Source: EURLEX
Language: en
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# 52013SC0091

**JOINT STAFF WORKING DOCUMENT Implementation of the European Neighbourhood Policy in Israel Progress in 2012 and recommendations for action Accompanying the document JOINT COMMUNICATION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS European Neighbourhood Policy: Working towards a Stronger Partnership /\* SWD/2013/091 final \*/**

  

1.         Overall
assessment and recommendations for action

This document reports on
progress made on the implementation of the European Union (EU) – Israel European
Neighbourhood Policy (ENP) Action Plan between 1 January and 31 December 2012,
although developments outside this period are also taken into consideration
when deemed relevant. It is not a general review of the political and economic
situation in Israel. For information on regional and multilateral sector
processes readers should also refer to the Partnership for Democracy and Shared
Prosperity progress report.

The EU-Israel Action Plan
was adopted in April 2005 for a period of three years. Its validity was
extended until the end of 2012. The 2005 Action Plan provides the general
political framework for bilateral relations.

Israel made reasonable overall progress in the implementation of the
Action Plan. Although the EU consensus on freezing the upgrade of EU-Israel
relations remained unchanged, an effort was made in 2012 to inject greater
dynamism into the partnership. The work that had been underway since April 2011
under the technical talks between Israeli ministries, the EEAS and Commission
services was completed in 2012 and endorsed by the EU-Israel Association
Committee, which met on 2 May for the first time after four years, and by the EU-Israel
Association Council, which met on 24 July. The EU and Israel agreed to exhaust the opportunities offered by the current Action Plan and to proceed with
carrying out initiatives that had already been included in the Action Plan in a
number of sectors and policy areas but had not been implemented so far. In
addition, the two sides identified potential areas for future cooperation,
where discussions on implementation could begin as soon as the conditions for
upgrade were met. Practical measures were agreed with a view to rendering
sector policy dialogue and political dialogue more efficient and effective,
with implementation to be followed in 2013.

Domestic political
developments in 2012 indicated that the previous trend of tabling in the
Knesset a number of bills that could be labelled as "discriminatory"
or even "anti-democratic" has somewhat subsided. As regards human
rights, despite conducting a number of consultations with representatives of
unrecognised Bedouin villages, the government has failed at this stage to make
its Prawer Plan comply with the Goldberg Commission’s earlier recommendations
for a broad recognition of Bedouin villages.

The EU continued to
encourage both the Israelis and the Palestinians to return to the negotiating
table and led efforts to reinvigorate the Quartet. In
the Foreign Affairs Council Conclusions of 14 May the EU reaffirmed its
commitment to a two-state solution and expressed grave concern about
developments on the ground, which threaten to make it impossible. There was a major escalation of violence between armed groups in Gaza and Israel in November 2012, followed by a ceasefire brokered by Egypt and the US. On 29 November, Palestine was granted non-member Observer State status in the
United Nations, through a vote in the UN General Assembly. Israel reacted by announcing the extended construction of settlements in the West Bank, in
particular in the so-called E1 area and in East Jerusalem, and withheld the
transfer of Palestinian tax and customs revenues. The EU Foreign Affairs
Council in December expressed deep dismay and strong opposition to the Israeli
moves, stating that the Union would closely monitor the situation and act
accordingly. Moreover, political developments in Egypt and continued
hostilities in Syria also changed the security context and prospects for
comprehensive peace in the region.

Economic growth in Israel continued to slow down in 2012, weakening domestic demand and moderating export
growth as foreign demand weakened along with the difficulties in the global
economy. Inflation remained contained. In efforts to support economic activity,
the Central Bank of Israel lowered its policy rate. As the result of a
significant slowdown in fiscal revenues and continuous increase in expenditure,
the fiscal deficit is estimated to have missed its targets in 2012, thus postponing
the government's debt reduction efforts. In an important step towards achieving
the Action Plan goal of deepening and enhancing the economic dialogue between
the EU and Israel, the first meeting of the EU-Israel Sub-Committee on Economic
and Financial Matters (as foreseen under the EU-Israel Association Council in
2005) took place in January 2012.

In the
area of the internal market, the approval and entry into force of the EU-Israel
Agreement on Conformity Assessment and Acceptance of industrial products (ACAA) will improve market access for both European
and Israeli products without
additional certification. Now that Israel has made substantial progress in
amending its intellectual property rights legislation, efforts towards
bringing this legislation into line with its commitments within the
Organisation for Economic Cooperation and Development (OECD) should continue. The EU encourages the Israeli authorities to proceed swiftly with
the signature of the comprehensive civil aviation agreement initialled in July.
Cooperation in science and technology continued successfully.

Irregular
migration continued to be a serious challenge for Israel. The imposition of
sanctions, as exemplified by the anti-infiltration law and threat of mass
arrest, provoked criticism from civil society, the international community and
some Israeli institutions, although steps towards a regularisation of the
status of migrants and improvements to their health and welfare situation,
should be encouraged. The EU welcomes Israel’s efforts to curb human
trafficking and is ready to enhance bilateral cooperation on the fight against
drugs.

