U.S. Department of State
 Bureau of Economic and Business Affairs

 
 
http://www.state.gov/www/issues/economic/country_reports.html
 
I. EXECUTIVE SUMMARY
 
This Country Commercial Guide (CCG) presents a comprehensive look
at Israel's commercial environment, using economic, political and
market analyses.
 
The CCGs were established by recommendation of the Trade
Promotion Coordinating Committee (TPCC), a multi-agency task
force, to consolidate various reporting documents prepared for
the U.S.business community. Country Commercial Guides are
prepared annually at U.S. Embassies through the combined efforts
of several U.S. government agencies.
 
Over the last decade Israel has undergone a profound
transformation. Buoyed by political rapproachment with Jordan
and Egypt, the beginnings of an agreement with the Palestinians,
and a substantial increase in population from the ex-Soviet
Union, the Israeli economy averaged growth of 6-7 percent in the
first half of the decade. With the peace process stagnating,
economic growth at 1.7 percent in 1997 and unemployment creeping
steadily upward, the Israeli government has managed to press
ahead with structural reforms that many analysts say provide a
solid foundation for economic growth within the next few years. 
In the meantime, Israel's economic managers have succeeded in
re-orienting the Israeli economy away from traditional low tech
and
heavy industry into services and production of high value
products for the new high technology industries.
 
Israel's economic transformation from hyde bound socialism to
dynamic entrepreneurial capitalism is one of the most impressive,
if under-acknowledged, international success stories. Israel's
proportion of scientists, engineers, and other skilled personnel
in the labor force is high by international standards.
Capitalizing on this human resource potential, the government has
instituted economic reforms and new policies that have created a
global high technology powerhouse in such industries as
semiconductors, computer software, telecommunications and
biomedical equipment. The dramatic growth of Israel's high tech
sector in recent years has led to a shortage of qualified workers
and a significant rise in salaries for these positions. 
 
Israel's highly developed economy and western oriented business
culture will seem very familiar and comfortable to the visiting
American executive. The country's legal and regulatory regime is
based on European commercial law and has developed its own very
strong legal precedence over the last 50 years. Over the past
few years net foreign investment in Israel has risen sharply,
from a $505 million in 1992 to some $3.4 billion in 1997. The
U.S.-Israel Free Trade Agreement has contributed greatly to the
expansion of bilateral trade to $13 billion in 1997. The fact
that Israel has concluded Free Trade Area Agreements with four
other countries, the European Free Trade Area (EFTA) and the
European Union indicates a real commitment to a liberal trading
regime. 
 
In order to improve its inadequate legislatory framework for the
protection and enforcement of intellectual property rights (IPR),
the Government of Israel has taken serious steps to revise the
IPR provisions in the areas of patents, copyrights, trademarks,
industrial designs, integrated circuits and cable broadcasting,
based on international guidelines and in accordance with Israel's
international obligations. Israel also intends to establish a
National Police Unit dedicated to IPR.
 
The real key to Israel's economic take-off will be its ability to
come to some peaceful accomodation with its immediate Palestinian
neighbors and the other countries of the region. As the Peace
Process has stalled, so have the bright prospects for economic
integration which were supposed to boost the regional demand for
Israeli products and services. With a genuine peace in this
region, Israel is easily poised to be a significant "engine of
growth" for the whole Middle East. 
 
  
II. ECONOMIC TRENDS AND OUTLOOK
 
Major Trends and Outlook 
 
In the first half of the 1990s, Israel enjoyed a remarkable
economic expansion that brought new levels of prosperity and a
significant increase in purchasing power. With economic growth
averaging nearly six percent between 1990 and 1996, Israel's
economy expanded by some 40 percent in real terms, and per capita
income jumped from $11,000 to almost $17,000. Along with rapid
economic growth came an even faster increase in import demand, as
Israeli purchases of goods and services from abroad grew from $24
billion in 1990 to over $43 billion in 1996.
 
The principal factors behind Israel's economic boom of the first
half of the decade were: 
(a) the influx of over 750,000 new immigrants (16 percent of
Israel's population at the end of 1989). These immigrants,
principally from the former Soviet Union (FSU), added
significantly to Israel's labor force while stimulating consumer
demand and new investment; 
(b) economic reforms that opened the economy to greater
international competition. The reforms resulted in the
development of the financial markets and in a reduction of
governmental control of the economy; 
(c) the Middle East peace process, which reduced Israels
international isolation, opening new export markets and
stimulating foreign investment.
 
More recently, economic growth has slowed substantially, from 7.1
percent in 1995 to 1.9 percent in 1997 and perhaps 1-2 percent in
1998. This slowdown in growth chiefly reflects a sharp
turnaround in new investment, which grew by 9.1 percent in real
terms in 1995 but declined by 5.1 percent in 1997. The slowdown
in growth is generally attributed to the waning of the
stimulative effects of the immigration waves, such as for
residential construction and new business investment; high
interest rates and much tighter fiscal policy in 1997; and
increased political and security uncertainty in the wake of
terrorist incidents and a lack of progress in the peace process.
 
Nonetheless, Israel remains well-positioned to compete in the
knowledge-intensive industries of the 21st century, and its
economy has the potential to grow at some four to five percent
per year. Israel's proportion of scientists, engineers, and
other skilled personnel in the labor force is high by
international standards, and Israeli companies are rapidly
developing experience in the business aspects of transforming
technology into marketable products and services. Further, the
ongoing structural transformation of the economy, especially its
shift from traditional to higher-value goods and services, should
add to Israel's growth potential in the near future. Finally,
structural reforms that will increase the level of competition
and reduce the role of the state should add to overall efficiency
and productivity.
 
Principal Growth Sectors
 
Israel is emerging as a high-tech center, particularly in such
industry sectors as semiconductors, computer software,
telecommunications, and biotechnology. Infrastructure
investments are likely to remain high in the near term, in
response to increasing affluence and a 2.5 percent annual
population growth. Housing, road construction, electric power,
public transportation, natural gas, telecommunications, and ports
and railways offer promising opportunities.  In addition,
Israel's retail distribution network offers scope for increased
penetration by U.S.-style retail chains, which are making their
mark on Israel's marketing system.
 
Government Role in the Economy
 
 
Over the past decade, Israel has moved gradually toward a more
open, competitive, and market-oriented economy. Nonetheless, the
level of government involvement in the economy remains high, as
do the public's expectations for government assistance. Despite
a government commitment to reduce taxes, Israel's tax burden
remains high by U.S.standards, at roughly 40 percent of GDP. The
country's infrastructure network remains publicly-owned, as does
much of the banking system. However, the pace of privatization
picked up markedly in 1997, highlighted by the sale of a
controlling stake in Israels largest bank, Bank Hapoalim, which
controls some eight percent of the Israeli economy through its
various corporate holdings. For 1998 and 1999, the government
plans the sale of Israel's second and third largest banks, Banks
Leumi and Discount, the sale of additional shares in the
telecommunications company Bezeq, the divestiture of its
remaining shares in Israel Chemicals, and the sale of 49 percent
of the national airline, El Al.
 
Balance of Payments Situation
 
Israel has traditionally run a large external trade deficit,
usually in excess of ten percent of GDP, that has largely been
offset by cash grants from the U.S. government and charitable
organizations and individuals abroad. From 1992 through 1996,
strong domestic demand and declining national savings led to a
steady increase in Israel's external current account deficit
which, in 1996, hit a worrisome level of $5.3 billion, or 5.6
percent of GDP. The significant tightening of fiscal policy
undertaken in 1997, when the government's budget deficit fell to
2.8 percent of GDP from 3.9 percent in 1996, was motivated in
large part by the need to prevent a potential external financial
crisis. The reduced budget deficit and overall economic slowdown
helped to reduce the current account deficit to $3.6 billion, or
3.6 percent of GDP, in 1997; a further reduction is expected in
1998.
 
Despite Israel's recent succession of large current account
deficits, its net external debt has remained relatively stable in
absolute terms in the past few years, while its debt/GDP ratio
has declined, reaching 19.1 percent in 1997. This fact reflects
the large inflow of equity investment, both portfolio and direct,
that Israel has received in the past few years. Investment in
the Tel Aviv Stock Exchange, acquisitions of Israeli companies,
and equity flotations by Israeli companies on foreign stock
markets, principally New York, have brought billions of dollars
in new capital to Israel in recent years, primarily though not
exclusively to its high technology industries.
 
Foreign borrowing by the Israeli private sector, undertaken as an
alternative to high domestic interest rates, has been another
important factor in Israel's balance of payment situation in
recent years. Such borrowing peaked in 1997, helping to increase
Israel's foreign exchange reserves from $11 billion to over $20
billion during the year. Concern has been expressed over the
currency risk implicit in such borrowing should there be a sudden
change in sentiment and a rapid depreciation of the shekel.
 
Infrastructure Situation
 
To cope with its growing population and to improve the
functioning of the economy, Israel is making large investments to
upgrade its infrastructure. Major projects include the
construction of a new terminal at Ben Gurion International
Airport, a tunnel through Mt. Carmel to provide a bypass route
around Haifa, the Cross-Israel Highway, a major north-south
artery and mass transit systems planned for Jerusalem, Beer Sheva
and the Tel Aviv region. Significant improvements to Israel's
ports, railways, and road network are also planned. 
 
The Israel Electric Corporation (IEC) is in the midst of a $10
billion investment program, which will double the country's
generating capacity to about 12,000 megawatts by the end of the
decade. Israel is also preparing for the availability of natural
gas by planning a natural gas distribution network. Local
authorities are searching for solutions to environmental problems
related to municipal solid waste and wastewater treatment. The
first international tender for a waste-to-energy plant was issued
in January 1998. Development of regional sanitary landfills, a
national air pollution monitoring system and municipal wastewater
treatment plants, even in outlying regions of the country, are
indicative of a growing awareness of environmental issues. 
 

[end of document]

Note* International Copyright, United States Government, 1998 (or other year of first publication). All rights under foreign copyright laws are reserved. All portions of this publication are protected against any type or form of reproduction, communications to the public and the preparation of adaptations, arrangement and alterations outside the United States. U. S. copyright is not asserted under the U.S. Copyright Law, Title17, United States Code.

III. POLITICAL ENVIRONMENT
 
Bilateral Relationship with the United States
 
Israel and the U.S. are closely bound by historic, religious,
political and cultural ties, as well as by many other mutual
interests. Over the years, U.S. economic and security assistance
has been an acknowledgment of these enduring ties, and a signal
of a strong and long-lasting U.S. commitment to Israel. In
recent years bilateral cooperative institutions in numerous
fields have been established, which further strengthen the
relations between the U.S. and Israel. Foundations in the fields
of science and technology include the Binational Industrial
Research and Development Foundation (BIRD), the Binational
Science Foundation, the Binational Agricultural Research and
Development Foundation (BARD), and the U.S.-Israel Science and
Technology Commission. The U.S.-Israel Education Foundation
(USIEF) sponsors educational and cultural programs.
 
The Peace Process
 
The issue of Arab-Israeli peace has been a focal point in
U.S.-Israeli relations, and the close working relationship
between the
two countries has greatly facilitated the breakthroughs in the
Middle East peace process. On September 13, 1993, the late Prime
Minister Yitzhak Rabin and PLO Chairman Yasser Arafat signed the
Declaration of Principles, which outlined a six-year timetable
for achieving permanent and comprehensive peace between Israel
and the Palestinians. On May 4, 1994, Rabin and Arafat initialed
an accord implementing the first stage of that agreement:
self-rule for Gaza and Jericho under the administration of a
Palestinian Authority (PA). The Paris Protocol, signed in April
of 1994, was also incorporated into the May 1994 Agreement on the
Gaza Strip and Jericho Area. The Paris Protocol set up the
framework for the conduct of economic relations between Israel
and areas administered by the Palestinian Authority. On
September 28, 1995, the Interim Agreement was signed, calling for
a phased Israeli withdrawal from certain areas of the West Bank. 
To date, six West Bank cities (Nablus, Tulkarm, Ramallah, Jenin,
Bethlehem, Qalqilyah) have been turned over to the PA and Israel
has withdrawn from the Arab-populated areas of Hebron, in
accordance with the Hebron protocol of 15th January, 1997. On
January 20, 1996 the Palestinians held their first democratic
elections, choosing Yasser Arafat as Ra'ees of the Executive
Authority along with 88 PA Council members. The government of
Prime Minister Netanyahu, which took office in June, 1996,
affirmed its commitment to continue implementation of the Interim
Agreement and expressed a readiness to resume negotiations with
the Palestinians on final status issues on an accelerated basis. 
 
Since the Hebron redeployment, in January 1997, the Government of
Israel (GOI) has insisted that further IDF redeployment is
contingent on fulfillment by the Palestinians of the mutual
obligations of the parties, as incorporated in the Note for the
Record of 17th January 1997 attached to the Hebron Protocol. To
date (July 1998) Israel has yet to announce the extent of the
second redeployment and has stated that further redeployment is
conditional on resolution of the outstanding reciprocity issues
contained in the Note for the Record. 
 
On October 26, 1994, Israel and Jordan signed a Treaty of Peace
which led to the immediate opening of two border crossings. In
the years since, the world has witnessed a series of first-ever
public meetings between senior Israeli and Jordanian leaders,
both abroad and at the Dead Sea, Aqaba, Amman, and on the shores
of the Sea of Galilee. Tourism between the two countries has
developed since the first Israeli tourists bearing Israeli
passports were welcomed into Jordan, and a non-stop bus service
and air services between Amman and Tel Aviv were initiated in
mid-1996. The peace treaty addresses boundary demarcations,
water issues, police cooperation, environmental issues,
transportation, and border crossings. Full diplomatic relations
have been established, and diverse contacts have been initiated
as the normalization process has proceeded. The economic
cooperation element of the treaty includes agreements on free
trade, investment, banking, industrial cooperation and labor,
among various other sectors.  In 1997 Israel and Jordan signed an
agreement establishing joint production facilities in a
qualifying industrial zone (QIZ) in Irbid. Products from these
facilities will enter the U.S. market duty-free under U.S.
legislation. More QIZs are expected in 1998. Israel and Jordan
continue to work on a joint airport project for the Aqaba-Eilat
region, and inaugurated a pilot project in 1997 for some
Israel-bound flights to land at Aqaba airport.
 
Under U.S. sponsorship, Israel and Syria conducted talks aimed at
achieving a peace agreement. The talks made some headway in
identifying areas of agreement and disagreement, but were
suspended in early 1996, following major terrorist attacks in
Israel and Prime Minister Peres' call for early elections. 
Efforts continue to find a formula to enable resumption of the
talks.
 
Israel has proposed a military withdrawal from southern Lebanon
under UN Security Resolution 425 with appropriate security
guarantees from the government of Lebanon. Currently there are
no direct negotiations with Lebanon on this issue. Progress on
outstanding issues with Lebanon, including Hizballah terror and
Israel's presence in southern Lebanon, probably depends on
success in talks between Israel and Syria.
 
Major Political Issues Affecting Business Climate
 
Two major political issues affect the business climate in Israel:
regional instability and terrorism. These two considerations
have led some foreign businesses to move cautiously on
investments in Israel. Historic agreements between Israel and
its Arab neighbors provide a sound framework for further progress
in achieving a comprehensive Middle East peace and, in turn, a
favorable business climate throughout the region. 
 
The Political System
 
Israel is a parliamentary democracy. The president is elected by
the Knesset, a unicameral parliament, for a five-year term. In
March 1998 Ezer Weizman was re-elected for a second term as
President of Israel. The Prime Minister is Binyamin Netanyahu,
the leader of the Likud party, who in May 1996 won a narrow
victory in the national elections. Netanyahu became Prime
Minister under a new law, which went into effect in 1996 and
which mandates the direct election of the Prime Minister and
separate elections for the Knesset. Netanyahu subsequently
formed a center-right religious coalition that holds a majority
of 66 seats in the Knesset. 
 
