In our area, the British "legacy" of the "Trading with the Enemy Ordinance" of 1939 remains in force. The Ordinance states that "trading or attempting to trade with the enemy" commits a crime and will be subject to a fine or imprisonment and confiscation of the funds or goods involved in such trading.
the British Ordinance was subsequently adopted by the Import and Export Ordinance of 1979, which enables the Minister of Industry, Commerce and Tourism to regulate matters relating to the import and export of goods by "Regulatory Orders" whereby goods shipped or transported contrary to the provisions of the Regulatory Order may be confiscated or, for example, under the "Defense Export Control Law", 2007 under which the export or brokerage of Defense items require the approval of the export department of the Ministry of Defence without which, such activity is a serious criminal offence and additionally such export, without a license, to a "hostile state" as defined in the "trading with the Enemy Ordinance" of 1939 (referred to above) constitutes an extremely serious crime.
So far, all appears to be clear and understandable, however the definition of "enemy" is clouded. An "enemy state" was defined by the British in the above 1939 Ordinance as "an area under the control of an entity which is in a state of war with Israel, and additionally that in respect of any legal proceedings under the Ordinance, a certificate issued by the Minister that the area in question is under control of a particular country will constitute sufficient and binding evidence of the contents of the certificate. The use of expressions in the Ordinance such as, "state of war", "certificate" and "minister" would suggest that the Minister of Defence would be the signatory of the certificate. However, this is not so, according to the Ordinance this authority is granted to none other than the "Minister of Finance".
The above situation resulted, in the matter of "Nachum Manbar" (criminal appeal No 6411/98) that there was no such certificate concerning Iran. Instead an Affidavit given the head of the Research and Intelligence Division, which stated as a matter of ideology, expressed in calls for the destruction of the state of Israel and financial assistance to Hamas and Hezbollah, Iran is an enemy of the State of Israel.
In 1954 the "Law for the Prevention" of Infiltration was passed under which an "infiltrator" is someone entering Israel from: Egypt, Syria, Saudi, Trans-Jordan, Iraq and Yemen. In practice under this Law the above states were regarded as being "hostile". Time has passed, regimes have changed, agreements have been made but no change has been made to Israel's domestic laws. In May 2011 against the background of the "unfriendly" ploys between Obama and Netanyahu to the U.S.A.) issued a declaration concerning a tanker owned by the Ofer brothers which had been sold by means of a Singapore company to a Dubai company which according to the American administration was connected to or was represented by to the Iranian Company (see the "Cargo", Issue No. 116, Pages 22-23). Within a few weeks the "line was straightened" regarding the sanctions which had been imposed by the American administration and in July 2011 the Israeli minister of Finance (Mr. Steinitz) on an Order for trading with enemy which detailed and defined a lengthy list of Companies and Individuals which were involved in the Iranian nuclear and ballistic rockets programs. Such as the "Iranian revolutionary guard", the identity of the owners of Iranian ships and further entities - which henceforth would be regarded as "hostile" under the 1939 ordinance. Accordingly, it was prohibited to "cohabit" with the "Iranian Atomic Council", "Shihad Bakri Industrial Union", "Nobin Energy Company", "Amin industrial complexes", Kava cutting tools (of "kilometer No. 3 of Kalge road Sa idi Street, of Shihad, Iran"), "Rachav Engineering Institve" and for example with a senior military officer, "Muhamad Razah Nakdi", or with Mr. "Abbas Rashidi" and further Iranian personnel. It should be noted that the in order of the Minister of Finance, there is no general statement of trading with Iran and it relates only to the bodies or persons stated in the Minister's Order.
In parallel and in addition, in relation to Iraq, the Ministry of Finance published a notice allowing trade with Iraq, the Ministry of finance published a notice allowing trade with Iraq as if it were not a hostile entity. The validity of this notice was until 12 July 2013.
Additionally under the Order for "free" imports of 1978 and as updated periodically, insofar as countries having no diplomatic relations with Israel and from which imports are prohibited – there is a procedure which involves obtaining an import license on an empirical basis. However, countries such as Iran, Syria and Lebanon, The Arab Principalities, Morocco, Saudi, Qatar, Pakistan, Kuwait, Bahrein are exempt from necessity of obtaining an import license until 31.12.2013,
Unless the products are materials or polyethylene, in which case an import license is required accordingly the license relates to the product and not the country of origin.
It emerges therefore that in respect of the Middle East, being the Middle East, the regulatory provisions are not clear. Saudi which is considered an hostile enemy under the law of 1954, is a country exempt from an import license and the "Iranian threat" is not defined as "hostile" in the Order and the Order relating to Iran applies to specified organisations and persons and is not all encompassing as is the Order issued relating to Iraq.
It may be that the present situation result from a "hopeful belief" for the realization of a commercial potential (how exactly will the trade in apples between Israel and Syria will be regulated?). it is possible that the existing situation derives from an inherent lack of uniformity in the relevant laws and the division of security and diplomatic authority between the Finance and Commerce Ministries. In any event every day is a new day and changes in the governing bodies involved in present business opportunities allowing interested parties to exploit them.
Yoav Harris, Advocate.
The author is the managing partner at Harris & Co. Maritime Lawyers.
Contents of the article are only for general information and do not constitute a legal opinion.