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How to Export

Required Documents
Procedures/Transportation
Exporting & Re-Exporting

How to Import

Required Documents
Licensing System
Standards & Testing 
Technical requirement/Labeling/Packaging
Clearance Procedure
Taxes/Tariff 
Transportation 

Trade Finance

Trade Environment

 

Other Technical Requirements:

Sanitary & Phytosanitary Regulations

Sanitary Certificate

Sanitary certificates are required for shipment of cattle, frozen and chilled meat, hides and animal parts. The certificate states that the product is suitable for human consumption and it is obtained in the country of origin.

Veterinary License

Veterinary licenses are required for live animals, meat and other products of animal origin. The license obtained in the country of origin, states that animals have not been affected by diseases for a certain amount of months.

Phytosanitary Certificate

Phytosanitary certificates are required for plants and plant material for which import licenses are mandatory such as propagation material, fresh fruits and vegetables, certain dried fruits, nuts and cut flowers. The relevant authority in the country of origin issues this certificate.

Environmental Permit

Environmental permits are required for all chemicals and raw materials. The application for an environmental permit is presented at the Environmental Department of the Palestinian Ministry of Health. The Israeli Ministry of Environment must also approve the application. Normal processing time for approval is 5 days. No fees are charged to issue the permit. A certificate of analysis of the imported good (obtained from the exporter) and the pro-forma invoice must be attached to the application.

Labeling, Marking and Packaging

Labeling

Imported products must have Arabic labeling containing the following information:

  1. Name of the product and product trade mark;
  2. Kind of product;
  3. Name and address of the importer;
  4. Place of production, name and address of producer;
  5. Date of production and expiry date;
  6. Product contents/ingredients;
  7. Any preservation and storage tools;
  8. Volume of product.

Should another label in a language other than Arabic be present on the product, the Arabic language label should be written in proportionally larger letters and the content in both languages should be identical. The label should be printed in color other than that of the package and be easily legible. The label should be printed on and not glued to the product. In the case of clothing items, the label should be sewn to each individual piece.

A) Approval of Label

Before shipping the goods, the importer should apply for approval of label at the General Directorate of Trade - Ministry of Economy and Trade. The following documents should be attached to the application form:

  1. Label design containing the above mentioned information;
  2. Corporate registration (Chapter 1, Section 4.1);
  3. Registration of the Palestinian agent if the producer distributes in the WBGS through an agent (Chapter 1, Section 4.3);
  4. Proof that the content of the product complies with standards and specifications (Chapter 2, Section 2.3).

The approval of the Ministry of Economy and Trade is valid in order to have the Arabic labels approved by the Israeli Customs Authorities when clearing the goods. In fact, Arabic labels are certified by the Ministry as consistent with the requirements. In case the label is both Arabic and another language, the Ministry of Economy and Trade also certifies that the content in the two languages is identical. The certification is done on the spot and no fees are charged.

B) Conditional Label Approval

The Ministry of Economy and Trade will grant conditional approval in the following cases:

  1. In case the product is a food item requiring the approval from the Ministry of Health regarding the expiry date;
  2. In case the product requires an environmental permit, as is the case with chemical items, the Environment Department at the Ministry of Health approves the label.

C) Warnings

Any product that requires safety warning can not be distributed without the requisite warning (i.e. cigarettes and flammables).

D) Location of Labeling

The labeling process can take place in the exporter country. The importer sends the label for acceptance to the Ministry of Economy and Trade prior to sending them to the exporter.

Goods can alternatively be labeled at the port of arrival. As containers cannot be discharged in the port area, goods must first be stored in a bonded area. From there, containers can be opened and goods labeled. Normally, labels arrive with the goods.

A third option is for the label to be applied at the importer’s warehouse. Goods may be cleared by putting a bank guarantee until such time when inspectors, by the General Directorate of Trade - Ministry of Economy and Trade, verify that the products have been appropriately labeled. The Ministry of Economy and Trade must communicate the result of its checks to the Israeli Customs Authorities within 45 days. The Customs Authorities authorize the bank to release the guarantee. Currently, as a result of an agreement between the PNA and Israel, guarantees should be put in Israeli banks, however it is expected that Palestinian banks will replace the latter.