The Knesset's 120 members are elected to four-year terms,
although the Prime Minister has the option to call for new
elections before the end of the term, or the Prime Minister's
government can fall on a vote of no-confidence in the Knesset. 
The president then has the option of asking the current Prime
Minister to form a new government. If he cannot, new elections
are held for the Knesset. A total of eleven political parties
are currently represented in the 14th Knesset. They include:
Likud-Gesher-Tsomet alliance, Shas, National Religious Party,
Meretz, Yisrael B'Aliya, Hadash, The Third Way, United Torah
Judaism, United Arab List, and Moledet.
 
The January 1998 departure of David Levy from the Cabinet
affected Prime Minister Netanyahu's majority. Levy's Gesher
movement kept its five Knesset seats and retains its voting
independence on major issues before the Knesset. This has
reduced the Prime Minister's automatic majority to 61 votes, as
follows: his ruling coalition in the Knesset is composed of his
own Likud-Tsomet (27 seats), Shas (10 seats), the National
Religious Party (9 seats), Yisrael B'Aliya (7 seats), the Third
Way (4 seats) and United Torah Judaism (4 seats), for a total of
61 seats out of 120. In addition, an ultra-right-wing party, 
Moledet (2 seats), has pledged to vote with the government
depending on the issue and the government's position. 
 
Orientation of Major Political Parties
 
The political spectrum runs a wide gamut from the Hadash Party, a
left-wing umbrella group including the Communist Party and other
Marxist factions that is made up of both Arab and Jewish
citizens, to the left-wing Meretz Party (which is actually a
compendium of three separate parties), the center-left and chief
opposition Labor Party, the new centrist Third Way Party, the
ruling right-center Likud-Gesher-Tsomet party bloc, the religious
parties - National Religious Party, Shas, United Torah Judaism
(also a mix of two separate parties) - and the rightist Moledet. 
Yisrael B'Aliya, is a centrist party focused on the rights of
Russian immigrants. The United Arab List, a combination of the
Democratic Arab Party and representatives of Israel's Islamic
Movement, is a defender of the rights of Arab citizens.
 
Schedule for Elections
 
Elections for the 15th Knesset are scheduled to take place in the
year 2000. 
 
 
IV. MARKETING U.S. PRODUCTS AND SERVICES
 
Distribution and Sales Channels
 
Approximately 25 percent of Israel's 6.0 million population is
concentrated in the Tel Aviv metropolitan area, Israel's
commercial and financial center. Another 15 percent of the
population lives in Haifa, a major port and the center for most
heavy industry. Almost all goods are imported through Israel's
two Mediterranean ports, Haifa in the north and Ashdod in the
south. They have good transportation links to the rest of the
country. Most companies are headquartered in the Tel Aviv or
Haifa metropolitan areas; a growing number of firms also maintain
branches, showrooms, or service facilities in Jerusalem and Beer
Sheba.
 
Consumer malls have become an overnight success story in Israeli
retailing. More than 30 large shopping malls now exist and
others are planned. Trendy, specialized national chain stores
and franchises have become increasingly popular, replacing
traditional food and consumer goods monopolies. The key to this
success has been the increasing variety of new products and
services offered to the Israeli consumer, driven by sustained
growth in consumption.
 
Israel's food market is estimated at $11 billion. Thirty percent
is directed to the institutional market which includes the army,
hospitals, hotels, restaurants, and factories as raw materials
for processing. Distribution is direct by manufacturers,
importers or wholesalers.
 
Over half of the food directed at non-institutional consumers is
sold through supermarkets and similar retail chains. Some 400
supermarkets, with an average floor size of 600 square meters,
are located throughout the country. Some of the larger stores
have areas of 1,000 - 2,000 square meters. Supersol and Blue
Square Co-op are the two main supermarket chains, together
accounting for fifty percent of the total sales volume in
supermarkets.
 
The rest of the food market is served by typical Middle Eastern
open markets and small groceries. In recent years specialty food
stores catering to the more affluent have developed in main
metropolitan centers. 
 
Most U.S. exporters choose to market their products in Israel
through agents/distributors who generally prefer to act as
exclusive representatives of their foreign suppliers and maintain
their own distribution networks. Chain and department stores
sometimes prefer to deal directly with overseas suppliers in
order to cut middleman costs.
 
Use of Agents and Distributors: Finding a Partner
 
Most U.S. manufacturers prefer to sell to the Israeli market
through a local agent or distributor on either an exclusive or
non-exclusive basis. Some exporters use a commission agent who
conducts limited promotional campaigns and calls on potential
buyers, but does not import on his own. This approach is most
commonly used by exporters of heavy industrial equipment. A good
local representative with proven reliability, loyalty, technical
suitability and after-sales service capability is a key factor to
success in selling and maintaining a continued presence in the
Israeli marketplace. U.S. companies need to be aggressive in
their pursuit of business opportunities and maintain an active
in-country presence.
 
The most common approach used by exporters of light industrial
equipment and consumer goods is to obtain a local distributor. 
Distributors will import on their own account, carry sufficient
stock to satisfy ongoing demand or to use for demonstration,
maintain their own sales organization, supply spare parts and
maintain a service division (if applicable). 
 
In concluding a representation agreement U.S. companies should be
sure to include the following elements:
--contract duration;
--exclusivity (if applicable);
--compensatory amount as a function of contract duration, in case
of termination of exclusivity;
--promotional input by agent and volume of sales; and
--dispute settlement mechanism, either by arbitration, or by
assigning a tribunal (preferably U.S.).
Once an adequate agreement is concluded, there is usually no need
for the U.S. exporter to retain a local attorney. Legal support
for the ongoing operation of the agency should be provided by the
local representative.
 
Foreign companies interested in participating in government
projects are often required to form a joint-venture partnership
with an Israeli company in order to tender their bids.
 
The U.S. Commercial Service and the U.S. Foreign Agricultural
Service (FAS) at the U.S. Embassy in Tel Aviv provide
agent/distributor search and other services designed to assist
U.S. companies to establish themselves in the Israeli market. 
For information on these services interested firms may contact
the nearest Department of Commerce district offices or the U.S.
government officials listed at the end of this report.
 
Franchising 
 
Franchising has become increasingly popular in Israel since the
introduction of this retail concept to the local market in the
mid-1980's. Its popularity is particularly high in the fast food
restaurant sector. Due to the strong presence of such companies
as Domino's Pizza and Pizza Hut, McDonald's, Kentucky Fried
Chicken, Burger King, Dunkin Donuts, The Country's Best Yoghurt,
Ben and Jerry's and more recently, Haagen Dazs, the U.S. share of
the Israeli fast food franchising market exceeds 50 percent.
 
Franchising has also penetrated other industry sectors. ACE
Hardware and Office Depot opened franchises in 1993/1994, and
operate branches in the main commercial centers of the country. 
Toys-R-Us opened its first outlet in 1995. Most franchises in
Israel are owned by a main franchisee, who owns and operates
branches in various parts of the country. One of the exceptions
is Subway, which has a network of individually owned and operated
outlets. Mailboxes is currently making its entry into the market
with individually owned franchises. The key to success in Israel
lies in strong management and good, ongoing, in-country training
programs to ensure continuing high quality standards. 
 
Direct Marketing
 
Direct marketing is relatively new on the Israeli scene. 
Activity in this field started in 1992, with the introduction of
cable TV, and already there are six active companies (including
telemarketing). In the coming year the direct marketing sector
is expected to grow by about 20 percent.
 
Other effective avenues for advertising are: point-of-sale
promotions in supermarkets, drugstores and malls; advertising in
major Hebrew newspapers, especially in weekend editions; and
professional business journals.
 
Joint Ventures/Licensing
 
Manufacturing under joint venture or licensing agreements is
common in Israel and encouraged by the GOI. Section VII of this
report provides information on investments in Israel.
 
Israeli businesses strive to obtain licensing agreements for a
five-year period, automatically renewable for another five years. 
They prefer agreements, in which the licensor takes equity with
the licensee.
 
The norm for royalties is 4-5 percent of the turnover, although
higher rates are common for luxury articles, for items that
include author's fees, and for specialized machinery. 
Twenty-five percent withholding tax on royalties and fees is
deducted at
the source. The licencee may repatriate royalties through an
authorized bank by producing a statement from a certified
accountant. The licencee is entitled to claim an income tax
deduction on royalties and fee payments.
 
Steps to Establishing an Office
 
A foreign firm can operate in Israel as a foreign company, a
foreign partnership or by establishing a branch office. There are
no restrictions on foreign ownership of Israeli companies or
securities. Israel allows repatriation of foreign investment
capital and profits.
 
A foreign company that wishes to establish an office in Israel is
required to register with the Registrar of Companies, at the
Ministry of Justice. The company must file a copy of the
document by which it is incorporated and which states its
objectives and rules, together with a list of its directors and
the name of its representative in Israel. If these documents are
in English, they must be accompanied by a Hebrew translation. 
There is no requirement for the managers or directors of the
company to be Israeli citizens or residents. However, U.S.
representatives assigned to manage the Israel office must first
obtain work permits from the Employment Service Division of the
Ministry of Labor. Authorization from the Ministry of Labor and,
if applicable, the Investment Center, is necessary before the
Ministry of Interior can issue a visa to begin employment in
Israel. U.S. companies wishing to establish an office in Israel
are advised to consult with a legal or accounting firm.
 
Advertising and Trade Promotion
 
Aggressive product promotion and advertising are effective tools
in Israel, especially for consumer goods, where brand image is
important and U.S. products face fierce competition from local
and European suppliers. The most effective means of
advertisement is through commercial television and radio. To
date, Channel Two is the only commercial Israeli TV station
broadcasting nationwide, permitted by law to carry private TV
commercials, while state-owned Channel One carries sponsored
advertising by public corporations. The state-owned Kol Israel
(the Voice of Israel) radio station broadcasts commercial ads via
two of its several channels. In addition, 13 privately-owned
authorized regional radio licensees accept commercial ads. 
 
Major Newspapers and Business Journals
English Language:
 The Jerusalem Post (daily newspaper)
 The Jerusalem Report (weekly)
 Link Magazine (monthly)
 Israel Business Today (weekly)
 *The International Herald Tribune - local edition
 
*The local edition of the International Herald Tribune includes
an abridged english language version of the Haaretz daily 
 
Hebrew Language(dailies):
 Haaretz
 Globes (financial)
 Maariv
 Yediot Aharonot
 
 Pricing Product
 
Price is a key factor affecting purchasing decisions by Israeli
companies and consumers. Companies often use low pricing during
the introductory period to facilitate market penetration of a new
product, followed by a price increase once market share and
reputation are established. Since most distributors prefer
exclusivity, a special pricing clause may be incorporated into
the contract. Whenever a similar product is produced locally,
U.S. companies should be careful of possible dumping
ramifications.
 
Sales Service/Customer Support
 
Efficient after-sales-service and client support are important to
assure a company's competitiveness in the Israeli market,
especially in sophisticated, high-tech sectors. U.S. firms
should ensure that their local representatives receive adequate
and ongoing training and technical support. The "time between
failure and time to repair" is one of the main issues affecting
purchasing decisions by Israeli companies and government-owned
entities. 
 
Selling to the Government
 
Israel is a signatory to the WTO government procurement code. 
Since the enactment of the 1993 Public Procurement Law and
Regulations, GOI entities and government-owned companies are
required by law to procure by tender. Open tenders are published
in the local press. However, government-owned companies, whose
tenders are of most interest to U.S. suppliers, often use
selective bidding practices inviting only selected companies to
submit bids. 
 
The Public Procurement Law contains "Buy-Israel" regulations,
which award a 15 percent advantage to local companies, and the
"National Priority Zones" regulations providing an additional
5-15 percent advantage to companies located in so-called national
priority areas. Where Israel's WTO or other international
obligations conflict with the "Buy-Israel" and "National Priority
Zones" regulations of the Public Procurement Law, the
international obligations take precedence.
 
Defense procurement is handled by the Ministry of Defense. The
Ministry maintains a 200-person purchasing mission in New York,
which handles purchases of U.S. equipment including direct
commercial contracts paid by FMS funds.
 
In spring of 1995 the GOI enacted the "Industrial Cooperation"
regulations, instructing GOI entities, including government-owned
companies, to include an offset requirement clause in their
tenders. Foreign companies making a sale to GOI entities of
$500,000 or over are required to purchase local products or use
local content for at least 35 percent of the cost of the awarded
contract. The Industrial Cooperation Authority (ICA) under the
Ministry of Industry and Trade, administers the offset program. 
U.S. companies interested in selling to the GOI are strongly
advised to appoint a well-connected local agent.
 
Performing Due Diligence/Checking Bona Fides of 
Banks/Agents/Customers
 
Prior to entering into a distribution/representation agreement,
investment project or joint venture with an Israeli company, it
is common practice for U.S. companies to perform a due diligence
check on the said Israeli company. This is particularly
recommended when the Israeli company is relatively unknown or
small to medium in size. The U.S. Commercial Service in Tel Aviv
can provide basic information on companies with whom its trade
specialists are acquainted. There are several local companies in
Israel, in addition to Dun & Bradstreet, that can provide
comprehensive in depth reports, which relate to the bona fides
and financial stability of banks/agents/customers.
 
Most U.S. banks correspond with the five leading Israeli banks.
It is advisable, especially when working with new clients, to
seek verification from a corresponding U.S. bank of the
authenticity of documents stemming from the Israeli banking
system. 
 
Performing the above checks is particularly relevant in the
Israeli economy today, as many companies are experiencing
difficulties following the rapid growth period of the early-90s
and the subsequent slow-down that currently prevails.
 
Need for a Local Attorney
 
U.S. companies should seek professional legal and/or accountancy
advice whenever engaged in complicated contractual arrangements
in Israel. Companies who wish to establish an office, invest, or
apply for IPR registration in Israel should seek professional
legal advice. Companies may also wish to seek legal assistance
when encountering trade or payment problems. A list of local law
firms is available from the U.S. Commercial Service in Tel Aviv.
 
V. LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT
 
Best Prospects for Non-Agricultural Goods and 
Services
 
 
Note: Official GOI statistics are quoted in U.S. dollars. Where
needed the following exchange rate was used: USD - NIS 3.60 
 
(USD million except where noted)
 
1 - Airport/Ground Support Equipment (APG) 
At the end of 1997 the Israel Airports Authority issued the first
tenders for the construction of the new Ben Gurion international
airport terminal. The Authority plans to issue tenders for the
supply and installation of large systems, i.e. generators,
chillers, boilers, compressors, baggage handling systems, loading
bridges by the end of 1998. A new terminal was built at Haifa
airport, which has been opened to short distance international
flights. The Government is contemplating privatizing Haifa
airport. Expansion of ground facilities and upgrading of the
main runway, possibly into the sea, will be delayed pending a
decision regarding the future of the airport. Agreement has been
reached between the governments of Israel and Jordan regarding
the joint use of Aqaba airport. Israel will close the Avdat
military airfield to civilian wide body aircraft and build a new
terminal at Ein Evrona, north of the current Eilat airport
terminal.
 
 1997 1998 1999
 (proj) (est)
Total Market Size 64 85 95
Total Local Production 20 25 30
Total Exports 8 12 15
Total Imports 52 72 80
Imports from the U.S. 34 45 50
The above statistics are unofficial estimates.
 
2 - Food Processing/Packaging Equipment (FPP)
The Israeli market for food processing/packaging equipment stood
at $66 million in 1997. Despite the slight decrease from 1996
caused by the general slow-down in the Israeli economy, the
market has grown significantly in recent years to meet the
increased demand created by the growth of the entire food sector.
 
The United States-Israel Free Trade Area Agreement removed all
customs tariffs on imported U.S. goods in this sector. The sharp
rise of 125 percent in imports from the U.S. between 1996 and
1997 was a delayed reaction to the removal of these tariffs
(which came fully into effect in 1995), combined with a
recognition by Israeli importers of the quality and value of U.S.
products. As the Israeli food processing industry continues to
expand, the demand for U.S. products is likely to remain high in
the coming years. 
 
