Commission staff working document accompanying the Communication from the Commission to the European Parliament and the Council - Implementation of the European Neighbourhood Policy in 2008 - Progress Report Israel {COM(2009) 188 final} {SEC(2009) 511} {SEC(2009) 512} {SEC(2009) 513} {SEC(2009) 514} {SEC(2009) 515} {SEC(2009) 517} {SEC(2009) 518} {SEC(2009) 519} {SEC(2009) 520} {SEC(2009) 521} {SEC(2009) 522} {SEC(2009) 523}
Date: 2009-04-23
Institutions: European Commission
Subjects: European neighbourhood policy, Israel, impact study, the EU's international role

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 23.4.2009 
SEC(2009) 516 

COMMISSION STAFF WORKING DOCUMENT 

Accompanying the 

COMMUNICATION FROM THE COMMISSION  
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 

Implementation of the European Neighbourhood Policy in 2008 

Progress Report Israel 

{COM(2009) 188 final} 
{SEC(2009) 511} 
{SEC(2009) 512} 
{SEC(2009) 513} 
{SEC(2009) 514} 
{SEC(2009) 515} 
{SEC(2009) 517} 
{SEC(2009) 518} 
{SEC(2009) 519} 
{SEC(2009) 520} 
{SEC(2009) 521} 
{SEC(2009) 522} 
{SEC(2009) 523} 

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1. 

BACKGROUND AND OVERALL ASSESSMENT 

Israel and the European Community first established contractual relations in 1975 by signing 
a  Cooperation  Agreement.  The  Euro-Mediterranean  Partnership  inaugurated  at  the  1995 
Barcelona  Conference  established  a  policy  with  ambitious  and  long-term  objectives.  This 
partnership was reinforced in 2008 with the creation of the Union for the Mediterranean. The 
Association Agreement with Israel which entered into force in 2000 sets out in more detail the 
specific areas in which the relations can be developed bilaterally. On this basis, the EU-Israel 
Action Plan was adopted in April 2005, for a period of three years. A first progress report was 
adopted in December 2006 and a second one in April 2008. 

In  addition,  institutional  cooperation  through  the  EU–Israel  Association  Council,  the  EU–
Israel  Association  Committee  and  ten  subcommittees,  nine  of  which  are  activated,  enabled 
both sides to move forward and follow the implementation of the ENP Action Plan closely. 

Following a request by Israel to upgrade bilateral relations, the validity of the current Action 
Plan  was  prolonged  in  April  2008. This  prolongation  provided  for  more  time  to  discuss  the 
contents of a successor document to the Action Plan. 

Since the June 2008 Association Council’s favourable response to Israel’s upgrading request, 
work  had  started  on  the  identification  of  possible  actions  for  a  new  instrument  in  the 
framework  of  subcommittee  meetings  and  in  meetings  of  an  ad  hoc  steering  group.  By  the 
end  of  2008,  initial  technical  discussions  were  held  for  all  the  areas  under  Community 
competence. 

This  document  reports  on  overall  progress  made  on  the  implementation  of  the  EU  –  Israel 
ENP Action Plan between 1 January and 31 December 2008, although developments outside 
this  period  are  also  considered  when  deemed  relevant.  It  is  not  a  general  review  of  the 
political and economic situation in Israel. 

Israel  has  been  an  active  partner  in  the  framework  of  the  ENP,  as  demonstrated  by  the 
progress made in implementing a large number of priorities of the Action Plan. Negotiations 
aiming  at  achieving  a  greater  EU-Israel  reciprocal  liberalisation  of  trade  in  agricultural, 
processed agricultural products and fish and fishery products were concluded in April 2008. 
In  the  transport  field,  the  European  Community  and  Israel  signed  a  horizontal  aviation 
agreement  and  started  negotiations  on  comprehensive  aviation  agreement.  The  European 
Commission  and  Israel  also  signed  a  Joint  Declaration  on  co-operation  and  dialogue  in 
education and training. The Protocol on the general principles governing the State of Israel’s 
participation  in  Community  programmes  was  signed  in  April  2008.  It  will  be  formally 
concluded once the European Parliament gives its assent. 

On the domestic front, more efforts are needed to address the increasing poverty gap and to 
improve the situation of the Arab minority by adopting adequate measures, for instance, in the 
field of employment, education and public administration. 

Any consideration of bilateral EU-Israel relations in the context of the ENP Action Plan must 
take into account the persisting Israeli-Arab conflict and overall political developments in the 
Middle East. This report therefore also expands on relevant activities of the Israeli authorities 
in  the  occupied  Palestinian  territory  (oPt).  The  continued  and  accelerated  expansion  of 
settlements  in  2008  had  a  negative  impact  on  the  peace  process  and  on  the  access  and 

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movement  situation  for  the  Palestinian  population  as  well  as  the  Palestinian  economy.  This 
effect was further compounded by the lack of progress on a certain number of commitments 
undertaken  in  the  framework  of  the  Action  Plan  (for  example  facilitating  the  Palestinian 
trade).  

The  year  2008  ended  with  one  of  the  gravest  chapters  in  the  Israeli-Palestinian  conflict, 
exacerbating  the  situation  of  the  Palestinian  population  in  Gaza,  which  was  already 
impoverished prior to the Israeli offensive. Following the collapse of a six-month long truce 
between Hamas and Israel, on 27 December the latter launched operation “Cast Lead” which 
lasted  until  17  January  2009.  Reportedly  over  1  315  Palestinians  were  killed,  of  which  415 
were children and 110 women, and over 5 500 wounded. 14 Israeli were killed. Despite the 
disastrous humanitarian situation on the ground, it is premature to analyse the political impact 
of the crisis in this report. Therefore, this report does not address the Gaza crisis which will be 
covered in detail in the next report covering 2009, to be issued in 2010. 

2. 

POLITICAL DIALOGUE AND COOPERATION 

Shared values 

Democracy, human rights and fundamental freedoms 

Objectives pursued in this area include: the promotion of democracy, rule of law and respect 
for  human  rights  and  international  humanitarian  law;  explore  the  possibility  of  joining  the 
optional protocols related to international conventions on human rights; protecting the rights 
of  minorities,  including  enhancing  political,  economic,  social  and  cultural  opportunities  for 
all citizens and lawful residents; evaluation and monitoring of policies from the perspective of 
gender equality and promoting dialogue on policies for the physically and mentally disabled. 

In  2008,  Israel’s  willingness  to  engage  with  the  EU  in  a  constructive  dialogue  on  sensitive 
issues  continued  to  grow,  and  closer  political  co-operation  and  dialogue  was  achieved.  The 
agendas and items discussed at formal and informal meetings at different levels bear witness 
to  this.  Matters  raised  included  inter  alia  the  legal  and  economic  situation  of  minorities  in 
Israel,  children  affected  by  armed  conflict,  administrative  detention,  access 
to 
education/health/place of employment/judiciary in the oPt. This improvement in atmosphere 
and  depth  of  the  political  dialogue  is  set  against  the  background  of  the  Israeli  request  for  a 
significant upgrading of bilateral relations dating back to March 2007.  

