R 221418Z JUL 08
FM USMISSION UNVIE VIENNA
TO SECSTATE WASHDC 8236
DEPT OF COMMERCE WASHDC
DOD WASHDC
INFO THE WASSENAAR ARRANGEMENT
AMEMBASSY TEL AVIV
AMEMBASSY NEW DELHI

UNCLAS UNVIE VIENNA 000413 
 
 
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SUBJECT: WASSENAAR ARRANGEMENT: MAY 29 OUTREACH MEETING WITH ISRAEL 
 
REF: SECSTATE 55864 
 
SENSITIVE BUT UNCLASSIFIED - PROTECT ACCORDINGLY 
 
¶1.  (SBU)  Summary.  On May 29, the Wassenaar Arrangement (WA) held 
an Outreach meeting with Israel, on the margins of the May 26-28 
General Working Group meeting.  Officials from Israel's Ministries 
of Defense (MOD), Foreign Affairs (MFA), and Industry, Trade, and 
Labor (MOITAL) participated in the meeting.  Approximately fifteen 
WA Participating States were present for the meeting.  Notable 
exceptions included the Russian Federation and the United Kingdom; 
many of the Participating States who were absent blamed their 
absence on the Hague Code of Conduct (HCOC) Plenary that was 
scheduled for the same date.  Israeli presentations included an 
overview of Israel's new defense export control legislation, a 
discussion of achievements and challenges in export controls, a 
dual-use export controls review, and an explanation of the role of 
the MFA in export control reform.  The meeting was an interactive 
one, with a number of delegations, including the U.S., Romania, 
Bulgaria, Germany, and Ireland asking a range of questions.  The 
meeting concluded with an Israeli invitation for WA Participating 
States to visit Israel and to meet with Israeli industry.  No 
specific decision was recommended or reached for follow on activity. 
 End Summary. 
 
¶2.  (SBU)  The May 29 meeting commenced with welcoming remarks by 
the WA Plenary Chairperson, Bulgarian Ambassador Chavdar Zhechev, 
where he summarized the history leading up to the outreach meeting 
and expressed the hope that the exchange would be a dynamic one. 
The Israeli officials included:  Ram Raviv, Office of the General 
Council, MOD; Roey Gilad, Director, Department of Export Control, 
MFA; Eli Pincu, Director, Defense Export Controls Directorate, MOD, 
and Ohad Orenstein, Director, Chemistry and Environment 
Administration, MOITAL.  Other Israeli delegation members included: 
Shai Cohen, Deputy Director, Export Control Department, MFA, and Avi 
Amidor, Head of Technological Assistance, MOD.  The Israeli UN 
Mission's Deputy, Guy Feldman, also participated. 
 
¶3.  (SBU)  Turning to the first agenda item, Ram Raviv, from the 
Office of the General Counsel in the Israeli MOD, presented an 
overview of the new Israeli export control legislation which came 
into force in December 2007.  Raviv stressed that, since 1991, 
Israel had been aligning its legislation with international regimes 
such as MTCR and the NSG.  Finally, in late 2007, explained Raviv, 
Israel adopted the WA lists as its own national control lists. 
Israel thus controls exports of defense and dual use items, 
including commodities, technology, and services.  According to this 
legislation, export control and licensing authorities rest with the 
MOD and the MOITAL, with the MFA tasked with inter-ministerial 
consultation and coordination.  The MFA, added Raviv, under the new 
legislation is also a full partner in licensing procedures and must 
be consulted before licenses are granted.  The MOD, explained Raviv, 
controls exports of military items and dual-use items intended for 
military end use.  MOITAL, in turn, controls exports of dual-use 
items intended for civilian end use.  Raviv stressed that new 
legislation was adopted because of constitutional requirements, the 
need to enhance control and enforcement mechanisms, and, quite 
significantly, the desire to conform with international standards. 
 
¶4.  (SBU)  Key elements of the new legislation include control lists 
based on WA, as well as licensing requirements for re-transfers and 
end-use changes.  Further, transit and transshipments would now need 
to be licensed, as well as brokering activities.  Raviv underscored 
that registry in the Defense Export Registry was a precondition for 
licensing.  Registration approval depended upon the applicant's 
criminal record and any prior export control offenses.  The new 
legislation also tightened reporting and record-keeping requirements 
as well as on-site inspections.  Raviv stressed that strong criminal 
and administrative sanctions would be placed on violators of the 
licensing process, with up to 3-5 years imprisonment and up to a 1.2 
million Euro fine, as well as possible deletion from the registry or 
suspension or revocation of licenses.  He also neatly tied in 
current UN Security Council sanctions and embargo resolutions, 
explaining that the legislation contained stiff criminal penalties 
for violators of any UN sanctions or embargos. 
 
