The 3 rd Seminar on Offset & Industrial Cooperation Jerusalem, May 2007

1. The 3rd Seminar on Offset & Industrial CooperationJerusalem, May 2007 Industrial Cooperation Authority (ICA)IsraelBina Bar-On, Director General 1

2. Israel’s Offset Policy (1) • Offset requirements apply both to Military & civil procurements • Minimum Offset rates required for civil procurements - 28% GPA Members, 35% Others • Minimum Offset rates required for Military procurements – 50% (Not FMF) • Threshold – 25 Million NIS (about 6 Million US$) 2

3. Israel’s Offset Policy (2) • At least 20% Direct Offset – by ICA Discretion • Multipliers – Currently under consideration • Implementation Plan • Black List • Eligible Offset Activities – Subcontracting, Procurement, Investments, R&D, TOT, Obligation Swap 3

4. We Mean Business • Competitive basis • Beneficial for both sides • Long-term involvement • Disputes settled in good faith • Umbrella / Banking Agreement 4

5. Umbrella Agreements Advantages • Long term involvement • Accumulation of credits – Even without specific obligation (Pre-Offset) • Surpluses are kept for futures obligations • Motivation for business activities • Beneficial for both sides • Simplify bureaucracy – No need to sign new obligation every contract agreement 5

6. Main Fields of Industrial Cooperation • Defense • Aerospace • Aviation • Electronics • Innovative R&D • Homeland Security • Automotive • Computers Hardware & Software • Communication • Medical Diagnostic • Chemicals • Transportation • Energy 6

7. Fulfillments Vs. Obligations 7

8. Obligations – Civil & Military (2000 - 2006) Fulfillments – Civil & Military (2000 - 2006) 8

9. Fulfillments By sectors (2000-2006) 9

10. Contact ICA at www.ica.gov.il Adv. Bina Bar-On Director General Industrial Cooperation Authority Tel. +972-2-6662410 Fax. +972-2-6662979 Mobile. +972-50-6240111 E-Mail: bina.baron@moital.gov.il Thank You! 11