Monetary Sanctions for Violating Food Legislation – A Fundamental Shift in Enforcement Approach

On 27.12.23, a document titled “Enforcement Policy in the National Food Service” was published. This document was issued by Ms. Pnina Oren Shenidor, Director of the Israeli National Food Service at the Ministry of Health.

This document represents a fundamental change in the enforcement policy of the National Food Service. While the authority was established previously under the Public Health Protection (Food) Law, 5776-2015 (hereinafter: “the Law“), its implementation is now taking effect, and the food business community must familiarize itself with these changes. The document states that this represents a fundamental shift in the approach to supervision.

It involves the practical implementation of responsibilities for food business operators (producers, importers, and food marketers).  This stems from the perception that food business operators have the best control and maximum knowledge of the production, import, or marketing processes of the food within their area of operation, and therefore they bear the primary responsibility for ensuring its safety and quality, while the regulator has “oversight responsibility”.

This perception necessitates a fundamental change in the deeply rooted perceptions of the Food Service and the food industry in Israel, both in the regulatory sphere and in the sphere of food supervision: In the regulatory sphere – more freedom is given to the food business operator to determine the conditions related to food safety, and in the supervisory sphere – a transition from supervision that emphasizes document inspection throughout the production, marketing, or import processes of food, to supervision based on risk assessment and increased supervision of marketing channels, based on the food business operator’s declarations and commitments, with an emphasis on ex-post enforcement.

The document states that in terms of the enforcement tools available to the Food Service, following the various amendments to the Law, the Director of the Food Service has several different enforcement options regarding violations of the Law: criminal enforcement, administrative enforcement including administrative enforcement measures in the form of monetary sanctions, administrative warnings, and commitments to refrain from violations.

In addition to the enforcement tools, the Food Service has additional administrative tools, such as the ability to suspend licenses or approvals, various conditions on licenses/approvals, confer upon the importers the status of “breach of trust”,” issuing orders to cease operations, to collect food and prevent the transfer of food to a violating entity, notification of food hazards including the rejection and destruction of food.”

The enforcement policy consists of several tracks: The criminal track – criminal offenses (Sections 256-257 of the Law), the administrative track – monetary sanctions, administrative warnings, commitments to refrain from committing an offense, as well as suspension of licenses, recalls, and the imposition of a “breach of trust” status.

In an accompanying document, the National Food Service explained that “most cases will be channeled for handling through the administrative enforcement procedure. However, this does not detract from the prosecutor’s authority to file an indictment, when the circumstances justify it in appropriate cases”. When will an indictment be filed? In cases where the suspect committed an offense with the potential for widespread harm to public health, or where the suspect committed an offense with the potential for significant harm to a person’s health or well-being, or in circumstances where a violation was committed systematically by a repeat offender, and after having previously received a payment notice, warning or commitment under the Law, or in other exceptional cases with the approval of the Legal Advisor of the Ministry of Health.

The Food Service may decide “with respect to a specific violation, or a specific type of violations, which have been determined to be enforced through criminal proceedings – that they be enforced through administrative enforcement due to the frequency of the violation and the need for a rapid and broad response, or due to the need for efficient and rapid enforcement of the provisions of the Law”.

In the following paragraphs, we will elaborate on the imposition of monetary sanctions. This is an effective, rapid, and deterrent enforcement tool. There is no need for a criminal investigation process. The imposition of a monetary sanction is not accompanied by social stigma and does not result in a criminal record.

Sections 261 and 262 of the Law details the acts or omissions for which a person who commits them is exposed to the imposition of a monetary sanction. The cases listed in Section 262 are severer allowing for the imposition of a sanction 1.5 times greater than the base sanction. Section 260 defines the base amount of the sanction, which currently stands at NIS 8,000 for a violation committed by an individual; where the violation was committed by a corporation, the sanction stands at NIS 20,000 per violation if the corporation had an annual turnover of less than NIS 100 million in the year preceding the violation, and if the violating corporation had an annual turnover of more than NIS 100 million, the sanction amount stands at NIS 40,000 per violation.

In other words, these are monetary sanctions that can reach tens of thousands of NIS and even more.

The Law stipulates that the Director is not permitted to impose sanctions lower than the amounts specified in the Law. However, the Law allows the Minister of Health to determine cases, circumstances, and considerations under which a lower monetary sanction may be imposed. On 1.1.24, regulations on reduction came into effect, establishing several parameters for a reduction in the monetary sanction.

The Director of the Food Service explained that “the first parameter is the conduct of the violator, which will lead to a reduction of different levels depending on the circumstances: Where the violator has not violated any provision of the Law or its regulations in the five years preceding the violation, there will be a 20% reduction in the sanction amount; where the violator has not violated the same provision in the three years preceding the violation, there will be a 10% reduction in the sanction amount; where the violator stopped the violation on his own initiative and reported it to the Director upon discovery, before the Director approached him on the matter, there will be a 40% reduction in the sanction amount; and where the violator took actions to prevent the recurrence of the violation and mitigate the damage caused by it, and satisfied the Director, there will be a 20% reduction in the sanction amount.

The second parameter is the personal circumstances parameter, and it is relevant only for a violator who is an individual and not a corporation. According to this parameter, if the Director finds that the violation was caused by personal circumstances that justify a reduction in the monetary sanction, or if severe personal circumstances existed that justify not fully enforcing the law against the violator, the violator’s monetary sanction amount may be reduced by 20%.

In any case, according to the regulations, even if multiple mitigating circumstances exist together, the reduction rate shall not exceed 70% of the original sanction amount. However, where the monetary sanction amount exceeds 5% of the violator’s annual turnover, the Director may reduce the amount to 5% of the violator’s annual turnover. From the above, we see that a certain reduction in the sanction amount can be obtained if the appropriate circumstances exist”.

Please note that acting in good faith does not provide protection against the imposition of a monetary sanction. In other words, even if the violation was an unintentional error committed in good faith, a monetary sanction may still be imposed.

How can businesses prepare for these requirements?

Every food business operator should establish procedures regulating their conduct regarding food legislation, preferably with professional assistance. These procedures should include instructions for ensuring compliance with legal requirements; instructions regarding the documents submitted to the Ministry of Health and how they are maintained; instructions on refreshing knowledge within the organization and conducting training; instructions on dealing with enforcement proceedings, and more.