Israel is a member of the WTO since 1995

Israel submits periodic reports and is regularly reviewed by the WTO.

Israel is party to all WTO agreements.

Israel actively participates in the E-commerce joint initiative negotiations of the WTO. In other areas it has been less active.

Israel has not participated in any WTO disputes in the recent five years as either a complainant or respondent. It has, however participated in the following disputes as a third party.

1. DS624 European Union – Additional Measures Concerning the Importation of Citrus Fruit from South Africa (15 April 2024)
2. DS623 United States – Certain Tax Credits Under the Inflations Reduction Act (26 March 2024) [panel established 23 September 2024]
3. DS613 European Union – Measures Concerning the Importation of Citrus Fruit from South Africa (27 July 2022) [Panel established 26 July 2024]
4. DS537 Canada – Measures Governing the Sale of Wine [Mutually agreed solution notified on 12 May 2021]
5. DS531 Canada – Measures Governing the Sale of Wine in Grocery Stores (second complaint) (28 September 2017) [Panel established 20 July 2018]
6. Australia – Anti-Dumping Measures on A4 Copy Paper (1 September 2017) (A panel report was circulated on 4 December 2019; Respondent (Australia) submitted an Implementation Notification on 17 September 2020].

Israel has not expressed any official views on WTO reform.

Israel in not party to any free trade association (such as the EU, etc.). It is, however, party to several bilateral free-trade agreements, some of them with trade association. Below is a table detailing all of Israel’s bilateral trade agreement that are currently in force:

Agreement (and link)	Type of Agreement	Entered into force (modifications)	Areas of trade included
Canada – Israel	Bilateral Free Trade Agreement (FTA)	1 January 1997 (1 September 2019)	Goods
Colombia – Israel	Bilateral FTA	11 August 2020	Goods; Services
EFTA – Israel	Bilateral FTA (one party is a regional trade association – RTA)	1 January 1993	Goods
EU – Israel	Bilateral FTA (formally -“association agreement”. One party is a RTA)	1 January 2000	Goods; Services
Guatemala – Israel	Bilaterial FTA	1 March 2024	Goods
Jordan – Israel	Bilateral Trade and Economic Cooperation	1 January 1995 (23 December 2004)	Goods, Qualifying Industrial Zones
Mexico Israel	Bilateral FTA	1July 2000	Goods
Panama – Israel	Bilateral FTA	1 January 2020	Goods, Services, Investments
Korea, Republic of – Israel	Bilateral FTA and Economic integration	1 December 2022	Goods, Services, Investments
Southern Common Market (MERCOSUR) -Israel	Bilateral FTA (one party is a RTA)	23 December 2009	Goods
Türkiye – Israel*	Bilateral FTA	1 May 1997	Goods
Ukraine – Israel	Bilateral FTA	1 January 2021	Goods
United Arab Emirates – Israel	Bilateral FTA and Economic Integration	1 April 2023	Goods, Services, Government Procurement,
United Kingdom – Israel**	Bilateral FTA	I January 2021	Goods
United States – Israel	Bilateral FTA	19 August 1985	Goods

*On May 2024 Türkiye announced it is halting all direct trade with Israel due to the war in Gaza. This prohibition on trade is still in effect (November 2024)

**There are ongoing negotiations between Israel and the UK to upgrade the agreement.

Below is a table of all on-going negotiations of FTAs, and their status:

Country	Status
Vietnam	FTA signed on 2 April 2023, awaiting ratification
Bahrain	Negotiation commenced on September 2022
China	Negotiations commenced in September 2016. Currently on-hold
Economic Aero- Asiatic Union	Negotiations commenced in April 2018. Currently on-hold
United Kingdom	On going negotiations for upgrading existing FTA
Costa Rica	MOU signed in 2023 to commence negotiations.

(1) Largest Trading partners

Imports

European Union (especially Germany, The Netherlands and Belgium)

United States

China

Türkiye

Great Britain

Exports

United States

European Union (especially Ireland, The Netherlands and Germany)

China

India

United Kingdom

(2) Most important goods

The most important imported goods to Israel are:

Raw Materials (43%); Consumer Goods (25%); Investment Goods (16%) and Fuels (12%).

