Although not meant to be all-inclusive, this can give you an introduction to some of the details you need to be aware of for specific markets.

More country-specific information is available from the Trade Information Center's Regional Databases here!

Benefits of tariff and taxes under FTA

Under this Agreement, American exporters can expect to receive the following benefits:

• No Israeli tariffs of any kind on product (except for agricultural products). The following fees, however, may apply:

→ A Port Fee of one percent on the cost, insurance, and freight value (CIF) of the  product is imposed on goods sent by ship.

→ A Stevedoring Fee of 0.5 percent of the CIF is imposed when products are unloaded from ships.

→ A Compulsory Levy is imposed at various rates on the CIF value of food and agricultural products.

→ A Purchase Tax is applied to specific products, primarily luxury and consumer items, whether or not they are imported or produced locally. The purchase tax is levied on the wholesale price of the item.

→ Israel imposes a Value-Added Tax (VAT) on most goods and services sold in Israel, including all imports, with the exception of fresh fruits and vegetables. The VAT rate is presently 18 percent. The VAT on an imported product is recovered by the importer upon resale of the goods.

• Limited import licensing requirements; No other import restrictions, except on agricultural products
• No barriers or discrimination in bidding on Israeli government procurement
• No requirements to purchase locally-produced goods or services
• Full intellectual property rights
• An open market for trade in services

Exporting under the FTA

 All American companies interested in exporting under this Agreement must satisfy two important conditions:

1. Products must meet the Agreement’s designated rules of origin criteria
2. Products must be accompanied by all required documentation.

The Israeli Customs Service prefers that exporters use their own commercial invoice forms to provide all required information. Exporters should include the following information on their invoice forms:

• The supplier's name and address
• General nature of the goods
• Country of origin
• Name and address of the recipient in Israel
• Name and address of the agent in Israel
• Rate of exchange
• Terms
• Israeli import license number (if applicable)
• Shipping information
• Full description of all goods in the shipment
• Price per unit and total value of the shipment

The commercial invoice must be signed by the manufacturer, consignor, owner, or authorized agent.

Rules of Origin for Israel

To satisfy the FTA's rules of origin criteria, products must be grown, produced, or manufactured entirely in the United States. If they are not, they must be substantially transformed into new products with a different name, character, or use. For example, one cannot simply combine or repackage his/her products to fulfill this requirement. Also, exporters must export products directly from the United States into Israel – products cannot be sent through a third country. A U.S.-Israel Certificate of Origin must accompany all qualifying goods in order to be accorded the preferences outlines in the FTA.

Product meeting U.S.-Israel FTA Rule of Origin = No (zero) tariff. A product qualifies for FTA tariff treatment if it contains at least 35% American and/or Israeli content. The green-colored U.S.-Israel FTA Certificate of Origin must be completed to obtain the zero duty-rate. If product does not qualify, look at general column - Taxes are in right hand columns.

Declaring Origin

An article imported into the Customs territory of Israel is eligible for treatment as "Product of the United States" only if:

• That article is grown, produced or manufactured in the United States
• That article is imported directly from the United States into the Customs territory of Israel
• The sum of: (1) The cost or value of the materials produced in the United States, plus (2) the direct costs of processing operations performed in the United States constitutes at least 35 percent of the appraised value of the article at the time of import. If the cost or value of materials produced in the customs territory of Israel is included with respect to an eligible article, an amount not to exceed 15 percent of the appraised value of the article at the time it is entered that is attributable to such Israel cost or value may be applied toward determining the 35 percent.
• The cost or value of materials imported into the United States from a third country may be included in calculating the 35 percent value-added requirement, provided they are first substantially transformed into new and different articles of commerce and are then used as constituent materials in the production of the eligible article.

No article may be considered to meet these requirements by virtue of having undergone:

• Simply combining or packaging operations
• Mere diluting with water or another substance that does not materially alter the characteristics of the article.

The phrase "direct costs of processing operations" includes, but is not limited to:

• All actual labor costs involved in the growth, production, manufacture or assembly of the specific merchandise, including fringe benefits, on-the-job training and the costs of engineering, supervisory, quality control and similar personnel.
• Dyes, molds, tooling and depreciation on machinery and equipment that are allocable to the specific merchandise.
• Direct costs of processing operations do not include costs which are not directly attributable to the merchandise concerned, or are not costs of manufacturing the product, such as (1) profit and (2) general expenses of doing business which are either not allocable to the specific merchandise or are not related to the growth, production, manufacture or assembly of the merchandise, such as administrative salaries, casualty and liability insurance, advertising and sales staff's salaries, commissions or expenses.

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 to qualify for US-Israel Free Trade Agreement preferences, it is necessary to fill out and get certified a U.S.-Israel Free Trade Agreement Certificate of Origin. The New York and Chicago American-Israel Chambers of Commerce both sell and certify the U.S.-Israel Free Trade Agreement Certificate of Origin as well as help companies do business with Israel.  For more information, click here!

Approved Exporters

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.