Marking

Marking is mainly used as an alternative to labeling when the imported goods cannot be labeled (i.e. heavy-duty machinery, vehicles, etc). Labeling requirements apply in this case. Moreover, marking is always required on the packing cases. Common shipping marks to be placed on each packing case are the following:

  1. The identification of the importer;
  2. The number of the packing case;
  3. The port of destination;
  4. Gross and net weight;
  5. Outside measurements of the case;
  6. The country of origin;
  7. Cautionary marks if careful handling is needed.

Packaging

Appropriate packing ensures that the goods arrive safely and comply with the Customs rules on packaging applied in the country of destination. There are various modes of packing including corrugated or plywood boxes, wooden crates, multi-wall bags, barrels and metal containers. In selecting the appropriate option, factors such as the characteristics of the product, the type of transport carrier, legal restrictions and after sale use of the product should be considered.

Legal restrictions apply to certain products, mainly foodstuffs such as fruit, plants and meat. This regulation is intended to protect consumer health and takes into consideration the after sale of the product (i.e. sold to final consumers, used in production and so on). Imported goods destined for the WBGS should comply with such packaging requirements. It is therefore forbidden to use any packaging materials for foodstuffs, which contain substances likely to have adverse affects on human health.

There are not specific Israeli packing requirements related to security concerns or inspections for products imported to the WBGS.

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Clearance

Prior to Arrival of the Goods

Before the goods arrive at the port, the importer should undertake the following steps:

  1. Inform the clearing agent regarding the date of arrival;
  2. Provide the clearing agent with the required documents, should they arrive directly to the importer. In any case, it is advisable to have the documents sent to the importer and/or the clearing agent by fax before shipping in order to verify conformity and accuracy. If all information sent is correct, the Customs Declaration Form can then be issued (Chapter 2, Section 3.2.2).

At the Port of Arrival

Once the shipment arrives, goods have to go through downloading, clearing, inspection and security procedures.

Downloading Procedures

The importer’s goods should be listed in a document called the “Manifest”. This document lists all goods present on the shipment. Only if the goods are listed, they can be downloaded and a delivery order issued. The delivery order is a document issued by the shipping company which states the price to be paid for transportation.

Goods are not allowed to proceed to customs before the importer has paid the shipping company. “Freight Collect” is the clause found in the Bill of Lading stating the importer’s obligation to pay. When the exporter has paid the shipping fees in advance, the clause in the Bill of Lading will be marked “Freight Pre-paid”. Refer to Chapter 3, Section 2.3.2 for a definition of Bill of Lading.

Clearing Procedures

In order to clear the goods the following documents must be presented:

  1. Invoice
  2. Packing list
  3. Certificate of origin
  4. Bill of lading/Airway bill
  5. Import license – where relevant
  6. Certificates from the Standard Institute – where relevant
  7. The file should contain the delivery order to prove that all shipping fees were paid

Goods are given a “Customs Entry” document that contains the number of the shipment and its value. At this stage, the clearing agent identifies customs and duties to be paid and completes the Customs Declaration Form. Clearance procedures are normally done directly in the customs broker’s office using electronic communication systems directly connected with the Israeli Customs Authorities.

Customs Declaration Form (CDF)

The Custom Declaration Form is the official document prepared by authorized clearing agents assessing and calculating customs duty and taxes to be collected by the Customs Authorities. The content of the CDF is as follows:

  1. Information about the shipment, the related file, storage conditions, etc.;
  2. Value of the goods according to the invoice;
  3. Value of the goods expressed in New Israeli Shekels (NIS) (Chapter 2, Section 4.2.3);
  4. Classification of the goods (Chapter 2, Section 4.1);
  5. Customs rates and other taxes (Chapter 2, Sections 4.2, 4.3 and 4.4);
  6. Administrative fees (i.e. 2.25% of the value of goods, as handling fees and seaport taxes);
  7. Total amount to be paid.

