Exporting Goods to Israel Amid Current Restrictions and Conflict
13 September 2024
Exporting goods to Israel has always required careful adherence to trade laws and regulations, but the current conflict between Israel and Hamas, along with heightened export licensing restrictions, has made the process even more complex and sensitive, and requires efficient due diligence when shipping goods. For businesses involved in international trade, navigating these challenges is critical to ensuring compliance with export control laws, while managing the risks associated with doing business in a conflict zone.
Notice to Exporters 2024/20: Suspension of Licences for Israel
Issued on 2 September by the Export Control Join Unit, the UK government’s Department of Business and Trade has imposed strict export licensing requirements on goods sent to Israel, particularly those with potential military applications, tightening up export controls in the light of Israel's ongoing conflict with Hamas.
Due diligence is also vital for dual-use goods (those that may have both civilian and military uses) when the end use or end user is in Israel. Examples of dual-use goods include certain electronics, software, and technological equipment.
Exporters can find pointers regarding the due diligence required for a particular item by exploring what the UK Tariff says about the ten-figure tariff code (normally used to declare imports on CDS), and seeing whether export checks apply.
Israel may not appear as yet in the HS code sanctioned countries, so Chamber International advises exporters to check the details on every item flagged with the codes EX005 or EX001, when investigated in the tariff.
Sanctions and Restrictions
Sanctions, which may target specific industries, individuals, or organisations, also play a role in determining whether a transaction is allowed. Consideration of sanctions should be part of a business’s due diligence procedure. Though Israel is not subject to comprehensive sanctions at the present time, specific restrictions may arise in response to international events or political considerations – for instance, to curb the flow of materials that could be used in the conflict with Hamas.
Exporters need to conduct thorough due diligence to ensure they are not indirectly supporting prohibited activities, such as dealing with sanctioned entities or those involved in military operations. Violations of export restrictions can result in heavy penalties, including fines and imprisonment.
Compliance and Documentation
Compliance with export control laws involves not only obtaining the correct licenses, but also checking that the current licence has not been suspended, and that any Open General Export Licence that the company intendeds to use has not been amended. Chamber International advises that businesses use the OGEL Checker tool every time an export to Israel being considered, for Control List Classified goods.
Chamber International also stresses that exporters should maintain accurate records of transactions, end-user details, and product classifications. Exporters should ensure their internal compliance programs are robust, incorporating regular audits, and training regarding the latest regulations. Export control documentation, such as the EORI shipper’s export declarations, must be accurately shared with any freight forwarder, agent, broker or Fast Parcel Operator entrusted with making the export declaration for and on behalf of the business. End-user statements and other relevant documentation must be carefully filled out, and held on record, ready to deal with any border force challenges that may arise.
Given the sensitive nature of the current situation, customs officials on both sides may be more stringent in reviewing shipments. Delays at customs are possible, as authorities may conduct additional inspections to ensure that goods are not diverted for unauthorised uses.
Risk Management and Political Considerations
Exporters should carefully assess the political risks of conducting business with Israel during the current conflict. The security situation on the ground may disrupt logistics, including transport routes, port access, and supply chains. Businesses might encounter difficulties in fulfilling contracts, due to operational interruptions or concerns about the safety of personnel in conflict zones.
Additionally, there are reputational risks associated with trading in regions affected by conflict. Companies that continue to supply goods to Israel during times of heightened conflict may face scrutiny or backlash from stakeholders, activists, or media outlets. Effective public relations management, and transparency in compliance efforts, are essential for businesses operating in this challenging environment.
It is important to note that though the US has restrictions similar to other global customs regimes, its Export Administration Regulations (EAR) also include an anti-boycott clause. US persons may voluntarily disclose any violations of these antiboycott conditions following the procedures outlined in Section 764.8 of the EAR.
Chamber International advises that dual-use goods, which may include items of US, UK, or other foreign origin, should be clearly recorded as actioned for export or restricted by applicable legislation, within export records. If US goods are no longer legally permitted for re-transfer or re-export to Israel, it is strongly recommended to seek guidance from legal experts or consult Chamber International.
Conclusion
Exporting goods to Israel, especially considering the ongoing conflict with Hamas, requires businesses to be extremely diligent about compliance with export control laws and regulations. Navigating the restrictions on export licensing, adhering to sanctions, and managing the risks of operating in a conflict zone, are critical to ensuring both legal compliance and ethical responsibility. Companies must stay informed of evolving regulations and geopolitical developments to successfully manage their export activities.
If you are unclear about any aspect of the regulations, in particular about whether action you are considering taking could contravene them, you are advised to seek independent advice. Contact us for further details.
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