Winds of Change at the Defense Export Control Agency – What You Need to Know?

The Defense Export Control Agency (DECA) has recently initiated first steps of a broad reform aimed at streamlining the control regime and adapting it to the evolving global reality. These significant changes are expected to impact, and hopefully ease, the regulatory burden on hundreds of exporters in the near future.

 

Repeal of the Encryption Order

On November 18, 2025, the Minister of Defense signed the repeal of the Control of Commodities and Services Order (Engagement in Encryption Means), 1974. As a result, this historic order, which for decades regulated the Ministry of Defense’s authority over encryption, will be annulled within four months of its publication in the official gazette (i.e., on March 20, 2026). Alongside this, export control will apply to Information Security items listed under Category 5(2) of the Wassenaar Arrangement (Prior to the repeal of the Encryption Order, the items listed in this category, which were subject to control under the Encryption Order, were not subject to export control). What Does This Mean for You?

• Export and marketing control will remain only for items listed under Category 5(2) of the Wassenaar Arrangement.
• All other encryption means, as well as any engagement with them, will no longer require control.

  What Should You Do Now?

• Exporters currently regulated under the Encryption Order should review whether their products will be controlled under Category 5(2) of the Wassenaar Arrangement.
• Exporters whose products include information security components should also verify whether their products are controlled under Category 5(2) of the Wassenaar Arrangement.

  Control by the Ministry of Economy and Industry Pursuant to the reform, the export of items listed in Category 5(2) of the Wassenaar Arrangement that are not intended for defense use or end-users will be subject to the control of the Diamond and Dual-Use Export Control Division at the Ministry of Economy and Industry (“MOE” – which currently oversees the export of other Wassenaar-listed items not intended for defense use). However, according to recent publications by the MOE, there are significant gaps in preparedness in terms of manpower and professional tools, and the MOE’s involvement in shaping the reform has been limited. We assume that during the next four months, until the formal repeal of the Encryption Order, the control framework of the MOE will become clearer.

 

Repeal of the Encryption Order as Part of a Broader Defense Export Control Reform

The repeal of the Encryption Order is part of a wider comprehensive plan presented at DECA’s 16th Annual Conference to expand the base of Israel’s defense exports. During the conference, some of the conclusions of the Shani Committee, a panel of experts led by former Israel Ministry of Defense Director General Maj. Gen. (Ret.) Udi Shani, were shared. The committee worked over the past year to strengthen and increase defense exports. The committee recommended a series of measures to reduce regulatory burdens and expand activity in the defense export sector. Key Measures Presented at the Conference:

• Transition to a single-stage licensing process and an enabling approach, including disclosure of Israel’s defense export policy, expansion of the list of “permitted countries” exempt from marketing licenses for non-classified products, and reduction of items excluded from the exemption.
• Changes in DECA committees, establishment of a single inter-ministerial committee for product registration under a new process, consolidation of current working groups, and increasing meeting frequency to twice a month with the participation of DECA’s head.
• Shortening processing times for applications, such as registration in the DECA registry, and reducing turnaround times for marketing license requests.
• Broad exemptions for marketing and export licenses, including granting exemptions for products classified as “restricted” for a defined list of countries (subject to legislative changes).

It should be noted that no timeline for implementing the reform stages has yet been published, as some measures require updates to guidelines, work procedures, and secondary legislation, and are therefore still in the planning phase expected to take place sometime during 2026. From DECA’s perspective, the reform means fewer restrictions and more opportunities, but also significant responsibility for exporters for safe and responsible export practices. Alongside the easing of regulations, the Ministry of Defense has expressed its intention to increase enforcement and penalties against unauthorized exports.   Best regards, Department of Defense, Regulation, and International Law