Article XV of the Protocol amends Article 29 (Exchange of Information) of the

Convention, by replacing paragraph (1) of Article 29 with a new paragraph. As amended, paragraph (1) provides for the exchange of information between the competent authorities of the Contracting States. The information to be exchanged is that pertinent for carrying out the provisions of the Convention or the prevention of fraud or evasion in relation to U.S. or Israeli taxes that are covered by the Convention. Thus, for example, information may be exchanged with respect to a covered tax, even if the transaction to which the information relates is a purely domestic transaction in the requesting State and, therefore, the exchange is not made for the purpose of carrying out the Convention. The exchange must, however, be for the purpose of preventing fraud or evasion with respect to that tax.

Paragraph (1) also provides assurances that any information exchanged will be treated as secret. Information received may be disclosed only to persons or authorities concerned with the assessment (including judicial determination), collection, or administration of the taxes to which the Article relates. The information must be used by these persons in connection with these designated functions. Persons concerned with the administration of taxes, in the United States, include legislative bodies, such as the tax-writing committees of Congress and the General Accounting Office. Otherwise confidential information may be received by these bodies but only for their use in the performance of their role in overseeing the administration of U.S. tax laws.