 1996 1997 1998
  (est)
Total Market Size 70 66 74
Total Local Production 18 19 21
Total Exports 7 8 8
Total Imports 59 55 61
Imports from the U.S.  4 9 11
The above statistics are unofficial estimates. 
 
3 - Computers and Peripherals (CPT)
U.S.-made computers and peripherals account for over 30 percent
of the import market in this sector. Israeli consumers have a
preference for U.S. brand-name computers, and the three largest
U.S. companies dominate the market. Portable computers are not
popular in Israel, accounting for for a seven percent market
share. The Israeli market is avid for the latest technologies,
which explains the fact that 30 percent of the computers sold
have Pentium 586 processors. Ministry of Defense entities prefer
U.S.-made computers, as they can be purchased with FMS funds. 
Growth in this industry sector is expected to continue as sales
of home computers are on the increase. Israel is a very
competitive market, and although European firms and Far Eastern
manufacturers are becoming more active every year, U.S.
manufacturers are expected to keep the lead on the market based
on the quality of their products.
 
  1996 1997 1998
 (est)
Total Market Size 740 995 1,110
Total Local Production 415 588 635
Total Exports 185 235 250
Total Imports 510 642 725
Imports form the U.S. 161 194 306
The above statistics are unofficial estimates.
 
4 - Franchising (FRA)
The Israeli franchising market has grown steadily over the past
fifteen years. The most developed segment of the franchising
market in Israel is the fast food sector, estimated to represent
about 75 percent of the market. However, other sectors offer
good opportunities for internationally known franchising
concepts. There are no official figures on this industry sector.
 
Total market size for franchising in 1997 was estimated at $810
million, representing a steady growth of 8-12 percent over the
last three years. The current slow-down in the local economy may
somewhat reduce the sector's growth rate over the next 3-4 years. 
U.S. companies are also extremely competitive in the non-food
franchising. The non-food franchising market, estimated at $200
million, is expected to grow at a five percent annual rate over
the next three years.
 
 1997 1998 1999
 (prog) (est)
Total Market Size 810 850 890
Local Franchises 340 355 370
Export Market  n/a n/a n/a
Foreign Franchises 470 495 520
U.S. Franchises 410 430 450
The above statistics are unofficial estimates.
 
5 - Telecommunications Equipment (TEL)
The Israeli telecommunication market will continue to manifest
strength, expected to result in a sustained growth of 8 to 10
percent over the next three years. Israel's telecommunication
market offers good opportunities with the deployment of the third
cellular operator and imminent introduction of D.B.S.
broadcasting. Future growth is expected to be led by upgrades to
new technologies which will affect virtually every sub-sector of
the market. The trend towards deployment of fibre optic lines
will spark growth in both fibre optic equipment and new network
equipment. Qualitatively, American products are considered to be
top of the line and subsequently, the U.S. import market share is
expected to remain above 50 percent.
 
 1996 1997 1998
  (est)
Total Market Size 1,526 1,459 1,600
Total Local Production 2,295 2,570 2,830
Total Exports 1,765 1,995 2,200
Total Imports 996  884 970
Imports from the U.S. 629 486 535
The above statistics are unofficial estimates.
 
6- Chemical Production Machinery (CHM)
The performance of the Israeli chemical production machinery
market in 1996 and in 1997 reflected the sustained growth of the
chemical industry output, generated by investment in automation
of production processes, as well as expansion of the production
infrastructure to meet overseas demand. Customers seem to prefer
U.S.-manufactured chemical production machinery due to a
traditional U.S. orientation in this sector.
 
 1996 1997 1998
 (est)
Total Market Size 87 104 114
Total Local Production 53 61 67
Total Exports 32 37 41
Total Imports 66 80 88
Imports from the U.S. 28 35 39
The above statistics are unofficial estimates.
 
7 - Electronic Components (ELC)
In 1997, total market value was down 22 percent, mainly as a
result of increased stocks held by leading end-users and the
continued tendency to reduce prices. However, the U.S. import
market share rocketed 40 percent, compared with 26.6 percent in
1996, reflecting the high technological reputation U.S.-made
components enjoy. American suppliers capable of competing in a
most advanced and sophisticated market will find Israel a very
receptive market. The wide range and broad basis of the Israeli
electronics industry, combined with the fast growing export
markets for the local electronics industry, provide electronic
components with a buffer against a downturn in demand in any
single end-user industry.
 
 1996 1997 1998
 (est)
Total Market Size 694 541 589
Total Local Production 490 520 574
Total Exports 288 299 330
Total Imports  492 320 345
Imports from the U.S. 131 128 139
The above statistics are unofficial estimates.
 
8 - Toys and Games (TOY)
In the past three years the Israeli toy market has undergone a
major change resulting from the liberalization of the import
market and the introduction of major international chains into
the market. Major chains, such as Toy-R-Us, offer the Israeli
consumer toys and games for all ages and at all price ranges. 
 
The Israeli market for toys and games grew almost nine percent
from 1996 to 1997, from $147 million to $160 million. The market
is expected to continue growing at the same rate to $172 million
by the end of 1998. The demand for toys & games peaks during the
Jewish holiday seasons: Rosh Hashanah, (Jewish New Year),
Hannukah and Pesach (Passover). Children up to the age of 15
represent 20 percent of Israel's total population.
 
 1996 1997 1998
 (est)
Total Market Size 147 160 172
Local Production 22 24 26
Total Exports 3 5 7
Total Imports 128 141 153
Imports from the U.S. 14 15.7  17.5
The above statistics are unofficial estimates.
 
9 - Computer Software (CSF)
Local production of computer software is well developed and at a
high standard, reflecting the Israeli high-tech sector in
general. In the course of the last three years, computer
software became one of Israel's leading industries. Therefore,
U.S. products encounter fierce competition on the local market. 
U.S. product capabilities are best used in the multimedia and
interactive software fields, education and entertainment, and
specialized professional software (legal, medical, etc.). These
industry sectors are growing at a startling pace. Many European
and Far Eastern companies have established themselves in the
local market through joint-ventures with Israeli companies.
 
 1996 1997 1998
 (est)
Total Market Size 900 1,110 1,200
Total Local Production 860 1,050 1,150
Total Exports  450 620 700
Total Imports 490 580 750
Imports form the U.S. 380 456 632
The above statistics are unofficial estimates.
 
10 - Machine Tools/Metalworking Equipment (MTL)
Over the next three years the market for machine tools and
metalworking equipment is expected to maintain its annual growth
rate of eight percent. However, between 1998-2000 U.S. exports
are expected to maintian their relative momentum in increasing
import market share --from 12.6 percent in 1995 through 16.3
percent in 1996, to 17 percent in 1997-- with an estimated annual
growth rate of 13.8 percent. 
 
The domestic metalworking industry employs over 60,000 people,
and constitutes 20 percent of Israel's industrial output and 19
percent of its exports. Growth in this market will be driven by
demand for automation equipment and advanced machinery in
high-tech defense industries and sophisticated export oriented
businesses. Israel has a well-understood need to stay in the
technological forefront in the fields of metallurgy, missile
systems, armor and avionics. As a result, there is a receptive
audience among users of metalworking equipment for all types of
advanced devices and systems. Germany, Italy and Japan are the
strongest third country competitors.
 
 1996 1997 1998
 (est)
Total Market Size 234 252 271
Total Local Production  130 141 153
Total Exports 55 60 66
Total Imports 159 171 184
Imports from the U.S. 26 29 33
The above statistics are unofficial estimates.
 
11 - Processed Food (FOD) (including beverages and cigarettes)
The processed food sector in Israel has expanded rapidly in
recent years, resulting from a combination of the removal of many
import barriers and the increased variation and volume of
domestic production as a reaction to the liberalization of the
import market.
 
In 1997 the import market for processed foods totaled $811
million, of which 23 percent came from the U.S. The slight fall
in imports in 1997 came as a result of the slow-down in the
Israeli economy, but imports are expected to grow again in 1998. 
The principal competition comes from the EU and Eastern Europe
where traditional trade ties have remained strong. The important
advantage of U.S. manufacturers lies in the quality of their
products. Changes in tastes and behavior of the Israeli consumer
have resulted in importers preferring U.S. products that offer a
better quality and value than the local production or imports
from elsewhere. 
 
Market penetration by U.S. products is dependent on investment in
sales promotion and market development. Once successful in
finding a niche for their products, U.S. suppliers who
demonstrate consistent quality and reliability accompanied by
responsiveness to importer needs, will find that the Israeli
market will reward them with a high degree of consumer loyalty
and increasing demand for their products.
 
 1996 1997 1998
 (est)
Total Market Size 2,036 2,171 2,297
Total Local Production 1,817 1,890 1,916
Total Exports 609 530 470
Total Imports 828 811 851
Imports from the U.S. 208 186 217
The above statistics are unofficial estimates.
 
12 - Information Services (INF)
The market for information services is rapidly expanding in the
intense commercial and academic R&D environments. Over the past
two years local production has increased significantly, while
U.S. manufacturers and service suppliers also have to compete
with European products available on the market. User-friendly
and specialized data-bases and commercial uses for the Internet
offer best market prospects in this industry.
 
 1996  1997 1998
 (est)
Total Market Size 43 52 57
Total Local Production 10 13 17
Total Exports 4 5 7
Total Imports  37 44 47
Imports from the U.S. 29 33 36
The above statistics are unofficial estimates.
 
13 - Leasing Services (LES) 
The total value of the Israeli leasing market is estimated at
$800 million. This figure reflects all the leasing transactions,
pending payments. Two thirds of the market is handled by the
banking sector, which provides only financial leasing. The
remaining one-third of the market is handled by private leasing
companies offering a combination of financial and operating
leases. The local market views operating leases as a high
cost/low performance service.
 
Seventy percent of the leasing activities in the Israeli market
consist of financial leasing of private and commercial vehicles. 
A strong presence of an entrepreneur, ready to contend with the
risks entailed in the operating leasing sector, has not yet
emerged in Israel. The market is receptive to U.S. equipment
suppliers offering leasing agreements for transportation,
construction, industrial, medical, and high-tech equipment. 
Established activities in secondary overseas markets should
contribute to the competitiveness of U.S. lessors. 
 
Israel has not yet enacted specific legislation related to
financial lease transactions. The Israel Equipment Lessors
Association has initiated and submitted a legislative proposal,
which is pending preliminary approval by the Ministry of Justice.
 
 1996 1997 1998
 (est)
Total Sales 720 760 800
Sales by local firms 720 760 800
Sales by foreign owned firms -0- -0- -0-
Sales by U.S. owned firms -0- -0- -0-
The above statistics are unofficial estimates
 
14 - Industrial Chemicals (ICH)
In the course of 1997 Israel's imports of mineral fuels, mineral
oils and distillation derivatives, bituminous substances, and
mineral waxes (HS 27) increased by five percent to $2.27 billion. 
Another major import sector is organic chemicals (HS 29), which
accounted for $680 million in 1997, representing an annual
increase of three percent. The 1998 projection for total imports
of industrial chemicals is $3.95 billion. Imports are estimated
to grow, steadily, at an average annual rate of four percent. 
The current U.S. share of the import market is eight percent.
 
The chemical industry plays a central role in the Israeli
economy, representing almost 15 percent of total industrial
output. U.S. companies have invested in the local production and
R&D, and are involved in numerous joint ventures, supplying the
Israeli market and exporting to other markets, including the US.
 
 1997 1998 1999
 (proj)  (est)
Total Market Size 6,800 7,000 7,200
Total Local Production 4,707 4,950 5,100
Total Exports 1,616 1,750 1,850
Total Imports 3,709 3,800 3,950
Imports from the U.S.  294 306 315
The above statistic are unofficial estimates. 
 
Best Prospects for Agricultural Products 
 
In Israel's trade relations with the U.S. Israel completely
barred imports of most fresh produce and many processed food
items.  This was possible under Article VI of the U.S.-Israel
FTA Agreement of 1985. On completion of the GATT-Uruguay Round
negotiations, Israel participated in the creation of the World
Trade Organization (WTO) and as a member is committed to
abolition of almost all import quotas and bans, tariffication of
all non-tariff barriers to trade and their reduction over time
to allow completely free imports from all its trading partners. 
In November 1996, the two countries signed a five-year Agreement
on Food and Agriculture, designed to allow the coexistence of the
WTO and the U.S.-Israel FTA Agreement.
 
As a result of the new agreement, in January of 1996 Israel
removed almost all import bans. Effective December, 1996 Israel
established Tariff Rate Quotas (TRQs) on a list of U.S. products,
and provided a preferential duty rate at least ten percent below
the general rates imposed on imports. It is difficult,
therefore, to study past import history to estimate export
potential for U.S. products.
 
The list below indicates the most important Tariff Rate Quotas
for U.S. products. In most cases, these products were totally
banned or import quotas with high levies existed.
 
Tariff Free Quotas for Imports from U.S.A.
 
HS Code Product Description 1988  1999
 
0202.0000 Frozen beef 6,998 7,558
0204.0000 Frozen lamb and goat 541 562
0207.0000 Poultry, fresh chilled or 
 frozen 265 273
0303.XXXX Fish, frozen, fresh water,
 not filleted 229 245
0303.XXXX Fish, frozen, salt water, 
 not filleted 4,007 4,288 
0402.1000 Dried milk, fat <1.5 % 1,082 1,125
0402.2000 Dried milk, fat > 1.5 % 1,082 1,125
0405.0000 Butter and other dairy spreads 324 337
0406.0000 Cheese and curd 386 405
0407.0000 Eggs in shell (millions) 3.8 3.9
0702.0000 Tomatoes, fresh or chilled 117 126
0703.1000 Onions and shallots 117 126
0703.2000 Garlic 108 112
0704.1000 Cauliflower and broccoli 1,082 1,125
0710.0000 Vegetables, frozen 433 450
0711.9020 Tomatoes, puree and juice 162 169
0713.2000 Chick peas (garbanzos), dried 110 116
 
Tariff Free Quotas for Imports from U.S.A. 
 
HS Code Product Description 1998 1999 
 
0806.1000 Grapes, fresh (Oct 15-Jan 31) 551 579
0806.2000 Grapes, dried (raisins) 530 546
0808.1000 Apples, fresh 1,697 1,748
0808.2010 Quinces, fresh 551 579
0808.2020 Pears, fresh (Nov 1 - May 31) 811 844
0813.2000 Prunes 743 765
1005.1010 Popping corn 105 113
1202,0000 Groundnuts 216 225
1206.1020  Confectionery sunfl. seeds 2,122 2,185
1602.3000 Processed poultry 265 273
1604.2030 Prepared or preserved fish, 
 carp 18 20
1604.2030 As above: not containing carp 121 133
2002.1000 Tomatoes, whole or in pieces 162 169
2002.9000 Tomato paste 379 394
2004.0000 Other vegetables, prep./
 preserved 108 112
2008.1000  Groundnuts, roasted, mixed 
 or not 87 90
2009.0000 Orange juice 3,308 3,473
2009.2000 Grapefruit juice 551 579
2009.3000 Juice of any other single
  citrus fruit 551 579
2009.5000 Tomato Juice 165 174
2009.7000 Apple juice 106 109
 
Source: U.S.-Israel Agreement on Food and Agriculture, November
1996. Appendix B. 
 
Best Prospects for Agricultural Products
 
Wheat - 041000
Israel has a growing demand for wheat and flour. The GOI permits
milling quality wheat imports and flour purchases from sources
other than the U.S., but U.S. Hard Red Winter remains the
preferred flour grain. Prospects exist for imports by Israeli
merchants and brokers for sale to neighboring countries such as
Jordan and Lebanon. Israel's market for milling quality wheat is
between 550 and 650 thousand metric tons, depending on the size
of the domestic wheat harvest. 
 
