Israel Launching New Firm to Do Grunt Work in Arms Exports

New government company will provide administrative support to the ministry.

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Minister Ya'alon. 'There is no danger of invasion by Arab armies,' he told the conference.
Minister Ya'alon. 'There is no danger of invasion by Arab armies,' he told the conference.Credit: Herzliya Conference (courtesy)

The division of the Defense Ministry that supervises security exports will transfer some of its tasks, including those connected to the arms industry, to a new government company.

The socioeconomic cabinet decided about two weeks ago to establish a government-owned company that would supply what it described as administrative services to the Defense Ministry, for part of the work currently tasked to the supervisory division for defense exports.

The assignments include providing lectures and advice on arms exports, a support center that operates for exporters and technical support in receiving requests for marketing, and export licenses for arms in the computerized system.

Defense Ministry officials also initially thought of transferring some of the tasks connected to providing arms export licenses to the company. In Defense Ministry documents, officials said the new company would serve as the “operational arm” for division activity, including certain aspects in the sensitive field of granting permits for the export of Israeli arms to foreign states and armies.

However, after receiving legal advice, this idea was rejected.

As a result, it was decided that the company would focus on providing support for the division’s core work.

The division is currently responsible for enforcement of legal violations of defense exports and in advising arms dealers.

There were 166 cases of suspected defense export law violations last year, leading to fines totaling 2 million shekels ($525,000) for the arms industry.

One exporter sent weapons accessories to a country in South America without a license, and was fined the maximum penalty allowed by law: 1 million shekels.

Although the violation was not the exporter’s first, the Defense Ministry did not press criminal charges.

According to a Defense Ministry official, the change in the supervisory division’s responsibilities is supposed to help exporters.

The official said none of the changes will be concerned with signing or approving licenses for marketing and export: this will remain exclusively in the hands of the supervisory division, rather than be given to the new government company.

The new company will be founded in coming weeks and is expected to be operational before the end of the year, the official added.

Besides the new assignments in the arms exports field, the company will also deal with the subject of security clearance for the Defense Ministry. It will also operate a facility and testing system according to security service guidelines. Likewise, it is supposed to assist the Defense Ministry in managing the array of royalties from the defense industry, and to set up classified facilities for the Defense Ministry.

A Defense Ministry spokeswoman said the government company being set up is not intended to serve as the operational arm for the Division for Supervising Defense Exports, or to privatize part of its operations or to provide arms export licenses.

Rather, she explained, the services are secondary in nature and meant to make the division’s work and its relations with exporters more efficient. This includes processing requests for licenses in the computerized system; lectures and advice for exporters; technological help for the division’s licensing and enforcement unit; and operating the service center for exporters.