Import Tariffs
Since January 1988, Israel's tariff classification has been based on the Harmonized System (HS) and the 1996 revision of the HS has been implemented. With most products from the United States, the European Union and the European Free-Trade Association receiving duty free status in the Israeli market, relatively few of Israel's imports are subject to customs duties.
Israel’s Customs and Purchase Tax Tariff is the main instrument used for the classification of goods. The correct classification of goods is the key to determining tax rates, as well as obtaining various authorizations, permits and licenses, and all other conditions of importation, in accordance to the applicable laws, regulations and instructions. We recommend contacting a professional customs broker for consultation since classification of goods requires professional knowledge. The website for the Israel Tax Authority, with information on Customs and other taxes, can be found at: http://www.mof.gov.il/customs/eng/mainpage.htm. It is currently in a trial mode and is intended for a preliminary valuation for payment of taxes. Some goods are charged with countervailing or anti-dumping charges.
Trade Barriers
In general, Israel offers a good commercial environment for U.S. companies. The United States-Israel Free Trade Agreement (FTA) has eliminated almost all tariffs, leaving Israel's agricultural sector as the only one with substantial barriers. The FTA also provides for a joint committee comprised of representatives from both countries to review the functioning of the agreement (the committee last met in October 2007). Israel is a member of the World Trade Organization (WTO).
A 1996 Agreement on Trade in Agricultural Products (ATAP) with the United States permits Israel to maintain non-tariff protection for certain agricultural products. This framework expired at the end of 2001 but the signed agreement was extended until the end of 2009. Under the agreement, Israel permits free access to a long list of food products and duty-free access for certain quantities of a list of U.S. products under tariff rate quotas (TRQ). American exporters and Israeli importers, however, complain that these TRQs provide an insufficient duty-free quota for many fruits and other products, and very high fees on additional quantities (above quota). Israel excludes some U.S. fruits, including, citrus, peaches, and nectarines, on phytosanitary grounds. Israel is revising its phytosanitary restrictions making them consistent with WTO requirements.
The U.S. Embassy in Tel Aviv is very actively pursuing much-needed improvements in the export and investment climate for U.S. firms in Israel. The efforts are focused in three specific areas: incorporating technical standards in Israel that do not discriminate against U.S. products, protecting intellectual property rights, and establishing greater transparency in Israel’s public procurement process. For further information about how these issues may affect your export prospects in Israel, please contact the Commercial Service in Israel.
Regarding intellectual Property Rights, while there has been improvement in the level of illegal production, importation, and sale of copyrighted and trademarked goods, serious problems still exist. For more details, see "Intellectual Property Rights, in Chapter 6, "Investment Climate Statement."
Import Requirements and Documentation
All administrative import licensing requirements for U.S.-made consumer and industrial goods have been eliminated under the FTA, including the requirements 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, Trade & Labor 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, phytosanitary or public health purposes. The Israel Veterinary Services (IVS), the Plant Protection and Inspection Services (PPIS) and the Food Control Service (FCS) of the Ministry of Health issue these, respectively. For information on entry procedures and requirements for food products, please direct inquiries to the Israeli authorities at the Ministry of Health, Food Control Services, 12-14 Haarba’a St., Tel Aviv 64739, Israel; 972-3-627-0116, fax: 972-3-627-0126.
Shipping Documentation
The Israeli Customs stringently enforces import documentation regulations, including the requirement for a U.S. Certificate of Origin for Exports to Israel. Therefore, U.S. exporters should meticulously follow the advice given below and always double-check with freight forwarders and shippers before the goods leave the United States to avoid potentially lengthy delays when the goods enter Israel.
U.S. Certificates of Origin for Exporting to Israel
In order for U.S. exporters to qualify for preferential access to the Israeli market, a special certificate of origin must accompany all shipments from the United States to Israel. The FTA came into full effect in 1995. Under this agreement, American companies exporting to Israel can gain greater market access, reduce transaction costs, increase sales, enhance export revenues and become more competitive in the Israeli marketplace. Israeli Customs advises that it will no longer be possible for goods to be cleared through customs if the correct certificate of origin form is not attached to the other standard shipping documents. U.S. exporters are encouraged to qualify for preferential tariff treatment and to obtain, when necessary, a certificate of non-manipulation for trans shipments.
