The Impact of EU Nanotechnology Risk Regulation on Non-EU Countries: The Case of Israel’s Policy Reform for Cosmetic Products

Abstract

The impact of the European Union (EU) in strengthening nanotechnology risk regulation in non-EU countries is still an under-researched topic. This article focuses on the EU’s influence on its trading partners, using the case study of Israel, which in 2023 adopted restrictions on nanotechnology in cosmetics products following the EU. It is argued that EU risk regulation have been both a trigger and a formative factor for the development of Israeli nanomaterials restrictions. The importance and economic interdependence in the EU market for cosmetics has prompted a response from Israeli policymakers. In addition, the EU regulatory capacity through its expertise and sanctioning authority have influenced the Israeli regulatory agenda. The article shows that the impact of EU regulation also coincided with domestic economic factors, concerns about technology policy and policymakers’ preference for stringent standards. Israel’s risk regulation of nanomaterials in cosmetics provides a useful case study for analyzing the EU’s regulatory impact on its trading partners. Once again, stricter EU’s health and safety regulation drives those of its trading partner upward.

I. Introduction

This article deals with the impact of the EU in strengthening nanotechnology risk regulation in non-EU countries. It focuses on the EU’s influence on its trading partners, using the case study of Israel, which in 2023 adopted restrictions on nanotechnology in cosmetic products following the EU. It is argued that EU risk regulation on the use of nanomaterials in cosmetic products was both a trigger and a formative factor in the development of Israeli nanomaterials restrictions. The importance and economic interdependence in the EU market for cosmetics impelled a response from Israeli policy makers. Lowering trade barriers and safeguarding of consumers was one of the factors driving Israeli nanomaterials regulation. Additionally, the EU regulatory capacity and growing domestic economic and technology policy concerns influenced the Israeli policy agenda.

Israel’s risk regulation for nanomaterials in cosmetic products can serve as an example of the EU regulatory leadership and its influence on its trading partners. In 2009, the EU adopted an ambitious, pioneering regulatory approach to this issue. The Cosmetics Directive 76/768/EEC was first adopted in 1976 and has undergone several revisions since. The latest update, EU Regulation (EC) No. 1223/2009 on cosmetics products (“EU Cosmetics Regulation”), ¹ sets specific requirements for the use of nanomaterials in cosmetics. In particular, Article 16 (1) clarifies that “for every cosmetic product that contains nanomaterials, a high level of protection of human health shall be ensured.” The EU was the first jurisdiction to establish a detailed and explicit regulatory policy for nanomaterials in cosmetic products. ² Therefore, this regulation can ultimately be seen as the birth of a new global standard for consumer health and safety. ³ Following the adoption of the EU Cosmetics Regulation, a number of non-EU countries, including Israel, adopted regulatory measures similar or based on the EU model. ⁴

The newly created Israeli requirements for controlling nanosafety in cosmetic products (“Israeli nanomaterials requirements”) ⁵ originate from an initiative by the Israeli Ministry of Health (MoH). After studying the EU Cosmetics regulation, it prepared a draft set of regulations, in order to align the Israeli ordinance from 1973. ⁶ The alignment process formally began in October 2013, when Israel first notified the World Trade Organization (WTO) of its intention to adjust its cosmetics marketing regulations with the European model. In the description of the proposed law, the notifying body stated: “this draft regulation fully adopts the European model for marketing of cosmetics outlined in regulation (EC) No. 1223/2009 of the European Parliament and of the Council of 30 November 2009 on cosmetic products, which according to professionals provides the best basis for controlling the marketing of cosmetics, the lowering of trade barriers and the safeguarding of consumers.” ⁷ The cosmetics regulatory reform finally came into force in April 2023, with the adoption of the Pharmacists Regulations (Cosmetic Products), 2023 by Israel’s MoH. With a few temporary exceptions, the Israeli restrictions on nanomaterials are in line with the EU Cosmetics Regulation.

