, U.S. Embassy 
Contact:  Barry Friedman 
Commercial Counselor 
Tel:  972-3-510-7211 
Fax:  972-3-510-7215 
 
Office Address: 
Migdalor Building 
8th Floor 
1 Ben Yehuda Street 
Tel Aviv 63801 
 
Mailing address:  
U.S. Embassy 
Commercial Service  
Unit 7228 
APO, AE 09830 
 
Commercial Section, U.S. Consulate Jerusalem 
Contact:  Ms. Carol Abington 
Commercial Specialist 
 (Jericho/West Bank) 
U.S. Consulate General 
18 Agron Road 
Jerusalem 94190 
Tel:  972-2-253-288 
Fax:  972-2-259-270  
 
Economic Section, U.S. Embassy 
Contact:  Mr. Tain Tompkins  
Counselor for Economic Affairs 
Tel:  972-3-517-4338 
Fax:  972-3-517-3227 
U.S. Embassy 
71 Hayarkon Street 
Tel Aviv 63432 
 
Mailing address: 
U.S. Embassy  
Economic Section  
Unit 7228 
APO, AE 09830 
 
Agricultural Section, U.S. Embassy 
Contact:  Tully Friedgut 
Agricultural Specialist 
Tel:  972-3-519-7588 
Fax:  972-3-510-2565 
U.S. Embassy  
71 Hayarkon Street 
Tel Aviv 63432 
 
Mailing Address: 
U.S. Embassy 
Office of Agricultural Affairs 
Unit 7228, Box 3 
APO, AE 09830 
 
Agricultural Section, U.S. Embassy (Athens) 
Contact:  Mr. Paul Hoffman 
Agricultural Counselor (Regional responsibility  
    for Israel, Greece & Cyprus) 
U.S. Embassy 
91 Vasilissis 
10160 Athens, Greece 
Tel:  (30) 1-721-2951, 6431289 (Direct Line) 
Fax:  (30) 1-721-5264 
 
Defense Attache's Office, U.S. Embassy 
Contact:  Col. John Siebert 
Defense Attache 
U.S. Embassy 
71 Hayarkon Street 
Tel Aviv 63442 
Tel:  972-3-517-4338 
Fax:  972-3-517-3227  
 
Washington-Based USG Personnel 
 
U.S. Department of Commerce 
Contact:  Mr. Paul J. Thanos 
Israel Desk Officer 
U.S. Department of Commerce 
Room 2029B 
14th & Constitution Avenues NW 
Washington DC 20230 
Tel:  202-482-1860 
Fax:  202-482-0878 
 
U.S. Department of State 
Contact:  Mr. Daniel Rubinstein 
Israel Desk Officer 
U.S. Department of State 
2201 C Street NW 
Washington, DC 20520 
Tel:  202-647-3672 
Fax:  202-736-4461  
 
U.S. Department of Agriculture 
Contact:  Mr. Philip Letarte 
Area Officer Southern Europe 
Foreign Agricultural Affairs, FAS 
U.S. Department of Agriculture 
Room 5951S 
Washington, DC 20250-1000 
Tel:  202-720-7725 
Fax:  202-690-2909 
 
U.S. Department of Agriculture 
Contact:  Mr. Robert Curtis 
Deputy Director 
        Asia, Africa and Eastern Europe Division 
        International Trade Policy Division, FAS 
U.S. Department of Agriculture 
Room 5503S 
Washington, DC 20250-1000 
Tel:  202-720-1483 
Fax:  202-690-1093 
 
U.S. Department of Agriculture 
Contact:  Ms. Suzanne Hale 
Director, Agricultural 
        Export Services Division, FAS 
U.S. Department of Agriculture 
Room 4939S 
Washington, DC 20250-1000 
Tel:  202-720-6419 
Fax:  202-690-4374 
 
U.S. Trade & Development Agency 
Contact:  Mr. John Richter 
Regional Director 
Department of Commerce, SA-16 
Room 309 
Washington, DC 20523 
Tel:  703-875-4357 
Fax:  703-875-4009 
 
Export-Import Bank of the United States (EXIM) 
Contact:  Ms. Margaret Kastic or Mr. Ken Wickett 
811 Vermont Avenue NW 
Washington, DC 20571 
Tel:  202-565-3814 
Fax:  202-565-3816 
 