The most important exported goods are:

Hi-Tech (39%) and Industrial products.

*Diamonds form a large part of Israel’s imports and exports of goods. However, there is no mining of diamonds in Israel, and diamonds provide little added value to the Israeli economy.

** Defence and arms exports and imports are not included in the official reports of the Ministry of Economy and Industry. Defence exports are approximately 15%-20% of all goods exported.

(3) Most important Service

The most important services exported from Israel are hi-tech services, and travel and tourism.

The most important imported services are travel and tourism and hi-tech services.

Israel has a large trade deficit in goods, and a large trade surplus in services.

Domestic Developments

The most important determinant of Israel’s economic and trade prospects is the armed conflict currently taking place in the region. The war has had a significant impact on Israel’s economy in general, and on international trade in particular. Trade and international investments have significantly decreased. However, up until now the Israeli economy has shown resilience. Israel’s currency has basically maintained its value, and consumer spending is actually somewhat on the incline. Yet, several rating agencies have downgraded the credit-rating of the Israeli government and banks, raising interest rates for Israel’s international debt.

The second important development in trade law in Israel is the ‘Import reform’, enacted by the Knesset (Israel’s parliament) as several amendments to Israeli domestic regulation of import between 2021 and August 2024. The reform is based on two main prongs:

First, a significant number of consumer goods approved for sale in at least one country in the European Union will be automatically approved for sale in Israel.

Second, many imported products will not require independent standards verification. The Importer will only have to declare that the goods comply with EU standards, and provide documentation to that effect. Enforcement of actual compliance will take place in the market.

These two changes are expected to reduce import prices, and reduce bureaucracy connected with imports.

International developments

• As an advanced economy, Israel is based on a strong hi-tech sector, the continued worldwide strength of which, is important for growth and international investments in Israeli economy.
• In the recent war, the shipment route from Asia through the Suez Canal was threatened by the Houthi faction in Yemen. As long as these disruptions continue, shipments costs to Israel will remain high.
• Several international courts and tribunals have recently issued judgments that might adversely affect trade with Israel. First, the International Court of Justice in its advisory opinion on Legal Consequences arising from the Policies and Practices of Israel in the Occupied Palestinian Territory (19 July 2024) called for states to distinguish between Israel and the occupied territories. This might affect Israel free trade agreements and their implementations. Several national courts, most notably in The Netherlands, have issued judgments limiting export of arms to Israel. If such decisions would become more widespread, Israel’s ability to buy arms in the world market might become limited.

There is extensive Israeli domestic regulation on environmental issues, forced labour and human rights, corruption etcetera. Israeli law also requires export approval for some environmentally hazardous material such as asbestos and its by-products.

However, Israel did not adopt any domestic measures to address sustainability issues in international supply chains. The major area in which Israel adopted measures to protect human rights is in the area of defense and security products. Approval of the Ministry of Defense is required for any sale of defense and security related products, and this approval may not be provided if the product is intended for use in the violation of human rights.

Issues of sustainability, human rights forced labour etc. are included in some of Israel’s FTAs due to the insistence of the other party. For example, the amended FTA between Israel and Canada (which came into effect in 2019) includes chapters on Trade and Environment (chapter 11) on Trade and Labour (chapter 12) on Trade and Gender (chapter 13). This FTA, however, is the exception. Inclusion of these issues in the FTA was as a result of the insistence of Canada.

The main export restriction in force in Israel is regarding the export of natural gas. Export of natural gas from Israel requires a special permit, as the vast majority of Israel’s natural gas reserves is dedicated towards domestic consumption.

There are significant limitations on the export of defense and security products. The Security Export Control Law requires approval by the Ministry of Defence for the export of security and defence related products.

Approval for exports and export quotas are also in place regarding scrap metal and certain minerals.