These similarities between EU and Israeli regulatory restrictions on nanomaterials will come as no surprise to some. Scholars such as Vogel, Drezner and Damro ⁸ argue that the economic importance of the EU market due to international economic linkages creates incentives for the adoption of high EU environmental, health and safety (EHS) standards by non-EU countries whose domestic industries are heavily dependent on the EU market. Other scholars such as Bach, Newman, Börzel, Risse and Bradford, ⁹ see regulatory capacity as a mechanism through which non-EU countries pursue policies similar to those of the EU. The ability of the EU to shape international risk governance in a given EHS area depends on the political institutions that define and implement a set of market rules. ¹⁰ In cosmetics, EU is arguably the undisputed regulatory hegemon; it combines a large and attractive market with a far-reaching regulatory capacity, deliberately applies EU rules extraterritorially and actively promotes their export. ¹¹

However, the similarities between the Israeli nanomaterials requirements and the EU Cosmetics Regulation cannot be explained by these factors alone. This article argues that while the EU Cosmetics Regulation triggered a similar Israeli policy initiative, domestic factors – technology policy concerns, a cost-of-living crisis and policymakers’ preferences for stricter public health oversight – explain the ultimate policy outcome. Each of these three explanatory factors – the EU market size, its regulatory capacity and domestic drivers – contributes to a multi-layered explanation of why and how the EU Cosmetics Regulation influenced Israeli restrictions on nanomaterials. The interaction between these factors over the course of Israel’s policymaking process explains the increasing trend towards policy convergence.

In view of EU pioneering ambition, this article contributes to three key discussions: First, it offers new empirical insights into EU nanosafety regulatory leadership. While the vast literature has significantly advanced our understanding of EU nanotechnology risk regulation, ¹² it lacks an up-to-date assessment of the EU’s impact on other countries’ rules. ¹³ The Israeli case thus provides us with an example of the factors and the process that can lead to stricter nanotechnology risk regulation along the lines of the EU model. Second, it highlights the link between regulatory capacity and resultant regulatory diffusion. The case of Israel shows that regulatory diffusion is more likely when it is accompanied by locally salient economic, technological and safety concerns, and when the EU’s regulatory capacity combines technical expertise and sanctioning authority for effective negotiation of trade agreements. Third, it unifies existing theoretical arguments in the literature of comparative risk regulation, regulatory convergence, and European studies on the role of the EU and domestic factors in determining causal relationship and provides a nuanced and testable set of expectations about the EU’s regulatory impact and learning processes. ¹⁴

The article proceeds as follows: section II briefly presents the Israeli requirements on nanomaterials safety and compares them with those of the EU. Section III discusses the analytical framework of EU’s regulatory impact and domestic factors. Section IV contains an empirical analysis that shows that EU risk regulation was a major trigger prompting Israeli risk regulation and continued to play a decisive role in the further course of the regulatory process. To explain the influence of EU and domestic factors on the Israeli adaptation process, this study uses a process tracing methodology based on primary policy documents, legislative texts and media reports, as well as interviews with senior Israeli officials. ¹⁵ Section V concludes.

II. EU and Israeli requirements on nanomaterials safety

The EU pioneered the adoption of risk regulation in the area of nanomaterials in cosmetics with the publication of the EU Cosmetics Regulation in November 2009. This was the result of harmonisation of previous EU Member States labelling, packaging, and safety regulations but with a more ambitious goal of filling gaps in national laws specifically related to the use of nanomaterials in consumer products. ¹⁶ Israel promulgated rules on the restriction of nanomaterials in cosmetics in April 2023, as part of a long-awaited reform in cosmetics. The new rules from 2023 took into account experience gained over several years and they were the result of detailed and thorough negotiations between the Israeli MoH, the Ministry of Economy and Industry (MoE) and the Ministry of Finance (MoF), which took several years to complete. ¹⁷ This section briefly presents the Israeli requirements for nanomaterials risks and compares them with those of the EU. As a full analysis of the EU regulatory measures is beyond the scope of this article, it focuses on three central dimensions of the EU Cosmetic Regulation – “definition,” “notification” and “labelling.” ¹⁸ The following section examines how these issues are regulated in Israel, following the EU.

