Fines of tens of millions of shekels: Enforcement against blocking parallel imports steps up

The Competition Authority has been shifting gears in recent months in the fight against harm to parallel imports, and the fines are already piling up: 11.5 million shekels for Carasso Motors, an intention to impose about 17 million shekels on Suny Cellular, alongside other proceedings, both open and covert, against importers in various sectors.

The state seems to be trying to send a sharp message to official importers, as actions that were previously perceived as part of the ongoing relationship with the manufacturer abroad — from transferring information about products that arrived via parallel import to tightening service conditions — could now be considered a violation and end in sanctions of millions of shekels. The Competition Authority itself says it is initiating inspections and not settling for complaints, and the market is already preparing for a reality in which almost every move against a parallel importer requires legal caution.

Photographing the serial number of a product that arrived via parallel import and sending it to the manufacturer, demanding that a customer present a document that already exists in the company's systems, or approaching a supplier abroad in an attempt to understand where products came from to the Israeli market — all these are already in the crosshairs of the Competition Authority.

In the last two years, the Authority has stepped up enforcement of the legal provisions intended to protect parallel and personal imports, and a series of proceedings taken in recent months illustrates how broad the interpretation it gives them is. For direct importers, the significance is not marginal: the financial sanction can reach up to 8% of sales turnover and up to a ceiling of 111 million shekels. In exceptional cases, the question of criminal enforcement may even arise.

Amendment to the law

The turning point came in September 2023, when an amendment to the Economic Competition Law came into effect, adding a dedicated chapter dealing with parallel and personal imports. Until then, it was possible to deal with actions intended to block parallel imports using the general provisions of the law, for example, a prohibition on restrictive arrangements, but in such cases, the Authority was also required to show a real risk to competition.

The relatively new legislation has significantly expanded its toolbox. It prohibits a direct importer from performing a series of actions that could thwart, reduce, or interfere with parallel imports, even when it is difficult to show that the action alone is expected to fundamentally change competition in the entire market. Among other things, this involves transferring information to the manufacturer that allows tracking the supply chain of a parallel importer, changing commercial conditions in a way that makes purchasing from a parallel source difficult, interfering with how a retailer marks or displays products, refusing to supply goods, and certainly an explicit approach to the manufacturer in an attempt to stop supply.

To understand why the Competition Authority attaches such importance to parallel imports, one must first understand the mechanism. Parallel import is the import of an original product from the same manufacturer, not through its representative or official importer in Israel. Instead of purchasing the goods directly from the manufacturer, the parallel importer can buy them from a marketer or supplier in another country and bring them to Israel.

The result is competition for the same brand: alongside the official importer's product, there is an identical or very similar product on the shelf that arrived via a different supply chain, sometimes at a lower price. Therefore, the official importer has a natural interest in reducing this competition, although the situation is more complex on the manufacturer's side. "The manufacturers themselves do not necessarily want to limit parallel imports, because ultimately their interest is to sell more," explains Asi Arbiv, one of the owners of the Clinton Trade group. "On the other hand, they want to maintain the relationship with their official representation in each country."

Photographing in the showroom

In the case of the company Ofer Avnir, an importer of two-wheeled vehicles, photographing the chassis numbers of motorcycles imported via parallel import and sending the photos to the manufacturer ended in sanctions of about 15 million shekels. In another case, the Authority notified the company Roltime, an importer of watches and suitcases, of an intention to impose sanctions of about 11.5 million shekels, subject to a hearing, among other things following the transfer of information regarding containers of Samsonite suitcases imported via parallel import and the use of "mystery shoppers" to photograph competitors' products.

Moshe Sides and Son, which imports sweets and food and bakery products, committed as part of a consent decree to pay more than half a million shekels after approaching a manufacturer abroad, which was intended, according to the Authority, to stop a foreign marketer from selling products to a parallel importer.

Last July, two more companies joined the list. A fine of 11.5 million shekels was imposed on the car importer Carasso Motors after the Authority determined that the company made it difficult for owners of vehicles that arrived in Israel via parallel import to receive service in its garage network. According to the Authority, Carasso demanded that they present an original warranty certificate even when the relevant information was already available in its systems.

In the same month, the Competition Commissioner announced that she is considering, subject to a hearing, imposing a sanction of about 17 million shekels on Suny Cellular, the official importer of Samsung devices in Israel. This is after, according to the Authority, the company approached Samsung with a demand to stop supplying devices to the Palestinian Authority, in a way intended to prevent parallel importers from purchasing them and marketing them in Israel.

And it is not just about responding to complaints. After the publication of the Authority's opinion in September 2023, it launched a proactive move in which it approached 13 major direct importers in various sectors.

"The 2023 amendment was intended to protect competition from actions by direct importers that could block or reduce the activity of parallel importers, recognizing the contribution of parallel imports to lowering prices for the consumer," the Competition Authority told Globes.

According to them, "The Competition Authority acts in the field of parallel imports extensively — initiating independent inspections to detect suspicions of violations, in parallel with examining complaints received on the subject. The Authority also examines the conduct of direct importers in Israel and their engagements with manufacturers and suppliers abroad."

"Very painful amounts"

Advocate Golan Kanti, partner and head of the antitrust and regulation department at Naschitz Brandes Amir, says that the main change from the importers' point of view is the transition from a regime that required an examination of the overall competitive damage to much more specific and broad prohibitions.

"The Authority has very broad authority to impose sanctions, and it is very extreme — up to 8% of turnover. These are very painful amounts. I am not sure that the market understands the situation, what is allowed and what is forbidden according to the way the Competition Authority presented things," explained Advocate Kanti.

According to him, the difficulty also stems from the nature of the relationship between an official importer and the international manufacturer. "This is not a normal supplier-customer relationship. Many times, these are two parties working together to develop the market in Israel, investing in sales promotion and taking risks. A very unique and cautious tango is required here."

One of the sensitive areas is service for products that arrived in Israel not through the official importer. A source in the industry told Globes that there are consumers who purchased products via parallel import and encounter difficulties in receiving service from the official importer's systems. "Some of the official importers' laboratories do not provide service for devices imported via parallel import," the source claims. "Why not provide software service when it is the same device?"

Has the increased enforcement already lowered prices for the consumer? It is hard to determine. There is currently no public data that isolates the effect of the fines and enforcement proceedings. In fact, in a report published in October 2025, the State Comptroller recommended that the Competition Authority and the government measure the impact of import and parallel import reforms on competition and prices — an indication that the state itself does not really know.