Progress  with  regard  to  the  promotion  of  democracy,  rule  of  law  and  respect  for  human 
rights and international humanitarian law was limited, in particular following the Gaza crisis 
at year-end, preceded by an 18-months blockade of Gaza. 

Overall, the promotion and protection of the Israeli Arab minority remained unsatisfactory 
during  the  reporting  period,  particularly  in  areas  like  land  allocation,  housing,  planning, 
economic  development,  investment  in  social  infrastructure  and  justice.  Regarding  land 
allocation,  a  petition  on  current  discriminatory  practice  is  still  pending  in  front  of  the  High 
Court. In December 2008, the Goldberg commission was established to elaborate a possible 
solution to the conflict regarding the land of the Negev and the Bedouin community living in 
the  area.  The  commission  presented  its  report  to  the  Israeli  Ministry  of  Construction  and 
Housing. The report issued a number of recommendations, inter alia the recognition of some 
of the villages and retroactive permits for some illegal buildings, financial compensation and 
the granting of alternative land as well as the creation of an independent agency to facilitate 

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the implementation of the commission's recommendations. It remains unclear if and how the 
findings  of  the  commission  will  be  implemented.  During  2008,  demolition  of  unrecognised 
villages continued. 

Outside  the  reporting  period,  with  respect  to  the  political  rights  of  minorities,  the  Central 
Elections Committee vote of early January 2009 to ban two Arab parties from participation in 
the  2009  parliamentary  elections  was  a  step  backwards.  This  decision  was  however 
overturned by the Israeli High Court only a week later. 

In  the  context  of  the  promotion  of  fundamental  freedoms,  restrictions  to  freedom  of 
expression  and  assembly  could  be  noted  since  the  onset  of  Israeli  military  operations  in 
Gaza,  leading  to  the  arrest  of  over  700  Arab  Israelis  demonstrating  against  the  offensive, 
including over 200 minors. Tight restrictions on access to Gaza for journalists existed already 
prior to the crisis, but were reinforced during the crisis. This measure significantly curtailed 
freedom of the press. 

As  regards  gender  equality,  the  first  mission  of  experts  on  the  identification  of  a  twinning 
programme  took  place  in  December  2008.  This  programme  would  help  strengthening  the 
commission  on  equal  opportunities  at  work.  As  regards  the  promotion  of  women’s 
participation in social, economic and political life, Prime Minister Olmert highlighted in May 
2008 in a speech at the Knesset the need to reinforce women’s representation in all aspects of 
Israeli  life.  He  also  invited  ultra-Orthodox  and  Arab  women  to  join  the  workforce  in  far 
greater numbers. 

Combating anti-Semitism - Fight against racism and xenophobia, including Islamophobia 

The  EU  and  Israel  pursued  their  cooperation  in  supporting  initiatives  tackling  racism  and 
xenophobia, in particular in the UN fora, but also at a joint international seminar in Jerusalem 
in January  2008,  as  reported  last year, focusing  on  education and education  related matters, 
especially in view of the recent increase in anti-Semitic incidents in Europe. The seminar was 
attended by officials and civil society representatives from Israel and the EU Member States. 

Regional and international issues 

Co-operation under CFSP/ESDP, crisis management 

The EU Police Mission for the Palestinian Territories (EUPOL COPPS) expanded and created 
a  new  rule  of  law  section  with  twenty  new  members  of  staff.  It  supports  a  comprehensive 
approach  to  creating  security  for  the  Palestinians,  treating  the  Palestinian  Criminal  Justice 
System as a whole.  

The  Council  of  the  European  Union  extended  the  mandate  of  the  EU  Border  Assistance 
Mission in Rafah (EUBAM Rafah) by a further year, until November 2009. It pointed out that 
since  the  closure  of  the  Rafah  crossing-point  the  mission  had  maintained  its  operational 
capability  and  that  the  EU  was  determined  and  prepared  to  redeploy  its  personnel  at  the 
crossing-point as soon as  conditions permitted.  In  November  2008  a  new  Head  of  EUBAM 
Rafah took office. 

Situation in the Middle East 

The EU-Israel political dialogue intensified during the reporting period in a number of fora 
and  at  different  levels.  In  December  2008,  the  Council  gave  a  preliminary  response 

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(‘guidelines in view of a reinforcement of the structures for the political dialogue with Israel’) 
to Israel’s request for a strengthening and formalisation of the existing political dialogue. 

Little progress was made regarding cooperation with the EU on a comprehensive settlement 
of the Israeli-Palestinian conflict. Despite Roadmap obligations and the commitment made at 
the  Annapolis  conference  to  freeze  settlements’  growth,  a  sharp  increase  in  settlement  and 
outpost  construction  can  be  noted  for  2008,  including  in  East  Jerusalem.  No  progress  was 
made  with  regard  to  the  further  improvement  of  access  and  co-ordination  to  facilitate  the 
implementation  and  delivery  of  humanitarian  and  other  forms  of  assistance.  During  the 
reporting  period,  the  European  Commission,  in  line  with  Council  conclusions  and  Quartet 
statements, continuously requested a regular and predictable opening of the border crossings 
to  and  from  Gaza  for  goods  and  people.  Delivery  of  EU  assistance  to  Gaza  was  hindered 
during most of the reporting period, generating higher costs, and an even greater dependency 
of the Gaza population on external aid. 

No significant progress can be noted on secure and safe movement of civilians and goods in 
the  West  Bank  and  Gaza.  During  the  reporting  period,  the  EU  on  a  number  of  occasions 
raised individual cases of Human Rights defenders facing travel restrictions or other obstacles 
to carrying out their work in the context of the political dialogue. Human rights defenders are 
being subject to unjustifiable restrictions on freedom of movement, violence and ill-treatment 
by Israeli settlers as well as Israeli security forces.  

Furthermore, medical patients attempting to exit the Gaza Strip through the Erez crossing in 
order to access medical treatment were denied authorisation by the Israeli Security Agency in 
a number of instances. On several occasions, the EU Presidency managed to help secure some 
permits to cross Erez for patients in need of life saving treatment. 

Progress on improving of economic and social conditions of all populations is limited. In May 
2008,  the  Israeli  government  agreed  to  proposals  for  economic  development  in  Jenin  by 
Quartet Representative Tony Blair. However, implementation continues to be difficult.  

Demolition of Palestinian houses without a building permit in Area C (which comprises areas 
under  exclusive  Israeli  control)  of  the  West  Bank,  the  so-called  administrative  demolitions, 
resumed in the last quarter of 2008, after a de facto moratorium of six months. 

Close  EU-Israel  cooperation  secured  the  departure  of  around  100  Palestinian  students  from 
Gaza with European scholarships between June and December 2008. 

Regarding  concrete  actions  against  incitement  to  hatred  and  the  use  of  violence  from  all 
sources, the Israeli government called for calm and announced financial compensation to the 
victims of violence after inter-religious violence between Jewish and Muslim residents of the 
city of Acre broke out in early October 2008. The incidents caused destruction on both sides, 
and severely damaged the houses of 13 Arab families living in mixed neighbourhoods. By the 
end  of  the  reporting  period,  the  concerned  families  had  not  received  the  compensation 
allocated for the damages incurred. 

