Client updates

The global stock index provider Morgan Stanley Capital International (MSCI) recently announced it is seeking market feedback on Israel’s possible inclusion in its European indices. MSCI, considered one of the largest stock index providers in the world, plans to announce a decision by the end of February 2022.

The Bank of Israel is proposing to regulate the provision of services to licensed cryptocurrency service-providers so that banks will not be able to sweepingly refuse to provide service and will have to formulate a risk management policy.

In December 2021, the Jerusalem District Court dismissed two motions to certify a class action against the leading dairy manufacturer in Israel, Tnuva, for charging excessive prices. Both the motion and the dismissal are part of an intense dispute for years. The dispute revolves around whether the prohibition of a monopolist charging an “unfair” price applies to charging excessive fees. In 2014, the director-general of the Competition Authority published a public statement on the prohibition of excessive pricing by a monopoly.

The Knesset Finance Committee, headed by MK Alex Kushnir (Yisrael Beitenu), recently approved a mechanism for compensation for the rehabilitation of industrial waste damages caused by Rotem Amfert (of the ICL Group). The committee arrived at the mechanism as part of discussions on the extension of the phosphate mining concession currently granted to the company.

For the first time, companies providing virtual currency services will be required to comply with Israeli anti-money laundering provisions. This follows an amendment to the Prohibition of Money Laundering Order that recently came into effect. The amendment will apply to financial asset service providers obligated to hold a license under the Control of Financial Services Law.

The Israeli Ministry of Environmental Protection announced this week its imposition of a pecuniary sanction totaling about ILS 3 million on the leading supermarket chain Shufersal for violations of the Clean Air Law. (In particular, the company violated provisions mandating the reduction and prevention of air pollution from its vehicles).

For the first time, the Israel Competition Authority has opened enforcement proceedings against a monopolist for abuse of its dominant position by charging an unfairly high price. Subject to a hearing, the authority intends to impose a pecuniary sanction of ILS 8 million on MBI Pharma Ltd. and personal sanctions on two officers of the company (of about ILS 600,000 each). The company faces accusations of charging an excessive price for Leadiant, a life-saving drug for CTX patients (an incurable genetic disease), which is marketed by MBI Pharma in Israel.

About seven years ago, one of the worst ecological disasters in Israel’s history occurred. During work to divert an oil pipeline, one of the old pipelines belonging to the government company Eilat Ashkelon Pipeline Co. Ltd. (EAPC) ruptured near the Evrona Nature Reserve. As a result, about five million liters of crude oil poured from the pipeline into the nature reserve located in the Arava Valley.

Earlier this month, the Israeli Ministry of Finance approved the outline for a hike to the purchase tax imposed on real estate investors, once again, to tax brackets of 8% and 10%. The Ministry of Finance has since updated that the purchase tax hike will take effect on Sunday, November 28. The ministry’s goal with this move is to “dissuade” investors from purchasing investment apartments and lower the demands in the residential housing market.

After years of expectations, the government has approved the legislative amendments needed to promote “Urban Renewal” projects in Israel. While everyone is talking about the amendment lowering the threshold of consent for apartment owners to 66%, a lot more has also changed. All of the amendments, both major and minor, are important.

The Black Shadow hacking group’s attack on Cyberserve, reported a few days ago, has resulted (at this point in time) in the leaking of a database with more than 800,000 records pertaining to various individuals and the exposure of additional databases. This attack raises important questions about the relations between database owners and the third parties with whom they engage to receive various services relating to business activities that incidentally involve their data.

On November 1, 2021, the new Chinese Personal Information Protection Law (PIPL) will come into effect. This law is modeled after the well-known European General Data Protection Regulation (GDPR).

Like the GDPR, the PIPL will apply not only to Chinese organizations, but also to any organization processing the personal information of people located in China.

Therefore, any organization that collects data from China must comply with this new law or risk suffering the consequences.

Up until today, pursuant to an Israeli government resolution dating back to 2001, NPOs (such as Amutot and public-benefit companies) that did not possess a certificate of proper management could not engage with government entities.

A certificate of proper management is a certificate issued to Amutot and PBCs by the Registrar of Amutot and Endowments after receiving an organization’s annual report (in conformity with the statutory requirements and the registrar’s instructions). It is valid for one year (or for two years, for Amutot and PBCs that fulfill particular criteria).

Many class action proceedings end in settlement. The settlement agreement is designed, inter alia, to facilitate an efficient and fair resolution to the proceeding, in a manner that also provides certainty to the parties. Essentially, it “takes on the risk” for all parties involved—the class action plaintiffs and their legal representation, the class, and the defendants. Settlement certification by the court constitutes res judicata, and ensures the preclusion of repeated claims regarding the subject of the settlement.

While Israel’s banks are in no hurry to accept the blockchain industry and are avidly trying to keep their distance from cryptocurrencies, this is not the case elsewhere.

Recently, the major global securities, derivatives and financial trade associations sent a joint letter to the Bank for International Settlements (BIS), which develops banking supervision standards and criteria, to adopt regulation that will enable their involvement in the crypto asset sector.

Updated regulations for the implementation of the Green Pass in Israeli workplaces will come into effect on October 5, 2021. Following are some of the main guidelines of the regulations.

There has been an uptrend in recent years of employers using a variety of technological tools to supervise their employees and oversee the quality of their work. The use of these tools has become more prevalent due to the shift of many organizations to working from home last year.

The Israeli High Court of Justice ruled recently that section 46 of the Income Tax Ordinance does not authorize the Knesset Finance Committee to exercise broad discretion in recognizing NPOs and in fact the Committee’s approval is limited solely to that related to its supervisory role.

E-commerce giant Amazon reported in its financial statements at the end of last month that the Luxembourg data protection authority had imposed on it a fine totaling EUR 746 million. The fine appears to have been laid on Amazon for its use of users’ personal data for targeted advertising, in violation of the EU’s General Data Protection Regulation (GDPR).

Due to the recent increase in incidences of COVID-19, there has been an update to the guidelines on quarantine payments to employees. Here are the main points of the update, for your convenience.