Overseas Private Investment Corporation (OPIC) 
1100 New York Avenue NW 
Washington DC 20527 
Tel:  202-336-8799 
Fax:  202-408-9859 
 
U.S. - Israel Science & Technology Commission 
Contact:  Mr. Lee Bailey  
Director 
Technology Administration 
U.S. Department of Commerce 
14th & Constitution Avenues NW 
Washington DC 20230 
Tel:  202-482-6264 
 
U.S.-Based Multiplier Organizations 
 
Association of North America - Israel Chambers of Commerce 
Contact:  Mr. Howard Bernstein 
President 
180 North Michigan Avenue, Suite 911 
Chicago, IL 60601 
Tel:  312-641-2944 
Fax:  312-641-2941 
 
Builders for Peace 
Contact:  Mr. R. Joseph DeSutter 
Executive Director 
1511 K Street NW, Suite 640 
Washington, DC 20005 
Tel:  202-628-0038 
Fax:  202-628-0048 
 
Eastern U.S. Agricultural and Food Export Council, Inc. 
Contact:  Mr. Ronald L. Gaskill 
Executive Director 
214 Senate Avenue, Suite 600 
Camp Hill, PA 17011 
Tel:  717-731-6017 
Fax:  717-731-6019 
 
Mid-America International Agri-Trade Council 
Contact:  Mr. Timothy F. Hamilton 
Executive Director 
400 West Erie Street, Suite 100 
Chicago, IL 60610 
Tel:  (312) 944-3030 
Fax:  (312) 944-1144 
 
Southern United States Trade Association 
Contact:  Mr. Scott Hanson 
Executive Director 
World Trade Center, Suite 1540 
2 Canal Street 
New Orleans, LA 70130-1408 
 
Western U.S. Agricultural Trade Association 
Contact:  Dr. James Youde 
Executive Director 
13101 N.E. Highway 99, Suite 200 
Vancouver, WA 98686-2786 
Tel:  206-574-2627 
Fax:  206-574-7083 
 
Appendix F. - Market Research 
 
U.S. Department of Commerce Reports 
     
FY 1995 Industry Subsector Analyses (ISAs)  
Computer Software 
Refrigeration Equipment 
Telecommunication Equipment and Services 
Water Pollution Control Equipment 
Airport and Ground Support Equipment 
Local Area Network Systems 
 
A complete list of market research is available on the NTDB. 
 
U.S. Department of Agriculture Reports  
 
CY 1995 Market Reports 
Flower Production in Gaza Increase (IS5001) 
Grain and Feed Annual Report (IS5003) 
Call for Bids to Maintain Wheat Stock (IS5004) 
Fresh Beef Imports from Europe Possible (IS5005) 
Citrus Preliminary Review MY94 (IS5009) 
Cotton Production and Use in Israel (IS5010) 
Oilseeds and Products Annual Report MY1994 (IS5012) 
Tomatoes and Products Annual Report MY1994 (IS5013) 
Apple Import Licenses for Additional 500 MT (IS5014) 
Poultry Annual Report MY 1994 (IS5016) 
 
CY 1995 Market Reports (planned) 
Agricultural Situation Annual Report 
Avocado Annual Report 
Citrus Development Annual Report 
 
 
APPENDIX G. Trade Event Schedule 
 
The following trade event is being organized by the U.S. Department of 
Commerce:   
 
Catalog Exhibition: Products for Development USA 
March-May 1996 
Tel Aviv, Gaza and West Bank 
Product categories: electrical power equipment; oil and gas field 
equipment; safety and security equipment; agricultural equipment and 
chemicals; computers and peripherals; food processing and packaging; 
telecommunication equipment; water resources equipment and supplies; 
machine tools and metal working equipment; medical equipment; automotive 
parts and accessories; pollution control equipment; plastic production 
machinery; textile machinery and equipment; transportation and 
communications equipment; construction equipment and supplies; avionics 
and ground support; education equipment. 
 