In addition, following a surge in settler violence in September and October 2008, the Israeli 
government  decided  to  establish  an  inter-agency  task  force  to  deter  settler  violence  and  to 
ensure  swift  processing  of  cases  brought  to  court.  It  also  announced,  but  has  not  yet 
implemented,  an  end  to  all  support  to  illegal  outposts,  and  the  creation  of  a  ministerial 
committee on how to strengthen law enforcement with regard to outpost construction. A sharp 

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increase in violence perpetrated by Israeli settlers against Palestinians and their property was 
reported  in  2008.  During  the  reporting  period,  the  EU  Presidency  issued  two  statements, 
condemning  the  acts  and  calling  on  the  Israeli  government  to  protect  the  Palestinian  civil 
population. 

No  progress  can  be  noted  with  regard  to  minimising  the  impact  of  security  and  counter-
terrorism measures on the civilian population, in particular in the context of the Gaza crisis. 
Punitive sealing of houses resumed in East Jerusalem outside the reporting period, in January 
2009. 

Non-proliferation  of  weapons  of  mass  destruction  and  their  means  of  delivery,  including 
ballistic missiles 

Informal dialogue on non-proliferation of weapons of mass destruction has continued and has 
focused  on  a  number  of  issues  of  common  concern  such  as  non-proliferation  treaties  and 
instruments,  Israel’s  participation  in  export  control  regimes,  multilateral  nuclear  fuel 
approaches, arms transfer to terrorists. 

Combating terrorism 

The Israeli government continued to put considerable emphasis on terrorism as a challenge 
to security and political leadership. Israel expressed interest to deepen collaboration with the 
EU, drawing on Israeli expertise in the subject matter. A report by the UN Special Rapporteur 
for  Human  Rights  found  a  number  of  incompatibilities  between  Israel’s  counter-terrorism 
laws and practices and the country’s international human rights obligations. 

The bilateral cooperation in this field has continued to progress. In addition to regular contacts 
among specialists from both sides, an ad hoc “Israel-EU troika ENP seminar on the dilemmas 
and concerns of democracies in fighting terrorism” took place in December 2008 in Brussels. 

Israel continues to hold hundreds of Palestinians in administrative detention without formal 
charges, including minors. Under Israeli law, the age of majority is attained at 18 whereas the 
Military  Order  132  defines  a  minor  as  a  person  under  the  age  of  16.  In  contravention  of 
Article 37 (c) of the Convention on the Rights of the Child, Palestinian children are routinely 
detained with  adults  both  before  and  after sentencing.  For the first  time,  two female minors 
were held in administrative detention in 2008. They were released in January 2009. The total 
number held in administrative detention fell from 813 in January 2008 to 548 in December. 
42 Palestinians had been held in administrative detention for more than two years. 

A number of violations by Israel of its treaty obligations under the Convention against Torture 
and  Other  Cruel,  Inhuman  and  Degrading  Treatment  or  Punishment  (CAT)  was  reported  in 
2008, and is being examined by the relevant authorities in Israel. 

International organisations 

In  line  with  the  joint  objective  to  promote  effective  multilateralism,  the  EU  and  Israel 
continued to develop regular contacts on a number of matters of common interest, notably in 
the framework of the United Nations. Discussions on UN-related matters were also addressed 
in the framework of the informal working group on “international organisations” which met in 
April 2008. 

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EU-Israel  cooperation  in  multilateral  fora  also  included  work  on  the  Universal  Periodic 
Review  (UPR)  in  the  UN  Human  Rights  Council  in  December  2008.  A  number  of 
recommendations were made to Israel as part of the review process, ranging from improving 
the  situation  of  the  Arab  minority  to  increasing  gender  equality,  improving  detainment 
conditions, facilitating access and movement as well as the humanitarian situation in the oPt, 
and  obligations  under  international  humanitarian  law.  The  UPR  outcome  document  was 
adopted  by  the  plenary  session  of  the  Geneva-based  UN  Human  Rights  Council  in  March 
2009. Israel committed itself to implement the recommendations it accepts within a four-year 
timeframe. Israel has 5 overdue reports of UN Treaty Bodies and it has extended a standing 
invitation  but  not  to  all  thematic  special  procedures.  While  Israel  has  hosted  eight  visits  of 
special rapporteurs in the last three years, the Special Rapporteur on the situation of human 
rights  in  the  Palestinian  territories  occupied  since  1967,  was  prevented  by  the  Israeli 
authorities from undertaking a mission to the oPt in December 2008. 

Regional cooperation 

Trilateral  cooperation  (involving  Israel,  the  Palestinian  Authority  and  the  European 
Commission) in the field of energy and trade, as a means to contribute constructively to the 
reinitiated  negotiations  in  the  framework  of  the  peace  process,  was  resumed  in  2008.  In 
particular in the energy field, progress was made in coordinating cooperation with a particular 
emphasis on cooperation in the field of solar energy. No progress was made towards restarting 
trilateral cooperation on transport matters. 

3. 

ECONOMIC AND SOCIAL COOPERATION  

Israel's economy slowed down to 4.1% in 2008, after four consecutive years of growth rates 
above  5%.  Real  GDP  growth  was  strong  during  the  first  half  of  2008,  but  has  moderated 
since, as  business  and  consumer  confidence weakened in the context of the global  financial 
turmoil. Exports were also affected by the slowdown in the EU and US markets and to some 
extent by the shekel's continued strength. 

Inflation rose to 3.8% for 2008, affected in part by increases in world prices of raw materials, 
in particular oil and food prices. The Bank of Israel raised interest rates to face inflationary 
pressures while keeping moderate the short-term impact on the economic activity. However, 
given the slowdown of the economy and the deterioration in the global financial markets, the 
interest rates were subsequently decreased towards the end of 2008. 

After four years of decrease the budget deficit in 2008 rose to 2.1%, above the budget target 
of 1.6% of GDP. This was due to the slowdown of the economy and a number of legislative 
changes which reduced the collection of direct taxes. The public debt was reduced to 80% of 
GDP  in  2008.  Public  debt  still  remains  a  constraint  for  the  Israeli  economy  and  the 
implementation of anti-cyclical policies (in the form of higher government expenditure). 

The  current  account  surplus  narrowed  to  1.3%  of  GDP  in  2008,  mainly  because  of  the 
slowdown  in  exports  and  the  fall  of  the  investment  income  from  abroad.  Nevertheless,  the 
surplus in the current account and the widening of the interest rates differentials with the US 
continued to support the shekel which appreciated markedly during 2008 despite the central 
bank's decision to purchase around USD 10 billion in foreign exchange. 

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The financial crisis in 2008 did not have a severe impact on Israeli banks which are relatively 
stable but was a point of concern for the capital markets. The drop in the price of shares and 
corporate bonds resulted in very significant losses in the value of pension and provident funds 
triggering  heavy  withdrawals.  The  Government  intervened  with  a  plan  to  provide  a  limited 
support to elderly pension savers depending on future market conditions. 