¶5.  (SBU)  Raviv provided an overview of previous Israeli MOD 
internal structures, where licensing and promotion were undertaken 
by the same office.  In order to end this seeming contradiction of 
activity within one office, Israeli created the Defense Export 
Control Directorate which would undertake no arms export promotion 
activities.  Rather the Defense Export Control Directorate is 
responsible for licensing activities.  Israel continues to use a 
 
two-stage licensing process; in the first state, a marketing license 
is required for marketing activities; in the second state, an export 
license is required for actual exports.  Any changes in end-use or 
re-transfer require the exporters to apply for an updated license, 
he stressed 
 
¶6.  (SBU)  Raviv provided a detailed overview of the MFA's "full 
partnership" in the licensing process.  According to Raviv, the MFA 
participates in all advisory committees, it has veto power on 
licensing recommendations, and other regulations also require MFA 
consultation.  Raviv's discussion of the MFA's role was later 
complemented by the presentation by Roey Gilad, the Director of the 
Department of Export Control in the MFA. 
 
¶7.  (SBU)  With regard to national control lists, Raviv reported 
that Israel maintains four control lists:  munitions (based on the 
WA Munitions list), dual-use (the WA Dual-Use list), missile 
equipment and technology list (the MTCR annex), and an additional 
dual-use list for transfers to the Palestinian Authority.  According 
to Raviv, the WA Munitions list has been translated into Hebrew and 
incorporated into law; the WA Dual-Use list has been incorporated 
into law by reference under a ministerial order.  Raviv explained 
that Israel "added" spacecraft systems (mainly satellites) and 
anti-terror and Homeland Security items (items designed or modified 
for the anti-terror and Homeland Security units) to the WA Munitions 
list.  Raviv ended his presentation with a firm commitment that 
Israel would update its control lists regularly to keep them in 
conformance with any updated to the WA lists. 
 
¶8.  (SBU)  Raviv's presentation led to a lively discussion, with a 
number of Participating States raising a variety of issues.  For 
example, Germany queried about the cooperation between government 
and industry.  The Israeli delegation responded that Israel has a 
good system of coordination with industry, with regular 
presentations and updates.  Romania asked about the registration of 
brokers.  Eli Pincu, the Director of the MOD Defense Export Controls 
Directorate, responded that the new legislation has some brokering 
controls but that they had not yet been put into force because they 
needed action by the MOD and MFA as well as Parliamentary approval. 
However, he added, brokering in contravention of UNSC resolution has 
been criminalized, and Israeli brokers living abroad are also 
liable.  Gilad added that Israel does not want to be seen as 
contributing to "instability;" therefore, overall regional and 
global stability, for example, the situation in Zimbabwe, is 
factored into licensing considerations (as well as the MFA "veto.") 
 
¶9.  (SBU)  Along the theme of international stability, Gilad 
provided a persuasive overview of the need for effective controls, 
especially as a key element in the fight against terrorism.  These 
reasons, explained Gilad, were the genesis for the enhanced role of 
the MFA in export control and licensing decisions.  Echoing Raviv, 
Gilad underscored the MOD, MOITAL, and MFA coordination in the 
licensing process, and added detail on the dispute resolution 
mechanism, where the MFA Director General or ministerial level would 
be called upon to settle inter-agency cases of dispute.  Therefore, 
stressed Gilad, the MFA was involved in both "stages" of the MOD 
licensing process, as well as in the MOITAL licensing process for 
dual-use goods, along with the MOD.  Gilad added that the MFA's 
licensing positions depended upon foreign policy considerations and 
involved internal MFA consultations with regional departments, the 
international organizations department, the legal department, and 
diplomatic missions abroad.  Major foreign policy considerations 
included, as Raviv noted, UN embargoes and sanctions, bilateral 
relations, regional and internal stability.  Gilad concluded by 
noting that the MFA maintained a regular dialogue with a variety of 
international control regimes and attended a wide range of 
international conferences and seminars so as to stay in 
communication with key countries on export control and licensing 
issues. 
 
