Customs News – Director Instruction No. 2.7 regarding the distribution of quotas and entry into force of the amendment to the trade agreement between Israel and Canada.

Dear Clients and Friends,

We would like to update you as to the following:

A. Publication of amendment to Director Instruction No. 2.7  – provision of quotas by the Customs or subject to the Customs exemption

The Ministry of Economy and Industry has published an update to the public’s notes with regard to the amendment: Director Instruction No. 2.7, concerning the provision and Distribution of quotas for the importation of food, which is subject to customs duty or a reduced customs duty.

As background: Israel is a signatory to trade agreements with the US, the member states of the EU, Mexico, Jordan, Canada, Turkey, the World Trade Organization (WTO) and the Mercosur states (Argentina, Brazil, Uruguay and Paraguay). In addition, the Israeli government allows for the provision and distribution of voluntary quotas from time to time in order to promote its policy objectives.

The quotas are provided and distributed by the Ministry of Economy and Industry. Director Instruction No. 2.7 regulates the manner by which the Customs Committee deals with applications for import licenses, in respect of which exemption has either been granted from customs duties or at a reduced rate, and sets out the principles of quota allocation for import licensing procedures assigned to them.

Should you wish to submit comments regarding this amendment, it would be appreciated if they could be received by us, no later than no later than August 14, 2019, by e-mail to: Weinbergeri@herzoglaw.co.il.

B. Publication of the Customs Tariff Order Applying the amended  Trade Agreement with Canada that will Enter into force on 1 September 2019

On 1 September 2019, the amendment to the trade agreement between the State of Israel and the Government of Canada will enter into force (the “Amended Trade Agreement”).

The Amended Trade Agreement implements the protocol to the Trade Agreement between the State of Israel and the Government of Canada, that was signed on May 28, 2018. The corrective protocol was approved by the Israeli government on December 20, 2018 (the “Protocol”).

Under the Protocol, customs benefits have been added beyond those existing under the original Trade Agreement, although not eliminating or reducing the existing customs benefits.

The main changes set out under the Amended Trade Agreement concern the expansion of benefits for agricultural products and food for Israeli exports, as well as the simplification of the rules of origin under the original Trade Agreement.

The Amended Trade Agreement establishes a process of entry into force and the State of Israel and Canada have agreed that the legislative proceedings will be concluded and the Agreement will enter into force on September 01, 2019.

For your convenience, the following links are attached, which include the amendment of the Customs Tariff Order, a background to the original Trade Agreement on the Ministry of Economy and Industry’s website, and a summary of the Amended Trade Agreement.

For the amendment of the Customs Tariff Order published on 5.8.19 (in hebrew), click here>>

For a background on the trade agreement on the Ministry of Economy and Industry’s website (in hebrew), click here>>

For and a summary of the trade agreement upgrade (in hebrew), click here>>

Should you require any further information or clarification regarding the issues discussed in this Circular, please do not hesitate to contact our Indirect Taxes, Customs & International Trade Department.