Any mistake in quality, quantity, price or tariff codes in the CDF will incur the payment of the difference in customs and import duties, if any. Moreover, mistakes will incur a fine of between 1-2% on the total CIF or FOB. The fine will be between 2% and 30% of the total amount imported if the importer has records.

If the goods do not go through clearance after being downloaded from the ship/plane, they must be placed in bonded areas. If goods go through clearance and there are delays during the clearing and/or security procedures, the importer might pay demurrage and storage fees.

A) Bonded Areas

These are warehouses under the control of customs authorities. Goods are placed in the bonded areas, before going through clearing procedures. Customs duties are not paid unless goods are taken out of the bonded area.

An importer can decide to put the goods in bonded areas for three main reasons:

  1. A long delay in the clearing/security procedures is expected;
  2. A product needs to be analyzed by the Standard Institute and there is uncertainty regarding receiving the standard certificate;
  3. Customs duty can only be paid when the goods are sold/placed in the market (i.e., cars and cigarettes).

Fees paid in bonded areas are for unloading and storing and are based on cubic meters occupied or on the weight of the stored goods. Fees differ between the airport and seaports. For example, a 20-foot container in a bonded area costs a monthly amount of 200 to 250 US Dollars at Ashdod or Haifa seaports.

B) Demurrage and Storage

Demurrage is paid for the delay in returning containers. Storage is paid for any delay in freeing the port areas. If the goods arrive at the airport, demurrage does not exist, however, storage fees are charged upon arrival.

Demurrage and storage for sea freight. If the goods occupy a full container, the Bill of Lading states “Full Container Load” (FCL). This arrangement gives the importer the first 6 days free of demurrage and storage charges. In case of delay, demurrage charges are paid from the 7th day onward, and the charges are on average $25 per day for a 20-foot container, while storage charges are paid starting from the first day of arrival. If the goods occupy only part of a container, the Bill of Lading states "Less Container Load" (LCL). This arrangement allows up to one month free of demurrage and storage charges. The above-mentioned mechanism to pay demurrage and storage apply to this case as well.

Security Measures on Palestinian Imports

Israeli security procedures differ according to the point of entry.

A) At a Seaport

Upon arrival at a seaport, security controls take place twice. The first security control is undertaken when the shipment arrives and the second once clearing procedures have concluded. The importer must pay the second security control for every hour of labor at a rate of about 30 US Dollars. This fee is charged for loading and unloading, not for the inspection itself. Both security controls should not last for more than five days. Security inspection is undertaken using electronic detectors (i.e. X-rays) during the first procedure and opening of the container during the second procedure.

B) At the Airport

At the airport, goods are checked twice. First, when the airplane arrives and after clearing procedures are terminated. Goods must, however, remain at least 24 hours in the airport before the second inspection can take place. Security inspection is undertaken using electronic detectors (i.e. X-rays) during the first procedure and opening of the cases during the second procedure. Approximately, security controls at the airport cost 30 US Dollars for every hour of labor.

C) Following the Inspection

After having been inspected, a gate pass is provided to the importer. The goods can then leave the port area, unless additional conditions must be met. Special arrangements to leave the port area include trucks transporting frozen meat and livestock to the WBGS (which need to be escorted by the Israeli Authorities either (i) directly to the importer’s warehouse or (ii) to the Palestinian checkpoint when such a warehouse is in Area A. The same escorting procedures apply to goods destined for the Gaza Strip on Palestinian trucks.

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Taxes/Tariff

Import Taxes

The Tariff Book: Instructions for Use

A Tariff Book contains all tariffs and other import requirements applied by a country to its imports, and tariffs are detailed and expressed for each product. As the PNA applies the Israeli import, the Customs Tariff Book of Israel is currently used for Palestinian imports.

The “Customs Tariff Book of Israel” (hereafter the Tariff Book) refers to an international Harmonized Commodity Description and Coding System (hereafter Harmonized System) established by the Brussels International Convention.

