Israeli Export Controls Regulations: An Overview of the Legal Requirements for the Marketing and Export of Military and Dual Use Items

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Israeli Export Controls Regulations: An Overview of the Legal Requirements for the Marketing and Export of Military and Dual Use Items

By Chaim Gelfand*

Export License Requirements

Israel regulates exports from Israel under two main regulations: the Israeli Defense Export Control Law – 2007 ("DECL") and the Import and Export Order (Control of the Export of Dual Use Goods, Services and Technologies) - 2006 ("DU Export Order"). The former is regulated by the Defense Export Control Agency of the Ministry of Defense ("DECA") while the latter is regulated by a unit under the Division of Environment and Sustainable Development of the Ministry of Economy and Industry.

In general, the DECL has a dual licensing requirement for Defense Exports (as defined below). First, one is required to receive a marketing license prior to any marketing activity and then one is required to receive a second license prior to the export of a Defense Item.

On the other hand the DU Export Order only requires the receipt of a license prior to the actual export of a controlled item.

Defense Export Control Law

Marketing License

Section 14 of the DECL1 provides as follows (unofficial translation):


“An Israeli citizen, an Israeli resident or an Israeli corporation shall not conduct a defense marketing activity without a marketing license (hereinafter – defense marketing license) that is granted pursuant to this law, and pursuant to the conditions of the marketing license; in this law –

“Defense marketing activity” - An activity aimed at promoting a defense export transaction, including brokering activity towards a defense export transaction, whether in Israel or outside of Israel, in writing or orally or via any other means, directly or indirectly, in exchange for remuneration or not, whether transfer of defense know-how occurs or n ot, or the holding of negotiations towards such transaction; the activity can be geared toward a certain customer or toward a general public, and may or may not result in a defense export transaction.”


In order to understand the scope of this clause it is necessary to first understand the scope of the terms "defense export transaction" and "defense export". These are defined in the DECL2 as follows:


"Defense Export Transaction" – A transaction involving a Defense Export;

"Defense Export" - Each of the following:

(1) Export of defense equipment;

 (2) Transfer of defense knowhow;

(3) Provision of defense services;










The terms Defense Equipment, Defense Know-how and Defense Services are also defined by the DECL.3

The term Defense Equipment includes three main aspects: (i) items on The Israeli Munitions List,4 (ii) items listed in the Equipment, Technology and Software Annex of the Missile Technology Control Regime;5 and (iii) items listed on the Wassenaar Arrangement's List of Dual-Use Goods and Technologies6 when intended for a security use.

The Israeli Munitions List is a list specifically legislated in Israel that was based on the Wassenaar Munitions List that was in effect in 2007 with certain additions that were added by the Israeli legislator (control on all UAVs and specially designed components, satellites and their specially designed components and "Tempest" software and equipment). This list has not been updated since its first enactment. There is currently an amended version that is in the legislative process, but it is still unclear if and when this shall become law.

With respect to the MTCR list and the Wassenaar Dual Use lists, all amendments to these lists are automatically adopted into Israel law upon the regimes approving such amendment.

Defense Know-how is defined as: (i) information that is required for the development or production of defense equipment or its use; (ii) know-how, data or technology regulated under any of the lists that encompass Defense Equipment; and (iii) know-how relating to defense forces, including know-how concerning their organization, build-up and operation, combat doctrine or training and drill methods as well as know-how relating to defense policy anti-terror combat and security methods.

A Defense Service is a service relating to defense equipment, including its design, development, production, assembly, review, upgrade, modification, repair, maintenance, operation and packaging, as well as instructions related to said equipment, and service regarding defense know-how, including instruction, training and consulting regarding said know-how.

As quoted above, Section 14 provides for a very broad definition of marketing activity that requires a license. Based on this definition, almost any action whose intent is to promote a transaction for the export of Defense Equipment requires the receipt of a license prior to commencing such activity.

Section 3 of the DECL states that as a prerequisite to the receipt of any license, an exporter must be registered in the Exporter's Register that is administered by the Defense Export Control Agency (DECA).

