RESTRICTED
WORLD TRADE G/ADP/W/231
G/SCM/W/241
ORGANIZATION 1December 1995
(95-3911)
Original: English Committee onAnti-Dumping Practices
Committee Subsidies andCountervailing Measures
QUESTIONS CONCERNING THE NOTIFICATIONS PROVIDED BY
ISRAEL1OFLAWS AND REGULATIONS UNDER
ARTICLES 18.5AND 32.6OFTHE AGREEMENTS
Thefollowing communication, dated 29November 1995, hasbeenreceived fromthePermanent
Mission ofCanada.
_______________
Chapter 3-Anti-Dumping Duty andCountervailing Duty
Title Two: Advisory Committee
Articles 5to7-Commissioner andAdvisory Committee
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 cantheyserve ontheCommittee? Isthereanypermanent organization
orministry thatconduct anti-dumping andcountervailing investigations orisittheAdvisory Committee
thatisresponsible forthefulldumping/subsidy andinjury investigation?
Article 6(c)-Additional Committee Member
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?
Title Three: Dumped orSubsidized Imports
Article 12(b) -Normal Price Determination
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
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withacomparable price(notwiththehighest price)ofthelikeproduct when exported toanappropriate
thirdcountry, provided thatthisprice isrepresentative...
Article 12(d) -Sales Below Costs
Thesalesbelow costs provision doesnotseem tomeettheWTO Anti-Dumping Agreement
ruleswhich require thatsalesbelow costs maybetreated asnotbeing intheordinary course oftrade
onlyifitisdetermined thatsuchsalesaremade within anextended period oftimeandinsubstantial
quantities andareatprices which donotprovide fortherecovery ofallcostswithin areasonable period
oftime(Article 2.2.1). TheIsraeli legislation should clarify thispoint.
Title Four: Complaints andtheir Treatment
Article 17-Documentation
Itshould beclarified thatacomplaint should include evidence ofdumping/subsisdy, injury
andcasual linkbetween thedumped imports andthealleged injury. Simple assertion, unsubstantiated
byrelevantevidence,cannotbeconsideredsufficienttomeettherequirementsoftheWTOAnti-Dumping
Agreement (Article 5.2).Itshould alsobestated thatinvestigating authorities shallexamine theaccuracy
andadequacyoftheevidenceprovidedintheapplicationtodeterminewhetherthereissufficientevidence
tojustify theinitiation ofaninvestigation. (Article 5.3oftheWTO Anti-Dumping Agreement)
Article 20-Dropping acomplaint -Undertakings
Itisnotclearwhen anundertaking canbeaccepted. Itshould beclarified thatanundertaking
canonlybeaccepted afterapreliminary affirmative determination ofdumping andinjury ismade
(Article 8.2oftheWTO Anti-Dumping Agreement).
Article 20(b)
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.
Article 21(b) -Powers oftheCommittee, Article 23-Imposition ofAnti-Dumping and
Countervailing Duties andArticle 31(c) -Minister 'sDecision onRe-examination Request.
Itisstated thatuponcompletion 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.
Title Five:Anti-dumping Duty andCountervailing Duty
Article 23-Imposition ofAnti-dumping andCountervailing Duties
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Itisstated thattheMinister mayimpose byorder anti-dumping andcountervailing duties if
hefinds thatthefollowing twoconditions aremet:(1)goods havebeenorareabout tobe,dumped
andsubsidized, and(2)material damage hasbeencaused tosome branch 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, anyknown factors other thandumped imports which atthesame timeareinjuring the
domestic industry should beanalysed toensure thattheseother factors arenotattributed tothedumped
imports (Article 3.5oftheWTO Anti-Dumping Agreement).
Threat ofmaterial injury
TheIsraeli legislation isalsosilent onthecriteria thathavetobeconsidered when conducting
athreat ofmaterial injury investigation. TheIsraeli legislation should clarify thatadetermination of
threat ofinjury shallbebased onfactsandnotmerely onallegation, conjecture andremote possibility.
Therefore thelisted factors under Article 3.7oftheWTO Anti-Dumping Agreement should be
incorporated intothelegislation.
Article 27-Period ofValidity
Sunset clause
Itisstated thatanorder thatimposes dutyshallbevalid foraperiod ofthree years fromthe
dayofitsimposition. However, upontheCommittee '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.
Article 28-Temporary Surety
Preliminary determination ofdumping\subsidy andmaterial injury
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 thatprovisionalG/ADP/W/231
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measuresbeappliedonlyifaninvestigationhasbeeninitiatedandapreliminaryaffirmativedetermination
hasbeenmade ofdumping andconsequent injury toadomestic industry.
OTHERS
Verification ofstanding
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.
Termination ofaninvestigation -Deminimis
TheIsraeli legislation should alsostateclearly thatthere shallbeimmediate termination in
cases where itisdetermined thatthemargin ofdumping isdeminimis orthatthevolume ofdumped
imports ortheinjury isnegligible (Article 5.8oftheWTO Anti-Dumping Agreement).
Subsidy Provisions
Israel indicated initsNotification ofLaws andRegulations under Article 18.5oftheAgreement
onImplementation ofArticle VI,Article 32.6oftheAgreement onSubsidies andCountervailing
Measures andArticle 12.6oftheAgreement onSafeguards, thatithasundertaken areview ofthe
relevant 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 partsofitsexisting 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?