Client updates / Regulation

The Industrial Cooperation Authority at Israel’s Ministry of Economy recently announced that it had blacklisted the Chinese company DAQO, which won a tender for the supply of components to the Israel Electric Corporation, because it failed to fulfill its reciprocal procurement obligation with Israel.

Earlier this month, the US Senate voted 99-1 to strike a key clause in a sweeping Republican domestic policy bill that sought to impose a ten-year moratorium on states’ enforcement of artificial intelligence regulations.

The “What’s Good for Europe Is Good for Israel” reform came into effect at 2025, with considerable resonance. This reform allows importers to import diverse products to Israel in a new standardization track, based on compliance with the requirements of strict European regulations and standards.

In July 2024, Israel’s Ministry of Economy imposed a 61%-146% temporary guarantee on aluminum imports from China to protect local industry from dumping. Recent guideline updates reinforce the focus on anti-dumping enforcement amid global trade tensions.

Foreign direct investments (FDI) in critical Israeli infrastructure and services, especially by entities representing foreign countries, are subject to oversight, mainly to ensure national security.

The European Securities and Markets Authority (ESMA) recently published its final report on the guidelines for supervisory authorities to detect and prevent market fraud in crypto assets under the Markets in Crypto-Assets (MiCA) Regulation.

As Operation Rising Lion continues, government ministries and authorities are continuing to announce regulatory reliefs in various areas.

Upon the launch of Operation Rising Lion last Friday, the Minister of Defense declared a special national state of emergency in conformity with the Civil Defense Law, 1951. On Sunday, the government extended the state of emergency until June 30, 2025.

In May, a US federal court ordered Israeli firm NSO Group to pay $168 million to WhatsApp. The ruling raises key questions about US jurisdiction over foreign companies and defense tech regulation.

EU foreign ministers have decided to explore the possibility of cancelling the EU-Israel Association Agreement due to allegations that the war in Gaza is raising doubts concerning Israel’s commitment to the safeguarding of human rights.

During the Swords of Iron War, it became evident that employees of the United Nations Relief and Works Agency (UNRWA) were working for Hamas and had participated in the October 7 massacre.

A court ruling handed down last month examined a fundamental practical issue: Can a material change be made in an imported product in order to change its classification for customs purposes?

The provision eliminating the de minimis exemption for low-value imports from China to the United States—previously granted for products valued under USD 800—has come into effect.

On Tuesday, April 29, 2025, the President of the United States signed an Executive Order and a Presidential Proclamation, easing some of the customs tariffs on automobiles imposed at the beginning of April.

The Israeli Privacy Protection Authority (PPA) published a draft directive recently to clarify its position about how businesses and organizations should apply the provisions of the Privacy Protection Law and the privacy regulations to artificial intelligence systems.

The Ministry of Finance, in conjunction with other government ministries, is currently formulating a plan to reduce the US trade deficit with Israel, in order to reduce the tariff rate that the Trump administration has imposed on goods imported from Israel. According to reports, one of the proposals currently being considered is to exempt US companies from reciprocal procurement obligation in exchange for their winning large-scale tenders in Israel.

On April 5, 2025, the United States imposed a 10% reciprocal tariff on all products being imported into the United States (with exceptions). In relation to countries with a large trade deficit with the United States – including the State of Israel – a special reciprocal tariff was imposed on imported products, which is calculated according to the magnitude of the trade deficit. The special reciprocal tariff was frozen for 90 days in order to allow the parties to reach agreements on ways to reduce the trade deficit.

According to press reports, on the eve of the Passover holiday, the Minister of Economy and Industry, Nir Barkat, decided to adopt the recommendation of the Advisory Committee on Trade Levies and impose a dumping levy on cannabis imports from Canada at a rate of up to 165% (the levy varies depending upon the manufacturer). On April 21, 2025, the Minister of Finance wrote a letter to the Minister of Economy expressing his opposition to the imposition of the levy, and the decision was put on hold.

Significant tariffs are currently being imposed on international trade between China and the United States, which effectively blocks direct trade between the two countries.

President Trump has repeatedly called for a lowering of the interest rate in the United States, while intensifying his attacks against the Chairman of the Federal Reserve, Jerome Powell, and threatening to fire him. According to recent reports, removing Powell is of the table for now, but there is no guarantee the proposal will not resurface in the future.