Dozens of Israeli companies that export arms, defense and security-related technologies are suspected of 172 violations of the country’s Defense Export Control Law this past year, according to Defense Ministry data presented Tuesday to the State Control Committee.
The law, according to the Defense Ministry, aims to “regulate the export of defense equipment, the transfer of defense know-how and the provision of defense services” while taking into consideration national security, foreign relations, international obligations and other “vital interests of the state.”
According to the Defense Ministry data, in 2013, its department of export controls conducted 14 hearings for companies engaged in military exports and imposed fines totaling more than 4 million shekels ($1.2 million) on firms that had exported or marketed restricted equipment without the proper authorization.
Although the data on violations or suspected violations from previous years is incomplete, Defense Ministry sources and information indicate that this year's figures mark a major increase. In 2011, for example, there were 43 cases in which companies were suspected of violating the export control law, while in 2009, there were 87 suspected cases. Of those, 16 resulted in administrative sanctions and two in criminal penalties. In 2008, there were 47 suspected cases, 13 of which concluded with administrative sanctions and one in criminal penalties. In 2013, not a single criminal investigation was opened, although administrative penalties were imposed on six companies.
Officials in the Defense Ministry said that enforcement efforts have been stepped up substantially recently. About a month ago, Meir Shalit, the outgoing head of the ministry's Department of Defense Export Controls, wrote to defense exporters to tell them that enforcement would be tightened. “We have recently witnessed a series of instances in which the Defense Export Control Law was violated by defense firms," he wrote. "These involved either military sales or marketing efforts that lacked the proper licenses or violated the terms of licenses.”
Shalit warned that the ministry would not tolerate such violations, and said he planned to apply “the full extent of the punishment available” against offending companies, following orders from Maj. Gen. Dan Harel, the ministry’s director general.
According to the Defense Export Control Law, exporting or marketing defense equipment or technology without the proper license is a crime punishable by up to three years and fines of 6.5 million shekels for those convicted (the law also gives the ministry the option of seeking civil penalties of up to just more than a million shekels). Shalit warned that in light of the current concern, the ministry might impose penalties against individuals in key positions at offending companies.
Haaretz has learned that, in one case, a company was fined for presenting the concept for a security system to military personnel of a foreign country without first obtaining a marketing license. Obtaining such a license involves an examination by the defense and foreign ministries before the equipment can be taken abroad and shown to a prospective buyer. At a hearing conducted about two months ago, the offending firm was fined a million shekels and its requests for marketing licenses were suspended for a year.
In another case, an Israeli company contacted a foreign firm to jointly develop a military product. The two companies signed a memorandum of understanding and the concept for the project was presented without prior authorization from the Defense Ministry. After a hearing, a fine of about a million shekels was imposed on that company as well.
The 2012 State Comptroller's report said that, in most cases, the Defense Ministry was not enforcing its own export control law, but rather doing so only after receiving information about a violation. “We will never be able to reach the last of the exporters," Shalit said on Tuesday. "Export oversight has to be self-enforced.”