ISRAEL Law and Practice Contributed by: Joseph Sprinzak and Rahel Rimon, J.SPRINZAK
Section 3 (1) of the Ordinance prohibits all trade with an enemy, and also establishes criminal sanctions for contravention of the prohibition. The term “enemy” is defined in Section 4 (1) to include “any individual resident in enemy territory” and “any state... at war with the State of Israel”. Section 3 (3) of the Ordinance states the prohibition on trading with the enemy, which applies also to a “person acting on behalf of an enemy”. The prohibition on trade with the enemy also applies to payment or transmission of money “to an enemy or for the benefit of an enemy or to a place in enemy country” (Section 3 (2)(a)(2) of the Ordinance). Section 4 (d) of the Prevention of Terror Ordinance, 5708 – 1948, prohibits the transmission of money “for the benefit of a terrorist organisation”. The Ordinance also prohibits transferring money or commercial documents and securities (Sections 6 and 7 of the Ordinance), clearly with the purpose of preventing any financial assistance that might aid the enemy in its war against Israel. The Finance Minister is responsible for determining the enemies of the State of Israel, and currently this list consists of citizens and residents of Syria, Lebanon and Iran. Israel is also a member of the Organisation for Eco - nomic Co-operation and Development (OECD) and therefore adopts a wide range of legislation regarding anti-money laundering and terror financing, as well as laws forbidding trade with “terrorist organisations”. Israel has not imposed formal trade or economic sanc - tions against Russia following the invasion of Ukraine; however, many companies are reluctant to engage in trade with Russia for fear of being blacklisted under international sanctions regimes. Moreover, in practice, Israeli banks comply with almost all financial sanc - tions against Russia and Belarus set by European and US regulators. 9.4 International Conflict The most notable legal impact of the war in Ukraine on commercial grain contracts has been the shift in the attachment of the risk in cost, insurance and freight (CIF) contracts to the entry into the Bosphorus Straits. This provides a measure of comfort to Israeli buyers seeking to mitigate the risk attendant on loading in Black Sea ports.
A month after the Hamas attack on Israel on 7 October 2023, the Houthis began attacking commercial ves - sels suspected of being linked to Israel or to Israeli entities or individuals in the Bab el-Mandeb straits and Gulf of Aden, leading to the diversion of shipping routes between Asia/Oceania and the Mediterranean/ Europe from the shorter route through the Red Sea to the longer route around the Cape of Good Hope and West Africa. According to Bank of Israel findings, the impact on Israeli imports and exports of these attacks has been limited compared to other OECD countries in the Med - iterranean, first in light of the small volume shipped to and from Asia/Oceana and second because of the swift action taken by ZIM Integrated Shipping Ser - vices Ltd to divert its vessels to an alternative shipping route that bypasses Africa, followed by the majority of the international shipping industry. Similarly, there have been minimal legal consequences of the Houthi attacks in the Israeli jurisdiction. 10. Additional Maritime or Shipping Issues 10.1 Other Jurisdiction-Specific Shipping and Maritime Issues In Israel, cabotage is regulated by the Coastal Ship - ping (Permit to Foreign Vessel) Law – 2005, and the regulations promulgated thereunder in 2012 regarding applications for permits. Section 1 of the Law defines coastal shipping broadly and includes the carriage of goods and passengers originating from and destined for a port, vessel, facil - ity or structure located in coastal or internal waters of Israel, without calling on a foreign port, excluding the carriage of empty containers or empty tows used by the ship-owner to carry goods. The law provides for permits to engage in cabotage, including the requirement for a permit to perform any other operation in such waters, excluding fishing, oil and natural gas drilling and production, and the plac - ing of pipes for conducting oil or natural gas on or under the sea bed. Insofar as the contiguous zone is
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