Free Trade Agreements
Summary of the U.S. - Israel Free Trade Agreement
Status: Entered into force on September 1985
**The information presented on this website is meant to serve as a guide.
Only the agreement text and the customs regulations issued to implement the agreement
are definitive. For complex issues or where interpretation is required, U.S. exporters should seek legal assistance or an advanced ruling from the customs administration in the country to which they are exporting.**
If you have any questions about this Agreement, please contact Maria D'Andrea-Yothers
at the U.S. Department of Commerce Office of Textiles and Apparel at 202-482-1550 or by email.
How U.S. Textile and Apparel Companies Benefit
Under the United States-Israel Free Trade Area Agreement (FTA), signed in 1985, the United States and Israel agreed to phased tariff reductions culminating in the complete elimination of duties on all products by January 1, 1995. Most tariffs between the United States and Israel have been eliminated as agreed, although tariff and non-tariff barriers continue to affect a certain portion of U.S. agricultural exports.
Through duty-free trade, the U.S.-Israel FTA allows U.S. textile and apparel exporters to be more price-competitive in the Israeli market when competing with domestic suppliers and with third country suppliers that do not receive duty benefits.
As of January 1, 1995, all qualifying U.S. textile, apparel, footwear and travel goods products exported to Israel were accorded duty-free treatment. However certain customs fees and taxes may still apply. Note: The U.S.-Israel FTA does not cover exports to the West Bank or the Gaza Strip. However, the Palestinian Authority agreed to provide reciprocal duty-free treatment for U.S. products entering the West Bank and Gaza.
Qualifying Products/Rules of Origin
In order to take advantage of the duty elimination, products must qualify as "originating" goods under the terms of the Agreement. In general, if the product is not entirely produced or manufactured in the United States, it must have sufficient U.S. or Israeli content or processing to meet the FTA rules of origin criteria. For example, simple garments such as tee shirts would have to be cut and then, to meet the 35% value-added requirement, be either wholly or partially sewn, and finished in the territory of one or more of the signatory parties to the Agreement. Tailored garments would qualify if they meet the 35% value added requirement and are fully assembled and finished in the territory of one or more of the parties.
A good imported into the Customs territory of Israel is eligible for FTA benefits, if:
No article shall be considered a new or different article of commerce under this Agreement and no material shall be eligible for inclusion as domestic content under this Agreement by virtue of having merely undergone
- the article is wholly the growth, product, or manufacture of a party or is a new or different article of commerce that has been grown, produced, or manufactured in a Party;
- that article is imported directly from one Party into the other Party; and
- the sum of (1) the cost or value of the materials produced in the exporting Party, plus (2) the direct costs of processing operations performed in the exporting Party is not less than 35 percent of the appraised valued of the article at the time of import.
For purposes of determining the 35 percent domestic content requirement under this Agreement, the cost or value of materials that are used in the production of an article in one Party, and which are products of the other Party, may be counted in an amount up to 15 percent of the appraised value of the article. Such materials must in fact be products of the importing Party under the country of origin criteria set forth in this Agreement.
- simple combining or packaging operations or
- mere dilution with water or with another substance that does not materially alter the characteristics of the article or material.
To see more details on these provisions, see Annex 3 (Rules of Origin) of the U.S.-Israel FTA.
For information on the FTA rules of origin specific to importing into the United States, see the U.S. Customs and Border Protection presentation--Agreements and Preference Programs NOT Based on Tariff Shift Rules.
For a qualifying good, for which U.S.-Israel FTA duty-free treatment is requested, the importer must make a claim of preference. The Israeli Customs Service prefers that exporters use their own commercial invoice forms to provide all required information. Exporters should include the following information on their invoice forms: the supplier's name and address, general nature of the goods, country of origin, name and address of the recipient in Israel, name and address of the agent in Israel, rate of exchange, terms of exchange, Israeli import license number (if applicable), shipping information, full description of all goods in the shipment, price per units and total value of the shipment. The commercial invoice must be signed by the manufacturer, consignor, owner, or authorized agent.
To benefit from the provisions of the U.S.-Israel FTA, qualifying goods exported to Israel must be accompanied by a special "US Certificate of Origin for Exporting to Israel." This certificate must be official, i.e., green in color. It can be purchased from one of the Association of American-Israel Chambers of Commerce or a printing house. Photocopies will not be accepted. Single certificates and assistance in filling out the forms may also be obtained at any of the American-Israel Chambers of Commerce.
When the exporter is also the manufacturer, only the signature of the exporter/manufacturer is required on the certificate. However, if the exporter is not the manufacturer and the goods qualify under the FTA rules of origin, the certificate must be notarized and stamped by a local American-Israel Chamber of Commerce. In lieu of notarization by a Chamber, a declaration prepared by the producing company may be attached to the certificate. The declaration, which must be on the producing company's letterhead and be signed by an authorized employee of that company, must refer specifically to the shipment described, stating: “The undersigned hereby declares that the goods in the invoice were produced in the United States of America and that they comply with the origin requirements specified for those goods in the U.S.-Israel Free Trade Area Agreement for Goods Exported to Israel.”
Blanket certificate of Origin--US firms with total annual exports to Israel of at least $20 million may apply for a blanket certificate, or "Approved Exporter" status. Approved Exporter status eliminates the need for a certificate of origin provided the appropriate information is included on the invoice accompanying the shipment. A manufacturer or exporter that wishes to become an Approved Exporter should complete a declaratory form and present it to the Israel Customs Services at the following:
Israel Customs Services
32 Agron Street
P.O. Box 320
For information on common export documents, such as transportation documents, export compliance documents, certificates of origin, certificates for shipments of specific goods, temporary shipment documents, and other export-related documents, see the Export.gov webpage on Common Export Documents.
Measures to Prevent Circumvention of the Agreement’s Rule of Origin
Measures to Prevent Serious Damage, or Actual Threat Thereof, to the Domestic Industry
Provision no longer applies..
Selling to the Government:
Under the U.S.-Israel FTA, Israel agreed to eliminate all restrictions on government procurement and to relax offset requirements on purchases by government agencies other than the Ministry of Defense. For more information, see Article 15 (Government Procurement) of the U.S.-Israel FTA.
Intellectual Property Rights:
The FTA provides full intellectual property rights for U.S. products. The FTA reaffirms obligations under bilateral and multilateral agreements relating to intellectual property rights.
Qualifying Industry Zone (QIZ):
In 1996, the U.S. Congress established the Qualifying Industrial Zone (QIZ) initiative to support the peace process in the Middle East. The QIZ initiative allows Egypt and Jordan to export products to the United States duty-free, as long as these products contain inputs from Israel. The QIZ legislation authorizes the President to proclaim elimination of duties on articles produced in the West Bank, Gaza Strip, and qualifying industrial zones in Jordan and Egypt. In order to obtain duty-free access to the U.S. market under the initiative, the goods must be produced in designated QIZ factories and meet specific rules of origin requirements. See the web page on QIZs for more information.
Office of the U.S. Trade Representative Israel FTA website
U.S. Commercial Service Israel Website
Israel Tax Authority website