Israel’s trade sanctions regime includes several laws:

Trade with the Enemy Ordinance – forbids any trade with enemy states. All economic activity with these countries or with corporations located in these countries,  including import, export, investment etc., is forbidden. Enemy states are currently: Iran, Iraq, Lebanon and Syria. In recent years, the Israeli Minister of Finance has issued an annual suspension of the law with regards to Iraq.

Combating Iran’ s Nuclear Program Law – forbids all economic activity with any natural person or entity declared as assisting Iran’s development of a Nuclear Program.

The Prevention of the Distribution and Financing of Weapons of Mass Destruction Law – forbids all economic activity with entities and natural persons declared as assisting any country or Non-State Actors to acquire weapons of mass destruction. The law adopts sanctions imposed by the UN Security Council and other international institutions with regard to entities or natural persons involved in the acquisition or financing of weapons of mass destruction.

Apart from this law, Israel does not have a comprehensive legal regime which allows the government to impose sanctions on the prevention of the distribution and financing of weapons of the mass destruction. Hence, up until now no formal sanctions have been imposed on Russia. Informally, however, many corporations – especially those with significant business with US corporations, have voluntarily adopted the sanctions list of the US government on Russia. It is too early to tell whether Israeli corporations would follow the same policy with regards to sanctions on China.

As will be explained below, Israel has a process in place to impose trade remedies. However, these remedies are rarely used. In fact, currently in effect is only

• One general safeguard order on (mostly) agricultural products from the US
• One anti-dumping measure on copper cables from Türkiye

Additionally, there is an on-going anti-dumping investigation with regards to the import of cannabis from Canada.

However, due to the extensive reform of deregulation in imports detailed above, it is expected that the volume of cases of complaints and requests for trade remedies will significantly increase in the near future.

The Trade Levies and Safeguard Measures Law, addresses four types of trade levies:

Safeguard levy – imposed, inter alia, to safeguard the country’s balance of payments and its foreign currency reserves, to safeguard the agricultural industry and the country’s mined resources, or as an economic reciprocal action against a foreign country.

Temporary Safeguard Measures  – safeguard measures intended to provide temporary protection to the domestic industry in case of a quick increase in imports or a change in import terms that may cause significant injury to the country’s domestic industry. Temporary protection is designed to provide a hiatus in which the domestic industry can become more efficient and prepare for imported competition.

Anti-dumping duty – a duty on dumped imports that causes material injury to the domestic industry.

Countervailing duty – a duty on exports (into Israel) subsidized by a foreign government.

The imposition of these levies and the safeguard measures are subject to bilateral trade agreements between Israel and various countries.

The Trade Levies’ Commissioner, a statutory appointment, is in charge of implementing the Trade Levies and Safeguard Measures Law. In addition, a public committee advises the Minister of Economy and Industry about anti-dumping duties and countervailing duties. The orders and safeguard measures must be approved by the Israeli Minister of Finance and the Knesset Finance Committee.

Safeguard Levy – is imposed by the Minister of Economy and Industry, after the approval of the Minister of Finance. for the following reasons:

(1) preventing a negative change in the balance of payments or the foreign currency balances of the State.

(2) regulating the production, demand, or consumption of agricultural and fishing products.

(3) protection of local production of agricultural products.

(4) prevention of depletion of minerals.

(5) Limiting or preventing the export of raw materials produced or produced in Israel, in order to prevent shortages in the local market.

(6) Absorption or prevention of excess profit arising from legislative provisions or economic measures taken by the government or a minister of its affairs.

(7) Absorption of aid or benefit given by the government due to goods intended for consumption in Israel but actually exported.

(8) taking economic countermeasures against a certain country that violated an agreement or arrangement with the State of Israel.

(9) Limitation or prevention of imports from a country that prohibits or restricts trade with Israel or takes discriminatory measures against it, or limitation or prevention of exports to the aforementioned country.

A safeguard levy can be imposed for a period of two years, which can be extended for further periods of two years each. 

Temporary Safeguard Measures

 Representatives of an industry may submit a written request to the Commissioner to conduct an inquiry into the possibility that an increase in importation of specific goods and their terms of imports might cause severe damage to the domestic industry.

The request should include documentation and evidence that:

(a) There is a significant increase in import of similar or competing goods.