The Harmonized System

All products are identified by a six-digit code common to all countries adopting the Harmonized System. Products are classified according to main categories, with listings categorized as, for example, live animals, animal products, vegetable products, textiles and textile articles, etc. For each section, different chapters identify sub-categories (for example, within textiles and textile articles there are 14 chapters which focus on specific sub-categories such as silk, cotton, carpets, other textile floor coverings, man-made filaments and so on).

The main six-digit code common to all countries adopting the Harmonized System, is supplemented with two more digits to compose the product’s complete code. For each product identified by the 8-digit code, the Tariff Book gives detailed information.

The Tariff Book Structure

Each page is structured in seven columns, identified by letters. Column A identifies the two main digits identifying the chapter and two more identifying the sub-category (in bold). The other four digits identify the specific product. Column B describes the product. Column C is a multiple column import tariff, indicating the Most Favored Nation (MFN) rate and all preferential rates under free trade agreements. It is worth noting that the EFTA sub-column is united with the EU sub-column, creating a single “EU + EFTA” sub-column . Moreover, the United States does not have a sub-column due to the duty free agreement between the two countries, which eliminated tariffs on all goods. Columns D and F are the purchase tax rate and import increment rate. Column F identifies the statistic units to use when calculating the taxes and customs duty (i.e. customs duty can be calculated per kilogram). Column G indicates whether a surcharge must be applied (stated by the letter C), a standard (S) or licensing (L) requirements must be met.

Identification of the Tariff Code

The exporter should provide the importer with the complete tariff code to ease the process of identification, calculation of taxes/customs duty, and licensing. The importer should request the tariff code for the product upon placing the order. It is advisable that the request for the tariff code happens simultaneously with asking for a catalogue and other relevant information. If not provided by the exporter, the importer’s clearing agent will be able to identify the tariff code from a detailed pro-forma invoice, a brochure, a prospectus and/or a sample. In some instances, an item product will not have any required standards while a very similar item of the same category. Therefore, in order to avoid identifying the wrong tariff code, it is essential to collect as much information as possible about the product. For all electrical, printing equipment and machinery, for example, it is advisable to know the voltage and the weight of the product.

Tariffs

Tariff Structure

Most tariffs are ad valorem and consequently calculated as a percentage of the value of the goods, which is normally the CIF (Cost, Insurance and Freight).

Sometimes tariffs are calculated on the specific base, which is assessed on a statistic unit, as specified in the Tariff Book. For example, duties can be a percentage or a fixed amount per Kg. Specific duties are common in the agricultural sector, particularly on meat, fruit, nuts and animal or vegetable fats/oils.

Tariffs can be combined (ad valorem plus specific). The total tariff is the sum of an ad valorem and a specific tariff. Combined tariffs apply mostly to textiles and textile articles, beverages and spirits, some electrical machinery, fish and crustaceans, edible vegetables and prepared cereals.

Tariffs can also be alternative (either ad valorem or specific). The Tariff Book indicates which of the two apply with the following acronyms: “But Not Less” (BNL) or “But Not More” (BNM). Alternative rates are applied mainly to clothing, dairy products, live animals, poultry meat, edible fruit, prepared vegetables and some electrical machinery and equipment.

Tariff Preference

The PNA grants tariff preferences under free trade agreements and arrangements with the EU, USA, EFTA and Canada. Tariff preference is also granted to Egypt and Jordan.

Customs Valuation

Customs valuation follows the Brussels definition of value:

…the value of imported goods is the value of the goods on the open market on the day they are released from the customs authorities.

Therefore, customs officials may revise declared values for the following reasons:

  1. The price on the sales contract does not reflect prices on the open market;
  2. Changes in prices occur during the period between the date of sale and the date of release;
  3. HARAMA is applied. Customs officials can apply this raise or “uplift” of the customs value (called in Hebrew Harama) as a function of the importer's declared price to import transactions.

Variable Import Levies

Variable import levies are imposed on imports to maintain price stability in the local market in order to protect domestic products. Variable import levies are applied to balance the difference between world prices and prices in the Israeli market. They are applied on a number of fresh and processed agricultural products such as sunflower seeds, sugar, pasta products, jams, fruits and nuts, wine, powdered milk, cheese and frozen fish.