The
situation in the occupied territories remained tense, given the stalled peace
process and worrying developments on the ground, including increased settlement
activity in East Jerusalem and the rest of the West Bank. Exercise of the
freedom of association and freedom of expression continued to be problematic.
However, the Israeli army recently stepped up interventions against settler
violence, including the creation of a special unit within the police to deal
with Jewish terrorists. The overwhelming majority of cases filed with the
Israeli police against such attacks were closed without indictment. Israel’s use of administrative detention of Palestinians decreased in 2012, although its
spread and length are still excessive. Palestinian economic and social rights
remain hampered by Israeli restrictions on freedom of movement, especially in
relation to the economic and physical isolation of the Gaza Strip.

Further to the
recommendations made in the previous year’s report, no significant changes were
observed in the respective fields. On the basis of this
year’s report and with a view to the sustained implementation of the 2005
EU-Israel ENP Action Plan in 2013, Israel should:

·
Step up cooperation with the EU on implementing
activities under the 2005 ENP EU-Israel Action Plan which were identified at
the 2 May 2012 meeting of the EU-Israel Association Committee but which have
not yet been implemented.

·
Continue and intensify efforts to curb settler
violence in Palestine and bring all perpetrators to justice.

·
Address the excessive use of administrative detention.

·
Bring internal procedures
for stateless people in line with the 1958 Convention on the Status of
Stateless Persons.

·
Ratify the Second and the Third Protocol to the
2003 UN Convention on Transnational Organised Crime on the illicit
manufacturing of and trafficking in firearms, their parts, components and
ammunition.

·
Ensure further progress in amending legislation
on intellectual property rights to bring it into line with OECD commitments.

·
Implement the commitment expressed by the
government to ensure the independence of the Equal Employment Opportunities
Commission and provide it with adequate resources.

·
Address control deficiencies for plant and plant
products for export.

·
Sign and ratify the regional Convention on
pan-Euro-Mediterranean preferential rules of origin.

·
Proceed towards the signature of the EU-Israel
comprehensive civil aviation agreement.

·
Take additional measures to lower carbon
emissions, in line with international agreements.

2.         Political dialogue and
reform
Deep and sustainable democracy

In the field of freedom
of association, the trend described in previous reports of tabling bills
in the Knesset that can be considered anti-democratic abated somewhat in 2012. No
new laws were adopted in this category; initiatives to tax foreign funding of
non-governmental organisations were shelved. The Supreme Court tried to
discourage appeals that were qualified as "unnecessary", by
introducing much higher penalties in such cases, which could potentially eat
into much of smaller NGOs’ budgets.

In spite of a number of
bills that had been tabled to influence the composition and competences of the
Supreme Court, the independence of the judiciary continued to be
protected, notwithstanding the Knesset’s decision to shorten the minimum tenure
for Supreme Court presidents from three to two years, thus enabling a
particular individual to be appointed.

Israel performed well in the fight against corruption, ranking 39th
in 2012 in the Transparency International Corruption Perceptions Index.
Although Israel’s ranking declined (30th position in 2010 and 36th
in 2011), it is still the highest level in any ENP partner country, and higher
than a number of EU Member States.

Other human rights and governance-related issues

Israel is party to most international human rights instruments, but not to
their optional protocols. Israel abolished the death penalty during peacetime
in 1954 with the exception of convictions for genocide, crimes against
humanity, war crimes and crimes against the Jewish people. In 2012, Israel decided to disengage from the Human Rights Council in Geneva and from the Universal Periodic
Review. Specific human rights cases were raised with the Israeli authorities in
demarches and day-to-day contacts, as well as during the meetings of the EU-Israel
political dialogue sub-committee (held on 11 December) and the informal working
group on human rights (held on 15 January 2013).

Eleven projects were selected for financial support under the European
Instrument for Democracy and Human Rights (EIDHR) and the Neighbourhood Civil
Society Facility (CSF), with 28 other EIDHR projects ongoing. These projects contribute
to the priorities identified in the Action Plan: respect and promotion of
rights of people belonging to minorities; respect for human rights and international
humanitarian law; and the fight against racism, xenophobia and anti-Semitism.

As regards the rights of minorities,
progress on the situation of the Arab minority was limited. The percentage of Israeli
Arabs in the civil service workforce has not yet reached the 10% target set for
2012 by law. Budget discrimination remains an issue, although there was an
increase of approximately 5% in funds allocated in 2012 compared to 2011.

In the wake of criticism,
the government increased consultations with representatives of unrecognised
Bedouin villages on the government’s Prawer Plan, which had proposed the
relocation of 30-40 000 Bedouins in the Negev in the context of an economic
development plan but without full recognition of land ownership and with limited
scope for legalising construction. So far, no final decision has been taken on
adjustments to or implementation of the plan, which, in its present form, falls
short of the Goldberg Commission’s earlier recommendations for a broad
recognition of Bedouin villages.

Although less prominent
than in 2011, and in spite of clear positions expressed
by the Prime Minister and other top politicians, women’s rights
continued to be the subject of debate as a result of a more aggressive attitude
of ultra-Orthodox groups towards separating men and women in the public sphere,
including beyond the traditional Jewish Orthodox communities. The legal
position of women was significantly improved by several new pieces of legislation:
on the retirement age for women (62-64 instead of the proposed 67); on
facilitating the granting of divorce; on allowing women staying in shelters for
battered women to continue to receive basic welfare pension and on extending
the time limit for filing complaints relating to sexual harassment.