(Thousands of metric tons)
 1997 1998 1999
Total Market Size 1,000 1,000 1,000
Total Local Production 200 160 250
Total Exports 0  0 0
Total Imports 800 840 750
Imports from the U.S. 765 800 700
The above statistics are unofficial estimates and include
consumption of 150 - 200 thousand metric tons of wheat in the
West Bank and Gaza. 
 
To date the majority of Palestinian flour consumption is provided
by Israeli millers as there are no commercial mills in the West
Bank or the Palestinian Authority. When the Palestinians
construct their own mills, imports to the combined Palestinian
and Israeli market will remain unchanged, however Palestinian
importers may turn to non-U.S. sources, at least for a portion of
their needs.
 
Feed Grains and Other Animal Feeds 
Israel produces virtually no feed grains of its own. Under the
Economic Support Agreement which grants the government $1.2
billion in economic assistance funds, Israel undertakes to import
at least 1.6 million metric tons of bulk agricultural commodities
including feed grains, milling quality wheat and oilseeds. In
recent years performance has exceeded the commitment by more than
500,000 mt in spite of the feed mill industry's high sensitivity
to the price of the feed it imports. Market share of US imports
depends on grain price ratios of U.S. to (mainly) European
suppliers. 
 
Recent trial shipments of feed grains and protein meal from Asia
and Eastern Europe have proven disappointing. Quality was not
satisfactory and some difficulties in timing of deliveries was
experienced. Feed mills can be expected to continue to search
for the golden combination of dependability, high quality, and
low price. To the extent that an ideal source is not found they
can be expected to turn to the U.S. as a key supplier excelling
in dependability of supply and product quality. However, if 1998
is an indication of changes in trends, U.S. exporters will have
to increase their market promotion efforts in order to fend off
the heavy competition of Eastern Europe. 
 
(Thousands of metric tons)
 1997 1998 1999
Total Domestic Market 2,040 2,050 2,100
Total Local Production 96 100 90 
Total Exports 0 0 0
Total Imports 1,950 1,950 2,010
Imports from the U.S. 1,100 900 1,000
The above statistics are unofficial estimates.
 
Dried Fruits
Israel's annual raisin and prune imports are governed by tariff
rate quotas of 550 and 750 metric tons respectively. Domestic
raisin production grows with the expansion of grape production
for fresh exports. However Israel's domestic raisin production
is of low quality. Consumers demonstrate a revealed preference
for U.S. Jumbo Golden Seedless raisins. The import statistics
below include apricots, figs etc., which originate mainly in
Mediterranean countries such as Greece and Turkey. Dried fruits
other than raisins and prunes are not subject to import quotas.
 
(Metric tons) 
 1997 1998 1999
Total Domestic Market 6,000 5,900 6,000 
Total Local Production 1,500 1,100 1,100
Total Exports 0 0 0 
Total Imports 4,000 4,700 4,500
Imports from the U.S. 1,500 1,300 1,500
The above statistics are unofficial estimates.
 
Following conclusion of the U.S.-Israel Food and Agriculture
Agreement of November 1996, Israels market is open to imports
beyond the tariff rate quotas on raisins and prunes. Whereas the
duties on ex quota shipments of raisins appear uneconomical, on
prunes the levy is actually below the levels of previous years. 
 
Note: The discrepancy between market size and the total of
production and imports represents changes in stocks.
 
Tree Nuts
U.S. nuts enter Israel without quota restrictions and with a
significant customs advantage. As of January 1, 1995 all duties
on imports from the U.S. were canceled while those from the
European Union are close to 15 percent and from third countries
(e.g. Turkey) as much as 22.5 percent. Market promotion by the
California Walnut Commission demonstrated that a well-designed
campaign can yield good dividends in market share and absolute
quantities. Although there is a market of more than $13 million
for pistachios, Israeli importers consider U.S. pistachio
varieties which have been tried on the local market to be
inferior. They claim they do not suit local taste which tends
more to the Persian and Turkish varieties. Recent tasting tests
indicate that the California pistachio is quite acceptable to the
Israeli palate and if properly promoted could capture a portion
of the market presently dominated by Iranian nuts, which Israeli
law bans from entering the country. In 1997 and 1998 the Israeli
Customs Authority began a systematic check of country of origin
of all pistachios. Nuts discovered to have Iranian origin were
not granted entry. This treatment, combined with a poor crop
year in Iran, opened the market to U.S. pistachios. In the first
half of 1998 the U.S. provided some 40 percent of total imports. 
With appropriate market development activities, U.S. market share
could grow significantly.
 
(Metric tons, shelled basis)
 1997 1998 1999
Total Domestic Market 15,500 15,500 15,000
Total Local Production 2,000 2,100 2,000
Total Exports  1,100 1,000 1,000
Total Imports 14,000 13,000 14,000
Imports from the U.S. 7,000 8,000 7,500
The above statistics are unofficial estimates.
 
High Quality Beef
Late in 1993 the GOI relinquished its monopoly on the importation
of almost all types of meat. At present, beef and lamb imports
are in the hands of the private sector. By law, all imported meat
and meat products must meet the kosher requirements of the Chief
Rabbinate of Israel, including fresh and chilled meat. Estimates
place the potential of this market at several thousand tons, once
it is properly developed. However primary demand, possibly as
much as 70 or 80 percent of the total, is for kosher beef. The
urrent governmental ban on all imports, of non-kosher meat is in
violation of Israel's national treatment obligation under the WTO
and U.S.-Israel FTAA. Provided the necessary changes of the laws
governing beef occur, the market for imported non-kosher, high
quality beef could develop into three to five thousand tons
within a few years. Price will play an important role in
determining the size of the U.S. market share, although studies
indicate that the Israeli consumer appreciates quality and is
willing to pay up to ten percent more for a high quality product. 
In any case, there is need for an investment in market
development to educate the public which has been exposed for many
years to inferior beef from South America. Israel continues to
receive the majority of its supply from that region. The market
for kosher U.S. beef is estimated at 10,000 mt. With proper
market development and sales promotion this figure could double. 
 
In the wake of the BSE (Mad Cow) crisis, the Israel Veterinary
Service bans all imports of target organs, which include central
nervous system and spinal column, including the brain, lymph
glands, spleen and, recently, bones from all countries which do
not legislate the prohibition of use of protein meal and flour of
animal origin in livestock feeds. U.S. beef is licensed for
bone-in sales but products from the central nervous system are
still banned.
 
 
(Thousands of metric tons)
 1997 1998 1999 
Total Domestic Market 110 110 115 
Total Local Production 55 50 50
Total Exports 0 0 0 
Total Imports 55 60 65
Imports from the U.S. 5 5 7 
The above statistics are unofficial estimates and include offal.
 
In most of 1997 only offal was imported from the U.S. In 1998
less than 500 mt of kosher beef can be expected to be shipped
unless additional plants indicate a willingness to produce kosher
beef and beef products according to Israeli specifications. No
plants conducting kosher slaughter are approved by the Israel
Veterinary Services to export their products to Israel.
 
Significant Investment Opportunities
 
1 - Independent Power Producers (IPPs)
According to GOI plans, IPPs will constitute up to 20 percent of
Israel's electricity production capacity by the year 2005. The
first IPP tender, issued by the Israel Electric Corporation (IEC)
for a 370MW gas turbine-combined cycle plant was awarded in July
1998. The Ministry of Natinal Infrastructures (MNI) has tasked a
foreign consulting engineering company with the preparation of a
second IPP project of similar scope and technology, which the MNI
plans to issue as an international BOO tender in the first half
of 1999. The MNI recently mentioned the possibility of
developing of a third IPP, which would bring the generating
capacity of IPP's open to foreign competition to more than 1,100
MW. 
 
2 - Hotels
Tourism is one of the most viable and fastest developing sectors
of the Israeli economy, offering opportunities for investments in
hotels and hotel infrastructure. Total revenues of the industry
from incoming tourism in 1995 amounted to $3.1 billion, of which
$600 million were from hotel services. After the Madrid Peace
Conference in November 1991 and until the first quarter of 1995,
incoming tourism showed an upward trend, averaging an annual
increase of 12 percent. Since then, a number of serious
terrorist incidents in Israel and the region, and the rising
tensions from the stalled peace process have led to a decline in
incoming tourism in Israel. 
 
Existing hotel facilities are limited. The number of rooms in
1995 was 35,000. According to forecasts, Israel will require an
additional 57,000 hotel rooms by the year 2006. Under the Law
for the Encouragement of Capital Investments, tax benefits and
financial incentives are available for investments in hotels and
other accommodation facilities, recreation sites and certain
other tourist attractions that meet specified criteria for
Approved Enterprise status. (See Chapter VII - Investment
Climate)
 
VI. TRADE REGULATIONS AND STANDARDS
 
Trade Barriers
 
Israel is a signatory of the GATT-Uruguay Round Agreement which
created the World Trade Organization (WTO). As such, its
government has agreed to replace non-tariff barriers with
equivalent duties which are to be reduced over time. In the
United States-Israel Free Trade Area Agreement (FTAA), signed in
1985, both parties agreed to remove all tariffs by January 1995
while allowing non-tariff protection for sensitive agricultural
products which are subject to agricultural policy considerations. 
According to the U.S. government, the combination of the FTAA and
the WTO agreements requires Israel to open its market completely
to U.S. products. The GOI argues that since both the FTAA and
the WTO Agreement allow each economy to protect its sensitive
products from undue competition, it is necessary to renegotiate
the U.S.-Israel agreement to take the WTO requirements into
account while not leaving Israeli agriculture without some degree
of protection. 
 
An interim solution to the impasse was negotiated in late 1995,
when a five year framework agreement was developed, wherein
Israel undertook to grant U.S. food and agricultural products
gradual, continuously improving access to its markets. The
agreement is to be renegotiated in the year 2000. The result of
the framework agreement is that total bans and limited quotas
which existed at the end of 1995 were replaced by Tariff Rate
Quotas (TRQs) and duties or fees which provide U.S. products with
at least a ten percent advantage over Most Favored Nation (MFN)
tariffs. The U.S. preference is scheduled to improve annually by
varying proportions, depending on the sensitivity of the product.
 
The consequence of this arrangement is that fresh fruits and
vegetables, and a number of other agricultural products, of which
the import had traditionally been totally banned, may now be
imported with payment of significant duties. Beginning in 1996
U.S. apples and pears as well as a variety of frozen berries and
other fruits have found a willing market among Israeli consumers. 
 
Because agricultural rules of the Israel-U.S. FTAA allow
imposition of fees and levies but not duties, the Israel Customs
Tariff shows all agricultural products of U.S. origin as being
exempt from duty. However, a separate order indicates the fees
and levies imposed on imports from the U.S., many of them
exceeding 100 percent. 
 
Similar to locally produced goods, imports, including those from
the U.S. are subject to a 17 percent Value Added Tax (VAT) and,
for some products, purchase taxes. In the case of food,
beverages and tobacco, purchase tax is imposed almost exclusively
on alcohol and alcoholic beverages, excluding table wine, and on
cigarettes. "Fees" on wine were reduced from 70 percent in
January, 1996, to 50 percent when the agreement was signed. They
fall by two percent annually to 40 percent in the year 2001. See
below the section on Tama, the factor used to inflate the base
value on which purchase taxes are imposed. 
 
Customs Valuation
 
Since January 1998 Israel has implemented the Customs Valuation
principles of the WTO code. Under the new regulations, the basis
for valuation is the Transaction Value, in most cases the CIF
price. With the implementation of the new system, the Harama
(uplift in Hebrew) practice was eliminated. The Harama, which
allowed an arbitrary uplifting of the CIF basis by 2-10 percent
to arrive at a Regular Price, had been strongly criticized by the
U.S. Government as being contradictory to FTAA principles.
 
Israel levies a 17 percent VAT on virtually all products sold in
Israel, including imports. The VAT is levied on the CIF landed
cost plus purchase tax. VAT is recovered by the importer upon
resale of the goods and is ultimately paid by the consumer on the
basis of the retail price.
 
Israel levies purchase tax on some products, primarily luxury and
consumer items. Calculation of the tax is based on the wholesale
price of domestic products and on the CIF landed value plus
"Tama" (the Hebrew acronym for "additional rate of increase") on
imports. Tama was designed to artificially raise the declared
value of an imported product for purposes of calculating purchase
taxes. The Tama system results in higher taxation on imported
goods than on domestic products. The U.S. and Israel Governments
have agreed upon an "Optional Tama track", under which a U.S.
exporter can declare the real wholesale price of a product for
the calculation of purchase tax. The purchase tax is then
applied to the adjusted price.  Interested U.S. companies should
contact the U.S. Department of Commerce's Israel Desk for further
information on this system.
 
Import Licenses
 
All import licensing requirements for U.S.-made consumer and
industrial goods have been eliminated under the FTAA, including
for most food and agricultural products. However, in the case of
products for which there is a TRQ, the Ministry of Agriculture or
the Ministry of Industry and Trade issues a license exempting the
bearer from duty on the quantity indicated in the license. 
Importers wishing to bring in goods without availing themselves
of the TRQ are not required to obtain a license except for
veterinary or phytosanitary purposes, or from the Food Control
Administration of the Ministry of Health.
 
For information on entry procedures and requirements for food
direct inquiries to Ministry of Health, Food Control
Administration, 12-14 Ha'arba'a St., Tel Aviv 64 739, Israel;
tel: 972-3-563 4781, fax: 972-3-562 5769.
 
Under the United States-Israel FTAA, all remaining duties imposed
on U.S.-made products were eliminated on January 1, 1995. As
Israel also maintains FTAA's with the EU and EFTA, U.S.-origin
products compete on a par with most European goods and have a
substantial market access advantage over suppliers from Japan and
other countries of the Far East. As Israel's FTAA with the EU
does not include agriculture, the duties paid on food items of
European origin partially offset the increased transportation
expenses which add to the cost of U.S. products. (See
"Membership in Free Trade Agreements" below.)
 
Although import duties have been eliminated for U.S. imports into
Israel, they are still subject to VAT and, for some products,
purchase taxes as described below.
 
Licensing Procedures for Medical Equipment
 
Licensing of imported and locally manufactured medical devices
and equipment is subject to enforcement according to a Ministry
of Health directive which went into effect on January 1, 1995. 
Companies interested in exporting medical equipment or devices to
Israel should first request a letter of acceptance from the
Ministry of Health in accordance with the export provisions
contained in Section 801(e) of the U.S. Federal Food, Drug &
Cosmetic (FD&C) Act. The request should be accompanied by one of
the following documents:
- 510(k), 
- Pre-Market Approval (PMA), or 
- Investigational Device Exemption (IDE). 
Because the Ministry of Health uses FDS standards and ECRI
nomenclature for the purpose of issuing licenses, the licensing
procedures for American-made medical equipment are facilitated.
 
Implantable medical devices require mandatory labeling in the
patient's file for tracking and surveillance purposes. The
labels must contain the following information:
- Name and address of the manufacturer
- Name and address of the importer
- Type of implant
- Sub-type of implant
- Size
- Serial number
- Batch number
- Reused implant
- Medication element needed
 
The registration authority is:
Ministry of Health
Pharmaceutical Division
Medical Device Department
P.O.B. 1176
Jerusalem 91010
Tel: 972-2-568 1216, 568 1217
Fax: 972-2-572 5827
 
Export Controls
 
Israel maintains very few export controls. Those that do exist
are primarily targeted against internationally controlled
substances and/or designed to protect national security.
 
Israel is adherent to the MTCR and maintains export controls on a
variety of military and sensitive technologies destined for
certain proscribed countries. U.S. export licenses are required
for exports to Israel of certain high-technology, defense
equipment/technologies and weapons for chemical/biological
warfare. U.S. exporters should ensure that they are in
compliance with the export control regulations as administered
through the U.S. Department of Commerce, Bureau of Export
Administration and U.S. Department of State, Office of Defense
Trade Controls. 
 
