Defense Ministry Aims to Fine Executives of Arms Firms if the Companies Break the Law

The Defense Ministry would also gain the authority to enter sites if it believes a defense-export infraction has been committed.

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Moshe Ya'alon, then the defense minister, at an arms expo in Azerbaijan, 2014.
Moshe Ya'alon, then the defense minister, at an arms expo in Azerbaijan, 2014.Credit: Ariel Hermoni / Defense Ministry

The Defense Ministry seeks the authority to fine industry executives whose companies break the defense-export law, according to a proposal published Thursday.

These people would be registered as arms exporters and would be liable to a fine if their company was fined. The bill was proposed by the Defense Ministry’s legal adviser, Ahaz Ben Ari.

According to the bill, the fine would be tailored to the size of the firm. For example, a company with sales topping $80 million over the previous three years could be fined 3 million shekels ($775,000) for the export or marketing of weapons, technology or expertise without a license or for breaching other conditions.

If sales are under $80 million, the fine could reach 1.8 million shekels.

According to the bill’s explanatory notes, “defining holders of a post as license holders, alongside the corporation itself, would also let administrative steps be taken against the holders of these positions. This would increase awareness of the instructions in the law, lead to greater rigor and reduce infractions.”

The ministry also seeks the authority to demand that any person produce documents on such a matter and enter any premises where there is a reasonable suspicion that equipment, expertise or a security service requires oversight.

The ministry’s oversight department would have to publish its decisions on the fines, but publication would not include the names of lawbreakers “unless it is necessary to warn the public against them.”

“The details of publication will let the public examine and critique the decisions of the official in charge,” the explanatory notes say.

On its website, the Defense Ministry’s department supervising defense exports already releases information on infractions. But this does not include the names of exporters breaching the law, either of large companies or of individuals who export weapons, technology or expertise.

Currently, supervisory officials can only demand information from registered arms exporters and can only enter sites on the list of approved exporters. Thus if the ministry suspects someone has broken the law on arms exports, it cannot demand information or documents, a situation the ministry calls “an enforcement failure.”

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