The Fundamentals of the Supervision of Defense Export - Part 1
Adv. Gill Nadel, Adv. Hila Wohlgemuth
At the end of 2007, the Defense Export Control Law, 2007 [hereinafter: "the law"] came into effect. The law, the regulations and orders that were legislated under the law, replace the secondary legislation which existed until the law came into effect. The law regularizes in primary legislation the supervision of export from Israel of defense equipment, the transfer of defense know-how and the provision of defense services. The law's purpose is to regularize the supervision of defense export by reason of national security, foreign policy, international obligations, and for maintaining other vital interests of the state of Israel.
Defense export is defined under the law as each one of the following:
a.Export of defense equipment
b.Transfer of defense know-how
c.Provision of defense services
It is the responsibility of every exporter and every individual who handles marketing which relates to defense export, to know and be familiar with the meaning of the following terms; as well as with the products which he handles, in order to prevent from being involved in defense export and/or marketing actions which require a license, without a proper license.
We will elaborate and clarify what is included in every category:
A.Export of Defense Equipment
Four lists of items of defense equipment are listed in the orders legislated under the law:
(1)List of Combat Equipment - this list is based on the Munitions List of the Wassenaar Arrangement, which includes 24 categories, among them: explosive devices, tanks, military armed vehicles, artillery, fighter jets, attack helicopters, warships, missiles and missile launchers, small arms and light weapons.
(2)List of Duel-Use Equipment - list of Dual-Use Goods and Technologies of the Wassenaar Arrangement, which includes 9 categories, among them: special materials and related equipment, material processing, electronics, computers, telecommunications, information security, sensors and lasers, navigation and avionics.
(3)List of Missiles Equipment - the technical annex of the Missile Technology Control Regime (MTCR) - a voluntary association of countries which share the goals of non-proliferation of unmanned delivery systems capable of delivering weapons of mass destruction. Since September 1991, the state of Israel has taken upon itself to act according to the standards set by the association.
(4)List of Equipment to the Palestinian Authority - list of dual-use items which their transfer to the Palestinian Authority is supervised by the Coordinator of Government Activities in the Territories (COGAT).
B.Transfer of Defense Know-How
Defense know-how is defined under the law as each of the following;
(1)Information required for the development or manufacturing of defense equipment or its use; information relating to the planning, assembling, examining, improving, transforming, guiding, possessing, operating or repairing of defense equipment or its care in any other manner, as well as technology included in the orders.
(2)Knowledge relating to armed forces, including knowledge regarding their organization, assembly, operation, combat doctrine or methods of commanding and training or their methods of action, as well as knowledge regarding defense policy, counter-terrorism and security methods.
In this context it shall be noted that in contrast to the prohibition on defense equipment, as to defense know-how it is also prohibited to transfer it to a foreign entity within the boundaries of the state of Israel.
C.Provision of Defense Services
A service which requires supervision under the law is a service regarding defense equipment which is provided by an Israeli civilian or an Israeli company to a foreigner outside of the state of Israel and/or within the boundaries of the state of Israel; accordingly regarding its planning, development, manufacturing, assembling, examining, improving, transforming, repairing, possessing, operating and packaging; as well as guidance regarding equipment as stated, as well as services regarding defense know-how, including guidance, training, or consulting.
The supervision mechanism of defense export is a two stage mechanism; the individual who engages in defense export is required to have a defense marketing license which serves him in the marketing-negotiations stage with the potential client. In addition, the individual who engages in defense export is required to receive a defense export license in order to conduct the export.
In the following articles we will discuss the various licensing stages, the required procedure for obtaining marketing and/or export licenses, the licensed exporter's obligations and the various exemptions.
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This document provides a general summary and is for information purposes only. It is not intended to be comprehensive nor does it constitute legal advice.If you are interested to obtain further information or wish to follow the legal developments on this matter, please contact Adv. Gill Nadel - Chair of the firm's Import, Export and International Trade Law Practice, Tax and Executive Compensation Department. Email: Gill.Nadel@goldfarb.com, phone: +972-3-6089848.