VZCZCXRO9762
OO RUEHROV
DE RUEHJM #1107 1591200
ZNR UUUUU ZZH
O 081200Z JUN 07
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7905
INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEHRC/DEPT OF AGRICULTURE WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

UNCLAS JERUSALEM 001107 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
NEA/IPA FOR WILLIAMS/SHAMPAINE/BELGRADE; NSC FOR 
ABRAMS/WATERS 
 
E.O. 12958: N/A 
TAGS: EAGR ECON ETRD IS KWBG
SUBJECT: AMBIGUOUS STANDARDS CONTINUE TO FRUSTRATE 
PALESTINIAN IMPORTERS 
 
 
¶1.  (SBU) Summary:  Palestinian importers of U.S. products 
continue to complain of obstacles to trade.  Among the 
obstacles cited are: (1) an arbitrary GOI 
standards-compliance process for imported products, including 
baby formula; (2) extended delays in the release of products 
from Ashdod port; and (3) the prohibition of Palestinian 
companies' access to the East Jerusalem market.  End summary. 
 
 
Businesses Obstructed By 
Ambiguous Standards 
------------------- 
 
¶2.  (SBU) Regional FAS Senior Attache Chris Rittgers and 
Econoff met June 5 in Jerusalem with Palestinian businessmen 
whose companies import U.S. agriculture products.  The Arab 
Company for Medical and Agricultural Products imports Wyeth 
Co. baby formula into the West Bank/Gaza through Israel.  Its 
General Manager, Ghassan Mustaklem, said that the Israeli 
government (GOI) should establish a transparent 
standards-compliance process, as its Ministry of Health's 
(IMOH) standards often change overnight, resulting in 
extended delays at port for importing companies.  According 
to Mustaklem, the IMOH system is ad hoc and does not provide 
standards information in paper form, creating an 
unpredictable import environment.  Mustabklem claimed that 
the IMOH discriminated specifically against Palestinian 
pharmaceutical companies by holding products at Ashdod port 
for an average of three months during the last year - more 
than twice the wait time for Israeli companies importing the 
same product. 
 
¶3.  (SBU) Medical Supplies and Services (MSS) General Manager 
Samer Kreitem, who imports Abbott Co. baby formula, said the 
ambiguous IMOH standards-compliance process is designed to 
protect local Israeli producers by increasing importers' 
costs with extended delays at port and general product 
prohibition.  In June 2006, according to Kreitem, the IMOH 
decided that a shipment of Abbott baby formula contained too 
much vitamin A for Israeli standards.  Following a year of 
negotiations between MSS and IMOH, and with FCS advocacy 
involvement, the product was released to be sold in the WB/G. 
 Kreitem claimed that MSS' additional demurrage costs in 
Ashdod were NIS 160,000 (USD 40,000), in addition to the high 
legal costs incurred to secure the shipment's release. 
 
 
Fighting For Access To 
East Jerusalem Market 
--------------------- 
 
¶4.  (SBU) Kreitem and Mustaklem confirmed that the IMOH 
prohibits the sale in East Jerusalem of products imported 
first into the WB/G.  Kreitem described this prohibition as a 
non-tariff barrier to protect Israeli importers, and noted 
that MSS had been selling its imported products in East 
Jerusalem since 1994.  Kreitem plans to open an 
Israeli-licensed MSS office in East Jerusalem in order to 
import the same Abbott products he cannot ship from his West 
Bank warehouse.  He opined that the IMOH's goals are 
two-fold:  (1) support local Israeli importers and (2) 
disrupt the operations of Palestinian businesses to the point 
that they decide to become sub-contractors for competing 
Israeli companies. 
 
WALLES