Import, Export and Regulatory Compliance

Having made the decision to import goods to Israel, the importer faces numerous legal and technical issues, the solution of which requires the help of a specialist.

Below is a summary of the information that the importer might find useful. To receive more detailed and professional advice on all issues regarding import to Israel,  we invite you to make an appointment at our office.

Import Permit

Importing most goods into Israel does not require an import permit. Simultaneously, to import a number of specific goods, it is necessary to obtain such a permit, for example, for the import of televisions, agricultural products (including food, food additives, etc.), cars, yachts, etc. In some cases, it is necessary to pre-register the importer and to obtain a corresponding certificate.

Food imports need to be considered in particular. First of all, import permits are issued either by the Ministry of Health or, in certain cases, by the Ministry of Economy and Industry.

To obtain a permit from the Ministry of Health, it is necessary – among other examinations – to submit a permit from a warehouse with a specific purpose of storing imported products, and that has the appropriate permit for it. This means that it is necessary to conclude an agreement with such a warehouse before submitting documents for obtaining permission.

It is important to note that import authorization is only granted to an entity registered in ISRAEL (a company or an individual entrepreneur).

Import from “unfriendly” countries

Import from a number of countries that do not maintain diplomatic relations with Israel and prohibit import of goods from Israel, require a special import permit. Today, such countries are:

Iraq, Iran, Lebanon, Syria.

Note that there was a special permit for trade with Iraq, which expired on December 31, 2021.

For the import of certain goods from other specific countries, it is also necessary to obtain a special permit. It is important to note that the lists of these countries and goods are periodically changed and adjusted.

Israel Standards Institute

The import of a number of goods is possible only after obtaining permission from the Standards Institution of Israel. These items include, for example, shoes, baby supplies, toys, electrical appliances, taps, plumbing fixtures, lamps, lighters and other items. Obtaining a permit is a long and rather expensive process. To obtain it, it is necessary to provide the Standards Institution of Israel with samples of goods in advance for examination, which may take a long time. The examination procedure is paid by the applicant, according to the corresponding price list.

Upon arrival in Israel of goods requiring a permit, the customs agent must notify the Standards Institution of Israel , which can send an expert to check the conformity of the goods to the samples provided for examination.

It is important to note that the customs service will not allow the goods to enter Israel without a permit.

Terms of delivery – INCOTERMS 2020

When defining the terms of a transaction with a foreign exporter, the importer first of all must determine and set the terms of delivery and payment for the goods. In international trade, it is common to use specially developed rules established by the International Chamber of Commerce (ICC), known as INCOTERMS 2000 (International Commercial Terms). These rules define the patterns of the standard relationship between the exporter and the importer, including the distribution of responsibility for delivery and cargo insurance, payment terms, etc.

The most common are the following three schemes:

• FCA (“Free Carrier”) – according to this scheme the seller (exporter) delivers the goods cleared of export duties, to the carrier specified by the buyer (importer or intermediary), at the specified location.
• FOB (“Free On Board”) – according to this scheme the seller provides the buyer with goods cleared of export duties and which are loaded onto a ship at the named port of shipment.
• CIF (“Cost, Insurance, Freight”) – according to this scheme the seller provides the buyer with goods cleared of export duties and which are loaded on a ship at the specified port of shipment, but also pays for the freight to the importer’s port and minimum product insurance coverage.

Forms of payment for goods, Letter of Credit (L / C)

Payment for goods can be made in various ways, the main of which are “Open Account”, “Documentary Collection” and “Documentary Letter of Credit”.

Open Account

A form of settlement and credit relations in which the seller ships the goods to the buyer without payment and at the simultaneously sends an invoice for payment to him, referring the amount of debt to the debit of the account opened by him in the name of the buyer – an open account. The buyer is obliged to pay off the debt on the open account within the agreed time frame. This form of payment is the most risky for the seller and is used only between partners who fully trust each other.

Documentary Collection

With this form of settlement, the seller’s bank collects payment from the buyer’s bank for the delivered goods. This form of payment implies a high degree of trust between the seller and the buyer, however, it is less risky for the seller than an Open Account.

Letter of Credit (“Letter of Credit”, “L / C”)

The most common type of settlement in international trade. A letter of credit is an obligation of the buyer’s (importer’s) bank (called the “issuing bank”) to the seller (exporter) (called the “beneficiary”) to pay for the purchased goods upon presentation of pre-agreed documents (defined in the terms of the letter of credit) and within the agreed term. The obligation of the bank – after the issuance of the Letter of Credit – will be fulfilled even if the buyer fails to fulfill his financial obligations.

There are different types of letters of credit: confirmed and unconfirmed, revocable and irrevocable, revolving l/c, transferable, stand-by, and “red clause” l/c’s. All forms and types of Letters of Credit, as well as their purposes, payment terms and etc. are detailed in the Uniform Customs & Practice for Documentary Credits (“UCP-600”) developed by the International Chamber of Commerce. These rules came into force on July 1, 2007, replacing the previous rules (UCP-500), which had been in force for more than 13 years, from January 1, 1994.

A letter of credit provides a high degree of protection for both the importer and the exporter. The importer can be sure that the exporter will receive payment for the goods only after submitting a number of documents confirming that the shipment of the goods took place, documents that are drawn up and submitted to the executing bank in full accordance with the terms of the letter of credit. The exporter, for his part, can be sure that after fulfilling his obligations and submitting the relevant documents, he will receive payment for the goods, even if the importer objects to the payment. In addition, the Letter of Credit is a very flexible tool that allows you to carry out complex transactions , involving more than two parties (for example, with the participation of an intermediary – using a transferable Letter of Credit), prepaid transactions (Letters of credit with a “red clause”), transactions involving a series of deliveries (Revolving Letter of Credit), etc.

At the same time, it is important to note that only a properly formulated Letter of Credit guarantees you the completion of the transaction, receipt of the goods by the buyer and payment by the seller. It is extremely important to choose the correct form of the Letter of Credit, thoroughly checking the conditions and the list of documents to be submitted. Our law firm, has considerable experience in this area, and will gladly assist you in avoiding mistakes and will formulate documents that guarantee your financial security.