¶10.  (SBU)  The MOITAL presentation on Dual-Use export controls was 
a straightforward one, with few surprises and a detailed overview of 
legislation.  Israel's basic policy, explained the MOITAL 
representative, was the requirement to obtain a license for export 
of goods, services, and technology according to the WA Dual-Use 
lists.  In relation to this, MOITAL licensing does not cover exports 
covered by the MOD licensing regime.  The MOITAL representative 
added that if the final end user is a military entity, the license 
would be given to the MOD under the new legislation.  As both Raviv 
and Gilad noted, any difference in licensing recommendations or 
opinions among the three ministries would be sent to an 
inter-ministerial body, and even the Prime Minister if necessary. 
The MOITAL representative also stressed that any licensing applicant 
 
could lodge an appeal to the inter-ministerial body within 14 days 
of the decision (both Raviv and Gilad also noted this point but the 
MOITAL representative highlighted this provision the most). 
 
¶11.  (SBU)  Eli Pincu, Director, Defense Export Controls 
Directorate, MOD, rounded off the Israeli presentations.  He 
reminded WA Participating States that his directorate, which was 
created in 2006, was a result of the Israeli policy decision to 
separate marketing promotion from export licensing, control, and 
enforcement.  Pincu gave an overview of how his Directorate 
processes both the marketing licenses and the export licenses (the 
"two-step" process which Raviv detailed earlier in the Israeli 
presentations).  However, Pincu also stressed that his Directorate 
was also responsible for outreach and enforcement.  According to 
Pincu, the MOD believes that the involvement of industry, which 
included regular outreach and training, was important as a "first 
line of defense" for export control.  Outreach examples portrayed by 
Pincu included both industry-wide and company-specific conferences 
and training, regular meetings with the "Industry Export Control 
Directors (a body made up of industry representatives)", and a 
website which Pincu said his Directorate updated regularly.  The 
Industry Export Control Directors were tasked with "self compliance" 
and encouraged to conduct internal training.  They were also an 
efficient and focused point of contact, Pincu stressed.  Pincu 
indicated that the MOD was satisfied that outreach to industry was 
progressing well and was a key ingredient to stronger commitment, 
implementation, and adherence to export controls. 
 
¶12.  (SBU)  According to Pincu, outreach did not end with industry 
and the general international community.  Rather, his office was 
also reaching out to exporters and related persons, including 
agents, lawyers, and accountants, industrial and trade associations 
such as the Federation of Israeli Chamber of Commerce, and other 
government ministries.  As Pincu explained, this regular undertaking 
of awareness-raising events would only serve to better inform key 
actors involved in the manufacture, sale, and export of items on the 
WA lists of both Israeli legal requirements and international export 
regimes.  Pincu stressed that these efforts would help ensure that 
Israel was playing a role in international and regional stability. 
Pincu noted that over 700 participants attended the MOD's Second 
Annual Export Control Conference in December 2007 and that six other 
conferences were held by the MOD in the twelve months alone, with 
over 400 participants. 
 
¶13.  (SBU)  These awareness-raising efforts notwithstanding, should 
there be violations of the export control legislation and 
regulations, noted Pincu, the new Defense Export Control Law 
provided for stronger penalties, as explained by Raviv earlier in 
the day.  According to Pincu, in 2007, there were 75 cases of 
possible violations, 11 meetings of the Directorate's Enforcement 
Committee, 11 hearings, and 3 criminal investigations. 
 
¶14.  (SBU)  While the bulk of the meeting focused on the Israeli 
presentations and the general discussion between the WA 
Participating States and the Israeli delegation, WA Head Of 
Secretariat Ambassador Sune Danielsson provided a concise 
post-plenary briefing and he and the WA Participating States 
detailed the WA's information exchange systems and mechanisms. 
 
¶15.  (SBU)  The meeting concluded with a discussion of Israel's 
query on how to best stay current with the WA standards and updated 
lists.  The Israeli delegation also repeatedly invited WA 
Participating States to visit Israel to further review Israel's 
export control policies and to undertake a "field trip" and 
discussion with key Israeli industry leaders.  Since any follow on 
meeting in Israel would need further consideration by the WA GWG and 
the Plenary, Plenary Chairperson Ambassador Chavdar Zhechev simply 
noted the Israeli invitation for the record.  COMMENT:  This genuine 
Israeli request for continued communication underscores the need for 
a more regular mechanism where non-Participating States can stay 
current with WA standards, guidelines, and updates to the control 
lists.  We should consider formally proposing such a mechanism for 
enhanced outreach at the October General Working Group meeting. 
 
SCHULTE 
 
 
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