One feature of the EU Cosmetics Regulation is a new definition for the identification of nanomaterials that are subject to specific regulatory restrictions. Article 2, Section k defines “nanomaterial” as an “insoluble or bio persistent material and intentionally manufactured material, with one or more external dimensions, or an internal structure, on a scale from 1 to 100 nm.” The Israeli nanomaterials requirements have exactly adopted the European definition. This definition is clearly stated in Article 55A of the Pharmacists Ordinance and is now also regarded as a general definition of the Israeli law. ¹⁹ Additionally, Israel added a definition of “EU import legal requirements” for nano ingredients, which specifically refers to the EU Cosmetics Regulation “as applicable from time to time, and any regulatory amendments that come in their place.” ²⁰ This suggests that the Israeli regulatory reform expanded the scope of restricted substances and nanomaterials are now explicitly covered, in accordance to the EU Cosmetics Regulation and its future adjustments.

The EU Cosmetics Regulation and the Israeli nanomaterials requirements regulate the use of the same nanomaterials, namely carbon black (nano), titanium dioxide (nano), zinc oxide (nano), methylene bisbenzotriazolyl tetramethylbutylphenol (MBBT) (nano), and tris-biphenyl triazine (TBPT) (nano). ²¹ The scope of products to which the nanomaterials restrictions apply resembles. The Israeli nanomaterials requirements apply to products that come into direct contact with the human body, such as sunscreens and other daily care products, which is in accordance with the EU Cosmetics Regulation.

As for the notification dimension, both the EU and the Israeli rules state that nanomaterials in cosmetic products can be placed on the market only if they have a responsible person (RP) associated. According to Article 13 of the EU Cosmetics Regulation, the RP must notify to the Commission and submit all the data requested concerning the product, via online Cosmetic Product Notification Portal (CPNP). This application is managed by the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs. ²² The RP should ensure that the product has undergone a rigorous safety assessment and that a cosmetic product safety report (CPSR) is set up in accordance with Annex I of the EU Cosmetics Regulation. The data required include nanomaterial specifications, such as physical-chemical properties and particle size, and estimation of the amount of nanomaterials contained in the product to be placed on the market annually, as well as providing toxicological profile. ²³ Since nanomaterials listed in Annexes IV, V, and VI have already been subject to a full risk assessment by the Scientific Committee on Consumer Safety (SCCS), nanoproducts listed in these Annexes no longer need a submission of notification.

As in the EU, the Israeli nanomaterials requirements oblige that each cosmetic product, including those which contains nanomaterials, should be linked to a legally responsible person, that must provide for marketing notification via online system. ²⁴ The notification regarding nanomaterials will contain data in accordance to the “EU import legal requirements.” ²⁵ Those include information on particle size, as part of a toxicological profile. For nanomaterials that are not listed in the annexes III–V of the EU regulation, further notification requirements will apply. ²⁶ In addition, a safety assessment conducted outside of Israel can be relied upon. It should contain all the data requirements, including a statement that the safety assessor meets the eligibility conditions of approval set forth in the EU import legal requirements. ²⁷ This indicates that the Israeli reform expanded the safety assessment for nanomaterials in accordance with the EU law.

In line with the EU Cosmetics Regulation, the Israeli nanomaterials requirements require mandatory labelling of cosmetic products containing nanomaterials. ²⁸ The names of the nanomaterial ingredients must be followed by the word “NANO” in brackets. ²⁹ In addition, cosmetics containing nanomaterials must carry a warning label in Hebrew stating: “This cosmetic product contains nanoparticles and is intended for use on whole, unbruised skin.” ³⁰ It was also decided to tighten the standard compared to the European regulation regarding the coating of nanomaterials in sunscreen lotions [Zinc Oxide (nano), and Titanium Dioxide (nano)]. However, these requirements were only approved as a temporary until June 1, 2024. ³¹

As the discussion above shows, EU and Israeli nanomaterials use restrictions in cosmetics have a number of remarkable similarities, such as addressing the same substances, safety assessment, definitions, responsible person and mandatory labeling.