Marketing License Exemptions

There are certain license exceptions7 available based on the regulations enacted under Section 14(b) of the DECL to exempt one from requiring a marketing license for certain activities, as shall be detailed below, but it is our understanding that DECA has taken the position that in order to use such exemptions one must first be registered with DECA and the relevant item must also be registered with DECA. This is also evident from the language of the exemption, as almost all of the license exemptions included a prerequisite that the item was designated by the Ministry of Defense as unclassified. Since a positive designation of unclassified is required then one must first approach the Ministry of Defense to have its item designated as unclassified prior to using any exemption.

Some of the exemptions include the following:

        (1)   Presenting, including demonstration, at an exhibition, of Defense Equipment and information for marketing purposes, related to Defense Equipment, Defense Know-How, or Defense Service which have been defined by the relevant authority in the Ministry of Defense as unclassified;

        (2)   Publication by internet or other mass communication means, of information for marketing purposes, related to Defense Equipment, Defense Know-How, or Defense Service which have been defined by the relevant authority in the Ministry of Defense as unclassified;

        (3)   Defense Marketing Activity vis-à-vis an entity in a country listed in the country list prepared for this section, which is set forth for viewing by those registered in the Defense Export Register in the offices of the authority, for end use in one of these countries, provided that the information transferred in this activity is unclassified and relates to unclassified Defense Equipment, Defense Know-How, or Defense Service, with the exception of Defense Equipment, Defense Know-How, or Defense Service that are listed on the list that shall be brought to the attention of those listed on the Defense Export Register.  


The first two exemptions are limited exemptions which allow for the presentation of Defense Items at exhibitions and on companies' websites without requiring an export license. It should be noted that DECA's position is that this exemption applies only to presenting the items at an exhibition (including demonstrating them at the exhibition), but does not allow for further discussions on sales with people present at such exhibitions.


Regarding the third exemption, this allows for a company to market unclassified Defense Equipment to a list of countries, provided that the item is not listed on the excluded list that is available on DECA's website. The excluded list is available in Hebrew at: (

To the best of our knowledge, DECA usually defines the list broadly so that they include all components that are intended for use with these systems and not only the full systems themselves. This issue should be clarified with DECA on a case-by-case basis.

Export License

As mentioned above, the Israeli Defense Licensing System is a dual licensing system. So even after one has a marketing license it is still necessary to receive an additional Export License prior to the actual export. Section 15 of the DECL states as follows:

        “[one] shall not be involved in the following activities, unless he/she received a license for such activity from the licensing authority (in this law – defense export license) and pursuant to the provisions of that license:

        (1) Export of defense equipment;

        (2) Transfer of defense know-how through any means, including orally - from Israel to outside of Israel, or in Israel to a person who is neither an Israeli citizen or an Israeli resident, or to a foreign corporation; ...


        (3) Provision of a defense service - if the service provider is an Israeli citizen or an Israeli corporation - outside of Israel, or within Israel to a person who is not an Israeli citizen or an Israeli resident, or to a foreign corporation;”    


The DECL defines Export of Defense Equipment as follows:

        “Transfer outside of Israel, including transfer to the Palestinian Civil Jurisdiction areas, as well as the transfer within Israel to a diplomatic or consular representation of a foreign state;”


The DECL itself sets out one area of transfer of know-how that does not require a license. "The transfer of defense know-how relating to equipment included in section (1) of the “controlled dual-use equipment” definition (items on the Wassenaar Dual Use List – C.G.) that is information in the public domain as well as basic scientific research, does not require a defense export license".

The DECL also sets out that a precondition to the receipt of any export license is the preexistence of a marketing license for the same activity or that the activity was exempt from a marketing license.

The regulations enacted under Section 15(b) of the DECL also set out a limited list of exemptions from export licenses.

Additional Licensing Requirements

There are several additional licensing requirements under the DECL, which are beyond the scope of this paper. These include re-transfer licenses, end-use modification licenses, licenses for defense equipment in transit, licenses for transfer to the Palestinian Civil Jurisdiction and license for brokering between foreign entities (which is not yet in effect).

