RESTRICTED
WORLD TRADE G/ADP/W/296
G/SCM/W/304
ORGANIZATION 26February 1996
(96-0705)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
REPLIES TOQUESTIONS POSED BYCANADA1
CONCERNING THE NOTIFICATION
OFLAWS AND REGULATIONS OFISRAEL2
Thefollowing communication wasreceived from thePermanent Mission ofIsrael on
15February 1996.
_______________
Articles 5to7-Commissioner andAdvisory Committee
Q1. Itisstated thattheMinister shallappoint aCommissioner andanAdvisory Committee todeal
withanti-dumping andcountervailing complaints. Arethese appointments doneonapermanent basis
oronanadhocbasis i.e.every timeacomplaint isreceived? Ifthemembers areappointed ona
permanent basis, howmany years cantheyserveontheCommittee? Isthereanypermanent organization
orministry thatconduct anti-dumping andcountervailing investigations orisittheAdvisory Committee
thatisresponsible forthefulldumping/subsidy andinjury investigation?
A1. Theappointments oftheCommissioner andthemembers oftheAdvisory Committee aredone
onapermanent andnotonanadhocbasis. TheLawdoesnotlimitthenumber ofyears inwhich
theCommissioner orthemembers oftheAdvisory Committee mayserve intheirrespective positions.
Theinvestigation iscarried outbytheCommissioner andhisstaffwhoareemployees oftheMinistry
ofTrade andIndustry. TheCommissioner uponcompletion oftheinvestigation submits thecomplaint
andhisfindings oftheinvestigation totheAdvisory Committee, whohears theparties andmakes
recommendations totheMinister concerning theimposition ofthefinalduty.
Article 6(c)-Additional Committee Member
Q2. Itisstated thatincasethesubject matter iswithin thescope ofactivity ofaMinister thatis
notrepresented ontheCommittee, arepresentative ofthatMinistry maybeappointed instead ofastaff
oftheMinistry ofAgriculture. Could thisleadtobiasdecisions since therepresentative inquestion
would presumably havespecial interest inthatparticular sector?
A2. Section 6(c)oftheLawintentionally setsupaCommittee whose members represent thevarious
sectors oftheeconomy. Theroleofthemember from theMinistry whose scope covers thesubject
matter before theCommittee istoshare hisviews fromhisparticular vantage point. Atthesame time,
theother Committee members from theother sectors oftheeconomy willcontribute theirviews on
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thematter before theCommittee andthusarecommendation ismade while every member participating
hasonevote.
Article 12(b) -Normal Price Determination
Q3. Itisstated thatifsimilar goods arenotsoldintheordinary course ofbusiness inthecountry
ofproduction, thenthenormal price shallbedeemed asthehighest price ofidentical goods exported
toathirdcountry inthecourse ofordinary business. Thisseems tocontravene Article 2.2oftheWTO
Anti-Dumping Agreement which requires thatthemargin ofdumping bedetermined bycomparison
withacomparable price(notwiththehighest price) ofthelikeproduct when exported toanappropriate
third country, provided thatthisprice isrepresentative...
A3. ThisSection wasenacted onthebasis ofArticle 2.4oftheAnti-Dumping Code of1979 and
hasnotyetbeen revised toconform withthenewprovision setforth inArticle 2.2oftheAnti-
Dumping Agreement. Inpractice theAuthorities haveactually usedthenormal value calculation as
setforthinSection 12(b)(2) oftheLawandnotthehighest export price toathirdcountry asappears
inSection 12(c) oftheLaw.
Article 12(d) -Sales Below Costs
Q4. Thesalesbelow costsprovision doesnotseemtomeettheWTO Anti-Dumping Agreement rules
which require thatsales below costs maybetreated asnotbeing intheordinary course oftrade only
ifitisdetermined thatsuchsalesaremade within anextended period oftimeandinsubstantial quantities
andareatprices which donotprovide fortherecovery ofallcostswithin areasonable period oftime
(Article 2.2.1). TheIsraeli legislation should clarify thispoint.
A4. Thedraftlegislation currently being prepared inorder torevise theLawwilltakeintoaccount
therules setforth inArticle 2.2.1 oftheA-DAgreement.
Article 17-Documentation
Q5. Itshould beclarified thatacomplaint should include evidence ofdumping/subsidy, injury and
casual linkbetween thedumped imports andthealleged injury. Simple assertion, unsubstantiated by
relevant evidence, cannot beconsidered sufficient tomeettherequirements oftheWTO Anti-Dumping
Agreement(Article5.2).Itshouldalsobestatedthatinvestigatingauthoritiesshallexaminetheaccuracy
andadequacy oftheevidence provided intheapplication todetermine whether thereissufficient evidence
tojustify theinitiation ofaninvestigation. (Article 5.3oftheWTO Anti-Dumping Agreement)
A5. Inpractice theAuthorities dorequire thattheprovisions ofArticles 5.2and5.3oftheA-D
Agreement arefollowed andtheproposed legislation thatispresently being prepared willtakeaccount
ofthese requirements.