III. Analytical framework: EU impact and domestic factors

This section outlines the analytical framework that will guide the empirical investigation. While academic literature identifies multiple factors to explain the EU’s power to influence EHS risk regulation of non-EU countries, scholars discern an emerging consensus towards two major factors, namely market size and regulatory capacity. ³² While these factors can explain the possible impact of the EU on regulatory developments in Israel, they do not exclude the possibility of additional domestic factors contributing to the policy-making process and outcome. Domestic concerns common to the EU and non-EU country, together with evolving state preferences, can increase the likelihood of regulatory convergence. These patterns of emulation and compilation are common in diffusion processes. ³³ Subsequently, these jurisdictions share an important commonality: more robust regulation is taking place that provides more stringent EHS protection.

Market size is an important factor that leads decision-makers to pursue a policy similar to that of the EU due to the economic interdependence in this large market. Non-EU country may decide to adjust policy in order to avoid market exclusion or the transaction costs associated with multiple regulatory frameworks. ³⁴ In the case of health-related public policy such as the Cosmetics Regulation, rules in a large consumer market such as the EU can produce economic incentives for non-EU industries to adjust their product safety regulation with the European model in order to ensure their importation from the EU. ³⁵ A scope condition for the market size factor is the degree of interdependence between the EU and non-EU markets for consumer products, especially the importance of the EU market for non-EU retailers. ³⁶

Regulatory capacity is additional factor which includes the ability of the EU to implement and enforce a set of market access rules, including the ability to uphold international rules for the risk-issue in question. Bach and Newman ³⁷ have proposed the term regulatory capacity for having regulatory expertise, coherence and statutory sanctioning authority to ensure compliance with EU rules. In particular, the growing coordination of control over market access coupled with technical expertise at the EU level has altered the ability of the EU to leverage its market power globally. ³⁸ Policy-makers use the EU expertise and risk governance tools in their own policy-making efforts for inspiration and to measure the outcomes of different policy options. In particular, once policy-makers have decided to address a certain risk-issue, they can find a helpful and instructive sources of information and guidance in the EU administrative authorities. ³⁹ Contacts between EU and Israeli actors for the purpose of information exchange and learning provide an indication of the EU regulatory capacity.

Relatedly, the power of the EU to persuade other countries to adjust their national regulations toward a more stringent approach is closely linked to its domestic regulatory capacity. ⁴⁰ When the EU adopts a regulatory position with extraterritorial implications, other countries evaluate the costs and benefits of changing their national rules. While the size of the EU market determines the magnitude of the potential harms of non-adjustment, regulatory capacity determines the EU’s ability to enforce its rules. Its regulatory institutions facilitate or support the adjustment process by providing the regulatory tools necessary to influence other countries’ rules.

The two factors above provide possible explanations for the EU impact on the adoption of risk regulation in non-EU countries. However, they cannot fully explain regulatory convergence upward. Domestic factors complete the picture. Vogel emphasises these factors and argues that regulatory convergence is not only influenced by the EU: Non-EU countries also make some choices in the adjustment process, and there are also some causal factors on the part of non-EU countries in adjusting to European policies. ⁴¹ These factors are anchored in the literature on policy convergence and diffusion, which emphasises, among other things, the costs of regulatory adjustments for stringent standards and the need to solve similar EHS problems at the domestic level, which lead to a political preference for regulatory convergence upward. In terms of the costs of regulatory adjustment, policy change requires that the costs of regulatory change are low relative to the benefits of market access. ⁴² For example, costs would increase if EU rules and existing domestic rules in a non-EU country diverge, whereas regulatory alignment with the EU will reduce these costs. Furthermore, the new, stricter standards in a non-EU country should be achievable at a reasonable cost. In other words, a policy change is desirable if it is affordable for a non-EU country. ⁴³

As for the similar problem-solving factor, some studies suggest that a non-EU country may adapt its risk regulation to the EU not only because of its trade interests but also because of its own need to respond to similar EHS problems. ⁴⁴ Moreover, policy convergence can be accelerated if international or supranational institutions have engaged in similar problem-solving actions. This argument reflects the “learning” aspect of the diffusion process. ⁴⁵ Policy makers in non-EU countries could learn lessons from EU risk regulation that they could apply in their own countries. This article focuses on three domestic factors that can be associated with this literature, namely technology policy concerns, a cost-of-living crisis, and policymakers’ preferences for risk-averse policies.