Other Levies: Surcharge

The Tariff Book contains a special column indicating compulsory surcharges (indicated by the letter “C”) applied on a number of imported goods including foodstuffs such as edible meat, fish and crustaceans, and textile products.

Purchase and Excise Taxes

Purchase and excise taxes are levied on both local and imported goods.

Purchase tax is levied on consumer goods (perfumery, carpets, clocks and watches), iron and steel products, some copper products, alcohol, machinery and boilers, some electrical machinery, motor vehicles, cosmetics, and tobacco. The rate ranges from 5 to 95%. Purchase tax is calculated for imported goods on the value of the goods for customs purposes, plus the amount of customs duty, applying the Tama System, which is called “import increment rate” in the Tariff Book and indicated in column E. The value of the goods is increased according to the import increment rate. The purchase tax is calculated on the value of goods, adding the import increment. For a practical example on how to calculate the purchase tax with the Tama system.

Tama

Tama is the Hebrew acronym for importation rate uplift and is a mark-up applied before calculating the purchase tax. Given that the Tama system applies only to imports, the result is that locally produced goods contain a lower purchase tax.

The excise tax is applied on alcoholic beverages, petroleum, arms and tobacco.

Value Added Tax (VAT)

The Value Added Tax is an indirect form of taxation on both locally produced and imported goods. The VAT is taxed at 17% and is calculated after all other tariffs and taxes have been added to the CIF value.

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Transportation

Transporting goods from the Israeli ports to the West Bank or Gaza can be done by Israeli “yellow plated” trucks (meaning licensed by Israel) or Palestinian licensed trucks. When Palestinian trucks are used, they require a special arrangement.

Procedures from the Port of Arrival to the West Bank

Goods transported to the West Bank by Israeli licensed trucks are permitted to proceed all the way to the final destination. Some Palestinian vehicles are granted an Israeli permission to transport goods from Israeli ports back to the West Bank.

Procedures and Costs from the Port of Arrival to Gaza

Goods transported to Gaza by Israeli licensed trucks must be unloaded at the Israeli crossing point with Gaza. If goods are immediately reloaded from the Israeli truck onto Palestinian trucks, it is a “back-to-back” procedure. When goods are unloaded in the security zone, at the Israeli crossing point, then reloaded onto Palestinian trucks the procedure is known as “unloading-reloading”. In both procedures goods will be subject to Israeli security checking.

After being reloaded onto Palestinian trucks, goods will be checked by the Palestinian Customs, Health and Supply authorities to monitor goods imported into Gaza.

The current fees for crossing any of the crossing points between Israel and the Gaza Strip are 250 NIS per truck.

The Convoy System

Palestinian trucks are allowed to reach Ashdod and Haifa ports and Ben Gurion airport to collect the imported goods, but they must be escorted by Israeli security. This operation is called the “Convoy System”. Arrangements for exit permits for the vehicle and the driver, as well as for the convoy, must be arranged through the Palestinian Ministry of Civil Affairs (via the Liaison Officer) few days prior to arrival of the shipment. Trucks permitted to leave in a convoy are subject to Israeli security inspection that could take few hours. All trucks must remain together, and be escorted by Israeli security while in Israel.

 

The importer and/or the clearing agent should arrange with a trucking company to move the goods from the port. The importer should calculate carefully the arrival of the shipment and the duration of the clearing process because the convoy can be only arranged for a specific day. If a shipment is late, the truck must return to Gaza and a new arrangement has to be made, to transport the shipment upon arrival.

Special Transport Arrangements

Imported goods need special transport arrangements, particularly frozen items, heavy-duty machines, and goods in containers. Therefore, the importer should inform the transporter about the nature of the shipment and its size to arrange for an appropriate truck.

Insurance

Trucks are insured for the cargo as well as for the vehicle. However, the importer can draw up an additional insurance, normally with a Palestinian insurance company (from the port to his premises) depending on the value of the goods.

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