New Amendment to the Israeli Restrictive Trade Practices Law regarding Parallel Importing
The Israeli Parliament (the Knesset) recently approved (on July 18, 2018), an amendment to the Israeli Restrictive Trade Practices Law, 5748-1988 (the “Law“) regarding parallel importing (the Restrictive Trade Practices Law (Amendment 20 – Temporary Order), 5778-2018) (the “Amendment“).
According to the Amendment’s explanatory notes, the purpose of the Amendment is to facilitate the removal of barriers for parallel importing to the Israeli market and to prevent harm to parallel importing to Israel by official importers.
In summary, the Amendment authorizes the General Director of the Antitrust Authority (the “General Director“), in certain cases, to instruct an official importer regarding steps he must take in order to dispel the concern for substantial harm to competition, as described below. The Amendment provides that a breach of the General Director’s orders may result in criminal and/or administrative sanctions.
The Background of the Amendment
Most imports to Israel reach the country through the following two main channels:
In the background of the Amendment are the recommendations from 2014 of the Israeli Committee for the Increase of Competition and removing Barriers to Imports (the “Committee“). The Committee concluded that official importers may abuse their market power by taking steps to prevent or make it more difficult for parallel importers to access various distribution channels. The Israeli Government adopted the Committee’s recommendations in a decision in December 2014 (Government Decision No. 2318).
Against the backdrop of the Committee’s recommendations and the Government Decision, the Israel Antitrust Authority published in 2017 a memorandum of law in which it recommended to give the General Director the authority to issue instructions to an official importer in certain cases. With minor changes, this memorandum was adopted as the above mentioned Amendment.
Main Elements of the Amendment – Giving the General Director tools to Supervise Official Importers
The following are the main elements that the Amendment introduces:
At the same time, the Law defines parallel importing as the importing to Israel of goods by a person who is not a direct importer or who does not carry out personal importing.
 Personal importing is defined as importing goods by an individual, which is not meant for the purposes, of supply, manufacturing, or provision of services and which is not done in the framework of commercial activity, but only if the goods are imported in a reasonable quantity for personal or family use of the individual.
 Monopoly is defined under the Law as holding more than 50 per cent of the total supply or purchase in a certain market in Israel, which may be either a product or a service market.
For further information, please contact:
Adv. Tal Eyal-Boger firstname.lastname@example.org +972.3.6944141
Adv. Ziv Schwartz email@example.com +972.3.6944141