IV. Empirical analysis: EU impact on Israeli risk regulation

EU Cosmetics Regulation had strong extraterritorial impact on Israel. The analysis shows that EU market size and regulatory capacity played an important role in the Israeli agenda-setting phase and continued to affect the subsequent policymaking process. Regulatory capacity gained significance throughout the course of the Israeli policymaking efforts. Moreover, domestic drivers related to Israel’s cost-of-living crisis and technological innovation policy also played a role in the policy formation phase and remained important. Administrative preferences for stricter public health oversight explain the temporary differences between the Israeli nanomaterials requirements and the Cosmetics Regulation.

1. EU market size

Lowering barriers to entry for trade was a key consideration pushing for nanomaterials restrictions higher on the Israeli regulatory agenda. ⁴⁶ The EU Cosmetics Regulation triggered a global shift towards establishing restrictions for the use of nanomaterials in cosmetic products, and set a de facto global standard for their marketisation. As Israeli retailers of cosmetic products are in trade relations with the EU, the adoption of the import principles laid down in the EU regulation was necessary to ensure the import from the EU.

The Israeli consumer products sector is characterised by a strong degree of interdependence and cooperation with the EU market, ever more so since Israel and the EU signed the EU–Israel Association Agreement, which entered into force in June 2000. ⁴⁷ The EU is Israel’s largest trading partner: In 2022, 32 per cent of Israeli imports came from the EU, while 25.6 per cent of its exports went to the EU member states. The Israeli market is heavily dependent on import from the EU, which stems from the limitations of Israel’s internal market, the EU market size and its geographic proximity. ⁴⁸ Israel’s dependence can be seen especially in the food, automotive and pharmaceutical sectors. The most traded products are chemicals and related products, and industrial products. ⁴⁹ Importing cosmetic products is permitted only from EU member states or those that have established trade relations with Israel. This high degree of interdependence meant that nanomaterials restriction requirements adopted for cosmetic products placed on the EU market directly affected a significant portion of cosmetic products imported to Israel from the EU. The importance of the EU market compels Israel’s cosmetics sector to adjust its marketing regulation in accordance with EU rules.

The Israeli MoH has taken note of the challenge that compliance with EU restrictions on nanomaterials in cosmetics poses for its domestic cosmetics industry. It initiated the process of drafting the Pharmacist Regulations (Cosmetics) in 2013 with an intention to adjust its cosmetics marketing legislation with the European model. In October, Israel submitted a new draft of cosmetics regulation to the WTO Committee on Technical Barriers to Trade (TBT) that promised to improve both trade and consumer safety. The new proposal closely followed the EU Cosmetics Regulation as a model for the marketing of cosmetics and included strict new requirements for nanomaterials. MoH has stated that the new regulations will allow for better protection of consumers whilst also lowering trade barriers to entry of products. ⁵⁰ That trade interests (apart from consumer safety) were a key driver for this regulation becomes clear when one considers that both Israeli MoH and MoE oversees nanomaterials marketing regulation. Whilst MoH led the alignment process, MoE and trade-related organisations worked with MoH and closely followed the Israeli policy-making process. ⁵¹

Another factor that explains Israel’s willingness to move towards the EU model had to do with the actions of Israeli industry during the alignment process. With the emergence of new cosmetic products in the EU (and the decline of alternative products that do not contain nanoingredients), the domestic competitive pharmaceuticals industry pushed to allow their importation into Israel. The goal of increasing the variety of cosmetic products that can be sold in the Israeli market thus led Israel’s pharmaceuticals industry to urge the Israeli MoH to adopt the EU regulatory framework for cosmetics, including products containing nanomaterials. ⁵² Overall, the Israeli industry had a strong incentive to realise EU-type reforms in Israel.