The Commercial Service and the Foreign Agricultural Service Tel Aviv 
will participate in the following international exhibitions to be held 
in Israel in FY 1996: 
 
Environment '96 - A biennial international exhibition for environmental 
protection to be held in May 27-30, 1996 at the Exhibition grounds in Te 
Aviv.  This trade show is held in conjunction with 
Building/Munex/Energy. (see below) 
 
Kitex'96 - Israel's main exhibition for institutional kitchens, 
including kitchen equipment and food.  Kitex is an annual exhibition 
scheduled for December 4-7, 1995 and October 21-24, 1996.  FAS will 
participate in the U.S. pavillion, which will house several U.S. food 
manufacturers, regional trade organizations and state exhibits.  Kitex 
is held in conjunction with Hotex. (see below) 
 
International Exhibitions in Israel which may be of interest to U.S. 
exporters 
 
Elcom 96 
Dates: February 27-29, 1996 
Place: Exhibition Park, Tel Aviv 
Frequency: Every three years 
Description: International exhibition for municipal facilities 
 
Computax '96 
Dates: April 29-May 1, 1996 
Place: Exhibition Park, Tel Aviv 
Frequency: Annual 
Description: International computer show 
 
Agritech '96 
Dates: May 1996 
Place: Exhibition Park, Tel Aviv 
Frequency: Every three years 
Description: International exhibition for agricultural machinery and 
technology 
 
Building/Munex/Environment/Energy '96 
Dates: May 27-30, 1996 
Place: Exhibition Park, Tel Aviv 
Frequency: Biennial 
Description:  
Building - International building and construction exhibition 
Munex - International exhibition for municipal facilities
Environment - International exhibition for environmental protection 
Energy - International energy exhibition 
 
Hotex/Kitex '96 
Dates: October 14-17, 1996 
Place: Exhibition Park, Tel Aviv 
Frequency: Annual 
Description: Hotex - International exhibition on hotel furnishings, 
equipment and supplies  
Kitex - International exhibition on food, processing technologies, 
equipment and supplies for hotels, restaurants, institutional kitchens 
and grocery markets 
 
Medax '97 
Dates: December 1-4, 1996 
Place: Exhibition Park, Tel Aviv 
Frequency: Biennial 
Description: International exhibition on medical technology, medical and 
hospital equipment and supplies 
 
Israchem/Analiza '97 
Dates: January 20-23, 1997 
Place: Exhibition Park, Tel Aviv 
Frequency: Biennial 
Description: Israchem - International exhibition on analytic, diagnostic 
and biotechnological equipment and instruments  
Analiza - International exhibition on processing equipment, chemical 
engineering, industrial processing and finishing 
 
In addition to the above exhibitions, numerous professional conferences 
and symposiums are held annually.  For information, please contact the 
Commercial Service, Tel Aviv, telephone: 972-3-510-7212, fax: 972-3-510-
7215 
 
Foreign Buyer Program 
 
Automotive Aftermarket Industry Week '95 
October 24-27, 1995 
Las Vegas, Nevada 
 
World Energy Engineering Congress 
November 8-10, 1995 
Atlanta, Georgia 
 
Medtrade/NHHCE 
November 15018, 1995 
Atlanta, Georgia 
 
Greater New York Dental Meeting 
November 25-29, 1995 
New York, NY 
 
Power-Gen Americas '95 
December 5-7, 1995 
Anaheim, California 
 
The Builder's Show 
January 26-29, 1996 
Houston, Texas 
 
International Franchise Expo 
March 8-10, 1996 
Washington, D.C. 
 
Conexpo-Con/Agg '96 
March 20-24, 1996 
Las Vegas, Nevada 
 
Comdex/Spring and Windows World '96 
June 3-6, 1996 
Chicago, Illinois 
 
HazMat Iternational 
June 5-7, 1996 
Philadelphia, Pennsylvania 
 
WasteExpo '96 
May 20-24, 1996 
Las Vegas, Nevada 
 
Note: Since trade event schedules may change, firms should consult the 
export promotion calendar on the NTDB or contact the Commercial Section 
at the U.S. Embassy for the latest information. 
 
The following USDA/FAS cooperators have market promotion programs in 
Israel and will conduct unscheduled trade-oriented visits to Israel 
during the course of the year: 
 
American Soybean Association 
California Walnut Commission 
Eastern U.S. Agricultural and Food Export Council, Inc. 
U.S. Feed Grains Council 
U.S. Meat Export Federation 
U.S. Wheat Associates 
Wild Blueberry Association of North America
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