Import/Export Documentation
 
Shipping documentation
 
U.S. exporters to Israel must follow U.S. Government requirements
regarding export control documentation. The Israeli Customs
Services prefer that exporters use their own commercial invoice
forms containing all required information including name and
address of supplier, general nature of the goods, country of
origin of the goods, name and address of the customer in Israel,
name of the agent in Israel, terms, rate of exchange (if
applicable), Israel import license number (if applicable),
shipping information, and a full description of all goods in the
shipment including shipping marks, quantity or measure,
composition of goods (by percentage if mixed), tariff heading
number, gross weight of each package, net weight of each package,
total weight of shipment, price per unit as sold, and total value
of shipment. The total value of the shipment includes packing,
shipping, dock and agency fees, and insurance charges incurred in
the exportation of the goods to Israel. The commercial invoice
must be signed by the manufacturer, consignor, owner, or
authorized agent. U.S. exporters should also double-check with
their freight forwarder, shipping company or importer what other
documentation, including bill of lading and packing list, is
required.
 
U.S. Certificates of Origin for Exporting to Israel
 
In order to benefit from the provisions of the FTAA, a special
"U.S. Certificate of Origin for Exporting to Israel" (CO) must be
presented to Israel Customs. The certificate does not need to be
notarized or stamped by a Chamber of Commerce if the exporter is
also the manufacturer. Instead, the exporter should make the
following declaration in box 11 of the certificate:
"The undersigned hereby declares that he is the producer of the
goods covered by this certificate and that they comply with the
origin requirements specified for those goods in the U.S.-Israel
Free Trade Area Agreement for goods exported to Israel".
 
The actual forms are printed by a number of commercial printing
houses in the U.S. For further information on how to obtain
them, U.S. exporters may wish to contact the U.S. Department of
Commerce Israel Desk Officer.
 
It is possible for exporters to apply for a blanket CO, or
"Approved Exporter" status. An "approved exporter" is only
required to present an invoice which substitutes for the CO, and
which contains an "approved exporter" number and a declaration
that the goods comply with the origin requirements. 
Certification and notarization are not necessary.
 
Authorization Procedures for "Approved Exporter" Status
 
a) A manufacturer or exporter who wishes to become an "Approved
Exporter" should complete a declaratory form and present it to
the Export Department, Israel Customs Services, 32 Agron Street,
P.O. Box 320, Jerusalem. Potential candidates are U.S. firms
with total annual exports to Israel of at least $20 million who
have a clean record with the Israel Customs Services.
 
b) Israel Customs will examine whether the manufacturer or
exporter complies with the criteria and grant approval for
"Approved Exporter" status. The approved exporter will be given
an identity number to be stamped on all invoices. The approval
is valid for six months, after which the exporter should receive
an automatic extension from Israel Customs. If the exporter does
not receive an extension notice he/she must terminate use of the
approval.
 
Compliance Procedures for Approved Exporters 
 
a) The "Approved Exporter" should stamp the invoice with his/her
identity number and add the following declaration:
"The undersigned hereby declares that the goods listed in this
invoice were prepared in the U.S. and they comply with the origin
requirements specified for those goods in the U.S.-Israel Free
Trade Area Agreement for goods exported to Israel."
 
b) For shipments of mixed goods, separate invoices must be
prepared for goods which do not comply with origin requirements
and/or for which approval to operate as an "Approved Exporter"
has not been granted.
 
Temporary Entry
 
Temporary entry of U.S.-made goods may be effected either with an
"ATA Carnet" issued by a U.S. Chamber of Commerce, or through
payment of a deposit, reimbursable upon re-export.
 
Labeling/Marking Requirements
 
 
Israel has strict marking and labeling requirements which
frequently differ from those of other countries. It is
recommended that U.S. exporters consult with their Israeli
importer prior to shipping.
 
All imports into Israel must have a label indicating the country
of origin, the name and address of the producer, the name and
address of the Israeli importer, the contents, and the weight and
volume in metric units. In all instances, Hebrew must be used;
English may be added provided the printed letters are no larger
than those in Hebrew. Food products sold in Israel must be
packaged according to standard uniform weights and volumes,
usually metric. If not, the vendor must indicate the price per
unit of weight or volume on the product. Nutritional labeling is
compulsory on all packaged foods. Specific information on these
standards is available from the Director, Department of Weights
and Measures, Ministry of Industry and Trade, 30 Agron Street,
Jerusalem 94190; tel: 972-2-622 0601, fax: 972-2-560 5994.
 
Marking should be done by printing, engraving, stamping, or any
other means, on the package or the goods themselves. If marking
is not possible, a label should be well-sewn or stuck to the
goods or package. Marking details should be clear, legible, easy
to trace, and in a different color from the background in order
to be clearly distinguishable. Printing dyes and other marking
materials should not affect merchandise quality. The marking
should not be blurred.
 
On a multi-layered package, the external layer should be marked. 
If the external layer is transparent the marking should be done
underneath that layer, provided it is still clear and legible. 
On a package containing subpackages, the labeling should specify
the number of subpackages, the net content of a subpackage, and
the overall net weight of the package. An aerosol container
should indicate the net quantity weight unit for semi-solid or
powder products, and volume unit for liquids. For products that
tend to lose weight under regular marketing/commercial
conditions, the maximum quantity of expected depletion should be
mentioned.
 
Specific labeling regulations apply to some consumer goods, paper
products, handbags, musical recordings, fertilizers,
insecticides, chemicals, pharmaceuticals, some food products,
seeds, and alcoholic beverages. In addition, special packaging
requirements apply to fruit, plants and meat. Outside and inside
containers of dangerous articles, such as poisons, insecticides,
drugs, flammable goods, ammunition, explosives, reptiles,
insects, bacteria and radioactive materials should be clearly
marked. For information on food labeling and packaging contact
the Israel Ministry of Health, Food Control Administration, 12-14
Ha'arba'a Street, Tel Aviv 61070; tel: 972-3-563 4782, fax:
972-3-562 5769. 
 
Prohibited Imports
 
Israel maintains restrictions on imports of what the government
considers to be economically sensitive products subject to
agricultural policy considerations. These are mainly high
variable levies. 
 
U.S. meat exports face an especially difficult environment due to
the enactment of a complete ban on non-kosher meat imports at the
end of 1994. The ban violates Israel's national treatment
obligations under the WTO and U.S.-Israel FTAA. The U.S.
continues to consult Israel on this issue. 
 
The only other product prohibitions are on internationally
controlled substances and/or are designed to protect public
morals, human, animal or plant health, or national security.
 
Standards
 
It is the declared policy of the GOI to adopt international
standards wherever possible and to implement mandatory standards
related only to safety, health, and the environment. In
practice, however, many products are still subject to mandatory
standards, some of which were designed to favor domestic
producers over importers. These local standards often specify in
terms of design rather than performance. 
 
The Standards Institution of Israel (SII) is the agency
responsible for the development of most product standards,
compliance testing, and certification of products and industry
quality assurance systems. For further information, interested
firms should contact the Standards Institution of Israel, 42
Levanon Street, Tel Aviv 69977; tel: 972-3-646 5154, fax:
972-3-641 9683.
 
Israel has not officially adopted ISO-9000 standards, although
there is a growing preference for ISO-9000 standard products
among Israeli importers. Also, many GOI procurements, notably
for IEC and other GOI-owned companies specify ISO-1000 or higher
standards.
 
Most imported food products are subject to metric system size
requirements which may exclude standard sizes used by U.S.
companies, thereby requiring them to package products especially
for export to Israel. The GOI implemented unit-pricing standards
in September, 1998, which should relieve U.S. products from most
of the weight and measure restrictions. Although the metric
system is not mandatory for other product areas, metric standards
are preferred by Israeli importers as non-conformity may affect
marketability. The electrical standard is 220V, 50Hz.
 
The GOI requires that food and health products be registered with
the Ministry of Health before they can be sold in the country. 
FDA approval for food and healthcare products is not mandatory,
but it is preferred by Israeli importers as it accelerates the
product registration process and import license approval. 
Product registration normally takes from 4-6 weeks if all
documentation is in order. FDA approval of a product does not
guarantee its acceptance by the Israeli authorities.
 
Free Trade Zones/Warehouses
 
Israel has one free trade zone, the Red Sea port city of Eilat. 
In addition to the Eilat Free Trade Zone, there are three free
ports: Haifa Port (including Kishon); the Port of Ashdod; and
the Port of Eilat. In May 1994 the Israeli parliament passed
legislation authorizing the establishment of Free Processing
Zones (FPZ's). However, by June 1998 no FPZ was operational.(See
"VII. Investment Climate" for further information.)
 
The Israeli government has plans to expand and upgrade the major
ports of Haifa (in the north) and Ashdod (in the south). There
is good quality warehousing in all of the major ports and trade
zones, but current capacity is inadequate in the face of growing
demand.
 
Special Import Provisions
 
There are no special import provisions.
 
Membership in Free Trade Arrangements
 
Israel has adopted a liberal import policy, and has thus far
concluded Free Trade Area Agreements (FTAAs) with the European
Union (EU), the United States, EFTA, Canada, the Czech Republic,
Slovakia, Hungary and Turkey.
 
Israel signed its first FTAA in 1975 with the EEC (now the EU)
which was fully implemented by 1989. A second FTAA was concluded
with the U.S. in 1985, under which all duties were eliminated on
January 1, 1995. A third FTAA was signed in 1992 with the EFTA
countries, followed by agreements with Canada, Turkey, Hungary,
Slovakia and the Czech Republic. As part of the peace treaty
with Jordan a preferential trade agreement has been agreed upon.
 
VII. INVESTMENT CLIMATE
 
Openness to Foreign Investment
 
The Israeli government places a high priority on encouraging
inward foreign investment. There are generally no restrictions
for foreign investors doing business in Israel, except for parts
of the defense industry that are closed to outside investors on
national security grounds. Investments in regulated industries
(e.g. banking or insurance) require prior government approval. 
There are no regulations regarding acquisitions, mergers, and
takeovers that differ for foreign investors. Foreign investors
are actively encouraged to participate in Israel's privatization
program, although the government is likely to require majority
Israeli control over certain sectors, such as air transport,
shipping, and telecommunications.
 
The Israeli government offers incentives for investment in
specified regions of the country and in certain economic sectors,
such as tourism and agriculture, to both residents and foreign
investors. All benefits available to Israelis are also available
to foreign investors, who in some cases may enjoy more generous
tax treatment than domestic investors. Details on the
government's investment incentives are provided below in the
section on performance requirements and incentives.
 
Various international agreements are in effect to finance
research and development (R&D) jointly with Israel on a national
treatment basis. The GOI actively encourages industrial research
and development, and the Office of the Chief Scientist at the
Ministry of Industry and Trade offers R&D grant incentives for a
wide variety of projects. The Israel-U.S. Binational Industrial
Research and Development Foundation (BIRD) promotes commercial
cooperation in R&D, and the United States-Israel Science and
Technology Commission was established to foster the
commercialization of technology in the two countries. The
Binational Agricultural Research and Development Foundation
(BARD) supports joint U.S.-Israel research on agricultural topics
of mutual interest to the two countries. Research is carried out
jointly in the U.S. and Israel by mixed research teams. Specific
R&D incentives are discussed in the Performance Requirements and
Incentives section.
 
Right to Private Ownership and Establishment
 
The Israeli legal system protects the right of both foreign and
domestic entities to establish and own business enterprises, as
well as the right to engage in remunerative activity. Private
enterprises are free to establish, acquire, and dispose of
interests in business enterprises. As part of its current
privatization efforts, the Israeli government actively encourages
foreign investment in privatizing government-owned entities.
 
Both the Ministry of Industry and Trade and the Ministry of
Finance are concerned with fair trade, and there is a law against
unfair competition. It is Israeli government policy to equalize
competition between private and public enterprises, although
there are problems with competition because of the existence of
monopolies and oligopolies in several sectors in Israel. In some
instances, private sector firms have charged that their public
sector competitors are unfairly advantaged by government
ownership. The courts are reviewing this issue. In the case of
monopolies, defined as entities which supply more than 50 percent
of the market, prices are controlled by the government.
 
Protection of Property Rights
 
Israel has a modern legal system based on British mandatory and
British case law. Effective means exist for enforcing property
and contractual rights. Courts are independent; there is no
government interference in the court system. Israeli civil
procedures provide that judgments of foreign courts may be
accepted and enforced by the local courts.
 
Secured interests in property, both chattel and real, are
recognized and enforced by the Israeli judicial system. A
recognized and reliable system of recording such security
interests exists.
 
While Israel has a legislative framework to ensure the protection
of intellectual property rights (IPR), enforcement is a problem,
because of inadequate arrests, prosecutions, convictions,
penalties, and scarce policing resources. The U.S. Trade
Representative, in recognition of a serious increase in the
illegal copying and distribution of audio CDs, video cassettes
and software, elevated Israel to the "priority watch list" in the
1998 Special 301 Report.
 
The GOI plans to address the problems listed by the U.S. Trade
Representative -- those of an old statutory framework for
copyright law and inadequate enforcement -- through IPR revisions
in the areas of patents, copyrights, trademarks, industrial
designs, integrated circuits, and cable broadcasting. Progress
in the committees convened to draft new legislation is varied,
with legislation nearly ready for introduction to the Knesset,
Israel's legislative body, in the area of design, trademarks, and
copyrights. All legislation will be based on the guidelines of
the World Intellectual Property Organization's (WIPO) model
legislation. In addition, as a signatory of the GATT Uruguay
Round and World Trade Organization (WTO) agreements, including
Trade in Intellectual Property and Services (TRIPS), Israel has
stated it will make the revisions necessary to meet all GATT
TRIPS requirements. Israel also intends to establish a National
Police unit, dedicated to IPR enforcement. 
 
Currently, there are available to owners of rights the full range
of criminal and administration relief, including injunctive
relief, damages, seizure and destruction of infringing goods;
provisional relief, customs border controls and criminal and/or
civil sanctions against infringers. As noted, however, the low
priority given to IPR enforcement by the police means that IPR
violators are often able to escape punishment. Israel adheres to
the major multilateral IPR agreements, including the Berne
Convention for the Protection of Literary and Artistic Works, the
Paris Convention for the Protection of Industrial Property, and
the Geneva Phonograph Convention.
 
Patents
 
Patent protection is available comprehensively, including product
as well as process protection for pharmaceuticals. Israel
employs compulsory licensing in limited circumstances: for
medicines, for a dependent patent (i.e., an earlier patent on
which use of a later patent is dependent), in case of abuse of
monopoly, where the Arab boycott precludes use of the patent, or
where necessary to protect the public interest. Patent
protection is provided for twenty years from filing.
 
Under the revised patent law, which is expected to be introduced
to the Knesset in 1998, compulsory licensing for medical purposes
is likely to be eliminated. The Embassy has received no recent
complaints by American businesses regarding compulsory licensing.
 
Copyrights
 
Israel's present copyright law is based on the United Kingdom
Copyright Act of 1911, with subsequent amendments. Protection
includes the exclusive right to (a) copy or reproduce the work;
(b) translate or otherwise adapt the work; (c) distribute copies
of the work; and (d) publicly communicate the work. There is no
explicit protection for derivative works, but protection would be
granted, provided the derivative work includes sufficient
elements of originality.
 
At present, there is no separate statutory protection for
computer software, which is protected under the general copyright
law, as "literary works." Sound recordings are protected under
the present copyright act and an amendment to the copyright act
has been enacted into law, which provides for rental and leasing
rights for sound recordings and compensation to copyright holders
for private copying onto blank cassettes. Rental rights for
software will be included under the new draft copyright act,
currently being prepared for introduction to the Knesset by
October or November of 1998.
 
Trademarks
 
 
Trademarks are protected under the Trade Marks Ordinance, and
appellations of origin are protected under the Appellations of
Origin (Protection) Law. Reform legislation is pending but
passage is not expected until late 1998 or early 1999.
 
