Client updates

The Israel Securities Authority recently published a staff position on situations it believes indicate fraudulent securities trading and which justify opening a criminal investigation.

Israel’s Privacy Protection Authority has published its recommendation that every organization appoint a privacy protection supervisor. This supervisor’s task is to implement the privacy protection laws that apply to the organization. The PPA noted that although Israeli law does not impose such a duty, it is a best practice recommended for organizations that collect and analyze personal data.

The Israel Securities Authority will soon require public companies to disclose details about independent committees tasked with overseeing transactions with controlling shareholders. The staff position was put together due to the increased need for supervision and oversight of decision-making processes in transactions between public companies and their controlling shareholders.

The European Parliament recently adopted a new regulation on crowdfunding platform activity. This regulation will apply across the board to all European Union countries. According to the new regulation’s provisions, it is possible to raise up to only EUR 5 million on a crowdfunding platform. Additionally, the regulation stipulates rules to protect people investing through a crowdfunding platform, reporting duties for the entities raising funds, and more.

An Israeli court recently rendered an interesting ruling on the impact of COVID-19. The case in question involved the lease agreement for the operation of a hotel. The lease agreement, executed in February 2020, provided payment of rental fees for the month of March, but payment for the months of April and May had not yet been arranged.  

In urban renewal projects, residents or owner’s rights holders select the company with whom they are willing to embark upon this long journey, based on relationship of trust and competence. The trust required leads both parties to execute a binding agreement. Understandably, residents expect the company which whom they have contracted with to remain unchanged and not for those rights not to be transferred to other parties.

A recently launched government program aims to encourage companies to publish social responsibility reports, or ESG (environmental, social, and government) responsibility reports. The Ministry of Strategic Affairs in the Prime Minister’s Office announced the launch of the “Impact Nation” program, as part of a broad move to promote publication of positive economic information regarding Israeli companies, following the publication of the Israeli companies database by UN Human Rights Council.

In early October, the Data Protection Authority in Hamburg, Germany announced that the clothing retailer H&M committed severe violations of its employees’ privacy. Because of these European General Data Protection Regulations (GDPR) violations, the retailer would pay a fine of approximately 35 million euros.

In late March 2020 we published a note regarding the de-facto “downgrade” of the Cayman Islands by the European Union’s Economic and Financial Affairs Council (ECOFIN) as a “non-cooperative jurisdiction” for tax purposes. This was regarded by the international investment community as a “blacklisting” of the Cayman Islands. We noted then that this blacklisting was “a technical result of the delay in the enactment of [certain Cayman Islands] laws, and therefore it is expected the EU will agree to return the Cayman Islands to its previous status and remove it from the list of the list of “non-cooperative jurisdictions” as early as by October 2020.”  Indeed on October 6, 2020, ECOFIN removed the Cayman Islands from its “blacklist” of non-cooperative jurisdictions in tax matters.

Yesterday the Court granted the State’s request to extend the period during which employees may use paid sick leave for time in quarantine until October 28, 2020. 

As you may remember, the Supreme Court repealed an order from the Ministry of Health, according to which a sweeping medical certificate was given to employees in quarantine due to possible exposure to COVID-19. This repeal was to have entered into effect on September 30, 2020.

The lockdown entered inְto effect on September 25, 2020, at 14:00, and is expected to continue until October 10, 2020. It is possible at the end of this period the lockdown will be extended. We have prepared an in-depth update for employers on the relevant topics.

A nationwide lockdown in Israel is to take effect on Friday, September 18, 2020, from 2 p.m., to last for at least 14 days, (the restrictions may be extended, in full or in part, as determined by the Israeli government). While the regulations are currently pending final approval by the Knesset’s Constitution, Law and Justice Committee, they are expected to be enacted late tonight or early tomorrow.

For the first time, the Israel Securities Authority has published Sentencing Guidelines for Administrative Procedures which contain the considerations guiding its determination of sanctions for individual violators and corporations in an administrative procedure.

An important ruling regarding workplace authority figures and the prevention of sexual harassment in the workplace has established that one cannot automatically assume sexual comments or advances by an employee with managerial authority constitute sexual harassment. In this ruling, it appears, the National Labor Court has tempered to some extent widespread notions about sexual harassment by an authority figure.

According to a new amendment to the Male and Female Workers (Equal Pay) Law, employers must publish a yearly report outlining wage gaps between female and male employees. The amendment provides that certain employers must draft an internal yearly report detailing the average salary of their employees and the average wage gaps between men and women within each group of employees in the workplace.

The Israeli Securities Authority has announced that distribution entities now may be liable for the contents of a prospectus. In a staff position paper published in late July, the ISA changed the rules of the game in the underwriting field by determining that a distributor, or an entity associated with a distributor, that purchases securities during an issuance and sells them within a short period of time (six months or less) shall be viewed by the ISA as an underwriter and shall be liable for the prospectus.

The National Labor Court recently handed down an important ruling that concerns many employers in the market engaged with service provider companies. The National Labor Court ruled that although there were no employee-employer relations between the employee and its employer in this matter, the service user still had to take part in the employee’s termination and hearing process, in addition to the obligation of the direct employer to hold the hearing.

Israeli Minister of Finance Israel Katz’s plan to reduce purchase tax for investors has gone into effect. Until now, under plans advanced by the previous Minister of Finance, Moshe Kahlon, for lowering housing prices and pushing investors out of the real estate market, the purchase tax for investors went up from 5% to 8% for an apartment that was not the purchaser’s sole apartment.

A July decision by the Court of Justice of the European Union has established that in light of the fact the United States does not respect the privacy of its citizens in accordance with EU standards, the Privacy Shield mechanism allowing for personal data transfers between Europe and the US can no longer be relied upon. At the same time, in Israel, the Ministry of Justice has published a memorandum that constitutes the first step in adjusting existing law to the digital age.

There have been a few recent updates to statutory provisions and administrative procedures regarding employees and employers during the COVID-19 outbreak.