Social situation, employment, poverty reduction 

Poverty represents a challenge in Israel. The poverty gap has deepened in the last few years. 
According  to  the  National  Insurance  Institute  (NII),  31.8%  of  the  Israeli  population  is 
considered poor (first semester of 2008), more than twice the average OECD rate. According 
to the Israel Central Bureau of Statistics, 51.4% of the Arab population living in Israel were 
considered  poor  and  26%  of  the  elderly  Jewish  population  was  at  poverty  risk  compared  to 
60% of the Arab elders1. The Bank of Israel set up an inter-ministerial team in July 2008 to 
analyse  the  expected  effects  of  the  negative  income  tax  on  poverty  and  on  the  rate  of 
workforce participation in Israel. The negative income tax plan gives tax refunds to low wage 
earners  in  selected  areas  as  of  September  2008.  Narrowing  the  inequalities  is  a  key  issue 
which  includes  the  training  of  technicians  from  the  ultra-Orthodox  sector,  and  the 
establishment of an authority which would deal with economic development in the minority 
sectors. 

Unemployment  continued  to  decline  and  reached  6%  in  October  2008.  Among  men,  it 
dropped from 5.9% to 5.7% and among women from 6.7% to 6.2%. The share of citizens out 
of the total number of job-seekers living in Arab towns and Jewish development towns was 
41%, far larger than their relative share in the population. The Ministry of Industry, Trade and 
Labour estimates that, due to the global economic slowdown, the construction and agricultural 
sectors as well as financial services were the most affected by the decline of available jobs. 
The total number of available jobs in the second quarter of 2008 declined by 4% compared to 
the first quarter, despite a rise in the number of available jobs in the fields of transportation 
and telecoms. 

As  regards  social  inclusion,  Israel  lags  behind  OECD  countries  regarding  the  social  targets 
related to poverty and employment. For example, the rate of participation in the workforce in 
Israel is 53%, compared to 66% in OECD countries. 

According to surveys published during the reporting period, Israel scores poorly regarding the 
integration of disabled people in the labour market. Disabled people earn about 34% less than 
the  national  average  (against  a  15%  gap  in  the  other  developed  countries  polled),  a  result 
putting Israel second to last of the 17 countries surveyed. 

As regards social dialogue, tripartite dialogue works fairly well. 

An inter-ministerial committee on sustainable development related matters has been set up; 
it is led by the Director-General of the Ministry of Environment and meets regularly. It also 
enjoys the active involvement of NGOs, academics and local authorities. An annual report on 
sustainable development is presented to the Government highlighting progress made. 

1 

The figures quoted are the most updated ones (e.g. from 2007)  

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4. 

TRADE-RELATED ISSUES, MARKET AND REGULATORY REFORM 

In 2008, the EU was the first trading partner for Israel, with imports representing 34.0% and 
exports 33.0 %. Contrary to the trend of the previous three years, export of Israeli products to 
the EU and import of EU products to Israel decreased respectively by 1.4 and 1.6%. In July 
2008,  Israel  and  the  European  Commission  initialled  the  preliminary  agreement  on  further 
liberalisation  of  bilateral  trade  in  agricultural,  processed  agricultural  products  and  fish  and 
fishery  products  amending  the  current  provisions  of  the  Association  Agreement  for  those 
products.  The  compensations  regarding  the  enlargement  of  the  Community  to  include 
Bulgaria and Romania formed an integral part of the negotiations. Work is on-going towards 
the  establishment  of  a  “dispute  settlement  mechanism”  for  an  effective  resolution  of  trade 
disputes  in  the  framework  of  the  Association  Agreement.  Israel  actively  participated  to  the 
Trade Senior Officials’ Working Group set up to draw a Euromed Roadmap of next steps in 
the  field  of  trade  till  2010  and  beyond.  The  Roadmap  is  due  to  be  adopted  at  the  Trade 
Ministerial meeting in autumn 2009. 

Israel  and  the  European  Commission  continued  to  exchange  information  and  experience  on 
customs,  in  the  context  of  the  relevant  subcommittee.  The  Israeli  Tax  Authority  signed  a 
contract  in  September  2008  that  would  establish  a  new  system  for  foreign  trade.  The  new 
system,  which  shall  be  operational  in  three  years,  shall  enable  the  handling  of  all  customs-
related activities between the private sector and the Israeli Department of Customs and VAT 
electronically, using online forms and electronic signatures. The web-based version of AFIS 
(OLAF's  Anti  Fraud  Information  System)  is  now  fully  operational,  which  constitutes  an 
improvement in communication and leads to enhanced cooperation in the fight against fraud. 

On  free  movement  of  goods  and  technical  regulations,  the  EU  and  Israel  launched  the 
negotiations  on  an  Agreement  on  Conformity  Assessment  and  Acceptance  of  Industrial 
Products (ACAA) in one of the priority sectors, namely Good Manufacturing Practice (GMP) 
for  pharmaceuticals  in  November  2008.  The  conformity  of  the  Israeli  Inspectorate  with  EU 
practices had been positively assessed by a European Commission expert mission in Israel in 
August  2008.  Final  amendments  to  the  Israeli  draft  GMP  legislation  are  being  assessed  by 
European  Commission  services.  Preparations  in  other  sectors  (i.e.  medical  devices  and 
pressure equipment) are on-going. 

At the request of Israel, a technical and information seminar on the Rapid Alert System for 
non-food  products  (RAPEX)  took  place  in  June  2008.  As  reported  last  year,  Israel  is  an 
affiliate member of the European standards bodies CEN and CENELEC since January 2008. 

Israel  and  the  European  Commission  continued  their  dialogue  on  sanitary  and  phyto-
sanitary  issues  including  through  the  relevant  subcommittee  and  Israel’s  participation  in 
workshops under the European Commission’s “Better training for safer food” programme and 
TAIEX funded events. Israeli veterinary services participated in SPS projects under the EU’s 
Framework  Programme  RTD.  In  August,  October  and  November  2008,  the  European 
Commission’s  Food  and  Veterinary  Office  (FVO)  carried  out  missions  to  Israel  on  plants, 
poultry as well as on fish and fishery products. In February 2009, after the reporting period, 
the Knesset adopted a new phyto-sanitary law for import of plants and plant products. 

While good progress was made in resolving a long-standing trade issue concerning the import 
of beef into Israel, no progress was registered in facilitating the import of live bovines. Other 
SPS issues are also outstanding. 

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As regards business climate, the EU-Israel business dialogue continued to develop over the 
reporting period and several events took place. The second meeting of the Israel-EU Chamber 
of Commerce took place in November 2008. 

As regards company law, accounting and auditing, most operators in the financial market in 
Israel adopted the International Financial Reporting Standards (IFRS) system in 2008, except 
for  the  banks  which  will  start  using  it  in  2009.  The  European  Commission  and  Israeli 
authorities  agreed  in  December  2008  to  start  a  dialogue  on  auditing  to  get  a  better 
understanding  of  the  Israeli  system  for  the  oversight  and  the  regulation  of  the  auditors' 
profession. The Companies Act of 1999 was amended in July 2008 to include provisions on 
independent  director.  Further,  broader  changes  to  that  Act  on  corporate  governance  were 
initiated but not yet adopted in the course of 2008. 