Trade Secrets
 
There is no protection for trade secrets under the rubric of
intellectual property law in Israel. Trade secrets are
classified as privileged information under the Evidence and Civil
Procedure Law, and the Penal Law provides that an employee with
express knowledge of a trade secret who reveals it may be
imprisoned for up to six months. In addition, a tort action may
be brought against an individual who divulges a trade secret
under Israeli tort law. There is no limitation on the length of
time for classifying an item as a trade secret. The GOI is also
preparing legislation for introduction in 1998-1999 for the
protection of trade secrets.
 
Integrated Circuits
 
At present, there is no protection for semi-conductor chip
design. The Microchip Topography Committee, operating under the
auspices of the Ministry of Justice, is drafting legislation that
is expected to meet all requirements of GATT-TRIPS and the
Washington treaty on semi-conductor chips. 
 
Cable Broadcast Law
 
The proposed legislation does not contain any compulsory
licensing or mandatory arbitration features. The draft law is
still under inter-ministerial review and enactment is not
expected before late 1998 at the earliest.
 
Performance Requirements and Incentives
 
There are no universal performance requirements for investors in
Israel. However, performance requirements are sometimes included
in contracts with the government, particularly relating to
exports.
 
Two basic laws provide the framework for investment incentives in
Israel: the Encouragement of Capital Investments Law, 1959 (with
subsequent amendments), and the Encouragement of Industry (Taxes)
Law, 1969. In addition, there are the Encouragement of
Industrial Research and Development Law, 1984, and the Law for
the Encouragement of Investments (Capital Intensive Companies),
1990. The Law for the Encouragement of Investments expired
December 31, 1997. 
 
Approved Enterprise Status
 
Foreign investors do not need government approval to invest in
Israel. To receive investment incentives from the Israeli
government (detailed below), however, such investors must apply
for status as an approved enterprise. They are required to
submit an application to the Ministry of Industry and Trade,
Investment Center, which identifies physical and financial
details of the projected investment; background information on
the investors; sources of financing; forecasts of sales,
operating results, cash flow, and "break-even point"; and
projected manpower requirements. Among the criteria applied by
the Investment Center in deciding whether to grant such status is
a legally-mandated cost-benefit test which evaluates the
long-term value of the project from the point of view of the
Israeli
economy. Government approval for the incentives program is not
given if investment in a proposed area is considered saturated. 
Investors may be required to disclose proprietary information in
the application for approved status.
 
Investors may apply for either of two forms of investment
incentives: the grants option or the tax exemption option. 
Under each plan, the extent of the benefit is determined by the
geographic location of the investment. For purposes of
investment support, Israel is divided into three regions: 
national priority area A (roughly speaking, the Negev desert and
northern Galilee), national priority area B (the western Galilee
and certain areas between Jerusalem and Ashdod), and the central
region (generally, the coastal region from Haifa to Ashkelon). 
Priority area A receives the most generous treatment and the
central region the least.
 
Grants Option
 
Benefits available under the grants option include both direct
government subsidization of the investment (detailed below) and
reduced tax rates. The amount of the grant is based only on
planned investment in fixed assets, such as buildings and
equipment, and at least 30 percent of the investment must be
financed by the investor's own equity. The investment project
must be completed within three years of the date of approval of
the investment, and at least 25 percent of the project must be
completed in the first year.
 
The investment incentives provided under the grants option
include:
 
 a. Reduced tax rates, as spelled out in Table A
 below, and accelerated depreciation, and 
 b. Direct grants, which depend on the type of project
 and its location in the country.
 
Grants available, by type of investment and region
(in percent of amount invested)
 
Type of  Priority Priority Central
Investment Area A Area B Region
 
Industry (1)(2) 20 10 0
Hotels (1) 20 20 0
Other tourism 15 0 0
 
Notes:
(1) In 1997 alone, industrial investments of less than NIS 160
 million (approximately $45 million) and hotels were
 eligible for investment grants of 24 percent in area A and
 12 percent in area B. These grant rates dropped to 20
  percent and 10 percent, respectively, in 1998.
(2) Beginning in 1997, approved industrial investments located
 in area A were eligible, under the grants option, for a
 complete tax holiday of two years and five additional
 years of reduced taxes, as detailed in Table A below.
 
Tax Holiday Option
 
The tax holiday option is available to incorporated businesses
only (subject to tax on corporate income). The investment plan
to be submitted by the interested investor must include only
fixed assets. The plan must be completed within three years of
the date of its approval, and at least 25 percent of the plan
must be completed within one year.
 
The incentives available under the tax holiday option include:
 a. Accelerated depreciation, and
 b. A tax holiday on undistributed profits, as specified
 below. If a firm elects to distribute profits, it
 will be liable for taxation at the rate at which it
 would have had to pay had it not chosen the tax
 holiday option.
 
Tax Holiday Option -- Benefits by Region
 
Area A 10 years full tax holiday
Area B 6 years full tax holiday plus one year at 
 reduced tax rates shown in Table A.
Central Region 2 years full tax holiday plus five years at 
 reduced tax rates shown in Table A.
 
Table A: Tax Rates on Approved and Unapproved Enterprises
 
For approved enterprises electing the grants option, the tax
rates in the table are applicable for seven consecutive years, or
for ten years in the case of enterprises that are at least 25%
foreign-owned.
 
Approved Enterprises by Local/Foreign Ownership
 
 Unapproved Local 49-74%  74-90% 90-100%
1. Taxable Income 100 100 100 100 100
2. Corp. Tax Rate 36 25 20 15 10
3. Balance 64 75 80 85 90
4. Total Tax on 36 25 20 15  10
 Undistr. Income 
5. Tax on Dividends 16* 11.25 12 12.75 13.5
 (15% of Balance)
6. Total Tax on 
 Distr. Income 52.0 36.25 32.0 27.75 23.5 
 
* - Tax on dividends distributed to individuals or companies
abroad. Dividends paid to Israeli companies are untaxed.
 
Research and Development 
 
The Israeli Government is particularly interested in research and
development (R&D) and provides grants of up to 66 percent of
approved R&D expenditures through the Ministry of Industry and
Trade's Office of the Chief Scientist (OCS). This is a highly
active office, providing most of the R&D monies spent to develop
Israel's infrastructure ($350-$400 million annually). Its grants
take various forms, from the 66 percent available to start-up
companies, to the 60 percent for those investing in Development
Area "A", to the 50 percent for standard R&D projects, to the 20
percent available for foreign subcontractors. There are also
specific tax benefits and credits available for R&D investors. 
Overhead expenses are provided for as an agreed-upon percentage
of direct R&D expenditure, usually around 45 percent of
sanctioned gross salaries. If a grant-supported R&D project
results in a commercial project, repayment of the grant is
usually stipulated, generally through royalty pay backs at a set
rate. Repayment is not required for projects that do not achieve
commercialization.
 
For joint ventures between Israeli and American firms, research
funding is also available through the Israel-U.S. Bilateral
Industrial Research and Development Fund (BIRD). BIRD funding is
in the form of conditional grants of up to 50 percent of approved
R&D costs over a two- to three-year period. These grants are
repayable if a project earns revenues, at an agreed-upon rate of
gross sales. Total repayment does not exceed 150 percent of the
grant. Because BIRD encourages R&D projects, it tends to more
readily support new programs than the private sector. The
U.S.-Israel Science and Technology Commission established in 1994
also has the objective of commercializing technology through
joint ventures.
 
"Capital Intensive" Investments. 
 
In 1990, the Israeli parliament passed the Law for the
Encouragement of Investments (Capital Intensive Companies),
providing further tax benefits for investors qualifying as
"capital intensive companies." A company may be qualified as a
"capital intensive company" by the Minister of Finance if:
a) It has paid up capital of no less than $30 million, of
 which at least 75 percent is channeled into qualifying
 activities;
 
b) Share ownership is restricted to non-residents; and
 
c) The aim of the company is to either a) conduct business in
 Israel in areas of activity which have been designated as
 "qualifying activities"; or b) invest in Israeli companies
 whose primary activities are "qualifying activities."
 
"Qualifying activities" include the establishment or expansion of
businesses in areas such as industry, agriculture, tourism,
transportation, construction, water, energy, communications,
computers, etc.
 
Benefits to the company include:
a) Real capital gains from the sale of shares or fixed assets
 (including real estate) which were used in qualifying
 activities are taxed at the rate of 25 percent, lower than
 the standard rate of taxation for businesses.
 
b) Revenue income of the company derived from these activities
 is taxed at 25 percent.
 
c) Revenue income which the company derives from dividends
 paid from a "qualified investment" is taxed at 15 percent.
 
U.S. investors interested in learning more about Israel's system
of investment incentives are encouraged to refer to: 
 Investment Center
 Ministry of Industry and Trade
 30 Agron St.
 Jerusalem 94190
 Tel: 972-2-622-0220
 Fax: 972-2-624-5110
 http://www.israel-industry-trade.gov.il
 
Transparency of the Regulatory System
 
Problems with competition are evident in Israel, although it is
government policy to encourage increased competition through
market liberalization and deregulation. Tax, labor, health, and
safety laws are frequently an impediment to the foreign investor
in Israel, mostly because of high levels of regulation. Although
there is a current trend towards deregulation, Israel's
bureaucracy can still be difficult to navigate, especially for
the foreign investor unfamiliar with the system. It is important
that potential investors get approvals or other commitments made
by regulatory officials in writing before proceeding, rather than
relying on unofficial oral promises.
Corruption
 
While some Israeli politicians have been indicted in recent years
on charges of improper use of campaign donations, corruption is
not generally regarded as a serious problem in the Israeli
business environment, and should not, as a rule, pose a problem
for the foreign investor. 
 
Labor
 
Israel's civilian labor force numbered 2.2 million at the end of
1997 (excluding Palestinians from the West Bank and Gaza and
short-term foreign workers, mostly from East Asia and Eastern
Europe). Highly skilled and well-educated, the Israeli labor
force continues to be a major asset to the economy. Those
working in professional, technical, scientific, and academic
positions account for 25 percent of the workforce. Skilled
workers make up another 24 percent. Approximately 38 percent of
the workforce have more than 13 years of education and over 17
percent have 16 or more years of education. More than 30 percent
of university students specialize in fields with high industrial
R&D potential
--engineering, mathematics, physical sciences, and medicine. The
rapid growth of Israel's high-tech industries in recent years has
increased the demand for workers with specialized skills; such
workers are in short supply, and their salary levels are rising
accordingly.
 
The Israeli labor market has also successfully absorbed a
significant portion of the roughly 750,000 immigrants who have
arrived since 1989. Among them are well-trained scientists,
physicians, and academics from the former Soviet Union. Such
workers can be expected to play a greater role in boosting the
performance of the Israeli economy in the coming years.
 
In the past few years, the number of Palestinian day laborers
from the West Bank and Gaza has dropped sharply, as Israel has
turned increasingly to short-term contract workers, mostly from
East Asia and Eastern Europe, to work in such fields as
agriculture and construction. 
 
Most Israeli workers are organized by the national labor
federation, the Histadrut. The fundamental changes in the
Histadrut first instituted in 1994 are continuing: a new
leadership has moved to drastically reshape the labor federation,
reducing its staff and narrowing its focus.  No longer linked to
the nation's health care system, and having divested itself of a
number of assets, the Histadrut plans to concentrate on its core
trade-union activities and the provision of services related to
employment. In addition, the organization will expand to include
small businesses and factories, including those in which
collective bargaining agreements do not presently exist. 
 
Collective bargaining negotiations in the public sector take
place between the Histadrut and the Ministry of Finance,
representing the government. In the private sector, negotiations
at the national level between the Histadrut and the Employers
Association are supplemented by local negotiations to finalize
details. Strikes and workers' sanctions in the private sector
are relatively rare, but occur more frequently in
government-owned enterprises, including the defense industry. 
The government and Histadrut cooperate to ensure the protection
of worker rights as defined by the International Labor
Organization (ILO). The Histadrut opposes the privatization of
essential industries and those of strategic importance; it has
accepted privatization of other concerns on the condition that
workers rights are protected and labor agreements secured for a
period of time. 
 
Israel strictly observes the Friday afternoon to Saturday
afternoon Sabbath, and special permits must be obtained from the
government authorizing Sabbath employment. At the age of 18,
most Israelis are required to perform 2-3 years of national
service. Until age 50, Israeli males are required to perform
30-50 days of military reserve duty annually, during which time
they are compensated by the National Insurance Institution.
 
Efficient Capital Markets and Portfolio Investment
 
Israel actively seeks foreign participation in its domestic
capital markets. Credit is allocated on market terms. Various
credit instruments are available to the private sector, and
foreign investors can receive credit on the local market. Legal,
regulatory, and accounting systems are transparent and conform
with international norms, although the prevalence of
inflation-adjusting accounting means that there are differences
from U.S.
accounting principles. The regulatory framework for portfolio
investment is currently being tightened in light of rapid growth
of non-trading scandals. The government hopes to provide a more
effective regulatory environment and supervision to help
encourage continued expansion of capital markets in a competitive
and fair atmosphere. 
 
The Israeli banking system is financially sound, although the
bank supervisory authorities have taken steps to limit its
exposure to the construction industry, while also expressing
concern over the risks involved in the growing use of foreign
currency-denominated loans by private borrowers. As a result of
a 1983 crisis in bank shares, the government owns the majority of
shares of the country's leading banks. A program to privatize
the banks is underway. Three large banks -- Bank Hapoalim, Bank
Leumi, and Israel Discount Bank -- dominate Israel's capital
markets, controlling well over 80 percent of industry assets. 
The government is currently undertaking a comprehensive bank
reform to enhance competition and improve regulation of the
banking industry. As of the end of 1996, the total assets of
Israel's five major banks amounted to an estimated $138 billion.
 
Most Israeli firms are not publicly traded and many of the
dominant firms that are traded publicly are controlled through
integrated holding companies. In the case of publicly traded
firms where ownership is widely dispersed, the practice of
"cross-shareholding" and "stable shareholder" arrangements to
prevent mergers and acquisitions is common, but not directed in
particular at preventing potential foreign investment. Hostile
takeovers are a virtually unknown phenomenon in Israel, given the
high concentration of ownership of most firms.
 
Israel has no laws or regulations regarding the adoption by
private firms of articles of incorporation or association which
limit or prohibit foreign investment, participation, or control. 
No practices exist in which private firms restrict foreign
investment participation or control in/of domestic enterprises.
 
Conversion and Transfer Policies
 
In 1998, Israel abolished most of its remaining controls on
foreign exchange, save only for limits on Israeli institutional
investors holdings of foreign securities and foreigners access to
certain hedging instruments. Nonetheless, despite the virtual
elimination of exchange controls, foreign exchange transactions
must still be reported to the central bank. Foreign residents
and recent immigrants can maintain unrestricted, freely
transferable accounts (called "Patakh" nonresident accounts) with
Israeli commercial banks. Once the "Patakh" account is
established, foreign investors can open a shekel account which
allows them to invest freely in Israeli companies and securities. 
These shekel accounts are fully convertible into foreign
exchange. 
 
Most transactions are conditional upon their performance being
carried out through an authorized dealer. An authorized dealer
is a banking institution licensed to arrange, inter alia, foreign
currency transactions for its clients. The authorized dealer
operates in accordance with the procedural instructions of the
Comptroller of Foreign Exchange and the operations of authorized
dealers are subject to the directives of the Supervisor of Banks.
 
Expropriation and Compensation
 
There have been no expropriatory actions affecting U.S.-owned
businesses in Israel in the recent past. Public authorities
rarely expropriate land, although they will do so in the near
future, with compensation, for the construction of a new
North-South highway which will run through the central part of
the
country. Property would only be expropriated if the possibility
had been indicated in a contract or as a result of a court order. 
Such an event remains unlikely, but, if it should occur, adequate
payment, with interest from day of expropriation until final
payment, is prescribed by law.
 
Dispute Settlement
 
In recent years, there has been one significant investment
dispute involving three U.S. construction firms. The cases
concern compensation for housing construction contracts canceled
by the GOI. The companies negotiated a compensation package with
the Israeli government only to have those packages withdrawn by
the government. Two of the companies have filed suit in the
Israeli court system while the other has not yet made a legal
claim. One of the two lawsuits has been settled. 
 
