The new bill, distributed by the Treasury Department, seeks to address the worrying phenomenon that has been steadily spreading in public bids in recent years. This is the involvement of criminal organizations in the government and public procurement processes.
Under the proposed law, accountant General Yali Rothenberg will be responsible for the mechanisms that allow them to “disqualify suppliers and prevent contracts with public institutions.” A committee is run to review suppliers and is led by senior officials from the accountants’ office. The committee will make recommendations regarding disqualification of suppliers based on opinions submitted by police. The final decision must be approved by the general accountant himself. A key innovation in the bill is its ability to act against businesses related to criminal elements, even if the companies themselves are not directly involved in criminal activity.
The state will implement procurement transactions and land allocations to more than NIS 120 billion per year. It is estimated that billions of shekels will find their way in the hands of criminals. “Israel has the involvement of criminal elements in bidding in various regions by local governments, particularly public bodies, including Arab communities, and even dominant phenomena,” the Ministry of Finance explained, based on data presented by police. “In recent years, there has been an identification of an increase in involvement due to criminal elements in both Israeli infrastructure tenders and land transactions.”
If the law passes Knesset, the supplier seeking to contract with a public institution must present approval from the Treasury General’s Accountant General and prove that he cannot make a deal with him. The supplier’s chief subcontractor must also pass the same check. The check is based on opinions from the police and after giving the supplier the opportunity to assert his case, the committee reviewing the supplier will make a decision.
The bill specifies the area in which it applies. Here, there appears to be a significant involvement by criminal elements. Construction and infrastructure. Security and guard services. Contract and project management in construction and rehabilitation. Transportation; Waste Disposal; Land allocation.
When it comes to land, the law applies only to commercial transactions and not to the purchase of individual private homes. Specifically, it applies to transactions consisting of four or more residential units, or half of the area of Dunham (500 square meters), or value of NIS 5 million.
The decision to disqualify a supplier will be valid for three years.
The bill is part of a broader measure to combat organized crime in Israel, including amending the Act on the registration of contractors, regulating the waste treatment market, and disqualifying contractors involved in government work-related crimes. Together, these measures aim to combat the penetration of criminal elements into their influential position in the Israeli economy, what the bill calls “comprehensive regulatory continuity.”
Published by Globes, Israel Business News – En.Globes.co.il – May 19, 2025.
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