The bilateral negotiations for the liberalisation of services and establishment were launched in 
2008. The next meeting is scheduled for the first quarter of 2009. 

In  the  field  of  financial  services,  preparations  for  a  new  law  on  the  Bank  of  Israel  are  on-
going. The  draft law  includes provisions for establishment of a  monetary policy  committee. 
Basel  II  principles  for  effective  banking  supervision  are  to  be  implemented  as  of  January 
2010.  The  Bank  Fees  Reform,  in  place  since  July  2008,  enables  customers  to  obtain  all 
relevant information regarding fees charged by banks for their services. Given Israel’s plans 
to  apply  SOLVENCY  II  in  Israel  by  2010,  local  insurance  companies  are  gearing  up  their 
preparations.  They  held  a  professional  workshop  in  June  2008,  and  are  looking  into  the 
establishment of a special committee for the implementation of SOLVENCY II. 

The Israel Securities Authority (ISA) proposed key amendments to Israel’s legislation, inter 
alia on marketing and portfolio managements, to the regulation and supervision of secondary 
markets as well as to the regulation of new financial instruments. Moreover, the ISA drafted 
amendments to the securities law which will broaden the category of "qualified investors” as 
well  as  a  major  amendment  regarding  the  regulation  of  securities  exchanges,  brokerage 
services and alternative trading platforms. 

Other key areas 

In the context of the relevant subcommittee, Israel and the European Commission continued 
to exchange information and experience in the area of taxation. Israel is currently reviewing 
its  purchase  tax  system  for  spirits  and  has  said  that  the  reformed  system  should  not  impose 
discriminatory taxes between different types of alcohol. 

With regard to competition policy, in the anti-trust field, the Israeli system is comparable to 
the systems in place in the EU Member Sates. No progress can be reported in the field of state 
aid. 

No progress was made towards resolving long-standing problems faced by EU companies in 
Israel  concerning  intellectual  property  rights  for  pharmaceutical  products.  Israel’s  OECD 
accession is an opportunity to resolve this. A new Copyright Law entered into force in May 
2008.  However,  Israeli  legislation  continues  not  to  be  in  line  with  a  number  of  EU 
requirements  on  patents  (data  exclusivity,  patent  term  extension,  registration  delays  and 
reinforcement  of  the  patent  administration)  and  designs.  This  creates  obstacles  to  market 
access  and  unfair  competition  on  the  world  markets.  During  the  reporting  period,  Israel 

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worked  with  the  European  Patent  Office  on  the  definition  of  a  cooperation  framework  to 
harmonise examining procedures and train patent examiners. 

As regards public procurement, Israel adopted new regulations in December 2008, aiming at 
full  transparency  of  the  tenders'  decision-making  procedures  in  the  different  ministries  and 
requiring  bidders  to  respect  all  labour  laws  and  workers'  rights.  The  buy-back  obligation 
(offsets) of foreign companies winning public tenders decreased from 28% to 20% in January 
2009 following Israel’s WTO General Procurement Agreement (GPA) commitments. Offsets 
are considered as an impediment to trade and fall under the on-going GPA review. 

The Israeli Central Bureau of Statistics (ICBS) and the Bank of Israel signed a Memorandum 
of Understanding in September 2008 that clarifies their relations, notably the distribution of 
responsibilities  and  mutual  expectations.  Israel  continued  to  participate  actively  in  the 
MEDSTAT  II  activities  oriented  towards  improving  the  national  statistical  system  and 
enhancing  staff  qualification.  The  ICBS  and  Eurostat  signed  a  Memorandum  of 
Understanding in May 2008 on data exchange. 

On  enterprise  policy,  Israel  assessed  its  progress  in  implementing  the  Euro-Mediterranean 
Charter for Enterprise. The assessment showed that Israel has a sound and effective enterprise 
policy,  with  a  good  record  both  in  enterprise  policy  making  and  implementation.  Israel’s 
performance  stands  out  in  particular  in  areas  such  as  risk  capital  and  innovation.  Areas  for 
improvement  include  inter-agency  cooperation,  legislative  and  administrative  simplification 
and the promotion of entrepreneurial learning in the school system. 

Israel took measures to reinforce the effectiveness of its legislation on consumer protection, 
in  particular  as  regards  the  prolongation  of  contracts  and  information  regarding  terms  of 
subscription. These measures entered into force in January 2009. The cancellation procedures 
for  long  term  contracts  (for  example,  Internet  and  telephone)  were  simplified.  New 
regulations on price marking were adopted in May 2008. The Bank of Israel decided, in July 
2008, to reform bank fees, in order to increase transparency and enhance competition. 

5. 

COOPERATION ON JUSTICE, FREEDOM AND SECURITY 

In the area of migration, information and best practices were exchanged between Israeli, EU 
and Member States’ experts at a seminar on legal and illegal immigration and asylum in June 
2008  under  the  auspices  of  TAIEX  and  in  several  occasions  in  the  second  half  of  the  year 
2008 within the framework of the Euromed Migration II project.  

Israel,  in  coordination  with  Egypt,  continues  to  instantly  and  forcibly  send  back  asylum 
seekers/migrants  from  countries  such  as  Sudan,  Eritrea  and  Somalia.  An  Israeli  NGO  in 
partnership with UNHCR and IOM received EC support for a project to enhance the Israeli 
authorities'  capacity  to  combat  labour  trafficking,  register  asylum  seekers,  assist  vulnerable 
migrants,  and  potential  victims  of  trafficking.  The  project  also  includes  a  pilot  voluntary 
return option for victims of trafficking. 

With  regard  to  the  fight  against  organised  crime,  in  July  2008,  Israel  ratified  the  First 
Protocol  to  the  United  Nations  Convention  against  Transnational  Organized  Crime  on  the 
trafficking of women and children. Work continued on the ratification of the second Protocol 
on  the  smuggling  of  migrants  while  the  third  Protocol  on  the  illicit  manufacturing  of  and 
trafficking in firearms has not been ratified yet. 

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An  exchange  of  information  took  place  with  respect  to  measures  to  combat  cybercrime  and 
Israel indicated willingness to accede to the Council of Europe Convention on Cybercrime. 

Israel  remains  a  key  destination  country  for  women  trafficked  for  sexual  exploitation  from 
Eastern  Europe  and  Central  Asia.  In  the  context  of  the  fight  against  trafficking  of  human 
beings,  a  study  visit  to  Italy  under  the  TAIEX  instrument  took  place  in  April  2008  on  the 
provision of services to victims of trafficking as well as cooperation methods and exchanges 
of best practice between law enforcement agents and social services. A second TAIEX study 
visit and a workshop took place in June 2008 in Moldova where EU, Israeli, Moldovan and 
Ukrainian officials, experts and civil society representatives explored further cooperation on 
actions  in  the  areas  of  prevention,  protection  and  prosecution.  Migrant  women  workers 
seeking  employment  in  the  health  care  and  service  sectors  are  particularly  vulnerable  to 
involuntary servitude, debt bondage and forced labour. While some convictions were secured 
for sex trafficking, raising public awareness of the issue, Israel remains on par with Lebanon, 
Yemen, Thailand and Ethiopia in this regard. 

