Client updates

A double taxation treaty was signed between Israel and Australia in the end of March 2019, after years of prolonged negotiations, expectations, and wonder about the obstacles.

Applicants who submit a permit application on or before May 30, 2019, may continue to offer brokerage under the previous ISA regime until receiving a decision on their application.

The committee appointed by the Israel Securities Authority (ISA) to examine regulation of cryptocurrency offerings to the public has published the outline of its regulatory policy in a final report submitted to the ISA chairman. The committee recommended focusing on regulatory models that offer structural flexibility.

Eight months after the European Union’s General Data Protection Regulations came into force, the French regulator issued Google a EUR 50 million fine, the highest fine issued so far under the GDPR.

On January 1, 2019, Israel’s parliament approved an amendment to the Restrictive Trade Practices Law. This amendment seeks to deepen and focus the Antitrust Authority’s efforts to prevent activities posing potential harm to competition and to the public.

Israeli Securities Authority Classifies Cryptographic Coins as Commodities Rather Than Securities. On March 19, 2018, the interim report of the Committee for Examination and Regulation of Cryptographic Currencies, which was established in August 2017, was submitted. The interim report examines the applicability of the Securities Law to offerings to the public in Israel based on decentralized registration.

Chapter 8 of the new Insolvency and Economic Rehabilitation Law addresses the liability of officers and functionaries. The law’s main innovation is that – beyond liabilities toward the corporation, which already existed prior to the enactment of the law, such as fiduciary duty and duty of care – special liability will also be imposed on the corporation’s officers and functionaries.

The Israel Securities Authority published an announcement to investors with various emphases about public companies operating in the medical cannabis market. Its announcement calls investors’ attention to several parameters they should consider when deciding whether to invest in securities of public companies operating, or expecting to begin operating, in the medical cannabis market.

On December 25, 2018, the Israeli parliament approved the second and third readings of an amendment to the Hazardous Drugs Ordinance (Delegation of Supervisory and Enforcement Authorities Relating to Cannabis for Medicinal and Research Purposes).

2018 was characterized by the promotion and development of numerous infrastructure and energy projects. A government decision in September 2017 led to the formulation of a multi-year plan for the development of 147 infrastructure projects in Israel at a total cost of NIS 116 billion. One of the goals of the plan is to promote public-private partnership (PPP) projects.

On December 23, 2018, the Israeli ministerial committee approved a draft bill on the subject of real-estate purchasing groups. This draft bill is designed, on the one hand, to protect members of purchasing groups and, on the other hand, to enable their continued existence as a means to construct residential apartments while cutting costs.

In March 2018 the Israel Innovation Authority launched a $264 Million National Digital Health Program, with the aim of promoting Israel as a leader in digital health, and improving the quality and quantity of digital health data to support the research and development of preventive and personalize medicine. The program includes a new National Genomic-Clinical Initiative, aimed at sequencing and analyzing the genomes of 100,000 Israeli volunteers, for the purpose of aiding drug discovery.

The Law for Reducing the Use of Cash, which is scheduled to come into effect on January 1, 2019, will have a significant impact on the real-estate sector.

Two important block exemptions have been updated recently: the exemption for joint ventures and the exemption for restraints ancillary to mergers. The amendments transfer the examination of the intensity of the harm to competition deriving from these arrangements from the Israel Antitrust Authority to the business sector.

Recently, the Israel Tax Authority published a circular discussing business restructuring in multinational groups.

With an eye to these other major markets, the Israel Securities Authority (ISA) has promulgated draft regulations for public comment that enable all reporting companies in Israel, who so desire, to publish their reports in English.

A new circular by the Israel Tax Authority determines the terms for granting options to employees when the vesting of such options is contingent upon performance milestones or the occurrence of an IPO or exit event.

The Israeli Privacy Protection Authority recently published a pronouncement whereby a collection of email addresses and the names of their owners also constitutes a database.

The Delaware Court of Chancery issued a precedent recently, whereby an acquisition agreement may be cancelled due to the occurrence of a “Material Adverse Effect” (MAE) in the acquired entity.

The Israeli Ministry of Energy published on November 26, 2018, a second call for bids, inviting international energy players to submit offers for the exploration of offshore soil.