The DECL also includes various reporting and documentation retention requirements with respect to all relevant documentation regarding a defense export.

Coordination with the Ministry of Foreign Affairs

Despite the fact that the regulating authority for defense exports is DECA, which is a division of the Ministry of Defense, there is a statutory requirement for DECA to receive the approval of the Ministry of Foreign Affairs for each license. In the event of a disagreement between the two ministries there is a resolution clause that can even bring matters to the Prime Minister's Office for final decision.


The DECL8 sets out that violations of the main provisions of the DECL are a criminal offence punishable by fine and imprisonment. In addition, the DECL grants DECA the ability to administratively fine offenders of the DECL without having to go through the criminal process. These fines can be significant.

Current Legislative Process

There is currently an ongoing legislative process to amend various aspects of the DECL. These include updating the Israeli Munitions List, providing for additional exemptions from export and marketing licenses, expanding the authority of DECA in investigating potential violations of the DECL, higher administrative fines for violations and adding a licensing fee for each license application.

These suggested amendments by the Ministry of Defense have run into much opposition from industry and this has delayed the legislative process. It is currently still unclear what the final decision of the legislature will be on these issues.

DU Export Order

As stated above, when an item on the Wassenaar Dual Use list is to be exported for a security related end use this is regulated by DECA under the DECL. The DU Export Order9 deals with exports of dual use items on Wassnaar's dual use list when such does not require a license from DECA, i.e. exports of such dual use items for all uses other than security related uses.

This definition obviously leaves some ambiguity as to which licensing authority one is required to approach, especially due to the fact that there is no explicit definition of "a security related use".

The licensing process under the DU Export Order is simpler than the process under the DECL. There is no registration requirement and there is no requirement for a marketing license. The time schedule for receiving these licenses is also much shorter than the process under the DECL.

The Ministry of Economy10 is required to provide a copy of each license request to the Ministries of Defense and Foreign Affairs and they have the right to block the granting of a license. As opposed to the positive coordination required under DECL, with respect to the DU Export Order if there is no timely opposition by the Ministry of Defense or the Ministry of Foreign Affairs then the Ministry of Economy may grant the license.

Encryption License

There is also a requirement under the Control of Commodities and Service Order (Conducting Business with Encryption Measures) - 1974 to receive a license from DECA prior to engaging in any business activity related to encryption measures, other than those encryption measures exempt under the law. The activity includes import, export, production and other activities related to encryption. The definition of encryption measures under this order is very broad and is not limited to encryption items captured under the Wassenaar Dual Use List.


The above is a brief summary of some of the aspects of Israeli export control laws. Obviously this article does not encompass all the aspects of the law, but should provide a basic background for those who want to conduct business in these regulated areas in Israel.

 1  All quotes from Israeli law and regulations in this article are a free translation from the original Hebrew and are unofficial.


2  See Section 2.

3  Ibid. and Section 15(a)(3)

4  Defense Export Control Order (Military Equipment) – 2007.

7  Defense Export Control Regulations (Exemptions from Defense Marketing License) – 2008.

8  See Chapters H & I of the DECL.

9  See Section 3(a) of the DU Export Order.

10  See Section 6(a).

* Chaim is recognized as one of the leading professionals in the field of Anticorruption Compliance in Israel, with over eight years of experience in this relatively new field and having established and implemented one of the first and most comprehensive anticorruption policies under Israeli’s Foreign Bribery statutes. This included anticorruption compliance activity and due diligence for third parties around the globe, including Asia, the Middle East, Africa and South America.


Chaim also has over a decade of experience in large complex international and Israeli defense transactions. Chaim is recognized as one of the leaders in Israel with respect to Israeli and International defense and dual use export controls regulations. He has represented corporate interests before the Israeli Knesset and the Israeli Ministry of Defense. In this capacity Chaim also leads Shibolet & Co.’s practice in the Defense and Homeland Security Sector.


Chaim prides himself on finding solutions that provide the company with maximum legal comfort without staunching its commercial goals.

Wednesday, April 19, 2017
Trade Law / Trade Regulation