With regard to the fight against drugs, the Israel Anti-Drug Authority (IADA) and the police 
continued  law  enforcement  measures  to  combat  trafficking  and  related  drug  offences.  The 
national  counter-narcotics  strategy  and  the  anti-drugs  programmes  operate  relatively 
effectively, though Israel remains vulnerable to smuggling despite strong security measures. 
Work  continued  on  updating  the  Dangerous  Drugs  Ordinance  (established  under  the  British 
Mandate)  into  a  comprehensive,  codified  Anti-Drug  Law  including  measures  such  as  the 
prohibition  of  the  import,  production  and  sale  of  drug  paraphernalia.  A  specific  police  unit 
was  established  in  2008  to  cover  the  selling  of  drugs  and  dangerous  substances  in 
convenience stores. Israel participated actively in the regional Euromed Police II programme. 
It  has  ratified  all  three  UN  conventions  on  narcotic  drugs  and  psychotropic  substances  and 
was  re-elected  as  a  member  of  the  UN  Commission  on  Narcotic  Drugs  for  a  second 
consecutive  term  (2008-11).  Furthermore,  Israeli  authorities  cooperated  with  the  Regional 
Near  East  Dublin  Group  in  the  preparation  of  an  updated  narcotics  situation  report  in 
November 2008 (see Sector Report). 

With regard to money laundering, economic and financial crime, Israel joined the Council of 
Europe’s  Moneyval  Committee  of  Experts  in  January  2008  as  an  active  observer  and 
completed the mutual evaluation process, discussed by the Moneyval Committee of Experts in 
draft in July 2008. Concerns highlighted included the timeliness of the reporting system, non-
regulation of anonymous or fictitious accounts and the adequacy of measures to prevent the 
establishment of shell banks. The pool of Moneyval evaluators was opened to Israeli experts 
as of April 2008. Israeli experts participated in a seminar on best practices in the fight against 
terrorist financing with their EU counterparts in March 2008. Planning is on-going for further 
seminars  on  the  transparency  of  financial  transfers  within  the  private  sector  and  the 
implementation of the 3rd Anti-Money Laundering Directive on the prevention of the use of 
the financial system for the purpose of money laundering and terrorist financing.  

In  the  area  of  police  and  judicial  cooperation,  work  continued  to  prepare  for  the  possible 
negotiation of an operational agreement with Europol. In this respect, the latter conducted a 
data protection audit visit to Israel in April 2008 as part of the negotiations. Israel expressed 
interest  in  concluding  a  cooperation  agreement  with  EUROJUST  and  appointed  a  contact 
point. Israeli experts and police benefited from a TAIEX study visit to EUROJUST in June 
2008 to better understand how the EU combats serious transnational crime.  

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Outside the reporting period, in February 2009, Israel ratified the United Nations Convention 
against Corruption. An amendment to the Penal Law in July 2008 criminalised the bribery of 
a foreign official as understood under the relevant article of the Convention. 

A financing agreement for a twinning project financed out of the 2007 National Programme 
on  personal  data  protection  cooperation  with  the  Israeli  Law,  Information  and  Technology 
Authority  (ILITA)  was  signed  in  July  2008.  The  project  aims  to  ensure  the  effective 
enforcement  of  national  legislation  on  privacy  in  line  with  European  standards  and  raise 
public awareness of personal data protection. 

Israel  requested  the  European  Commission  to  activate  the  procedure  aimed  at  declaring,  in 
accordance with Directive 95/46/EC that Israel ensures an adequate level of protection with 
regard to the personal data transferred from the EU. In response to this request, the European 
Commission commissioned a study to determine whether Israel provides adequate protection. 
The study was transmitted to the Israeli authorities in September 2008. 

6. 

TRANSPORT, ENERGY, THE ENVIRONMENT, THE INFORMATION SOCIETY, RESEARCH 
AND DEVELOPMENT, SCIENCE AND TECHNOLOGY 

The importance that is placed by Israel on issues of transport safety is reflected in the recent 
name change of the responsible ministry that is now called ‘Ministry of Transport and Road 
Safety’. Road safety and telematics are areas where the EU and Israel continued to cooperate 
actively.  A  number  of  intelligent  transport  system  (ITS)  initiatives  are  on-going,  from 
highway traffic management, traffic control centres, cellular based traffic monitoring to light 
rail projects. In the area of public transport a twinning project is under preparation with a view 
to  reinforcing  the  capacity  of  the  ministry  to  provide  quality  public  transport  in  the  urban 
areas of Israel. 

As  regards  infrastructure  investments,  Israel  attaches  great  importance  to  the  increased 
involvement  of  the  private  sector  through  public-private  partnership  (PPP)  projects.  In 
January 2008 the Government approved a set of recommendations for the evaluation of new 
transport projects to be promoted in cooperation with the private sector during the years 2008-
2015. Nearly 90% of the on-going PPP projects in Israel (amounting to approximately USD 7 
billion) are already in the transport sector, but there is a potential for 12 additional important 
projects in the fields of airports, seaports, roads, railway and mass transit systems, at a total 
cost of approximately USD 4 billion for the years 2008-2015. 

through  the  on-going 
Israel  continued  to  strengthen  the  railway  sector,  not  only 
comprehensive  investment  programme  of  upgrading  and  developing  infrastructure,  but  also 
through  the  setting  up  of  a  regulatory  body,  that  in  a  first  phase  will  be  situated  within  the 
Ministry of Transport and Road Safety itself. 

The European Commission and the Israeli authorities signed in December 2008 the horizontal 
air transport agreement bringing bilateral air service agreements between Member States and 
Israel  in  line  with  EC  law.  In  April  2008,  the  European  Commission  received  from  the 
Council of the European Union a mandate for a comprehensive EU-Israel Euro-Mediterranean 
aviation  agreement  providing  for  gradual  market  opening  and  a  high  level  of  regulatory 
convergence;  a  first  negotiation  round  took  place  in  December  2008.  As  regards  aviation 
safety,  Israel  needs  to  increase  efforts  and  resources  in  order  to  ensure  efficient  safety 
oversight. 

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In the maritime sector, Israel is re-evaluating the results of the previous port reform as it had 
not  led  to  the  expected  increased  competition  and  efficiency  of  the  ports.  The  delays,  in 
particular on import container movements and the relative high container fees and surcharges 
in Israeli ports are causes for concern. 

