Government Officials in Israel

Government Officials in Israel

Share this post

January 10, 2017

Chaim Gelfand is a Partner at Shibolet and Co. and head of its Anticorruption Compliance Practice— one of the first dedicated anticorruption compliance practices in any of Israel's first tier law firms. Chaim has been dealing with anticorruption compliance in large multinational companies for almost a decade.

One of the specific compliance risks relevant to Israel is the prevalence of government officials that one is likely to encounter when doing business here.

Despite widespread privatization of various industries over the last 25 years, there are still many government-owned companies, including some of the most prominent companies in the country’s business landscape. These include three of the four largest defense companies as well as the Israel Electric Company, among others. These companies typically conduct themselves as any other commercial company would and do not always have a “governmental” aura to them.

It is debatable whether each of these companies meets the “instrumentality” standard set forth in U.S. v. Esquenazi. But under Israeli law their employees (and even their contract employees) are considered government officials. Under Section 34X of Israel’s Penal Law-1977, a “government official” is defined (for all aspects of the Penal Law) as including “a director in a governmental company … and also an employee of such company or a person employed in its service.”

That definition is further expanded by Section 290 with respect to the Penal Law’s domestic bribery offense. For purposes of that offense, “an employee of an entity providing a service to the public” is also deemed a government official. This somewhat vague definition has been the subject of numerous court cases over the years, in which the courts have expanded their understanding of the term to coincide with the ongoing privatization and outsourcing of what the courts perceive as government functions. This interpretation of “government officials” has been applied to reach employees of privately owned trans­por­ta­tion companies; employees of a gas and oil infrastructure company (in which the govern­ment had a minority share); employees of privately owned banks; members of the National Workers Union; and a guard employed by a private contractor providing security for a government office.

These two issues—the explicit inclusion of government-owned companies in defining the scope of government officials, and the extension to public-service providers for purposes of domestic bribery—make it very likely that when doing business in Israel you will find yourself meeting with a government official. So, although Israel does not have a specific “private bribery” prohibition, one should err on the side of caution when dealing with anyone acting in service to the public. 


TRACE Matrix: Israel
A Look at Anti-bribery Efforts in Israel, Part One – Israel’s History with the OECD
A Look at Anti-bribery Efforts in Israel, Part Two – Perceptions and Enforcement Trends
Israel Strengthens the Battle against Bribery and Corruption

Gray Mail IconClick here to subscribe to TRACE Trends: A Compliance Conversation and receive email notifications as new posts are published.

Turning over a new leaf or getting lost in the weeds? News from the English country garden
Indonesia: An Increasing Focus on Corruption Involving Private Companies
Justina Song Government Officials in Israel


Leave a Reply

Leave this field empty:

Your email address will not be published. Required fields are marked *