Article 20-Dropping acomplaint -Undertaking
Q6. Itisnotclear when anundertaking canbeaccepted. Itshould beclarified thatanundertaking
canonlybeaccepted afterapreliminary affirmative determination ofdumping andinjury ismade
(Article 8.2oftheWTO Anti-Dumping Agreement).
A6. Inpractice theAuthorities donotaccept anundertaking untilaprima faciedetermination is
made. Therevisionary procedure currently underway willrelate totherequirements setforth in
Article 8.2oftheA-DAgreement.G/ADP/W/296
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Article 20(b)
Q7. Itisstated thattheAdvisory Committee shall terminate itstreatment ofacomplaint ifan
undertaking hasbeenreceived. However, Article 8.4oftheWTO Anti-Dumping Agreement requires
thattheinvestigation ofdumping andinjury shallnevertheless becompleted iftheexporters sodesires
ortheauthorities sodecide.
A7. Dueconsideration willbegiven totheprovision setforth inArticle 8.4while amending the
present Law.
Article 21(b) -Powers oftheCommittee
Q8. Itisstated thatupon completion ofthework, theCommittee shalldeliver itsconclusions and
itsreasoned recommendations totheMinister. Does thatmean thattheMinister hasthefinalsayin
terms ofwhether anti-dumping/countervailing duties should beimposed ornot?DoestheMinister have
thepower toincrease ordecrease therecommended anti-dumping andcountervailing duty? Ifthisis
thecase, itwould appear thatduties could beimposed based onpolitical considerations rather than
asaresult ofanobjective investigation.
A8. Section 23oftheLawgrants theMinister theauthority athisdiscretion toimpose byorder
anti-dumping andcountervailing duties. TheSection specifically allows theMinister totakeintoaccount
trade relations between Israel andforeign countries andconsiderations thataffect theeconomy inits
entirety. Thisdiscretionary authority conforms toArticle 9.1oftheA-DAgreement.
Sections 24and25oftheLawpermit theMinister tolevyalesser dutythantheratefound
bytheAdvisory Committee butinnocasemayitbegreater thanthedifference between thenormal
value andtheexport price.
Article 23-Imposition ofAnti-dumping andCountervailing Duties
Q9. Itisstated thattheMinister mayimpose byorder anti-dumping andcountervailing duties if
hefindsthatthefollowing twoconditions aremet:(1)goods havebeenorareabout tobe,dumped
andsubsidized, and(2)material damage hasbeencaused tosomebranch ofproduction bythedumped
andsubsidized imports.
TheIsraeli legislation issilent onthefactors tobeconsidered when determining ifthere is
material injury (material damage). Thelegislation should stateclearly thatadetermination ofmaterial
injury shallbebased onpositive evidence andinvolve anobjective examination ofboth(a)thevolume
ofthedumped imports andtheeffect ofthedumped imports onprices inthedomestic market forthe
likeproducts, and(b)theconsequent impact ofthese imports ondomestic producers asrequired by
Articles 3.1,3.2and3.4oftheWTO Anti-Dumping Agreement.
Further, theIsraeli legislation should include specific provisions oncausality. Inparticular,
thedemonstration ofacausal relationship between thedumped\subsidized imports andtheinjury to
thedomestic industry shallbebased onanexamination ofallrelevant evidence before theauthorities.
Therefore,anyknownfactorsotherthandumpedimportswhichatthesametimeareinjuringthedomestic
industry should beanalysed toensure thatthese other factors arenotattributed tothedumped imports
(Article 3.5oftheWTO Anti-Dumping Agreement).
A9. Causality isspecifically addressed inSections 16,21(b) and23oftheLaw.G/ADP/W/296
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Astothefactors tobeconsidered when making aninjury determination, theAuthorities do
soinaccordance withthefactors setforthinArticle 3oftheA-DAgreement. Theproposed legislation
willaddress thefactors tobeconsidered infullaccordance withtheAgreement.
Threat ofmaterial injury
Q10. TheIsraeli legislation isalsosilent onthecriteria thathavetobeconsidered when conducting
athreat ofmaterial injury investigation. TheIsraeli legislation should clarify thatadetermination
ofthreat ofinjury shallbebased onfactsandnotmerely onallegation, conjecture andremote possibility.
ThereforethelistedfactorsunderArticle3.7oftheWTOAnti-DumpingAgreementshouldbeincorporated
intothelegislation.
A10. Inpractice theguidelines setforthinArticle 3.7oftheA-DAgreement arepresently followed
bytheAuthorities. Theproposed legislation being prepared willconsider theprovisions pertaining
tothreat ofinjury inaccordance withthefactors setforth intheA-DAgreement.