Israel signed the UN Convention on the Rights of the Child in 1990 and
ratified it in 1991, but did not follow this with any legislative or
administrative steps. In Israeli legislation children are not recognised as a
population group with specific needs. A draft law was submitted to the Knesset in
March 2012 aimed at establishing a Commission for Children's Rights,
which would be part of the Ministry of Justice and would be responsible for
promoting and defending the rights of children and for coordinating government measures
in this regard.

Israel ratified the UN Convention on the
Rights of Persons with Disabilities in September 2012. Two EIDHR
projects accompany Israel's steps towards the transposition of the Convention's
provisions into domestic legislation.

There
is no legal discrimination in Israel based on sexual orientation and
hate crimes are limited. LGBT (lesbian, gay, bisexual and transgender) rights
are largely accepted and protected.

The sixth EU-Israel
seminar on the fight against anti-Semitism, racism and xenophobia took
place in Jerusalem in June, bringing together officials, diplomats and experts
from both Israel and the European Union. It
proved very useful for exchanging information on trends and developments in EU
Member States and in Israel on these problems and for outlining possible
responses.

Cooperation
on foreign and security policy, regional and international issues, conflict
prevention and crisis management

Throughout 2012 the EU
continued to encourage both the Israelis and the Palestinians to return to the
negotiating table. However, the Palestinians did not stray from their position
whereby they could only re-enter negotiations if Israeli settlement
construction, including in East Jerusalem, was frozen, a demand with which Israel did not comply. During most of 2012, no major initiative was taken by the parties to
try to re-start negotiations. In the Foreign Affairs
Council conclusions of May and December 2012 on the Middle East peace process,
the EU reaffirmed its commitment to a two-state solution and expressed grave
concern about developments on the ground, which threatened to make a two-state
solution impossible.

In November 2012, there
was a major escalation of violence between armed groups in Gaza and Israel, leading to the death of more than 160 Palestinians and five Israelis. A ceasefire
was eventually agreed in indirect negotiations between Israel and the de facto authorities in Gaza, thanks largely to mediation efforts by Egyptian
President Morsi and the United States. The terms of the ceasefire agreement
call for further negotiations aimed at opening up the crossings into Gaza. In the Foreign Affairs Council conclusions of December 2012 the EU expressed its
readiness to make use of its instruments in support of the parties’ efforts,
including the possible reactivation, in the appropriate way, of the EUBAM Rafah
mission.

On 29 November, Palestine was granted non-member observer State status in the United Nations, through a
vote in the UN General Assembly. After this vote, Israel announced that it
would increase the construction of settlements in the West Bank, in particular
in the so-called E1 area and in East Jerusalem and that it would withhold the
transfer of Palestinian tax and customs revenues and offset these revenues
against Palestinian debts to Israel. This Israeli reaction was widely
criticised by the international community, including the EU. On 10 December,
the EU Council adopted conclusions expressing deep dismay and strong opposition
to Israeli plans for new settlement construction, stating that the Union would closely monitor the situation and its broader implications, and act
accordingly. Efforts are ongoing among key players of the international
community, notably in contacts between Middle East Quartet members, to try to
move beyond the current confrontation between the parties, to create the
conditions for resuming direct negotiations without pre-conditions.

The changes in the
political landscape in Egypt caused a steadily deteriorating security situation
in the Sinai. Following an attack by terrorists in August that left a number of
Egyptian policemen dead and whose ultimate aim was to stage a large-scale
attack in Israel, Egypt temporarily moved into the Sinai more military force
than allowed in the military annex of the Israel-Egypt 1979 peace treaty. The
Israeli reaction was low key out of concern for safeguarding the peace treaty.

In Israel there was continued concern about a possible spill-over from hostilities in Syria, particularly the risk that chemical and/or biological weapons might fall into the hands of
rogue groups. In spite of Israeli efforts towards a rapprochement with Turkey, such as inviting a group of Turkish journalists, bilateral relations continued to be
strained as a consequence of the 2010 Mavi Marmara incident and the fact that Israel was not prepared to meet Turkey's demand for an apology.

3.         ECONOMIC REFORM, SOCIAL REFORM AND DEVELOPMENT

Macroeconomic framework[1]

In
2012 the economic growth slowed down to 3.3%, from 4.6% in 2011. The
moderation was mostly a result of slowing of both domestic and external demand.
As a result of weakening demand pressures inflation continued to slow down
in the first half of 2012; it reached its lowest point (1%) in June 2012 but on
average was of 1.7% in 2012. From late 2011 the Bank of Israel's monetary
policy responded to slowing growth and inflation by decreasing the interest
rate, to in 1.75% in December 2012.

The shekel
strengthened by 2.3% against the US dollar and 0.4% against the Euro, adding to
the slowdown of exports grew that grew by only 1.1% year-on-year in 2012(they
rose by 5.5% in 2011). At the same time, import growth slowed to 3.2%
year-on-year from 11.1% in 2011. A deficit of 0.6% of GDP in the
current account is expected in 2012.

A
sharp drop in fiscal revenues, by 2.9% in 2012, and growth in government
expenditures by 7.0% in the same period have led to an increase of the fiscal
deficit of 4% of the GDP 2012. In an effort to contain the deficit to 3% in
2013, the government increased the VAT and the income tax.

