Defense firms ordered to enact 'compliance program'

Defense Ministry orders contractors to establish program in bid to prevent corruption, bribe-giving to foreign government officials.

By YAAKOV KATZ
soldier jumps of Merkava tank 390 (photo credit: REUTERS)
soldier jumps of Merkava tank 390
(photo credit: REUTERS)
Israeli defense contractors are being ordered to establish a "compliance program" aimed at preventing corruption and particularly the possibility of bribe-giving to foreign government officials.
Earlier this month, India announced that it was barring Israel Military Industries (IMI) from competing in government tenders amid allegations that the Israeli government-owned company was involved in a local bribery corruption scandal. IMI has rejected the charges.
The Defense Ministry has ordered Israeli companies to enact the compliance program in line with new business regulations that Israel is trying to adopt as a member of the OECD, which the country joined last year.
MOD Dir.-Gen. Udi Shani has ordered the ministry's Export Licensing Division not to issue export licenses to companies that do not adopt the new program. Several dozen companies, the ministry said, had already formulated a program and others were currently in the process.
"Signing a commitment to enact a program is a condition for receiving an export license," MOD officials said Sunday.
Compliance Programs are aimed at setting standards for a company regarding the way it does business and to promote ethics and transparency. It also promotes awareness of international conventions that could impact business dealings in foreign countries.
IMI was blacklisted together with India five defense firms for 10 years for allegedly bribing an Indian bureaucrat. According to Indian news reports, IMI has been forced to put multimillion dollar plans to set up a fuse production line on hold due to the decision.