Israel has a written and consistently applied commercial law
based on the British Companies Act of 1948 as amended over time. 
The GOI is currently modernizing this law through legislation. 
Israel's commercial law contains standard provisions governing
company bankruptcy and liquidation. Personal bankruptcy is
covered by a separate bankruptcy ordinance. Monetary judgements
are always awarded in local currency.
 
The GOI accepts binding international arbitration of investment
disputes between foreign investors and the State. Israel is a
member of the International Center for the Settlement of
Investment Disputes (ICSID) and the New York Convention of 1958
on the Recognition and Enforcement of Foreign Arbitral Awards.
Political Violence
 
Israel is a parliamentary democracy with a relatively stable
domestic environment. The smooth transition in government
following the tragic assassination of Prime Minister Rabin in
1995 underlined the strength and continuity of Israel's
democratic traditions. Nonetheless, the unresolved conflict
between Israel and the Palestinians, now under negotiation, means
that the potential for politically-inspired violence and
terrorism still exists. U.S. citizens are urged to use caution
in their travels within Israel, particularly with respect to the
use of public transportation, since buses have been a frequent
target of terrorist violence in recent years.
 
Israel has signed peace treaties with Egypt (1979) and Jordan
(1994), and its borders with those two countries are open. The
lack of similar agreements with Lebanon and Syria means that
those borders remain closed, and the potential for violent
incidents remains.
 
Bilateral Investment Agreements
 
Israel has bilateral investment agreements with Bulgaria,
Estonia, France, Germany, Hungary, Latvia, Lithuania, Poland,
Romania, and Ukraine. It is currently negotiating agreements
with Albania, Argentina, Armenia, Belarus, Belgium, Britain,
Canada, China, Columbia, Cyprus, Czech Republic, Georgia, Greece,
India, Italy, Kyrgyzstan, Malta, Mexico, Moldova, Peru, Portugal,
Russia, Slovenia, Switzerland, Turkey, Turkmenistan, and
Uzbekistan. Other bilateral investment agreements are being
investigated as Israel continues to develop diplomatic relations
with more nations.
 
OPIC and Other Investment Insurance Programs
 
OPIC offers a full range of programs in Israel and currently
insures American direct investment in Israel against political
risk. OPIC is also active in financing projects sponsored by
U.S. investors in Israel. Israel is a member of the Multilateral
Investment Guarantee Agency (MIGA).
 
Foreign Investment Statistics
 
Foreign investment in Israel hit a new peak of $3.4 billion in
1997, well above the few hundreds of millions of dollars that
used to be the norm. In the past, outside investors shied away
from Israel because of several factors: high inflation until the
mid-1980s, frequent changes in rules and regulations, and
government intervention in the economy. Other factors
influencing investors included questions about political risk and
the Arab boycott. Such concerns still play a role, although
considerably diminished in recent years as the peace process has
reduced Israel's international isolation and improved its credit
rating.
 
In the past few years, Israel has more actively pursued and
encouraged foreign investment, particularly because of the
important role such investment plays in creating jobs for new
immigrants, a primary consideration for Israel. Moreover, the
ongoing peace process has opened Israel to more trade and
investment with countries formerly reluctant to do business with
it. In addition, the rapid development of Israel's high-tech
industries in recent years has attracted significant new flows of
foreign capital. As a result, net foreign investment (inflows
less outflows) in Israel has risen sharply over the past few
years: from a total of $505 million in 1992 to some $3.4 billion
in 1997, as noted below.
 
The stock of foreign direct investment in Israel totalled an
estimated $7.4 billion as of the end of 1997. In addition,
foreign investors held $2.1 billion in securities traded on the
Tel-Aviv Stock Exchange and $9.0 billion in the shares of Israeli
companies traded on foreign stock markets.
 
Foreign Investment Flows (in millions of dollars)
 
  1994 1995 1996 1997
  
A. Investment by Foreigners 
 in Israel 
 
Direct - Net 415 1516 2030 2569
--Inflows 645 1766 2375 3249
--Outflows  230 250 345 680
Securities - Net 183 386 331 712
--Inflows 991 1752 1831 4373
--Outflows 807 1365 1500 3659
Other - Net 28  17 83 125
Total 626 1912 2355 3406
 
B. Investment by Israelis Abroad
 
Direct - Net 735 646 743 670
New 765 759 1041 1015
Repatriations  29 113 299 345
Securities - Net -303 -15 -76 150
New 736 754 1948 1328
Repatriations 1039 769 2024 1178
Total 433 673 682  520
 
Source: Bank of Israel, Annual Report 1996.
 
 
VIII. TRADE AND PROJECT FINANCING
 
Brief Description of Banking System
 
Israel has a modern and sophisticated banking system, based on
the European "universal" banking model. The government currently
owns, and is in the process of privatizing, several of Israel's
largest banks, as the result of a bank shares crisis in the early
1980's. Despite its ownership, the government does not interfere
in the day-to-day management of the banks. Most types of loans
and project financing traditionally available in industrialized
countries are available in Israel. (Also see "VII. Investment
Climate, Capital Outflow Policy".)
 
Foreign Exchange Controls Affecting Trade
 
 
Israel does maintain foreign currency controls. Residents,
including companies that conduct business in Israel, may purchase
foreign currency for routine trade transactions but may not
transfer capital abroad or hold foreign assets without permits
from the Comptroller of Foreign Exchange of the Bank of Israel.
 
Two types of permit are available. The "general permit"
authorizes Israeli residents or non-residents to conduct current
transactions in foreign currency and with foreign residents
through an authorized dealer, or most commercial banks. Specific
permission for individual transactions is not required upon
receipt of this permit. Included in this permit are normal
commercial transactions for the import and export of merchandise
and the receiving or granting of normal credit associated with
these transactions. Non-residents must open a non-resident
(patah) account with a commercial bank to which the foreign
currency from abroad can be transferred. A "specific permit" is
required for non-routine transactions, such as establishing a
subsidiary or a branch in a foreign country.
 
General Financing Availability
 
There is no scarcity of capital or trade financing in Israel. 
There are no unusual rules or regulations concerning export
financing, apart from the foreign currency regulations noted
above. Loans at market interest rates are available from
commercial banks to finance the manufacture of exports including
the imports of raw materials and components for export products. 
Loan terms vary depending upon the raw material requirements,
cost of conversion and collection timeframe. 
 
Export Finance/Methods of Payment
 
Israeli business people have a reputation for reliability and for
making quick and on-time payments for goods and services. In
many cases, including the purchase of agricultural commodities,
payments are made without any recourse to financing. However, as
there are always exceptions to the rule, U.S. businesses should
take common precautionary measures when doing business in Israel.
 
The most common method of payment is by Letter of Credit (L/C). 
Collection without a L/C is not unusual, however. Cash Against
Documents (CAD) is the most common mechanism preferred by Israeli
importers. Since there is no guarantee of payment, as there is
in a L/C transaction, some exporters prefer to collect an advance
payment, or an irrevocable bank guarantee on a certain portion of
the sale. This practice is appropriate and recommended when
there is no past relationship and experience with the buyer. A
combination of L/C and CAD issued for the same Bill of Lading is
also acceptable to most local banks.
 
When substantial investment and engineering (as required for
custom-made products) are involved, it is not unusual for
exporters to demand advance payment of a certain portion of the
selling price. The Bank of Israel authorizes advance payment of
up to 35 percent or $200,000, whichever is lower. The $200,000
limitation does not exist for import of equipment.
 
Payment schedules vary. For raw materials, components and
semi-finished goods, credit is usually limited to 60 days. For
equipment and machinery more extended schedules range from six
months to two years.
 
The local banking system provides sources of short and long-term
credit and access to venture capital. Due to the relatively high
interest rates for local currency loans, many importers prefer to
seek U.S. Export-Import (ExIm) Bank financing. The ExIm Bank has
most of the leading Israeli banks as correspondents and may
supplement private sources of export financing with medium and
long-term loans. 
 
Export Financing and Insurance
 
Export financing and insurance for trade with Israel is available
through commercial sources, from City/State-sponsored export
financing and loan guarantee programs, and from the Small
Business Administration (SBA) in cooperation with the ExIm Bank,
which can provide U.S. exporters with export credit insurance,
pre-export financing and working capital guarantees. The ExIm
Bank can also provide Israeli buyers with fixed-rate financing
for their purchases from U.S. exporters. The ExIm Bank's
Environmental Export Insurance Policy provides enhanced
short-term insurance for medium and long-term loans and
guarantees for
environmental exports, projects and services. No special credit
instruments are available to U.S. exporters of agricultural
commodities, nor does Israel receive PL-480 or similar program
commodity grants.
 
Project Financing
 
There are several U.S.-Israeli Government funded organizations
which provide financing for joint U.S.-Israeli R&D and research
projects. These include: the U.S.-Israel Science and Technology
Commission and the BIRD Foundation which finance commercially
viable R&D projects in selected high-tech areas; the BARD
Foundation which finances agricultural R&D; and the Binational
Science Foundation which finances joint research projects.
 
The U.S. Overseas Private Investment Corporation (OPIC) provides
medium and long-term financing and investment insurance for
projects in Israel. Direct loans are available to projects
sponsored by U.S. small businesses. For larger projects, OPIC
will guarantee loans to projects sponsored by U.S. investors,
starting at $2 million per project. OPIC can also provide
fee-based feasibility studies to companies considering overseas
investments. 
 
ExIm Bank provides project finance through its Project Finance
Division, established in June, 1994. Upon completion of a
favorable evaluation, within 45 days from the commencement of the
evaluation by the Bank and a contracted financial consultant, a
preliminary project letter will be issued indicating the bank's
willingness to move forward on the financing offer. For more
information on financing opportunities, interested U.S. companies
should contact these organizations directly. ("Appendix C: U.S.
and Country Contacts". Also see "VII. Investment Climate" for
other investment financing opportunities and incentives.) 
 
Correspondent Banking Arrangements
 
Israel's three leading banks - Bank Leumi, Bank Hapoalim, and the
Israel Discount Bank -, as well as the Mizrahi Bank and the First
International Bank of Israel, maintain correspondent
relationships with major U.S. banks and have their own
subsidiaries in major U.S. cities. Interested parties should
contact their U.S. banker or these Israeli banks directly for
more detailed information on their respective services.
 
Major Correspondent Banks:
 
Bank Hapoalim
Bank Leumi Le-Israel
First International Bank of Israel
Israel Discount Bank
United Mizrahi Bank
 
IX.BUSINESS TRAVEL
 
Business Customs
 
Israel has a professional and westernized business environment in
which most U.S. business persons will feel at home. Israelis
arrive well-prepared for meetings, come straight to the point and
are very direct. Appointments can be made on fairly short
notice, but punctuality is desired. Business cards are
recommended. Business suits are appropriate for meetings with
private sector companies and government officials, but business
travelers will find business dress in both private sector and
government offices to be much less formal than in the U.S.,
especially during the summer months. English is widely spoken in
the business community and in government offices.
 
Israel is two hours ahead of Greenwich Mean Time (GMT) except
during March - September, when local time is advanced by one
hour. Most businesses and government offices work a 40-45 hour,
five day-work week, from Sunday through Thursday. Common office
hours are from 8:00 a.m. till 5:00 p.m. Retail outlets are also
open on Fridays, from 9:00 a.m. till 2:00 p.m. Banks are usually
open in the mornings, Sunday through Friday.
 
Travel Advisory and Visas
 
As a result of the 1967 war, Israel occupied the lands known as
the "Occupied Territories" (the West Bank, Gaza Strip, Golan
Heights, and East Jerusalem). Pursuant to the September 13, 1993
Israel-PLO Declaration of Principles on interim self-government
arrangements (DOP); the May 4, 1994, Cairo Agreement on the Gaza
Strip and Jericho Area; and the August 29, 1994 agreement on
preparatory transfer of powers and responsibilities, certain
powers and responsibilities for the Gaza Strip, Jericho and other
major cities in the West Bank have been transferred to the
Palestinian Authority. 
 
The following public announcement regarding potential violence in
Israel and the Occupied Territories was published on December 23,
1997:
 
The American Embassy in Tel Aviv, taking note of heightened
tension at the present, reminds all U.S. citizens that the
potential for violence in the area remains high.
 
Although they have not been specifically targeted for attack,
U.S. citizens have been killed in past terrorist actions in
Israel, the West Bank, and Gaza. The most recent attacks have
been in highly frequented shopping and pedestrian areas, and
public buses. The U.S. Government has no information that such
actions have been planned for the immediate future, but citizens
are reminded that in the past, premeditated terrorist attacks
have frequently taken place on Sunday morning and at rush hours. 
 
U.S. citizens should, at all times, avoid large crowds and
political demonstrations, and not remain in an area where a
demonstration or altercation appears to be developing. Such
gatherings can occur spontaneously, and have the potential to
become violent without warning.
 
U.S. citizens may contact the Consulate of the U.S. Embassy in
Tel Aviv at telephone 972-3-519 7575 for information and help in
Israel and the Gaza Strip. After hours number: 519 7551. The
fax number is 972-3-519 0315. The e-mail address is
acs.amcit-telaviv@dos.us-state.gov. 
 
For information and help in Jerusalem and the West Bank U.S.
citizens may contact the U.S. Consulate General in Jerusalem at
tel: 972-2-625 3288. After hours number: 625 3201. The fax
number is 972-2-272 2233.
 
All travelers are advised to refer to the latest Consular
Information Sheet for Israel and Travel Warnings issued by the
Bureau of Consular Affairs, Department of State, Washington, D.C. 
Recorded travel information is available at tel: (202) 647 5225. 
For information by fax, call (202) 647 3000. Internet address:
travel.state.gov.
 
The State Department advises U.S. citizens who plan to be in the
region for a substantial period of time to register at the U.S.
Embassy in Tel Aviv or the U.S. Consulate General in Jerusalem. 
When registering, U.S. citizens can obtain updated information on
travel and security in the area. 
 
Entry Requirements
 
Passports, an onward or return ticket, and proof of sufficient
funds are required for entry to Israel and the occupied
territories. A three-month visa may be issued free of charge
upon arrival, and may be extended by the Ministry of the
Interior. Visitors who plan to travel to Arab countries without
diplomatic relations with Israel may request to have their
Israeli entry visas stamped on a separate form at the port of
entry. Visitors who have been refused entry or have experienced
difficulties with their visa status during previous visits, or
who have overstayed a visa, can obtain information from the
Israeli Embassy or an Israeli consulate regarding the
advisability of attempting to return to Israel. Except during
periods of closures, U.S. citizens, except those of Palestinian
ancestry may enter and exit Gaza and the West Bank on a U.S.
passport with an Israeli visa. It is not necessary to obtain a
visitor's permit from the Palestinian Authority. Private
vehicles frequently encounter long delays entering or leaving
Gaza, and may also expect to be stopped at checkpoints entering
or leaving the West Bank.
 
International crossing points are now in operation between Israel
and Jordan at the Arava (Wadi Al-Arabah) crossing in the South,
and the Jordan River crossing (Sheikh Hussein Bridge) in the
North. Prior visas are not necessary for American citizens using
these two crossing points, but travellers will have to pay a fee. 
Travelers interested in crossing the Allenby Bridge, linking
Jordan with the occupied West Bank, should obtained visas and
bridge crossing permits in advance. (Note: Palestinian Americans
with residency in the West Bank must cross into Jordan using the
Allenby Bridge). Procedures for all crossings into Jordan are
subject to frequent changes. Travelers interested in the most
up-to-date border crossing information should contact the U.S.
Embassy in Tel Aviv or the U.S. Consulate General in Jerusalem. 
For further entry information, travelers may contact the Embassy
of Israel, 3514 International Drive, N.W., Washington, D.C.
20008, telephone (202) 364-5500, or the Israeli Consulate General
in Los Angeles, San Francisco, Miami, Atlanta, Chicago, New
Orleans, Boston, New York, Philadelphia, or Houston.
 