As an
important step towards the Action Plan goal of maintaining the economic
dialogue between the EU and Israel, the first meeting of the EU-Israel
Sub-Committee on Economic and Financial Matters took place in January 2012.

Employment and social policy

Unemployment
in 2012 is estimated at 6.5%, compared to 6.8% in 2011. Deep socio-economic and
income disparities (with a Gini coefficient of 0.378 for 2011) subsisted and Israel still has the highest poverty rate among OECD countries. Arab-Israelis and
ultra-Orthodox Jews continued to register the highest rates of unemployment and
poverty.

 As regards social policy social unrest continued in 2012,
though less intensively. The government accepted some of the recommendations of
the Trajtenberg Committee, but their impact has yet to be felt. In this
context, the government approved a plan to finance free education as from the
age of three. Discussions were launched on a draft law aimed at putting a cap
on senior management’s salaries.

On social
inclusion, the Twinning project with the Israeli
Equal Employment Opportunities Commission (EEOC) ended in February successfully
achieving its goals. The project shared EU experience and promoted laws in Israel concerning equality in the workplace. The Ministry for Industry, Trade and Labor expressed its continued commitment
to ensuring the EEOC's independence and providing it with adequate resources.

4.         Trade-related issues, market and
regulatory reform

The EU is
Israel's main trading partner accounting for 32% of its trade volume in 2011[2]. Bilateral trade flows
remained stable and during the first eleven months of 2012 amounted to EUR 27.3
billion. EU exports to Israel consisted mainly of machinery, chemicals, as well
as vehicles and transport equipment. EU imports from Israel consisted mainly of
chemicals, machinery and transport equipment as well as pearls and precious
stones.

There were no significant developments in the customs area.
The number of companies with Authorised Economic Operator (AEO) status
slightly increased during the reporting period. Israel is yet to sign and ratify the regional
Convention on pan-Euro-Mediterranean preferential rules of origin. Israel regularly participated in the meetings of the pan-Euro-Med Working Group which is
currently dealing with the revision of the rules of origin in the framework of
the regional Convention.

Regarding sanitary and
phyto-sanitary issues, a twinning project was
launched in February. It aims to harmonise Israeli veterinary quality control
procedures for animal feed, animal welfare and food of animal origin with EU
standards. Israel participated
in a Commission/European Food Safety Agency/TAIEX supported Mediterranean
seminar on animal identification and disease control
measures that was held in September in Cyprus.

On agriculture and rural development, a twinning project to help the Israeli Ministry of
Agriculture and Rural Development ‘Reinforce National Policy and Tools for
Implementing Rural Development in Israel’ was finalised.

On the free movement of goods and technical
regulations, the EU-Israel ACAA entered into force in January 2013 after
obtaining the European Parliament’s
consent on 23 October. The Agreement contains an annex on good
manufacturing practices for
pharmaceutical products which will enable EU-certified pharmaceuticals to be placed on Israel’s market and vice-versa, without additional certification. Other priority sectors could
be included in the Agreement once Israel is ready with the legislative alignment and the implementing infrastructure.

The business
climate in Israel benefits from a high level of investment
protection and ease of trade across borders. However, the handling of construction
permits and the registration of property could be improved. Compared to the
previous year, Israel dropped slightly to 38th place (out of 185) in
the ease of doing business ranking in the World Bank’s ‘Doing Business 2013’
annual report.

In the area of financial services, the European
Regional Committee (ERC) of the International Organisation of Securities
Commissions accepted the Israeli Securities Authority as a full member. From June 2012, foreign lawyers were allowed
to practise law in Israel and foreign law firms were allowed to collaborate
with Israeli law firms.

There were no significant developments in the areas of company
law, movement of capital and current payments.

Other key areas

The agreement on avoidance of double taxation
between Denmark and Israel entered into force in January. The agreement with Malta signed in July 2011 has not yet entered into force. Discussions between Israel and Cyprus (the only remaining Member State without such an agreement with Israel) are ongoing.

In the
area of competition, the Knesset approved a law allowing the Israel
Antitrust Authority to impose administrative fines of up to approximately EUR
4.8 million in specified cases.

Israel made
substantial progress in amending its intellectual property rights legislation
with respect to patent term extension, namely regarding the publication of
patent applications 18 months after being submitted. A new law, approved in
July, allowed for third-party intervention on a patent application, with no
possibility of extending the deadline for approval of the patent, thus putting
the patent owner at a disadvantage. Data exclusivity on biological products and
the issue of third-party intervention in the patent approval process remain
areas of concern.

In the framework of the
WTO, Israel negotiated the phasing out of its public procurement offset
benefits. The agreement refers to a gradual fifteen-year phasing out, with a
20% offset in the first eight years after signing and 18% in the remaining
years. Negotiators agreed to commitments in March. The Government Procurement Agreement
will now have to be ratified by the Parties.

A twinning project has been launched to support the Israeli
Central Bureau of Statistics in improving national accounts, education
statistics, survey methodologies, the website, and the coordination of the
Israel National Statistical system. For the first time, monthly estimates of
work and employment were published, covering the demand and supply sides of the
labour market. Together with the Job Vacancies Survey, and the Business
Tendency and Consumer Confidence Surveys they provide a comprehensive picture
of the labour market. A major development is the launch of the Rolling
Integrated Census, based on administrative files, which makes it possible to
estimate the population on a yearly basis.

