TEL AVIV – The Israeli Defense Ministry celebrated a decade since establishment of an export control agency with a spectrum of sweeteners for exporters who play by the rules.

Details of the proposed carrot and stick policy revamp, coordinated with Israel's Foreign Ministry, Ministry of Commerce and tax authorities, will be presented soon to Israel's Defense and Foreign Affairs Committee. But highlights of what MoD is flagging as a "comprehensive reform" were shared at a conference Sept. 5 with hundreds of industry executives, security and trade officials and visiting US Pentagon and State Department representatives, sources here said.

In an announcement based on a conference address by Dubi Lavi, MoD's director of the Defense Exports Control Agency (DECA) that was established at US insistence, MoD outlined changes aimed at easing restrictions governing the marketing of non-classified products and services.

In exchange for tighter enforcement and tougher penalties for export licensing violations, Lavi said the proposed revamp aims to:

-- Expand exemptions for marketing permits for unclassified products to the US;

-- Update Israel's controllable munitions list;

-- Waive temporary export licenses now required for marketing participation in trade shows;

-- Waive marketing licenses for most counter-terrorism products and services;

-- Expand marketing license exemptions for international brokers from exempted countries;

-- Institute a single generic marketing license that will apply to some 98 preferred countries;

-- Institute online export licensing applications; and

-- Extend marketing licensing from three to four years.

"In its first ten years, DECA has issued hundreds of thousands of licenses to Israeli defense exporters and helped to promote defense exports from Israel... Primarily [it has] prevented the leaking of technology [and] retained the strategic advantages of the Israeli defense establishment and the interests of our major partners," said Lavi. 

He added, "Thanks to our extensive experience over the past ten years, today, we know better where to invest monitoring efforts. The rest are significantly easy to simultaneously tighten the enforcement and penalties on violators."

An MoD spokeswoman declined to specify how the ministry intended to enhance enforcement and punishment mechanisms, nor would she provide the updated munitions list or identify the 98 countries deemed as favored exporting nations.

However, the Ministry's Sept. 5 statement quoted Udi Adam, MoD director-general, as saying DECA would increase enforcement "with no compromise."

"We will continue to facilitate the proper responsibility alongside increased enforcement," Adam said.

MoD reported earlier this year that its defense industries entered into $5.7 billion in new contracts in 2015, a slight increase from the previous year, but about $1 billion less than 2013.

Israeli Defense Minister Avigdor Liberman told conference participants that MoD was working to encourage responsible exports that sustain Israel's strategically important defense industrial base.

"Defense exports play an important part in the [Israel Defense Forces'] strength as well as the economic strength of the State of Israel. Nationally, the defense industries provide thousands of jobs. Internationally, defense exports add value to strengthen Israel's bilateral relationships with countries around the world," he said.

Liberman also referenced the role Washington played in the creation of DECA.

 "The establishment of DECA and its success are closely tied to the deep friendship between Israel and the United States… Despite the natural differences of opinions between friends, the friendship between the two countries is strong and stable, based on mutual trust and a strong strategic partnership," he said.

The July 2006 creation of DECA and passage of Israel's Defense Export Control Law in October 2007 was aimed, in large part, to assuage US concerns about laxities and loopholes that precipitated a crisis of confidence between the two governments over suspected transfers to China and other end-users potentially hostile to Washington's interests.

In addition to traditional defense exports, the law covers dual-use items as well as intellectual property and other intangible, so-called deemed exports that Washington claimed were insufficiently covered under prior regulations and statues.

Among its provisions, the law requires MoD to maintain a frequently updated registry of certified exporters, including brokers who reside in Israel but trade in non-Israeli origin items or services. The law also grants oversight responsibility to Israel's Foreign Ministry, which is expected to work as a full partner on all stages of the export licensing review process.

Earlier this year, the prime minister's office decided to grant the Economic Ministry lead oversight authority of most dual-use cyber-related products and services within the framework of the Wassanaar Agreement for Dual-Use exports.

@opallrome

 

About Barbara Opall-Rome

Opall-Rome is Israel bureau chief for Defense News. She has been covering U.S.-Israel strategic cooperation, Mideast security and missile defense since May 1988. She lives north of Tel Aviv. Visit her website at www.opall-rome.com.

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