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The government has completed a draft law to regulate defense exports that would significantly tighten existing rules.

The bill, which was published in the government gazette Reshumot last week, prior to being submitted to the Knesset, would also create new organs to devise policy and oversee enforcement. It was drafted in response to American pressure, following a crisis in Israel's defense relationship with the United States that erupted over Israeli arms sales to China.

The bill would require the Defense Ministry to maintain a registry of defense exports in which every such deal would be recorded, and would require Israelis living abroad to register their defense sales as well. It would also incorporate the international Wassenaar Arrangement, which governs trade in conventional arms and dual-use technologies, into Israeli law. In addition, it would impose government supervision over third-party arms deals that transit through Israel and forbid Israelis to serve as middlemen in arms deals for any country subject to a UN Security Council arms embargo.

The rules would be enforced by a new Defense Ministry unit set up in the wake of the crisis with Washington.

The bill would also give the Foreign Ministry a role in supervising defense exports: A ministry representative would sit on all advisory panels dealing with this matter, as well as on the panel that sets defense export policy, and the Defense Ministry would have to consult the Foreign Ministry before issuing an export license.