As
regards enterprise policy, Israel continued implementing the
2011-2012 work programme on Euro-Mediterranean industrial cooperation.

In the area of consumer protection, a law obliging
airlines to compensate passengers for changes in flight times entered into
force in August 2012. It covers flight cancellations, long delays and early
departures, downgrades in seating arrangements and overbooking.

5.         Cooperation on justice,
freedom and security

In the area of irregular
migration and asylum Israel started implementing the new Anti-Infiltration
Law. This law substantially increased the sanctions for
migrants who had irregularly entered Israeli territory, but did not include
adequate safeguards for the fact that they might need for international
protection. Israel’s policy to address mixed migratory flows coming from the Sinai was
based exclusively on the principle of deterrence. Work on the fence along the
Egyptian border is very nearly complete. Efforts continued to increase the
capacities of detention centres and to relocate individuals from third
countries. The Saharonim detention centre has a capacity of 3000. A
further 2500 places were allocated at the Ketziot prison. The
construction of the new Raviv detention centre (with a capacity of 8000)
was launched.

Estimates at the end of
2012 indicated the presence of about 62,000 migrants who had entered Israel irregularly via the Egyptian border. Of these, 52,000 were Eritreans and North
Sudanese who had been granted temporary group protection, based on their
nationality. After June, the number of newcomers declined substantially (1946 in
May, 999 in June, 216 in July, 199 in August, 134 in September, 51 in October
and 17 as at mid-November). Following the establishment
of the state of South Sudan, the Israeli government decided to put an end to the
group protection status of South Sudanese citizens and return them to their
country. Out of the estimated 700-1,500 South Sudanese, most returned
voluntarily to South Sudan. Each person received 1,000 EUR from the Israeli
government and was encouraged to board the flights organised by the government
in June. More recently, a more restrictive approach was reportedly applied by
Israeli authorities also to Eritrean refugees.  In some cases, Eritreans were
obliged to choose between return to Eritrea, detention in Israel as irregular migrants, or voluntary relocation towards third countries accepting them.

Against this background, a
positive step was taken by the government with regard to the health and welfare
of irregular migrants and of persons in need of international protection who
were already in Israel. The Government decided to expand by 1 January 2013 a small
government-funded clinic in Tel Aviv, previously staffed by volunteer doctors,
so as to provide paediatricians, family doctors, gynaecologists and X-ray
services. Another positive step was the decision to allow, at least in
principle, every irregular migrant in detention to undergo refugee status
determination (RSD), including Eritreans and Sudanese, who had previously been
excluded because of temporary group protection. This change may be significant
as many Eritreans and Sudanese may be entitled to refugee status. It was also
decided that the RSD unit would be substantially reinforced.

In November, the
Population Immigration and Border Authority issued a new procedure for dealing
with stateless people living in Israel, whereby for the first time a stateless
person may apply for recognition at the Ministry of the Interior, without being
arrested. The procedure does not, however, comply with the international
Convention relating to the Status of Stateless Persons which Israel ratified in 1958, as Israel does not provide social rights, health and welfare to stateless
persons.

An EU funded project on
migration management was contracted in December 2012, to be implemented by the
Centre for International Migration and Integration in partnership with the
United Nations High Commissioner for Refugees (UNHCR) and the International
Organisation for Migration (IOM). The project will support the development of a
migration management framework in Israel in line with international standards
and European best practices.

Israel has made substantial progress in the fight against trafficking
in human beings. The dismantling of the special
anti-trafficking police unit Sa'ar in 2011 led to a decentralisation of
activities to regional units and substantially increased human resources. An Anti-Trafficking
Police Coordinating Officer was appointed to ensure coordination between the
units. The reduction of trafficking for sex purposes
was particularly successful. A TAIEX workshop on government-NGO
relations in the field of trafficking in human beings took place in May in Haifa.

Concerning the fight against financial crime, a TAIEX seminar on combating
financial crime, money laundering and asset forfeiture took place in February
in Tel Aviv. In the area of counterterrorism, in September Israel launched a new police unit to help investigate Jewish terrorism crimes (“price tag”
crimes).

In May, Israel participated in the first Reitox
Weekend of the European Monitoring Centre for Drugs and Drugs Addiction
(EMCDDA) in Lisbon. It also participated in the Multi-Country Workshop on Drug
Prevention and Monitoring: Situation and Perspectives in the ENP Southern
Partnership countries organised by the European Commission and EMCDA under the
auspices of the Cypriot Presidency, which took place in Cyprus in October. Good progress was achieved in cooperation between the Israeli Anti-Drug Agency
and EMCDDA. Israel expressed interest in negotiating a Memorandum of Understanding
with EMCDDA.

It should be noted that Israel is considered to provide an adequate level of protection for personal data
transferred from the European Union in relation to automated international
transfers of personal data (Commission Decision of 31.01.201, for the purposes
of article 25(2) of Directive 95/46/EC).

6.         Transport, energy,
environment, the information society, research and innovation

On transport, in
July the EU and Israel initialled a comprehensive aviation agreement aimed at
developing a common aviation area between the parties based on common rules. This
agreement will replace bilateral air-services agreements between EU Member
States and Israel. The EU urges the Israeli authorities to proceed swiftly with
the signature of the agreement. Israel cooperated with the Mediterranean
Aviation Safety Cell (MASC) within the European Aviation Safety Agency (EASA) on
regulatory convergence in the field of safety.