1999 Holidays
 
The following is a list of official Jewish and American holidays
observed by the U.S. Embassy, Tel Aviv:
 
January 1 New Year's Day
January 18 Martin Luther King's Birthday
February 15 President's Day
April 1 *Passover (first day)
April 7 *Passover (last day)
April 21 *Israel Independence Day
May 31 Memorial Day
May 21  *Shavuot (Pentecost)
July 5 Independence Day
September 6 Labor Day
September 11 *Rosh Hashana (New Year-first day) 
September 12 *Rosh Hashana (New Year-second day)
September 20 *Yom Kippur (Day of Atonement)
September 25 *Succot (Feast of Tabernacles)
October 2 *Simhat Torah(Rejoicing of the Law)
October 11 Columbus Day
November 11 Veterans Day
November 25 Thanksgiving Day
December 24 Christmas Day 
*Jewish Holidays: All businesses in Israel are closed
 
Business Infrastructure
 
Languages
 
Hebrew and Arabic are the two official languages of Israel. 
English is the second and principal international language. Most
signs in public places are in all three languages. Due to the
diversity of the immigrant population, most Israelis are
multilingual. 
 
Transportation
 
Israel has advanced inland and international transportation
facilities. An extensive road network links the entire country. 
The railway system provides limited passenger services to the
center and the north between Jerusalem, Tel Aviv and Haifa, and
more extensive freight services from the north to the Beer Sheva
region in the south. Israel is connected internationally by
means of air and waterways. Ben Gurion International Airport is
the center of air passenger and cargo operations. Internal air
services connect the major cities of Tel Aviv, Haifa and
Jerusalem to Eilat in the south and to the Galilee region in the
north. The three main ports located in Haifa, Ashdod and Eilat
offer full freight services for international shipping. 
 
Communications
 
Israel's national and international telecommunications systems
are being constantly improved and upgraded to cater to increasing
demands. Many Israeli high-tech companies operate in the data
communications sector, providing an immediate business link both
domestically and internationally. There are about 1.25 million
subscribers to cellular phones operated by two companies: Cellcom
Israel Ltd. and Pele-Phone Communications Ltd., a private company
co-owned by Bezeq Israel Telecommunication Corp. Ltd. and
Motorola. A third company is due to enter the market in autumn
1998. The number of subscribers is increasing annually at a rate
of ten percent. The major telephone credit cards are: AT&T, MCI
and Sprint.
 
Hotels and Restaurants
 
Israel has a variety of good business hotels and restaurants that
offer a wide variety of international cuisine. Most places
accept internationally recognized credit cards such as Visa,
MasterCard, Eurocard, American Express, and Diners Club. Food
and water is generally safe, although bottled water is often
preferred. Visitors should be wary of roadside food in hot
weather.
 
Medical facilities
 
Modern medical care and medicines are available in Israel. 
Travelers can find information written in English about emergency
medical facilities and after-hours pharmacies in the "Jerusalem
Post" newspaper. Doctors and hospitals often expect immediate
cash payment for health services. U.S. medical insurance is not
always valid outside the United States. Supplemental medical
insurance with specific overseas coverage has proven useful. The
international traveler's hotline at the Center for Disease
Control, telephone (404) 332-4559, has additional health
information.
 
X. APPENDICES
 
APPENDIX A. - COUNTRY DATA
 
 
-Population 5.8 million (1996)
-Population Growth Rate - 2.6% 
-Religions Judaism, Islam, Christianity, Druze
-Government Parliamentary Democracy
-Languages Hebrew, Arabic, English widely spoken
-Work Week Sunday - Thursday





 
 
APPENDIX B. - DOMESTIC ECONOMY 
(USD millions except where noted)
 
 
  1996 1997 1998
 (est)
-GDP (current dollars) 97,900 100,600 97,300
-GDP real growth rate (%) 4.4 2.5 3.0
-GDP per capita 16,400  16,700 17,000
-Government spending
 (as % of GDP) 56 55 54
-Inflation (%) 10.6 10.0 9.0
-Unemployment (%) 6.7 7.5 8.0
-Foreign Exchange Reserves 11,420 15,000 n/a
-Average Exchange 3.2 3.4 3.6
 (for USD 1.00) 
-Foreign Debt - Gross 48,057 50,000 52,000
 - Net 20,028 22,000  23,000
-Debt Service Ratio (%) 18.2 n/a n/a
-U.S. Economic Aid 1,280 1,280 1,280
-U.S. Military Aid 1,850 1,850 1,800
 
*Ratio of principal and interest payments on foreign debt to
exports of goods and services.





 
 
APPENDIX C. - TRADE 
(USD millions except where noted):
 
 
 1996 1997 1998
 (est)
Total Israeli Exports 19,067 20,200  21,400
Total Israeli Imports 29,584 30,200 32,000
U.S. Exports 5,982 6,300 n/a
U.S. Imports 6,261 6,400 n/a
 
Sources: Central Bureau of Statistics, Bank of Israel,
International Monetary Fund
 





 
 
APPENDIX D. - INVESTMENT
 
 
There are no direct foreign investment figures available which
are tied directly to country of origin or to industry sector
destination. Nor are there reliable figures available on direct
foreign investments by U.S. companies or by other nations'
companies. (See "VII. Investment Climate")
 
 
 
 
XI. U.S. AND COUNTRY CONTACTS
 
APPENDIX E. -U.S and Country Contacts
 
 
U.S. Embassy Trade-Related Contacts
 
Michael Benefiel
Commercial Counselor 
The Commercial Service
U.S. Embassy
71 Hayarkon Street
Tel Aviv 63903
Tel: 972-3-519-7327
Fax: 972-3-510-7215
 
Debbi Schwartz
Economic Counselor
Economic Section
U.S. Embassy
71 Hayarkon Street
Tel Aviv 63903
Tel: 972-3-519-7506
Fax: 972-3-510-1035
 
Tully Friedgut
Agricultural Specialist
Office of Agricultural Affairs
U.S. Embassy
71 Hayarkon Street
Tel Aviv 63903
Tel: 972-3-519-7324
Fax: 972-3-510-2565
 
Government Offices Related to Key Sectors
 
Ministry of Industry and Trade
Mr. Dov Mishor
Director General
30 Agron Road
Jerusalem 94190
Tel: 972-2-622 0377
Fax: 972-2-625 0435
 
Ministry of Agriculture
Mr. Daniel Kritchman
Director General
P.O. Box 7011
Hakirya, Tel Aviv 61070
Tel: 972-3-697-1722
Fax: 972-3-697-1516
 
Ministry of the Environment
Ms. Nehama Ronen
Director General
P.O.B. 34033
Jerusalem 95464
Tel: 972-2-655 3777
Fax: 972-2-653 5934
 
Ministry of Defense
Mr. Ilan Biran
Director General
Hakirya, Tel Aviv 61909
Tel: 972-3-697-5774
Fax: 972-3-691-9918
 
Ministry of Transportation 
Mr. Nahum Langenthal
Director General
97 Jaffa Road
Jerusalem 91000
Tel: 972-2-622-8300
Fax: 972-2-622-8206
 
Ministry of Communications
Mr. Dani Rosen
Director General
23 Jaffa Stret
Jerusalem
Tel: 972-2-670 6303
Fax: 972-2-624 0029
 
Ministry of National Infrastructures
Mr. Yaacov Katz
Director General
PO Box 13106
Jerusalem 91130
Tel: 972-2-500 6718/9
Fax: 972-2-500 6720
 
Trade Associations and Chambers of Commerce
 
American States Offices Association
Sherwin Pomerantz
Director
PO Box 45005
Jerusalem 91450
Tel: 972-2-571 0199
Fax: 972-2-571 0713
 
Federation of Israeli Chambers of Commerce
Mr. Dan Gillerman
President
P.O. Box 20027
Tel Aviv 61200
Tel: 972-3-563-1010
Fax: 972-3-561-9025
 
Israel-America Chamber of Commerce & Industry
Ms. Nina Admoni
Executive Director
P.O. Box 33174
Tel Aviv 61333
Tel: 972-3-695-2341
Fax: 972-3-695-1272
 
Manufacturers' Association of Israel
Mr. Dan Proper
President
29 Hamered Street
Tel Aviv 68125
Tel: 972-3-519-8821
Fax: 972-3-510-3154
 
Market Research Firms
 
Mitsuv Ltd.
Prof. Michael Peri
General Manager
12 Bialik Street
Tel Aviv 63324
Tel: 972-3-525-5522
Fax: 972-3-525-5523
 
Gitam/BBDO Ltd.
Ms. Dina Navot
Director, Research & Strategy Department
1 Jabotinsky Street
Ramat Gan 52520
Tel: 972-3-576-5757
Fax: 972-3-752-5496
 
Romiglobe Ltd.
Mr. Eitan Margalit
Managing Director
4 Rahavat Ilan Street
Givat Shmuel 54056
Tel: 972-3-532-5027
Fax: 972-3-532-5338
 
MAP Market Analysis & Planning Ltd.
Prof. Igal Ayal
Managing Director
49 Ibn Gevirol Street
Tel Aviv 64361
Tel: 972-3-696-9710
Fax: 972-3-691-6073
 
I.M.D.E. Ltd.
Mr. Uri Ovnat
2 Shifon Street
Ramat Hasharon 47404
Tel: 972-3-540-2898
Fax: 972-3-540-0754
 
Dun and Bradstreet (Israel) Ltd.
Mr. David Bondi
General Manager
27 Hamered Street
Tel Aviv 61500
Tel: 972-3-510-3355
Fax: 972-3-5103397/8
 
Teldan Information Systems Ltd.
Mr. Dan Carmi
General Manager
7 Derech Hashalom Street
Tel Aviv 61180
Tel: 972-3-695-0073
Fax: 972-3-695-6359
 
MS&P - Market Strategy and Planning
Mr. Yuval Bar Ner 
General Manager
88 Gordon Street
Tel Aviv 64389
Tel: 972-3-522-1058
Fax: 972-3-522-2774
 
Simar Consulting Ltd.
Mr. Jacques Rozenbaum
General Manager
16 Pinsker Street
Rehovot 76308
Tel: 972-3-537-1770
Fax: 972-3-537-1765
 
Zenovar Consultants Ltd.
Mr. Haim Zaban
General Manager
1 Tfutsot Yisrael Street
Givatayim 53583
Tel: 972-3-571-9693
Fax: 972-3-573-2150
 
Commercial Banks
 
Bank Hapoalim B.M.
Mr. Moshe Amit
Joint Managing Director
50 Rothschild Boulevard
Tel Aviv 66883
Tel: 972-3-567-3380
Fax: 972-3-567-3149
 
Bank Leumi Le-Israel B.M.
Ms. Galia Maor
General Manager
P.O. Box 2
Tel Aviv 61000
Tel: 972-3-514-8800/8111
Fax: 972-3-514-8177
 
The First International Bank of Israel Ltd.
Mr. Shlomo Pjoterkovsky
General Manager
9 Ahad Ha'am Street
Tel Aviv 65251
Tel: 972-3-519-6111/6227
Fax: 972-3-510-0316
 
Israel Discount Bank Ltd.
Mr. David Granot
General Manager
27 Yehuda Halevi Street
Tel Aviv 65546
Tel: 972-3-514-5513/4
Fax: 972-3-514-6336
 
United Mizrahi Bank
Mr. Victor Medina
General Manager
13 Rothschild Boulevard
Tel Aviv 66881
Tel: 972-3-567-9207/9211
Fax: 972-3-560-4780
 
Binational Foundations/Commissions
 
BARD Foundation
Prof. Edo Halutz
Executive Director
P.O. Box 6
Bet Dagan 50250
Tel: 972-3-968-3230
Fax: 972-3-966-2506
 
Binational Science Foundation
Dr. Yona Ettinger
Executive Director
2 Alharizi Street
Jerusalem 91076
Tel: 972-2-617-314/635-440
Fax: 972-2-633-287
 
BIRD Foundation
Mr. Dan Vilenski
Executive Director
3 Tevuot Ha'aretz Street
P.O. Box 39104
Tel Aviv 61390
Tel: 972-3-647-0710
Fax: 972-3-649-8341
 
U.S.-Israel Science and Technology Commission
Mr. Yoram Yahav
Director
1 Ben Yehuda Street
Tel Aviv
Tel: 972-3-517 0963
Fax: 972-3-517 4617
 
Washington-Based USG Personnel
 
U.S. Department of Commerce
TPCC Trade Information Center
Tel: 1-800-USA-TRADE
 
U.S. Department of Commerce
Paul J. Thanos
Israel Desk Officer
Tel: 202-482-1860
Fax: 202-482-0878
 
U.S. Department of State
Office of Business Affairs
Tel: 202-646-1625 
Fax: 202-646-3953
 
U.S. Department of State
Daniel Rubinstein
Israel Desk Officer
Tel: 202-647-3672
Fax: 202-736-4461 
 
U.S. Department of Agriculture
Charles Alexander
Director
Agricultural Export Services Division, FAS
Tel: 202-720-7053
Fax: 202-690-2909; 720-6063
 
U.S. Export-Import Bank (ExIm Bank)
Margaret Kastic or Ken Wickett
811 Vermont Avenue NW
Washington, DC 20571
Tel: 202-565-3814
Fax: 202-565-3816
 
Overseas Private Investment Corporation (OPIC)
1100 New York Avenue NW
Washington DC 20527
Tel: 202-336-8799
Fax: 202-408-9859
 
APPENDIX F: Market Research
 
 
U.S. Department of Commerce Reports FY 1998
Industry Subsector Analyses (ISAs) available on the NTDB
 
Consumer Goods
Communication Equipment
Chemical Machinery
Machine Tools
Air Pollution Control Equipment
Toys and Games
Footwear
Computers
Medical Equipment
Pet Foods
 
FY 1999 Industry Subsector Analyses (ISAs) 
 
Sporting Goods 
Processed Foods
Giftware 
Venture Capital Market in Israel
Smart Cards 
Pumps, Valves/Compressors
Air Conditioning, Refrigeration Equipment
Hazardous Waste 
Airport/Ground Support Equipment
Apparel 
Furniture 
 
U.S. Department of Agriculture Reports 
 
Israel: The market for Food Products - A Survey
Grain and Feed Annual Report
Oilseeds and Products Annual Report
Tomatoes and Products Annual Report
Official Standards for Animal Feeds
Mango Production and Development
Israel's Flower Sector
Poultry Annual Report
The Apple Sector in Israel
Annual Avocado Survey
Annual Citrus Report
 
The above market research reports are available on the FAS home
page.





 
 
APPENDIX G. Trade Event Schedule
 
International Exhibitions in Israel 
 
Agritech
September 2-5, 1999
Conference Center, Haifa
Agricultural equipment
 
Technology
June 21-24, 1999
Exhibition Park, Tel Aviv
Machinery, Hi-Tech and Industrial Equipment
 
Israchem/Analiza
January 25-28, 1999
Exhibition Park, Tel Aviv
Industrial Processing and Laboratory Equipment
 
Hotex/Israfood
November 22-25, 1999
Exhibition Park, Tel Aviv
Hospitalitiy Industry, Food and Beverages
 
Computax
June 1-3, 1999
Exhibition Park, Tel Aviv
PC and AAC Systems
 
Interpronet
June 1-3, 1999
Exhibition Park, Tel Aviv
Internet Applications
 
Medax 
November 1-4, 1999
Exhibition Park, Tel Aviv
Medical Technologies, Hospital Equipment
 
The following USDA/FAS cooperators have market promotion programs
in Israel and will conduct unscheduled trade-oriented visits to
Israel during the course of the year:
 
American Soybean Association
California Walnut Commission
California Pistachio Commission 
Eastern U.S. Agricultural and Food Export Council, Inc.
U.S. Feed Grains Council
North-West Pear Association 
U.S. Wheat Associates
Wild Blueberry Association of North America