2. Regulatory capacity

EU regulatory capacity was a second driver, especially once the Israeli regulatory agenda was set. ⁵³ There has been a multitude of communications between Israeli and EU policymakers on topics related to the EU Cosmetics Regulation, and Israeli policymakers have ample access to EU information about nano-policies through channels such as joint workshops and non-state actors. The number of events and contacts with the specific aim of discussing the restrictions on nanomaterials in the EU and Israel suggests that the EU’s regulatory capacity had an important influence on the Israeli policy-making process.

For example, in 2017, the European Commission’s Technical Assistance and Information Exchange Instrument (TAIEX) organised a seminar in Israel to explain the notification procedure for nanomaterials, with key officials from MoH, MoE and industry. ⁵⁴ MoH, MoE and the Federation of Israeli Chambers of Commerce, also visited Brussels in November 2017 to discuss regulatory developments in the field of cosmetics, including nano-related issues. ⁵⁵

The EU also continued to use its regulatory capacity to reshape the details of Israel’s final draft regulation by controlling market access and exercising expert judgment. It used its ability to scrutinise and assess information to exert pressure on the Israeli administrative authorities within the WTO TBT framework. In November 2018, the EU called on the Israeli government to revise its final draft regarding the requirements for risk assessment and the pre-notification procedure, which deviated from the EU Cosmetics Regulation. ⁵⁶ The EU further emphasised that the inclusion of nanomaterials in the EU Annexes means that they have undergone a very comprehensive risk assessment and have received a positive opinion from the SCCS. Therefore, the EU “strongly recommends following this approach.” ⁵⁷ The high cost of complying with additional procedures, which were stricter than those of the EU, eventually led Israel to abandon most of them, as explained below.

Multinational cosmetics manufacturers and their trade associations actively engaged in the Israeli alignment process and advocated more compatibility with EU rules. In a series of moves, these non-state actors have forced Israeli regulators to adjust. While the motivation of these industry players stems primarily from international trade and economic interdependencies, they also provided Israeli decision-makers with expertise and regulatory tools from the EU Cosmetics Regulation in addition to trade-related considerations, thus facilitating regulatory diffusion. For example, on November 2017, U.S Personal Care Products Council welcomed Israeli regulators from MoH and MoE to Europe in order to clarify EU cosmetics regulatory policies and to observe how they are implemented by authorities in day-to-day practice. On 25 January 2018, the Council wrote a follow-up letter demanding that the proposed regulation should not require pre-submissions for nanomaterials that have already been positively assessed by the EU and are listed in the annexes of the EU Cosmetics Regulation. ⁵⁸ Similarly, Cosmetics Europe (European trade association for the cosmetics and personal care industry), have raised the existence of specific Israeli proposed requirements for nanomaterials that are not in line with the EU or international practices, and “if implemented as such will be very burdensome for companies and will result in product importation being blocked unnecessarily, delay to market access and potential product cost increase.” In their letter to the Knesset Labor, Welfare and Health Committee chairman, the European trade association argued that these requirements are “very concerning” and was willing to accept them only for new nanomaterials that are not listed in EU Annexes ⁵⁹ . Following these moves, several representatives of the Israeli industry strongly opposed regulatory requirements for nanomaterials that differ from the EU Cosmetics Regulation. Israeli importers argued that stricter requirements will cause serious economic disruption, particularly exemption from trade. ⁶⁰ The risk of being excluded from trade with the EU was therefore an important reason for aligning with the EU Cosmetics Regulation. In short, the expansion of regulatory capacity in the EU has strengthened the EU’s position as a policy maker at the international level. This demonstrates the EU regulatory capacity power, both through its expertise and sanctioning authority. ⁶¹

3. Domestic technology policy concerns

While the above analysis shows that the size of the EU market and regulatory capacity were formative factors in setting Israel’s regulatory agenda, they are not the only factors. They coincided with growing national concerns about technology policy, arising from the lack of legislation on nanotechnology health and safety risks.