Israel continued work on a new energy master plan-2050. In February
2012, the government approved the establishment of a sovereign wealth fund to
manage royalties from the (future) exploitation of gas reserves. In August, an Inter Ministerial Committee presented its
final recommendations to the government on how to use the country’s natural gas
resources. The committee estimated the amount of available gas at 1,480 billion
cubic meters (bcm). It recommended, inter alia, that gas for domestic
consumption should be guaranteed for 25 years and that a maximum of 500 bcm be
permitted for export. Also in 2012 energy security was impacted by a substantial
decrease in Egyptian gas imports after several explosions on the import
pipeline. In this context, Israel continued preparations to connect the
offshore Tamar gas field to Israel’s pipelines. It also pursued the construction of a maritime buoy to receive liquefied natural gas. Israel and Cyprus launched a feasibility
study to assess the possibility of interconnecting their electricity networks. Israel continued to implement energy efficiency and renewable energy measures, including
work on a 30 MW photovoltaic power plant and the replacement of less efficient
domestic appliances by more efficient ones. The EU remains committed to re-launching
trilateral energy cooperation with Israel and the Palestinian Authority.

As regards climate
change, Israel approved grants (totalling about EUR 27 million) to the
municipal, industrial, commercial and transportation sectors for projects and
incentives to reduce green house gas emissions. Regional
cooperation on climate change related water availability is continuing with the
water authorities of Israel, the PA and Jordan. Israel is encouraged to build
capacity and engage in the new carbon market mechanism to be developed
following the 17th and 18th sessions of the United
Nations Framework Convention on Climate Change Conference of the Parties. With
the support of the newly launched regional technical assistance project for
climate change and related matters, Israel is encouraged to devise a low-carbon
development strategy and step up its mitigation efforts. Additional efforts
should be made to fully implement the Cancun and Durban agreements.

On environment, the “green government” project was approved in September. Under
this project, 20% of the equipment and supplies purchased by ministries must be
environmentally friendly by 2020. Israel provided approximately EUR 14 million
in financial incentives for the establishment of waste-to-energy facilities. An
Electronic Waste Law (based on EU legislation) and an Emissions Reporting Law
were passed. A three year programme, costing about EUR 43 million, was launched
to rehabilitate the Kishon River. A twinning project is
in preparation on the implementation of a system of
integrated pollution prevention and control (IPPC) and a pollutant release and
transfer register (PRTR).

Israel actively participated in ENPI-financed regional projects namely the
Sustainable Water Integrated Management (SWIM) project and those falling under
the Horizon 2020 de-pollution initiative (the Mediterranean Environment
Programme and the Shared Environmental Information System support project led
by the European Environment Agency).

Israel actively participated in the Integrated Maritime Policy
(IMP-MED) technical assistance project under the ENPI South programme.

In the
area of civil protection, the flagship programme for Prevention of,
Preparedness for, and Response to natural and man-made disasters (PPRD South)
contributed to the establishment of a regional framework of disaster management
authorities that could intervene collectively in the event of disasters
overwhelming the affected country. Indeed, sustainable development requires
adequate disaster risk reduction efforts. Israel is among the 168 governments
that adopted in 2005 the "Hyogo Framework for Action: Building the
Resilience of Nations and Communities to Disasters", which emphasizes the
central role of disaster risk reduction for all development policies. However,
work on Disaster Risk Reduction (DRR) and climate adaptation is only at the
beginning and it will require considerable further support to develop
capacities and processes. DRR policy is fostering dialogue with Civil Society
and NGOs, thus contributing to a more sustainable democracy. Analysis of the
regulatory and institutional frameworks started with the aim of strengthening
capabilities and inter-ministerial coordination in the second phase of the
programme.

On information society,
a specific twinning cooperation project was completed with the Israeli telecommunications
regulator and all expected results were achieved. The project identified
concrete pricing methodologies, areas for approximation and consumer protection
initiatives. It accompanied Israel’s reforms aimed at increasing competition
between providers of fixed communications services by opening up the wholesale
markets. The EU also supported the setting up of a computer system enabling the
Ministry to implement the twinning recommendations on data collection, thereby
facilitating interaction between operators and the regulator. Competition in
the mobile market increased with the arrival of new entrants. Israel has not yet established an independent regulatory authority for electronic communications.

As regards audiovisual
policy, Israel worked towards the establishment of a Council for Commercial
TV and Radio Broadcasting. This new body will have all the regulatory
responsibilities that are now divided among the Second Broadcasting Authority
of TV and Radio, the Second Authority Council, and the Council of Cable and
Satellite TV Broadcasting.

In the area of research
and innovation, the European Commission’s Joint Research Centre and
the Israeli Ministry of Energy and Water Resources signed a memorandum of understanding
for scientific cooperation on energy, with a particular focus on clean energy
and water desalination. In 2012, there were 1 514 participations of
Israeli institutions in 1 246 projects under the EU’s Seventh Framework
Programme for Research and Technological Development (FP7). The total EU
contribution to these projects amounted to more than EUR 4.5 billion, of which
EUR 609 million were for the Israeli participating entities. Through the
calls for proposals that Israel publishes via the 22 ERA-NETs in which it is a
member, Israel provides additional research funding. Israel is associated with
FP7 and was very active in the European Research Council’s Ideas programme,
which accounted for over 42% of the FP7 funding received by Israel. Under the FP7 Cooperation Programme Israel participated most actively in the areas of
information and communications technology, health, nanotechnology and security
research. At the December 2012 Joint Committee Meeting, Israel discussed with the European Commission various aspects of its possible association with
Horizon 2020.

