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The 3The 3rdrd Seminar on Offset & Seminar on Offset & Industrial CooperationIndustrial Cooperation

Jerusalem, May 2007Jerusalem, May 2007

The 3The 3rdrd Seminar on Offset & Seminar on Offset & Industrial CooperationIndustrial Cooperation

Jerusalem, May 2007Jerusalem, May 2007

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Industrial Cooperation Authority (ICA)Israel

Bina Bar-On, Director General

Industrial Cooperation Authority (ICA)Israel

Bina Bar-On, Director General

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1.1. Offset requirements apply both to Military & civil Offset requirements apply both to Military & civil procurementsprocurements

2.2. Minimum Offset rates required for civil Minimum Offset rates required for civil procurements - 28% GPA Members, 35% procurements - 28% GPA Members, 35% OthersOthers

3.3. Minimum Offset rates required for Military Minimum Offset rates required for Military procurements – 50% (Not FMF)procurements – 50% (Not FMF)

4.4. Threshold – 25 Million NIS (about 6 Million US$) Threshold – 25 Million NIS (about 6 Million US$)

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Israel’s Offset Policy Israel’s Offset Policy (1)(1)

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5.5. At least 20% Direct Offset – by ICA At least 20% Direct Offset – by ICA Discretion Discretion

6.6. Multipliers – Currently under considerationMultipliers – Currently under consideration7.7. Implementation Plan Implementation Plan 8.8. Black ListBlack List9.9. Eligible Offset Activities – Subcontracting, Eligible Offset Activities – Subcontracting,

Procurement, Investments, R&D, TOT, Procurement, Investments, R&D, TOT, Obligation SwapObligation Swap

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Israel’s Offset Policy Israel’s Offset Policy (2)(2)

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• Competitive basisCompetitive basis

• Beneficial for both sidesBeneficial for both sides

• Long-term involvementLong-term involvement

• Disputes settled in good faithDisputes settled in good faith

• Umbrella / Banking AgreementUmbrella / Banking Agreement

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We Mean Business We Mean Business

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• Long term involvementLong term involvement• Accumulation of credits – Even without specific Accumulation of credits – Even without specific

obligation (Pre-Offset)obligation (Pre-Offset)• Surpluses are kept for futures obligations Surpluses are kept for futures obligations • Motivation for business activities Motivation for business activities • Beneficial for both sidesBeneficial for both sides• Simplify bureaucracy – No need to sign new Simplify bureaucracy – No need to sign new

obligation every contract agreement obligation every contract agreement 5

Umbrella Agreements AdvantagesUmbrella Agreements Advantages

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Main FieldsMain Fields of Industrial Cooperation of Industrial Cooperation

• DefenseDefense• AerospaceAerospace• AviationAviation• ElectronicsElectronics• Innovative R&DInnovative R&D• Homeland SecurityHomeland Security• AutomotiveAutomotive

• Computers Hardware & Computers Hardware & SoftwareSoftware

• CommunicationCommunication

• Medical DiagnosticMedical Diagnostic• ChemicalsChemicals• TransportationTransportation• EnergyEnergy

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7

0

500

1000

1500

2000

2500

3000

2000 2001 2002 2003 2004 2005 2006

M$

Fulfillments Obligations

Fulfillments Vs. ObligationsFulfillments Vs. Obligations

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3305, 53%2923,

47%

military civil

4253, 32%

9216, 68%

military civil

Obligations – Civil & Military Obligations – Civil & Military (2000 - 2006)(2000 - 2006)

Fulfillments – Civil & Military Fulfillments – Civil & Military (2000 - 2006)(2000 - 2006)

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Fulfillments By sectors (2000-2006)Fulfillments By sectors (2000-2006)

Others, 1448, 10%

Aviation, 2169, 15%

Metal, 1380, 10%

S.W. Comp. & Comm., 1985,

14%

Medical Devices, 1822,

13%

Chimicals, 225, 2%

Plastic & rubber, 161, 1%

Electronics, 3795, 26%

Automotive, 1231, 9%

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Adv. Bina Bar-OnAdv. Bina Bar-OnDirector GeneralDirector General

Industrial Cooperation Authority Industrial Cooperation Authority Tel. +972-2-6662410Tel. +972-2-6662410Fax. +972-2-6662979Fax. +972-2-6662979

Mobile. +972-50-6240111Mobile. +972-50-6240111E-Mail: E-Mail: bina.baron@moital.gov.ilbina.baron@moital.gov.il

Thank You!Thank You!

Contact ICA at www.ica.gov.il Contact ICA at www.ica.gov.il

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