Since the early 2000s, the Israeli government has prioritised nanotechnology research and development (R&D), seeing it as crucial to the future of the Israeli economy. Over the course of a decade, the Israeli government has invested more than $400 million in nanotechnology R&D and established six university centers for nanotechnologies. ⁶² However, despite the clear potential of the Israeli nanotech sector, there were signs that it was not realising its full potential. This prompted the government to commission a report on the future of nanotechnology in Israel in 2014. ⁶³

In its report, the Samuel Neaman Institute – a national policy research center for science and technology – addressed the EHS issues related to nanotechnology worldwide and advocated for regulatory changes in Israel based on the experience of American and European institutions. ⁶⁴ It drew the Israeli government’s attention to the risk of advancing nanotechnology without simultaneously establishing a regulatory framework to protect public health and safety. It was argued that the lack of regulation on nanosafety issues leads to uncertainty and hinders the willingness of investors to invest in the intermediate phase between academic and industrial development. The above recommendations were fully cited in the Israeli Parliament’s report on the development of nanotechnology in Israel. ⁶⁵ This seems to indicate that solving a similar policy problem was a relevant factor. The existence of international and supranational institutions that facilitated the response to nano-EHS issues was emphasised, as was the fact that Israeli policy makers could draw lessons from the EU regulation that could also be applicable in Israel. ⁶⁶ Israel changed its regulations regarding nanomaterials in cosmetics to mirror the EU regulation not only because of its import interests in relation to the EU, but also because of its own need to respond to domestic technology policy concerns. Given its own nanotechnology risk management needs, Israel saw the EU risk regulation as a possible model for reform. Israel’s regulatory changes can therefore be linked to both the government’s public health agenda and technology policy concerns.

4. Domestic administrative preferences for stricter public health oversight

Domestic administrative preferences for stricter health oversight may explain some subtle differences from the EU Cosmetics Regulation. The complexity and relative novelty of the technology posed a challenge to MoH regulators who, in the decision-making stage, had come to the conclusion that it would be prudent to add supplements to the list of restricted uses and labeling requirements of the EU Cosmetics Regulation.

In addition to supporting an EU-like regulation, MoH has sought to add requirements on nanomaterials due to specific local concerns, such as the frequent use of sunscreen lotion due to the amount of sunlight exposure (particularly in regard to children and the elderly). MoH has therefore opted for careful risk management, which takes into account the needs of those populations that might be more vulnerable to the possible adverse effect of nanomaterials. ⁶⁷ MoH added, as extra precaution, labelling of warning on cosmetic products containing nanomaterials. ⁶⁸ MoH also decided to tighten the standard compared to the European regulation regarding the coating of nanomaterials in sunscreen lotions [Zinc Oxide (nano) and Titanium Dioxide (nano)].

However, these requirements were only approved as temporary, until June 2024, and were not extended. ⁶⁹ The MoH’s stricter standards provoked opposition from the MoE, which claimed they constituted an unnecessary import barrier. ⁷⁰ The MoE claimed that it has not been presented with any data to support the tightening of Israeli regulations compared to European regulations, and that it is an “overly cautious measure” that will cause manufacturers not to export to Israel, which will increase the prices of products in Israel. ⁷¹ In this sense, the most likely explanation seems to be that the costs of adapting to the stricter standards compared to the EU were perceived as high and unreasonable compared to the benefits of market access. The high cost of complying with additional procedures, which were stricter than those of the EU, eventually led MoH to abandon them. Eventually, the MoH added a non-binding warning on its website: pregnant and breastfeeding women, toddlers, people who are in a state of illness and the elderly are advised not to use products containing nanoparticles. ⁷²