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 United States. For more information, please see the U.S. Commercial Service webpage on the Certificate of Origin in Israel.
Other 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 to find out if any other documentation, including bill of lading and packing list, is required. It is imperative that these issues be addressed before the goods arrive at the Israeli port, to avoid any possible delays and storage fees. In addition, U.S. goods that are transshipped through third countries require a Certificate of Non-Manipulation from the customs authority of the third country, in order to qualify for the FTA preferential tariff.
Authorization Procedures for "Approved Exporter" Status
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 that have a clean record with the Israel Customs Services. 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
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 United States 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." For shipments of mixed goods, separate invoices must be prepared for goods that do not comply with origin requirements and/or for which approval to operate as an "Approved Exporter" has not been granted.
U.S. Export Controls
U.S. exporters to Israel must follow the standard U.S. Government requirements regarding export control documentation for sensitive U.S. exports. For information on this subject contact the U.S. Department of Commerce Bureau of Industry and Security, Internet web site: http://www.bis.doc.gov/, or the Trade Information Center at 1-800-872-8723.
Although Israel is not a signatory to the Wassenaar Arrangement, it has adopted the Wasennar list of dual-use items subject to control. As of January 1, 2007, the Ministry of Industry, Trade & Labor is responsible for the administration of Israel’s dual-use export control system. However, it lacks sufficient trained personnel to shoulder this responsibility completely and continues to rely on staff work of the Ministry of Defense. The Ministry of Defense has established a new division to deal exclusively with the export controls of defense items.
U.S. export licenses are required for exports to Israel of certain high technology, defense related equipment and technologies and weapons for chemical and 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 Industry & Security and U.S. Department of State, Office of Defense Trade Controls.
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 and Marking Requirements
Israel has strict marking and labeling requirements that frequently differ from those of other countries. U.S. exporters should consult with their Israeli importer prior to shipping any product that will be offered to the local market. At present, some labeling and marking requests from the Ministry of Health have been inconsistent. Embassy Tel Aviv is working with the Ministry to try to resolve any discrepancy. Specific information on labeling and packaging standards is available from the Director, Department of Weights and Measures, Ministry of Industry, Trade, and Labor 30 Agron Street, Jerusalem 94190; phone: 972-2-622-0678, fax: 972-2-622-0670.
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 or 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.
Nutritional labeling is compulsory on all packaged foods. For information on food labeling and packaging contact the Israel Ministry of Health, Food Control Services, 12-14 Haarba’a Street, Tel Aviv 61070; phone: 972-3-563-4812-, fax: 972-3-568-4602.
Israel has no declared government policy on genetically modified organisms (GMO) although regulations are being prepared which will require positive labeling when a product or an ingredient is genetically modified. Israel’s main export market for food is Europe where consumer concern over GMO is considerable. Thus, many Israeli importers of raw materials require an exporter’s declaration that the product is free of GMO.
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 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 sub-packages, the labeling should specify the number of such sub-packages, the net content of a sub-package, 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. 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.
Prohibited and Restricted Imports
Israel maintains restrictions on imports of products the government considers to be economically sensitive and subject to agricultural policy considerations. U.S. meat exports face an especially difficult environment due to a ban on beef and non-kosher meat imports.
Israeli law determines that the sole authority for certifying food as kosher is the Council of the Chief Rabbinate of Israel. Hence, products considered kosher in the United States still must obtain certification from Israel's Chief Rabbinate to be considered kosher in Israel. With the exception of meat, poultry and their products, there is no legal requirement that imported food be kosher. However, for commercial considerations, in most cases it is advisable to obtain kosher certification for products and raw materials as surveys show that between 60 and 65 percent of the Jewish population prefer Kosher food. Please contact Agricultural Specialist Yossi Barak for more details at yossi.barak@usda.gov , tel: 972-3-519-7686.
The U.S. Commercial Service — Your Global Business Partner
With its network of offices across the United States and in more than 80 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://www.export.gov/eac.
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Disclaimer: The information provided in this report is intended to be of assistance to U.S. exporters. While we make every effort to ensure its accuracy, neither the United States government nor any of its employees make any representation as to the accuracy or completeness of information in this or any other United States government document. Readers are advised to independently verify any information prior to reliance thereon. The information provided in this report does not constitute legal advice.
International copyright, U.S. Department of Commerce, 2008. All rights reserved outside of the United States.