Israeli Supreme Court Precedent: Minimum Incarceration for Cartel Offenses

In early September 2025, the Israeli Supreme Court issued its ruling on Youngster v. State of Israel (Cr.A. 4475/24), also known as the “Poland trips cartel case.” In this landmark ruling, the Supreme Court called for the imposition of much harsher sentences for restrictive arrangements between competitors (cartels). It also set a minimum sentence of nine months of incarceration for such offenses.

The Poland Trips Cartel Case

The case involves a cartel formed by competing travel agencies for school trips to Poland between 2010 and 2016 as part of Holocaust remembrance studies. The cartel members coordinated prices and divided the market among themselves in a way that limited and even prevented competition.

The Supreme Court specifically deliberated the appeal of Ms. Ayelet Youngster, head of the Poland Department at World Gesher Tours. The Central District Court convicted Youngster of “obtaining something by deceit under aggravated circumstances” (section 415 of the Penal Law) and of being a party to a cartel under aggravated circumstances. It sentenced her to five months’ incarceration, as well as additional penalties (probation and a fine). In her appeal, Youngster argued that her sentence should be reduced and served via community service. The Supreme Court rejected her appeal and upheld the District Court’s sentence. In doing so, it laid down several guiding principles regarding sentencing policy for cartel offenses.

Harsher Sentencing for Competition Law Violations and Cartel Offenses

The Supreme Court reiterated that the default sentencing for Economic Competition Law violations is actual imprisonment. The Supreme Court also ruled, for the first time, that for criminal offenses under the Economic Competition Law and, in particular, for horizontal restrictive arrangements (coordination among competitors, aka cartels), the general rule should be the imposition of a minimum sentence of incarceration, which cannot be served via community service.

The Penal Law stipulates that if a prison sentence does not exceed nine months, it may, under appropriate circumstances, be served through community service rather than behind bars. This means the minimum sentence for Competition Law violations and, in particular, for restrictive arrangements among competitors, should, as a rule, exceed nine months of incarceration.

• Even when there is justification for reduced sentencing, preference should be given to actual incarceration over community service. The Court emphasized that even when there is reason to deviate from the aforesaid rule and a sentence of less than nine months is imposed, serving it behind bars rather than via community service is preferrable, unless substantive extenuating circumstances exist.

• The court will attribute less significance to mitigating circumstances when adjudicating Economic Competition Law violations.

Factors that often reduce sentences in other criminal proceedings—the passage of time since the offense, lack of prior convictions, the defendant’s age and medical condition, or the hardship imposed on the defendant’s family—will have less impact for Competition Law violations and, as a rule, will not justify deviating from the guiding principle of imposing actual incarceration for these offenses.

This stance reflects the unique characteristics of economic and white-collar crimes and the need for efficient deterrence. As the court stated, “Although community service imposes both a negative moral stigma and some loss of income, actual incarceration has a particularly deterrent effect on this type of offender, i.e., individuals who are generally regarded in their communities as respectable.”

Implications of the Ruling

This ruling may mark a significant turning point in sentencing policy for Competition Law violations in Israel. Although the courts have repeatedly stated that such violations should be punished by actual imprisonment, this is the first time the Supreme Court has issued a ruling ordering the minimum sentence for cartel offenses to exceed nine months of incarceration.

The determination that extenuating circumstances will not carry much weight during sentencing for this type of offense also has considerable practical implications. In past rulings, delays in proceedings and the defendant’s personal circumstances did result in reduced sentences. Thus, this ruling is likely to prompt defendants to seek expedited proceedings.

It is important to emphasize that the harsher sentencing policy also applies to offenses committed prior to the date of this ruling. Thus, the ruling can be expected to have an immediate impact on ongoing criminal proceedings for Competition Law violations (of which there are several, including indictments for attempted cartels through the media), as well as on current Competition Authority investigations that may result in indictments. The Competition Authority is thus likely to adopt a more rigid position and demand substantial prison sentences even during plea negotiations.

Legal Advice on Competition and Antitrust Law

Given the increased exposure to harsh penalties for Competition Law violations, particularly cartel offenses, we recommend that companies consult with competition law experts before taking any action that could be interpreted as such a violation. We also recommend that companies develop and implement comprehensive internal compliance programs and provide periodic training to employees and officers, in order to minimize risks and personal and corporate exposure to competition law violations.  

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Adv. Gal Rozent is a partner and heads Barnea Jaffa Lande’s Antitrust and Competition Department.

Adv. Yarden Anavi is an associate in the Antitrust and Competition Department.

Barnea Jaffa Lande’s Antitrust and Competition Department offers comprehensive legal services, including providing ongoing advice during business processes and representing clients in criminal and civil courts, before the Competition Tribunal and the Competition Authority Director General, and in dealings with legislative and regulatory authorities. We are at your service for any questions about the Economic Competition Law.