Population: 6,276,883

Economy Overview:

Israel has a technologically advanced market economy with substantial government participation. It depends on imports of crude oil, grains, raw materials, and military equipment. Despite limited natural resources, Israel has intensively developed its agricultural and industrial sectors over the past 20 years. Israel imports substantial quantities of grain, but is largely self-sufficient in other agricultural products. Cut diamonds, high-technology equipment, and agricultural products (fruits and vegetables) are the leading exports. Israel usually posts sizable current account deficits, which are covered by large transfer payments from abroad and by foreign loans. Roughly half of the government's external debt is owed to the US, which is its major source of economic and military aid. The bitter Israeli-Palestinian conflict; difficulties in the high-technology, construction, and tourist sectors; and fiscal austerity in the face of growing inflation led to small declines in GDP in 2001 and 2002. The economy grew at 1% in 2003, with improvements in tourism and foreign direct investment. In 2004, rising business and consumer confidence - as well as higher demand for Israeli exports boosted GDP by 3.9%.

General Business Practices.

a). The main language used for business transactions is Hebrew, and contracts with foreign countries are drawn up in English. Hebrew is also used in court proceedings.
b). Business transactions within Israel are normally paid in Israeli shekels (IS) at the counter value of the dollar rate on the date of payment. The majority of commercial transactions are dealt with US dollars.

Collections.

A. Background of Industry.
1. An estimate for collections in Israel would be approximately 70% of debts.
2. Debt collection is handled by both collection agencies and lawyers.
3. Collections work is done ion both commercial and consumer debts.

B. Licensing Requirements.

The majority of collection work is handled by licensed lawyers' offices. Lay collection agencies do not require a licence, but they are not permitted by law to take legal steps and act as the execution office. This can be done only through the intermediary of a lawyers' office

C. General Procedures.

1. Collections agencies will generally send a letter. They are not entitled ( as lawyers are) to act on behalf of their clients through court actions or the execution office.
2. Lawyers send a demand for payment with a warning that the creditor will file legal action if the debt is not paid.

D. Charges & Remuneration.

1. Lay collection agencies charge between 40% and 60% of the amount recovered. 2. Lawyers fees are charged by agreement with the clients as follows :
a) Minimal payment for warning letter plus a percentage of the amount recovered from the debtor plus lawyers fees as adjudged by the court or execution office.
b) Payment on the basis of a retainer for handling the case, and
c) Advance payments for handling from start to conclusion, irrespective of the success of the collection.
3. Collection charged can not be passed onto the debtor.
4. Interest may be added by a court to unpaid bills. In court, interest of 4% to 8% plus linkage to the index, on shekels. On foreign currency interest is charged according to the agreement. According to Israeli law, it is 8 %.

E. Accounting & Remitting.

1. There are presently no restrictions on the transfer of debt collection monies, an any currencies, out of the country. An authorization is required - and granted- from the Bank of Israel to transfer the collection money out of the country in the required currency.
2. Remittance of the debt to a lawyer's office is m