RESTRICTED
WORLD TRADE G/STR/Q1/ISR/7
5March 1997
ORGANIZATION(97-0899)
Original: English Working Party onState Trading Enterprises
Replies toQuestions Posed bytheUNITED STATES1Concerning
theArticle XVII Notification ofISRAEL2
Thefollowing communication, dated 24February 1997, hasbeenreceived fromthePermanent
Mission ofIsrael.
_______________
Question
InG/STR/Q1/ISR/3, Israel describes theIsrael Cotton Production andMarketing Board as
anentity created asaprivate company thatoperates according toIsraeli "Private Companies Order"
directives.CouldIsraelprovideadditionaldetailsonthesedirectives?Arethereotherprivatecompanies
thatwerecreated byandnowoperate under thissame directive?
Israel indicates thattheBoard is,defacto, theonlyIsraeli exporter ofcotton fibre, andthat
thisposition ismaintained onavoluntary basis withIsraeli cotton producers. Areother private
companies eligible toparticipate inthecotton export trade inIsrael iftheysodesire? Does thecotton
board benefit fromanyGovernment sponsored finance, taxrelief, credit, orother programmes that
arenototherwise available toprivate companies?
Weunderstand thattheGovernment ofIsrael hasparticipated inanincome stabilization plan
forcotton growers, which ensures atleast80%oftheirproduction costs inyears when world prices
fallbelow thatlevel. Ingoodyears, when prices exceed normal production costs, including anormative
return tocapital andmanagement, thegrowers contribute anagreed proportion ofthesurplus tothe
stabilization fund. Please clarify therolethattheIsrael Cotton Promotion andMarketing Board plays
inthegovernment income stabilization planforcotton growers. Does theCotton Promotion Board
administer theplan?
Answer
TheCompanies Ordinance (New Version), 1983 (referred toinourprevious reply totheUS
asthe"Private Companies Order" directive) isthebasic Israeli company law,under which alllimited
companies operate. Under theOrdinance, alllimited companies mustberegistered withtheRegistrar
ofCompanies, which deals withcompany registration andother similar formalities. TheCompanies
Ordinance stipulates, among other things, thestandard rules ofconduct forcompanies.
1G/STR/Q1/ISR/5.
2G/STR/N/1/ISR.
./.G/STR/Q1/ISR/7
Page2
Wereiterate thattheIsrael Cotton Production &Marketing Board isaprivate company owned
andoperated bythemajor cotton producers. There isnobarrier toanyother producer establishing
itsownexport company orexporting onitsown. TheCotton Board receives nobenefits from the
Government ofIsrael thatarenototherwise available toprivate companies.
There isnoincome stabilization planforcotton. Infact,theGovernment ofIsrael doesnot
maintain anyestablished support programme forcotton.