(b) There is a significant and comprehensive (or a probability of such damage) to the domestic industry of similar or competing goods.

(c) A causal connection between the increase in import and the damage to the domestic industry.

The request should also include a detailed plan as to the way the domestic industry plans to adapt to the increase in imports.

The Commissioner will initiate an inquiry into the matter if he finds that there is sufficient prima facie evidence for the request. A decision of the Commissioner on whether to initiate an inquiry will be handed down within 30 days. A notification of a decision to initiate an inquiry will be sent to the authorities of the State from which the relevant goods are imported, and to any other party of interest, including the importers of the goods. These parties have 30 days to respond. The party requesting the inquiry has 20 days to submit a counter response.

At the request of any party the Commissioner may conduct an oral discussion. He is also authorized to decide on which evidence will be provided to all the parties. The Commissioner may impose temporary measures such as temporary bonds.

The Commissioner will issue his final recommendation no later than 215 days after the initiation of the investigations.

At the recommendation of the Commissioner the Minister of Economy and Industry may impose safeguard measures in the form of duties or import quotas, for a period of no more than four years, which can be extended to one additional term of four years.

Anti-Dumping and Countervailing Duties

Complaints are submitted for the investigation of the Trade Levies Commissioner. Complaints may be submitted by domestic manufacturers representing domestic industry, against importers and foreign manufacturers, for importing dumped or subsidized-price products or products that cause injury to domestic industry.

The complaint should include information and evidence showing that:

(a) There exists an importation of goods at a “dumped” or subsidized price.

(b) There is substantive damage (or bribability of such damage) to the domestic industry of similar or competing goods.

(c) A causal connection between the dumped or subsidized price of the imported goods and the damage to the domestic industry.

The Commissioner will initiate an investigation into the matter if he finds that:

(1) The producers of more than 50% of the domestic – similar or competing  – goods support the complaint.

(2) There is sufficient prima facie evidence supporting the complaint.

A decision of the Commissioner on whether to initiate an investigation will be handed down within 21 days. A notification of a decision to initiate an inquiry will be sent to the authorities of the country from which the relevant goods are imported, and to any other party of interest, including the importers of the goods. These parties have 30 days to respond. The party requesting the inquiry has 20 days to submit a counter-response.

At the request of any party the Commissioner may conduct an oral discussion. He is also authorized to decide which evidence will be provided to all of the parties. The Commissioner, with the approval of the director general of the Ministry of the Economy may impose temporary measures such as temporary bonds.

The Commissioner will issue his findings within 240 days and submit the findings to the advisory committee.

The advisory committee, after hearing from all interested parties, will submit a recommendation to the Minister of Economy and Industry regarding:

(1) The existence of dumping or subsidized prices, damage to the local industry, and the causal connection between the prices and the damage.

(2) A suggested rate of anti-dumping or countervailing duty, if relevant.

On the recommendation of the advisory committee, the Minister of Economy and Industry with the approval of the Minister of Finance, may impose a duty for a period of no more than five years, which may be extended.

Circumvention of evasion of trade remedies is dealt with like any other custom evasion.

According to the Trade Levies and Safeguards Measures Law:

• The recommended levies of anti-dumping or countervailing duties to be imposed will be the lesser between: (a) the duties that would prevent the damage to the local industry (b) the rate of dumping or subsidy.
• In his decision whether to impose duties or levies, the Minister of Economy and Industry may take into account Israel’s trade relations with other countries, and the affect on the market as a whole.

Decisions of the Minister of Economy and Industry can be challenged in the High Court of Justice.

There were no challenges to Israeli trade remedies

The authority responsible for enforcing customs and import regulations is the Customs Directorate which is part of the Israel Tax Authority. The Customs Directorate has the authority to confiscate goods, impose fines, and initiate criminal proceedings regarding severe violations of the law.

Importers can submit a request to the Customs Directorate for “prior information for the classification of commercial goods”. The information provided will be information regarding the classification of the goods (Customs Headings) and is valid for one year. It is the responsibility of the applicant to examine the implication of the information (tax rate, legality of the import, import process etc.)