5. Tackling a cost-of-living crisis and driving domestic competition

Tackling a cost-of-living crisis was an additional and important factor that ultimately led to the regulatory reform in accordance with the EU law. In recent years, Israel has sought to restructure its economy by moving toward greater competition in the domestic market and trade liberalisation, and away from the regulatory barriers to trade in consumer goods that have dominated much of Israel’s economy in the past. This is reflected in the 2021 government horizontal plan on opening the domestic market for competition and lowering the cost of living, which aims for regulate the strategy of importation to Israel in accordance with the EU. ⁷³ The Israeli government approved a major import reform implemented for different products sectors which included changes in the regulation for food, cosmetics, electric home appliances, and many other products that need to be in compliance with an official EU law. ⁷⁴ “What’s good for Europe is good for Israel Law” has become the new mantra, making compliance with EU standards more profitable and worthwhile to retailers. ⁷⁵ The import of hundreds of products is affected by the reform. The bureaucratic process faced by manufacturers who want to bring their goods to Israel will be eased and the variety on store shelves will increase as manufacturers begin to benefit. ⁷⁶

In particular, the government’s import reform includes cosmetics – and nanomaterials therein – as a sector of strategic importance. ⁷⁷ As part of the government’s policy to reduce the regulatory burden and increase competitiveness in this sector, the government has made a decision to simplify the regulatory process for nano-products. The decision highlighted the EU regulation to shift the regulatory debate: “An importer may import a product that complies with the legal import requirements of the European Union. Nano-products are accompanied by further specialized information in accordance with the European Regulation.” ⁷⁸ This shows the high priority that the Israeli government attaches to the competitiveness of its consumer goods sector. Compliance with the EU Cosmetics Regulation, which has become a prerequisite for reducing the regulatory burden, can be seen as part of Israel’s broader strategy to open up its market to competition and reduce the cost of living. As the explanation of the costs of regulatory adjustments suggests, the regulatory changes were expected to be relatively small compared to the benefits of market access. ⁷⁹ In addition, costs would increase if the EU rules and existing domestic regulations in Israel were different, whereas regulatory alignment with the EU would reduce these costs.

V. Conclusions

This article has argued that the EU risk regulation of nanomaterials in cosmetic products affected similar regulatory developments in Israel. It has shown that the EU’s leverage through its market size and regulatory capacity can enable it to influence risk-policies in non-EU jurisdiction. Control over market access and the exercise of expertise-rich judgment can strengthen the external impact of EU risk regulation. The empirical analysis illustrates how both factors are intertwined. Their importance varied throughout the different phases of the Israeli policy process. Lowering trade barriers played an important role in triggering regulatory change in Israel, in combination with the EU regulatory capacity and emulation of the European model. The EU Cosmetics Regulation can therefore be considered a major influencing factor to the strengthening of nano-standards in cosmetic products.

EU’s regulatory impact, however, should not be measured in isolation from domestic factors in the non-EU jurisdiction. The article shows that the EU regulatory impact is also due to a combination of domestic economic crisis, technology policy, and decisionmakers preferences. These domestic factors guided a significant part of policymakers and industry positions and activities during the design and decision-making of Israel nanomaterials requirements.

Moreover, a country’s preference to emulate regulatory measures may set some limits to the influence of EU risk regulation. The EU can achieve significant external impact by introducing pioneering risk regulation and health policy, but it is likely that subsequent risk regulation in other jurisdictions will not be entirely identical. The empirical analysis also demonstrates that Israeli administrative preferences for health risk management posed some limiting factors that explain the temporary differences from the EU Cosmetics Regulation. This may demonstrate to some extent the influence of local concerns, especially in small countries like Israel, that may intervene even in a subtle manner and take risk-averse position on health issues that are particularly important to them.

However, it is plausible that as implementation and compliance with EU risk regulation increases, the diffusion process will be strengthened. A first sign of this can be observed with regard to the approach to warning label. MoH has added this provision, which is more stringent than the EU Cosmetics Regulation, but only temporarily. It was not extended because MoE rejected any deviation from the European regulation, fearing that this would be an obstacle to imports. ⁸⁰ This means that regulatory convergence prevails and that economic interests were given priority over further national administrative precautions. It remains to be seen whether MoH will renew its precautionary stance and balance between trade and risk.