Tuesday, November 17, 2009

Dual-Use Technology (or Oil for Food)

Iran isn't the only group having their dual use technologies under tight scrutiny, or facing sanctions connected to compliance with an Oil for Food program.

Like the Iranians, Chareidim in Israel face similar problems.

As you know Chanukah is approaching rapidly, and the hiddur mitzvah of lighting the Chanukiah demands pure olive oil.

And herein lies the problem.

Pure olive oil one buys in the supermarket is very expensive. Prohibitively so for the average Chareidi family in the quantities they would need.

So an entrepreneurial spirit decided to import, ahead of Chanukah, Badatz certified pure olive oil properly labeled for candle lighting.

The reason this would be cheaper is because the olive oil in the supermarket is taxed to the skies by the tax authorities who categorize it as a food product (oil for food), whereas oil for candles, not being categorized as a food product sidesteps all these additional sanctions and tariffs.

The Customs Authority recognizing this dual-use technology and the importers legal attempt to bypass the sanctions and tariffs (for the more dangerous use of this product) through proper labeling, declared the oil as food, hence taxable to the tune of 850,000 shekel - an amount that would probably guarantee the importers lose any profit from their venture.

After a month of no agreement between the sides, and with their candle oil locked up in Customs ahead of the Chanukah buying season, and having no other choice, the importers agreed to put the sum in escrow until an agreement could be reached by both sides on the oil's proper categorization.

The oil has been released to the Chareidi market in time for Chanukah, but an entrepreneurial venture has been crushed.


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8 comments:

Commenter Abbi said...

This story makes absolutely no sense. There has been Badatz candle lighting oil in Israeli supermarkets for years.

JoeSettler said...

So? You're expecting logic from the Israeli Customs Authority, when they smell a company making a profit?

Warren Burstein said...

What a shame that we don't grow olives here in Israel and that we need to import it. /sarcasm

JoeSettler said...

Foreign olive oil is apparently much cheaper (despite all the foreign workers we imported that leave our locals jobless).

They got the Badatz certification because otherwise the Chareidim would not buy it to light their candles.

Customs feels that the Badatz certification (regardless that the oil is labeled and marketed for candle lighting) places the oil under the category of food.

Shlomo said...

According to Wikipedia:

"The grades of oil extracted from the olive fruit can be classified as:
* Virgin means the oil was produced by the use of physical means and no chemical treatment. The term virgin oil referring to production is different from Virgin Oil on a retail label (see next section).
* Refined means that the oil has been chemically treated to neutralize strong tastes (characterized as defects) and neutralize the acid content (free fatty acids). Refined oil is commonly regarded as lower quality than virgin oil; the retail labels extra-virgin olive oil and virgin olive oil cannot contain any refined oil.
* Pomace olive oil means oil extracted from the pomace using chemical solvents, mostly hexane, and by heat."

I had assumed the chanukah oil was from this last category, with traces of dangerous chemicals in it, thus unsuitable for eating and cheaper.

http://en.wikipedia.org/wiki/Olive_oil
http://en.wikipedia.org/wiki/Toxic_oil_syndrome

josh said...

Shlomo is right. The lighting oil is really not edible and the oil for candle lighting available in most supermarkets is labelled as such, I think one is under a well known brand name 'Mia'. I understand that it might also have glass shards in it. Anyway, you can't find the same lighting oil made in Israel because the oil companies are much more efficient here and don't have enough low grade to bother selling it.
Maybe the batch that was sent over was just cheap olive oil and not labeled non-edible

Rob Fisher said...

On the lengths customs officials will go to: Distinguising bolts from screws.

Jameel @ The Muqata said...

We've produced oil from our olive tree in our backyard.

Its edible...and we've used it for lighting chanuka menora lights as well.

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