Decisions of the Customs Directorate can generally be challenged by an internal process of appeal to the Customs Directorate itself. If this appeal is rejected, there are two procedures on the basis of which one can turn to the court:

• If the disagreement is a monetary one (e.g., classification, value of goods etc.). The Customs Ordinance allows the owner of the goods to pay the amount requested by the authority “under protest” and sue the Customs Directorate in a civil action within three months of the payment. The Israeli Supreme Court has ruled that this is the default procedure in all cases of monetary disagreement.
• If the disagreement relates to the approval of the import itself or its non-monetary conditions, the importer can submit an administrative appeal to the High Court of Justice.

The Israel Tax Authority provides information on commercial importation of goods to Israel and tax rates according to the Harmonized System (HS) of the World Customs Union. The Israel Tax Authority publishes the “Customs book” which is available online.

In addition to the 97 chapters of the HS, the book includes some specific information relevant specifically to Israel such as: import regulations for immigrants, returning citizens, tourists, diplomats etc. and details regarding free trade agreements to which Israel is a party.

a. Authorised Economic Operator (AEO) or equivalent programme?

Israel’s Custom Authority manages the Authorized Economic Operator (AEO) programme. The AOE is a party involved in the international movement of goods and has been approved by the Israel Customs Directorate as complying with World Custom Organization (WCO) standards or equivalent supply chain security standards. AOEs enjoy benefits as operators in the program during international trade.

Currently (November 2024) there are 320 AEOs in all areas of international trade including exports, freight forwarders, custom brokers, warehouses, airlines, and seaports. A list of AEO’s and the conditions required in order to be recognized as an AEO can be found here.

b. Mutual recognition arrangements (MRAs) with other jurisdictions in relation to their AEO programmes?

AOEs enjoy benefits of export to countries with which Israel signed a Mutual Recognition Agreement (MRA). To date, 7 MRA’s have been signed between the Israel Customs Directorate and the following countries: the United States of America, China, Taiwan, South Korea, Mexico, Canada, and Hong Kong.

c. Suspension of duties on any goods imports (for example, for goods for which there is no domestic production)?

The Israeli Minister of Finance has the authority to temporarily suspend duties. This is done mainly in relation to agricultural products if there is a seasonal shortage. In recent years it was used for example, with regards to tomatoes.

d. Allowing goods imports valued below a certain amount to enter duty free (de minimis shipments)?

Currently, any shipments below $75 (not including shipping costs) is considered “personal import” and exempt from all duties and taxes. This exemption is not relevant to alcoholic beverages and tobacco products.

There is now a bill before the Knesset to cancel this so-called “amazon exemption’.

Certain taxes and duties do not apply to the city of Eilat, in the southernmost district of Israel. No VAT is charged on most goods and services sold in Eilat for use in Eilat. Indirect taxes including tariffs and other import duties do not apply to goods imported for use in Eilat. All taxes are charged once the goods leave the Eilat area.

Bonded warehouses can be located within sea or air – ports of entry, or no more than 20 KM from a customs station. There are currently (November 2024) 124 bonded warehouses in various areas of Israel.

Trade negotiations are conducted by representatives from the Ministry of Foreign Affairs, the Ministry of Economy and Industry, and the International Law Department at the Ministry of Justice. There is no mandatory consultation with representatives of the industry and the public during the negotiations, although there is a process of informal consultations. International Agreements are ratified by the Israeli government (cabinet) after they have been “tabled” at the Israeli Knesset for at least 14 days.

Some of the undertakings in the international agreements require adopting changes to Israeli laws and regulations, and a process of discussion of changes takes place.

There are more than 50 economic attachés in Israeli diplomatic missions around the world, including all major trading partners. Part of their mandate is to assist Israeli exporters in matters concerning trade measures inconsistent with existing agreements. The Ministry of Economy and Industry operates an “Export request management system” which allows exporters to contact the relevant economic attaché directly through an electronic form. In cases in which the problem is not resolved through diplomatic means, the Ministry of Economy and Industry is responsible for taking further steps.