7.         PEOPLE-TO-PEOPLE CONTACTS, EDUCATION AND HEALTH

Regarding education
reform, Israel and the European Training Foundation (ETF) maintained a strong
relationship in their joint work on vocational education and training
(VET). This involved, in particular, information and knowledge sharing
activities in relation to EU policies and practice. Israel expressed interest
in working on qualifications and quality assurance. The ETF provided expertise
on raising awareness and knowledge about on-going policies and practices in
these two fields in the EU and in the EU Member States. Israeli ministries, other
VET actors and the Central Bureau of Statistics continued to take an active
role in the so-called Torino process to assess the Israeli VET sector.

In the area of higher education,
Israel showed increased interest in participating in Tempus IV
increased, with five new projects selected. Three of
the selected projects are coordinated by Israeli institutions - making this
year's results the most important since Israel joined the Tempus programme in
2008. The projects focus on student support services, internationalisation of
academic colleges, multicultural education, and interdisciplinary education and
social work study programs. The most visible and
sustainable contributions of Tempus in Israel are in the areas of curriculum
reform, the management of international relations offices and the promotion of
the Bologna Process. Moreover, a significant number of Tempus projects are
aimed at creating links between higher education institutions and the world of
work, in order to increase the employability of graduates. Israeli students
benefitted from three new scholarships for Erasmus Mundus joint Masters
Courses along with further 197 mobility grants allocated within a university
consortium.  Israel made good use of Marie Curie actions (FP7) aimed at
fostering international research cooperation; from 2007 until the end of 2012,
over 377 researchers have been funded and Israeli research organisations have
participated in 390 projects. No new Jean Monnet project was approved in 2012.

Young Israelis and Israeli
youth organisations continued to benefit from the Euromed Youth IV
programme. The EU decided to add an extra EUR 900,000 to the programme in Euromed
Youth IV programme in Israel; 11 projects were selected targeting 47 young
people. In addition, young Israelis and Israeli youth organisations
participated in the Youth in Action programme; 48 projects
reaching 213 young people were selected in 2012.

In the area of culture,
Israel is not a party to the 2005 UNESCO Convention on the Protection and
Promotion of the Diversity of Cultural Expressions, which remains a stumbling
block for developing bilateral relations in this field.

In the framework of the
Euromed Audiovisual III programme, the Israeli New Foundation for Cinema and
Television implemented and led the project on "Greenhouse: Development of
Documentary films by South Mediterranean Cinema School Graduates". Under
the EU’s “Investing in People” programme, two Israeli projects were carried out
by Arab organisations from Israel, in partnership with organisations from Palestine and Europe.

Israel is implementing its health policy strategy until 2020 as
well as a tobacco control plan until 2015. The EU and Israel strengthened cooperation on prevention and control of communicable diseases through the
signature of an administrative arrangement between the European Centre for
Disease Prevention and Control (ECDC) and its Israeli counterpart. Israel participated in the EU supported ‘Episouth Plus’ project aimed at increasing health
security in the Mediterranean region and South East Europe. Israel participated in a Commission/ECDC conference and training course aiming to strengthen
capacity building for communicable diseases prevention and control in the Mediterranean. The aim is to jointly explore the scope for developing a regional training
programme on intervention epidemiology.

8.         Israel in the occupied territories

In the course of the year,
255 Palestinians (including 122 civilians) as well as 9 Israelis (including 5
civilians) were killed in Israeli-Palestinian conflict-related incidents
in Israel, the West Bank and Gaza Strip, and 4785 Palestinians and 242 Israelis
were injured (figures provided by the UN Office of the Coordinator for
Humanitarian Affairs — OCHA).

Settlement construction
and expansion continued,
including deep into the West Bank. Decision-making on the creation of new
settlements was facilitated by delegating it from the full cabinet to a
"Ministerial Committee on Settlement Affairs". Several settlement
outposts (Bruchin, Rehalim, Sansana and Givat Salit) were
"authorised". Given the absence of formalities, they had been
considered "illegal" even under Israeli law. So far, no decisions
have been taken on the report by the Levy Committee, which the government
entrusted with examining the status of building in the West Bank. This
Committee tried to provide a legal basis for the establishment of settlements
by arguing that the West Bank was not occupied territory, recommending the
"legalisation" of outposts which are not built on land privately
owned by Palestinians. Following rulings by the Supreme Court, which found that
the Ulpana and Migron "illegal outposts" were built on private Palestinian
land, their residents were relocated to nearby sites in the West Bank. Of
particular concern are plans for building settlements that sever the geographic
contiguity between East Jerusalem and the rest of the West Bank (e.g. E1, Givat
Hamatos) as they undermine the prospect of a two-state solution with Jerusalem as the future capital of two states.

