Israel to ease regulations on arms and defense exports

As sales increase, some controls on industry to be relaxed but penalties for violations to become stiffer

An Israeli Air Force drone, Hermes 450 UAV, manufactured by Elbit (photo credit: Elbit via Tsahi Ben-Ami/Flash 90)
An Israeli Air Force drone, Hermes 450 UAV, manufactured by Elbit (photo credit: Elbit via Tsahi Ben-Ami/Flash 90)

Israel is set to relax its regulations on the exports of arms and defense products, amid a reform program for the industry undertaken by the Defense Export Controls Agency, a branch of the Defense Ministry.

In a session with the Knesset Foreign Affairs and Defense Committee Monday, the agency’s director outlined key concessions to be offered to defense exporters and emphasized that stiffer penalties would be levied on those who violate the new regulations.

According to a report in business daily Globes, the relaxed regulations include “extending exporters’ exemption from the requirement for marketing licenses for exports of weapons systems to 98 countries around the world, permission for exporting an item for [demonstration purposes] or display at a defense exhibition without obtaining an export license, and an exemption from a marketing license for a product categorized as non-classified (so that it can be marketed through an intermediary party from one of the 98 countries on the list of license-exempt countries)” and an expansion of the agency’s online services for exporters, with the aim of shortening waiting times.

Alongside the concessions, the stronger penalties would include sanctions, fines and restrictions on companies and executives found to have violated the Defense Export Control Law.

In December 2016, the Stockholm International Peace Research Institute, which monitors the arms industry worldwide, released statistics that showed Israel’s major arms manufacturers benefiting from a sales increase of some 10 percent, amid a global slump.

According to the report, Israel was listed as the seventh largest arms seller in the world, with its major manufacturers accounting for 2.1% of global sales. The US came in at number one, then Britain, Russia and France.

Israel’s Elbit Systems was, according to the data cited, the world’s 29th largest arms seller, with $2.95 billion in sales, while Israel Aerospace Industries, with $2.78 billion in sales, was 32nd on the list. Rafael came in at number 43 with sales totaling $1.98 billion. The majority of the sales of all the companies were of weapons and weapons systems.

The Stockholm International Peace Research Institute reported this week that worldwide arms trade has risen to its highest level since the Cold War in the last five years, driven by a demand from the Middle East and Asia.

Between 2012-2016, arms imports in terms of volume by countries in Asia and Oceania accounted for 43 percent of global imports, a 7.7 rise compared to the previous 2007-2011 period, according to SIPRI.

“Transfer of major weapons in 2012-16 reached their highest volume for any five-year period since the end of” the Cold War, the independent institute said in a statement.

The share of Asia and Oceania in international imports was slightly higher (44 percent) between 2007 and 2011.

The share of countries in the Middle East and the Gulf monarchies jumped from 17 percent to 29 percent, far ahead of Europe (11 percent, down seven points), the Americas (8.6 percent, down 2.4 percentage points) and Africa (8.1 percent, down 1.3 points).

“Over the past five years, most states in the Middle East have turned primarily to the USA and Europe in their accelerated pursuit of advanced military capabilities”, said Pieter Wezeman, Senior Researcher with the SIPRI Arms and Military Expenditure Programme.

“Despite low oil prices, countries in the region continued to order more weapons in 2016, perceiving them as crucial tools for dealing with conflicts and regional tensions,” he added.

SIPRI said worldwide arms imports and exports over the last five years have reached a record level since 1950.

Saudi Arabia was the second largest importer of weapons in the world (up 212 percent), behind India, which unlike China, does not have a production at national level yet.

The United States remains the top weapons exporter with a 33 percent market share (up 3 point), ahead of Russia (23 percent, down 1 point), China (6.2 percent, up 2.4 points) and France (6.0 percent, down 0.9 points) passing Germany (5.6 percent, down 3.8 points).

These five countries account for almost 75 percent of global exports of heavy weapons.

The United States and France are the main weapons providers for the Middle East while Russia and China are the main exporters to Asia.

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