Israel  and  the  EU  further  strengthened  energy  cooperation.  In  2008,  the  European 
Commission and Israel took preparatory steps towards the country’s future participation in the 
Intelligent  Energy  Europe  Programme.  Israel  started,  although  with  some  delays,  the 
implementation  of  its  2007  electricity  sector  reform  plan,  which  aims  at  progressive  market 
opening.  Israel  increased  the  use  of  natural  gas  in  particular  for  electricity  generation.  It 
further  expanded  domestic  gas  pipelines.  In  2008,  gas  imports  from  Egypt  through  the 
completed  undersea  pipeline  started.  The  gas  is  used  by  the  Ashkelon  and  Tel  Aviv  power 
stations. Following completion of a feasibility study in 2007, Israel decided to work towards 
the construction of a Liquefied Natural Gas terminal. Israel and Turkey continued to study a 
Haifa-Ceyhan  interconnection  for  oil,  gas,  electricity  and  water.  Also  in  2008,  Israel 
confirmed  its  interest  in  off-shore  Gaza  gas  supplies.  Israel,  the  Palestinian  Authority  and 
Jordan  exchanged  views  on  possible  future  electricity  interconnections.  In  view  of  the 
situation  in  the  Gaza  Strip,  the  construction  of  an  electricity  line  to  Gaza  remained  frozen. 
Israeli  oil  refineries  developed  investment  plans  aiming,  inter  alia,  to  produce  cleaner 
products. 

Israel  continued  to  improve  energy  efficiency  and  to  enhance  the  use  of  renewable  energy 
sources. As indicated already in last year’s report, it wishes to reach, by 2020, 20 % energy 
savings and a 10 % share of renewable energy sources in electricity generation. Israel initiated 
work  towards  a  national  energy  efficiency  programme,  allocated  additional  resources  to 
research  and  development  in  the  area  of  renewable  energy  and  further  prepared  the 
construction of a solar-thermal power station in the Negev. 

At  regional  level,  Israel  pursued  Euro-Mediterranean  energy  cooperation,  in  particular 
through  multiple  projects.  The  July  2008  Summit  of  the  Union  for  the  Mediterranean 
endorsed  the  development  of  a  Mediterranean  Solar  Plan.  In  2008,  Israel,  the  Palestinian 
Authority and the European Commission re-launched their trilateral energy cooperation with 
the  aim  of  facilitating  the  joint  Israeli-Palestinian  “Solar  for  Peace”  initiative  and  the 
establishment  of  a  joint  energy  office.  A  European  Commission  financed  study  was 
undertaken to support the “Solar for Peace” project. 

In  the  field  of  climate  change,  Israel  took  initial  steps  to  formulate  a  national  plan  for  the 
reduction  of  greenhouse  gas  emissions  and  work  continued  on  greenhouse  gas  emission 
inventories.  The  Ministry  of  Environmental  Protection  prepared  a  report  on  the  anticipated 
impacts  of  climate  change  on  Israel.  Israel  also  prepared  further  Clean  Development 
Mechanism (CDM) projects. Altogether 13 of the more than 40 Israeli projects that have been 
submitted to the Designated National Authority are registered at UN level. Israel has not yet 
adopted a formal position regarding the post-2012 climate regime. 

The Ministry of Environmental Protection took steps to implement its vision and goals for 
2008-2010.  New  legislation  was  adopted  on  air  quality,  protection  of  the  Kinneret  Lake, 
enforcement of environmental regulations by local authorities, offences to wildlife protection, 
national cleanliness day, as well as new or amended regulations on tires, import and export of 
hazardous waste, ozone-depleting substances and non-ionizing radiation. Israel also took steps 
to prepare new legislation on soil, asbestos, enforcement and marine areas, as well as new or 
amended  regulations  on  air  pollution  from  on-road  vehicles,  access  to  information,  marine 

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pollution  from  land-based  sources,  protection  of  the  coastal  environment,  hazardous 
substances and prevention of water pollution. Israel adopted a national contingency plan for 
preparedness  and  response  to  marine  oil  pollution.  Under  the  protocols  to  the  Barcelona 
Convention,  Israel  prepared  a  national  plan  to  reduce  pollution  to  the  marine  environment 
from land-based sources and is preparing draft legislation on a national plan for preparedness 
and response to marine pollution incidents. Work is on-going to prepare a national action plan 
on  sustainable  consumption.  Work  continued  to  implement  existing  strategies  and  plans, 
where continued attention is required. In the field of water, Israel took measures to promote 
more efficient use of water resources. 

Israel took some steps to strengthen administrative capacity on environment at local level, but 
overall,  the  administrative  structures  still  need  to  be  strengthened.  Several  activities  took 
place  to  integrate  environment  considerations  into  other  policy  sectors,  such  as  through 
capacity  building  of  sector  ministries.  Steps  were  also  taken  to  implement  integrated 
permitting  through  the  business  licensing  law  and  clean  air  law.  Israel  continued  to  publish 
environmental information on a regular basis, and carried out activities to inform and involve 
the public. Steps were taken to prepare a study on a pollutant release and transfer register. 

Israel did not make significant progress in ratifying and signing outstanding Protocols to the 
Barcelona Convention for the Protection of the Marine Environment and the Coastal Region 
of the Mediterranean2. Israel continued its participation in the “Horizon 2020” Initiative, the 
EU  Water  Initiative  and  the  Mediterranean  Action  Plan.  Israel  also  participated  in  the  2008 
Euro-Mediterranean Ministerial Conference on Water, launching the preparation of a regional 
water  strategy  for  the  Mediterranean.  Cooperation  and  information  exchange  took  place 
between  the  European  Commission  and  Israel,  including  on  integrated  pollution  prevention 
and control, water and environment management and planning, environmental reporting and 
civil protection. Other topics, such as water, were identified for possible closer cooperation. 

As  regards  the  Information  Society  sector,  the  Ministry  of  Communications  declared  in 
August 2008 that it will follow the recommendations set out in the report of the Committee 
for  Promotion  of  Competition  in  the  Telecommunication  Industry  in  Israel  (the  Gronau 
Committee) issued upon the request of the Minister with the objective to enhance competition 
in  the  field  of  telecommunications.  The  implementation  of  certain  recommendations  will 
contribute  to  aligning  the  Israeli regulatory  framework  with  that  of  the  EU  in  areas  such  as 
local loop unbundling, the establishment of a regulatory authority and the option of requesting 
the remedy of a structural separation within the fixed network operator. The fixed and mobile 
operators  introduced  number  portability  and  the  general  license  holders are  obliged  to  offer 
Universal  Service.  The  three  major  mobile  operators  focused  on  third  generation  mobile 
services (3G) which account for 25% of the subscriptions. The Ministry of Communications 
intends  to  issue  additional  licences  using  the  technology  of  a  Mobile  Virtual  Network 
Operator (MVNO). 

Exchanges  of  views  on  cultural  and  audiovisual  policy  took  place  in  the  framework  of  the 
Euromed  Ministerial  meeting  on  Culture  and  Cultural  Dialogue  and  in  the  relevant 
subcommittee. 

2 

Israel has signed but not ratified the Barcelona Convention’s New Emergency Protocol. The same goes 
for  the  protocols  on  Specially  Protected  Areas  and  Biodiversity  and  Integrated  Coastal  Zone 
Management (signed in January 2008). It has not ratified the amendments to the Land Based Sources 
and Dumping protocols. 