Article 27-Period ofValidity
Sunset clause
Q11. Itisstated thatanorder thatimposes dutyshallbevalid foraperiod ofthree years fromthe
dayofitsimposition. However, upon theCommittee 'srecommendation, theMinister mayreimpose
thedutyiftheconditions foritsimposition continue toexists. Isthethree-year period alsoapplicable
incasetheMinister decides toreimpose theduty? Inother words, doestheIsraeli legislation provide
forasunset provision asrequired byArticle 11.3oftheWTO Anti-Dumping Agreement.
A11. Theprovisions ofSection 27oftheLawwereintended tobesimilar tothesunset provision
setforth inArticle 11.3oftheA-DAgreement.
Article 28-Temporary Surety
Preliminary determination ofdumping\subsidy andmaterial injury
Q12. Itisstated that,ifitappears totheCommission prima faciethatgoods havebeenimported
orareabout tobeimported asdumped orsubsidized imports, anditappears prima faciethatdamage
isliable tobecaused toabranch ofproduction, itmayinform thedirector oftheestimated rate-in
itsopinion -oftheanti-dumping dutyandofthecountervailing dutythatwillapply tothose goods.
Does thatmean thattheCommission canrequire theimporter toprovide surety forpayment
ofthedutywithout having conducted apreliminary determination ofdumping andinjury? Further,
theestimated rateseems tobebased onlyontheopinion oftheCommission andnotontheresult of
apreliminary investigation. Article 7.1oftheWTO Anti-Dumping Agreement requires thatprovisional
measuresbeappliedonlyifaninvestigationhasbeeninitiatedandapreliminaryaffirmativedetermination
hasbeenmade ofdumping andconsequent injury toadomestic industry.
A12. Thepresent Israeli Lawdoesnotcontain theterm"preliminary determination", butinpractice
temporary measures areinvoked according totheprovisions setforthinArticle 7.1totheAgreement.
Theproposed legislation presently being prepared willconsider incorporating theterm"preliminary
determination" initsprovisions.G/ADP/W/296
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Others
Verification ofstanding
Q13. TheIsraeli legislation should provide adefinition of"domestic industry" andspecify that
investigating authorities have toverify whether complainants have standing before initiating an
investigation. Article 5.4oftheWTO Anti-Dumping Agreement requires thataninvestigation shall
notbeinitiated unless theauthorities havedetermined, onthebasis ofanexamination ofthedegree
ofsupport for,oropposition to,theapplication expressed bydomestic producers ofthelikeproduct,
thattheapplication hasbeenmade byoronbehalf ofthedomestic industry.
A13. Theproposedlegislationwilltakeintoaccountthenewproceduredealingwiththresholdsupport.
Itshould benoted thatpresently theAuthorities infactdoensure thatthereisdomestic industry support
forthecomplaint before initiation.
Deminimis
Q14. TheIsraeli legislation should alsostateclearly thatthere shall beimmediate termination in
cases where itisdetermined thatthemargin ofdumping isdeminimis orthatthevolume ofdumped
imports ortheinjury isnegligible (Article 5.8oftheWTO Anti-Dumping Agreement).
A14. Asstated earlier, theIsraeli legislation wasenacted onthebasisoftheA-DCode of1979and
therefore theLawdoesnotaddress thisissue, butdueregard willbegiven tothe"deminimis "rule
asstated inArticle 5.8oftheA-DAgreement when amending thecurrent Law.
Subsidy Provisions
Q15. Israel indicated initsNotification ofLaws andRegulations under Article 18.5oftheAgreement
onImplementationofArticleVI,Article32.6oftheAgreementonSubsidiesandCountervailingMeasures
andArticle 12.6oftheAgreement onSafeguards, thatithasundertaken areview oftherelevant parts
ofitslawtoensure itsconsistency withtheWTO Agreements. Inthisregard, could Israel respond
tothefollowing:
- Totheextent thatthecovered agreements areintended tobeincluded andtoapply
toinvestigations andprevail overanycontrary ordifferent provisions contained in
previous laws, canIsrael identify thespecific parts ofitsexisting legislation thatwill
continue toapply toinvestigations, thespecific articles thatwillchange andhowexactly
these articles aretobechanged?
- Isthere anymeans bywhich domestic interests could useIsraeli laws(such asa
constitutional challenge) toprevent thegovernment fromimplementing aDSBpanel
decision?
- Could theIsraeli government advise when theregulations topermit administrative
changes totheCommittee benotified?
- What isthelegalmechanism inIsraeli lawfortheimplementation ofdecisions rendered
byaWTO panel?G/ADP/W/296
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A15. Since thereview process iscurrently underway andthepreparation oftheproposed legislation,
containing therevisions oftheLaw, hasnotyetbeencompleted itwould beimpossible torespond
fullytothequestion.
TheIsraeli Government ispresently redrafting thecurrent legislation andwecanexpect a
proposal tobecompleted inthenearfuture. TheCommittee willbenoted promptly when theenactment
iscomplete.