The exercise of media
freedom, freedom of expression and freedom of assembly remained
problematic in Palestine. The “All for Peace” radio station whose closure was
reported in the 2011 report, has appealed to Israel’s Supreme Court against the
Israeli Communications Ministry’s decision to shut it down. Violent clashes and
crack-downs continued to occur during demonstrations against the building of
the separation wall. Human rights defender Bassem Tamimi was sentenced to 13
months, corresponding to the period he had been held during his trial, plus 17
months suspended for 5 years on counts of organising protests without a permit
and solicitation of stone throwing. Almost half a year after his release, he
was arrested again and sentenced to four months."

The Israeli Army stepped up its
interventions against settler violence. However, most of the cases filed
with the Israeli police on the issue were closed without indictment. In October,
Israel decided to create a special unit within the police tasked with foiling
attacks by Jewish extremists in the West Bank. OCHA recorded 353 cases of
settler-related incidents in 2012. These incidents include brutal attacks
against persons and damage of property, most notably the uprooting or burning
of olive trees.

There were several arson
attacks against mosques in the West Bank and a marked increase in the number of
arson and graffiti attacks against Christian monasteries and churches. A number
of Christian communities across the West Bank, in addition to all Christians in
Gaza, were unable to exercise their right to worship in Christian sites
in Jerusalem and Bethlehem during Christian holidays, due to Israeli access restrictions.
However, on the occasion of Ramadan an unprecedented number of Palestinians
from the West Bank were allowed access to East Jerusalem and Israel for Friday prayers and family visits.

By the end of November
2012 there were 4432 Palestinian prisoners and
detainees in Israeli jails. Israel continued to make excessive use of the administrative
detention of Palestinians, although the number of administrative detainees
fell significantly from 307 in December 2011 to 160 in January 2013. Of these, 71
have now been held in administrative detention for one to two years, with 14 detainees
held for even longer periods. During the year, several administrative detainees
went on hunger strike for very extensive periods in protest at the renewal of
their detention. In all cases, a deal was ultimately struck at an advanced
stage of the hunger strike, with the authorities pledging not to renew the
detention beyond the expiration date of the detention order or the detainee
accepting transfer to Gaza.

In the spring, a mass
hunger strike spreading beyond the issue of administrative detention began,
with about 1600 sentenced Palestinian security prisoners taking part in
protests against their conditions of detention. The strike ended with the
agreement of 14 May 2012, whereby the Israeli authorities undertook to ease the
conditions of prisoners held in separation and to grant family visits in
exchange for a commitment by the prisoners to cease any involvement in
terrorist activity in prison.

The Israeli military
continues to detain, prosecute and imprison Palestinian minors. By the end of 2012 there were 21 children under 16 years of age and
156 between the age of 16 and 18 in custody. Throughout 2012 there were no
minors held in administrative detention. Concerns remain about insufficient
protection of children during arrest and detention, in particular the failure in
the majority of cases to permit children to be accompanied by a lawyer and
parent during questioning. Palestinian minors do not enjoy
the same level of protection as is provided for under Israel's Youth Law or required by international law.

A
new military order (No.1685) has been issued reducing from eight to four days
the time within which detained children must be brought before the military
court. This does not provide enough protection for children, who are at their
most vulnerable in the first 48 hours of detention.

Palestinian economic
and social rights are still hampered by Israeli restrictions on the freedom
of movement. The economic and physical isolation of the Gaza Strip is still a
source of great concern. The average number of truck loads entering Gaza from Israel was somewhat higher than in 2011, while exports remained extremely low
compared to the period before the blockade. After the escalation in Gaza in November, Israel extended the permitted fishing zone from 3 to 6 nautical miles
from the Gaza shore. While this is a positive step, it still falls short of the
20-mile zone provided for in the Oslo Accords.

Regarding freedom of
movement in the West Bank, a number of significant easing measures were adopted
between July 2011 and June 2012, reducing travel time for about 100 000
Palestinians from their villages to six main cities. Palestinians travelling to
and from Jerusalem were also assisted by easing measures at the Qalandia
checkpoint. There was little change in restrictions on Palestinian movement to
and from large rural areas, which are mostly related to settlement activity
across the West Bank. However, on 3 October, the Ministry of Defence decided
that henceforth unrestricted movement would be permitted, subject to security
inspection at all crossings, between the Jordan Valley and the rest of the West Bank.

Palestinian property
rights continued to be under particular strain.
According to OCHA, 598 Palestinian residential and non-residential structures
were demolished by Israel in East Jerusalem and the rest of the West Bank in
2012, thus displacing 886 persons, as against 1 094 persons displaced in 2011.

The EU expressed concern
about the announcement by the Israeli Civil Administration that 20 Bedouin
communities living in the periphery of East Jerusalem had to leave, placing 2 300
people, primarily refugees, at risk of forced displacement. This relocation would
accommodate the expansion of the Ma’ale Adumim bloc of settlements (E-1 Zone).
However, so far it has not been implemented.

The participation in EU
programmes of Israeli entities carrying out EU-funded activities in the
occupied territories continued to raise concerns within the EU. The issue will
be addressed in a horizontal manner for the EU's 2014-2020 programming
period taking into account EU positions and commitments in conformity with
international law.

[1] Figures on GDP, inflation, trade and
employment are generally from Eurostat based on data supplied by the national
statistical offices; or IMF or Commission Staff estimates, as indicated in
the Statistical Annex. When other data sources are used
these are then indicated.

[2] Data for 2012 was not available at the time of writing.

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