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In the area of science and technology, cooperation between Israel and the EU remained very 
strong  as  Israel  was  associated  to  the  7th  Framework  Programme  for  Research  and 
Development  (FP7)  since  its  beginning  in  January  2007.  Its  success  rate  in  participating  in 
FP7 financed research projects was impressive since then. Israeli researchers were particularly 
successful in the FP7 Ideas programme as well as in the FP7 Information and Communication 
Technologies  (ICT)  and  the  health  thematic  programmes.  Sixty-seven  projects  with  89 
participants were registered for the ICT theme. Five of these FP7 projects were initiated and 
are  coordinated  by  Israeli  organizations.  In  March  2008,  the  Parties  organised  their  fourth 
Joint  Research  Committee  meeting  in  Tel  Aviv  at  which  both  sides  expressed  satisfaction 
with the development of S&T cooperation. The Joint Research Centre and the Israel Nuclear 
Energy Commission concluded a memorandum of understanding covering cooperation for the 
peaceful  use  of  nuclear  energy.  Israel,  the  Commission  and  the  European  Space  Agency 
(ESA) discussed the Israeli participation in EU FP7 space funding and in ESA programmes as 
well as issues related to space policy, critical technologies, earth observation data and Global 
Monitoring for Environment and Security (GMES) services. 

7. 

PEOPLE-TO-PEOPLE CONTACTS, EDUCATION AND HEALTH 

Reform  of  the  education  sector  continued  under  the  national  “New  Horizon  Programme” 
which  aims  to  improve  teaching  quality  while  allowing  for  an  individualized  approach  to 
student education. In addition, a draft law on special needs education based on the European 
model is under consideration with improvements in the area of e-learning and the introduction 
of life long learning approaches to teaching and learning provision.  

In July 2008, Israel signed a Joint Declaration with the European Commission on cooperation 
and  dialogue  on  education  and  training  with  an  initial  focus  on  lifelong  learning  policies, 
including  information  and  communication  technologies,  school  twinning,  language  learning 
and  the  promotion  of  the  transferability  of  qualifications.  Israel  participated  actively  in  the 
first  call  for  proposals  for  Tempus  IV  benefiting  from  two  projects  for  the  academic  year 
2008-9.  In  addition,  eight  masters  students  and  nine  scholars  received  scholarships  under 
Erasmus  Mundus.  A  further  three  Israeli  students  received  scholarships  in  European 
integration  studies  at  masters  level  for  students  from  the  ENPI  region  under  a  special  pilot 
project  for  the  academic  year  2008-9.  Student  and  academic  mobility  was  further  enhanced 
through  the  involvement  of  two  universities  in  Erasmus  Mundus  External  Cooperation 
Window  However,  inadequate  funding  as  well  as  ‘brain  drain’  continue  to  affect  higher 
education,  while  the  high  drop-out  and  low  graduation  rate  of  Arab  minority  students 
continued to be an area of concern alongside the academic freedom and movement of people 
including Palestinian students and academics. 

Israel  increased  funding  for  youth  activities  in  2008  and  continued  support  for  the 
development  of  youth  exchanges,  informal  education  provision  and  intercultural  dialogue 
within the context of Israel’s participation in Euromed Youth III. Under the latter, a total of 
16  projects  were  selected  in  the  period  2007-8  facilitating  contacts  between  youth  from 
diverse  cultural  and  religious  backgrounds  as  well  as  youth  exchanges.  Policy  dialogue  on 
youth issues took place in the framework of the relevant subcommittee. 

In the field of culture, the EU supported six Israeli projects selected under a call for proposals 
for local and regional cultural activities including support for three international film festivals. 
Israel  actively  participated  in  the  Euromed  Audiovisual  II  programme  and  in  a  regional 
project under Euromed Heritage III on capacity-building and promotion of the preservation of 

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shared  Byzantine-Islamic  cultural  heritage  alongside  partners  from  the  occupied  Palestinian 
Territory, Cyprus, Greece and Turkey. 

Israel is not a party to the 2005 UNESCO Convention on the Protection and Promotion of the 
Diversity of Cultural Expressions. 

The European Commission expressed its concern about the restricted access to holy places in 
its meetings with Israeli authorities. Muslims and Christians are impeded from worshipping at 
some  of  their  most  holy  places  in  the  world  due  to  an  elaborate  system  of  permits,  visas, 
checkpoints  and  the  barrier.  Ms  Asma  Jahangir,  the  UN  Special  Rapporteur  on  freedom  of 
religion  or  belief,  following  her  visit  to  Israel  and  oPt  in  January  2008,  also  voiced  her 
concern over problems of access to holy places revered by Jews. She drew attention to the fact 
that while Israeli citizens' ID cards no longer state the holder's ethnicity, those of Palestinians 
residents  of  the  oPt  do  disclose  their  religion.  She  stated  that  there  was  no  religious 
persecution  by  the  State  of  Israel,  but  strands  within  Christianity,  Judaism  and  Islam  still 
experienced some forms of discrimination. 

Extensive  contacts  between  EU/Israeli  civil  society  continued.  The  second  annual  trilateral 
meeting  of  Israeli,  Palestinian  and  European  Peace  NGOs  took  place  in  Pisa  in  September 
2008.  

Israel and the EU continued the dialogue on health. In November 2008, Israel participated in 
the second Euro-Mediterranean ministerial health conference, which opened new perspectives 
for  regional  health  cooperation.  Israel  participated  in  the  EU  Network  of  competent 
authorities  in  health  information  and  knowledge.  It  also  continued  its  involvement  in  the 
“EpiSouth” network for EU, Mediterranean and Balkan countries on communicable diseases.  

8. 

FINANCIAL COOPERATION – 2008 KEY FACTS AND FIGURES 

In the framework of the European Neighbourhood and Partnership Instrument (ENPI), a small 
bilateral  allocation  (EUR  8  million  for  the  period  under  the  2007-2010  National  Indicative 
Programme)  has  been  programmed  for  Israel,  in  support  for  the  implementation  of  the  EU- 
Israel  Action  Plan through  operations  that  promote  the  approximation  of  Israeli  norms  and 
standards to those of the EU. For this purpose, the Twinning cooperation instrument became 
available to Israel by the end of 2007. Since 2006, Israel has also received support from the 
TAIEX instrument. 

With their first bilateral allocation of EUR 2 million under the ENPI-Israel Action Programme 
2007,  two  twinning  projects  in  the  fields  of  Data  Protection  and  Urban  Transport  will  be 
funded after their signature by EU Member States. Additional twinning projects are currently 
being  identified,  which  will  be  funded  by  the  EUR  2  million  allocation  provided  for  2008. 
Moreover,  Israel  is  the  leading  country  in  the  Mediterranean  in  terms  of  requests  and 
organisation of TAIEX seminars. 

Israel  is  also  eligible  for  other  cooperation  activities  like  multi-country,  regional,  including 
the Partnership for Peace,  financed  under the ENPI,  as  well  as  the  European  Instrument  for 
Democracy  and  Human  Rights  and  other  thematic  programmes  supporting  the  civil  society. 
Israel is a partner in the CBC Mediterranean Sea basin programme (EUR 173,607 million for 
the  programme  in  the  period  2007-13).  Through  this  programme  the  populations  of  the 

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maritime regions bordering the Mediterranean Sea will receive funding for joint co-operation 
projects aimed at fostering sustainable development and enhancing human contacts.  

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