Defense firms ordered to enact 'compliance program'

Defense Ministry orders Israeli companies to establish a compliance program, particularly aimed at preventing the possibility of offering bribes.

March 19, 2012 03:04
1 minute read.
IMI-manufactured Uzi sub-machinegun

IMI manufactured Uzi sub-machinegun 390 (R). (photo credit: Reuters)


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Israeli defense contractors are being ordered to establish a “compliance program” aimed at preventing corruption and – in particular – the possibility of offering bribes to foreign government officials.

Earlier this month, India announced that it was barring Israel Military Industries 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 allegations.

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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.

Ministry director-general Udi Shani has ordered its 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 of doing so.

“Signing a commitment to enact a program is a condition for receiving an export license,” ministry officials said Sunday.

Compliance programs are aimed at setting standards for the way companies do business, and to promote ethics and transparency throughout the industry. These programs also promote awareness of international conventions that could impact business dealings in foreign countries.

IMI was blacklisted for 10 years, together with five Indian defense firms, for allegedly bribing an Indian bureaucrat. Due to the decision, IMI has been forced to put on hold multimillion dollar plans to set up a fuse production line, according to Indian news reports.

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