WORLD TRADE  
ORGANIZATION  G/ADP/Q1/ISR/13 
G/SCM/Q1/ISR/13 9 June 2006 
 
(06-2777) 
Committee on Anti-Dumping Practices 
Committee on Subsidies and Countervailing Measures Original:   English 
 
 
 
NOTIFICATION OF LAWS AND REGULATIONS UNDER 
ARTICLES 18.5 AND 32.6 OF THE AGREEMENTS 
 
Replies to Questions posed by the EC1 and the UNITED STATES2  
regarding the Notification of ISRAEL3 
    The following communication, dated 8 June 2006, is being circulated at the request of the 
Delegation of Israel. 
 
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QUESTIONS FROM THE EUROPEAN COMMUNITIES 
 
Q1.  The Trade Levies Law provides that implem enting provisions shall be adopted by the 
Minister, e.g. on calculating the production co sts (Art. 12 (b)), on the manner of implementing 
the comparison between export price and normal  value (Art. 15 (c)), on information to be 
contained in a complaint (Art. 21 (b)) or on the conduct of investigations (Art. 23.3 (e)).  Could 
Israel please clarify whether such provisions have  meanwhile been adopted and, if so, when they 
will be notified?  
 
Reply
 
 
The implementing provisions are currently being pr epared.  They will be notified in accordance 
with Article 18.5 of the Anti Dumping Agreement (ADA) upon their completion and after their 
translation into English. 
 
Q2. Could Israel please clarify the meaning of  Article 28 (d) of the Trade Levies Law? 
 
Reply  
 
The meaning of Article 28(d) of the Trade Levies Law is that following a preliminary 
determination, even in the case of a negative dete rmination, the investiga tion proceeds to the final 
stage of the investigation.  In the case of a determination of negligible imports or a de minimis  margin 
of dumping, the investigation shall be immedi ately terminated pursuant to Article 32.7. 
 
                                                      
1 G/ADP/Q1/ISR/11-G/SCM/Q1/ISR/11 
2 G/ADP/Q1/ISR/12-G/SCM/Q1/ISR/12 
3 G/ADP/N/1/ISR/3 G/ADP/Q1/ISR/13 
G/SCM/Q1/ISR/13 Page 2 
 
 
  Q3. Could Israel please clarify what kind of special reasons could justify that, pursuant to 
Article 32.7 (c) (1) (b), the Commissioner determ ines that the import volume is not negligible, 
even though it is below the thresholds of Arti cle 5.8 of the Antidumping Agreement (ADA), and 
how compatibility with this provisions is ensured?  
 
Reply
 
 
Article 32.7 (c) (1) (b) of the Trade Levies Law in  fact grants some degree of discretion in  
determining that the import volumes are not negligible  when they are below the thresholds established 
under  Article 5.8 of the ADA. It should be noted that  this mirrors the situation as set forth in Article 
5.8 of the ADA:  "The volume of dumped imports shall normally be regarded as negligible…".  The word "normally" in this context connotes that th ere may be unusual cases in which despite being 
below the numerical thresholds, the import volumes w ill not be considered negligible.  To date there 
have been no cases in Israel establishing import volum es as being not negligible when they are below 
the thresholds set forth in Article 5.8 therefor e it would be difficult to address the compatibility 
question at this point.  
 
Q4. Article 32.15: Would the Commissioner always continue handling the complaint if this is 
requested by the exporter from whom an und ertaking is accepted, in accordance with 
Article 8.4 of the ADA, or is this a matter of discretion as the text seems to suggest?  
 Reply
 
  In the case of an undertaking being accepted, if  the exporter has requested the completion of 
the investigation the Commissioner will in fact continue handling the complaint.  
 
 
QUESTIONS FROM THE UNITED STATES
 
 
Q1. In the event of a conflict between Israel’s int ernational obligations and its domestic law, 
which takes precedence in the administration  and judicial review of trade levies? 
 
Reply  
  Since Israel is a member of the WTO, Israeli anti dumping officials are required to observe the provisions of the Anti Dumping Agreement (herei nafter –ADA) when such provisions are not in 
contravention with the existing domestic legislation.  According to the Israeli legal system in the case 
of a direct conflict between the ADA and the Tr ade Levies Law- 1991 (hereinafter- the Law), the 
provisions of the domestic legislation would override .  It should be noted however, that according to 
Israeli principles of jurisprudence it is presumed that  the Israeli legislature enacts laws which are in 
conformity with principles of international law.  Th erefore the Israeli court will in fact interpret the 
Trade Levies Law in conformity with the AD Agreement.   Q2. Section 10(b) of Israel’s Trade Levies Law (“ ITLL”) refers to ‘market conditions in the 
exporting country’ that may preclude a price co mparison for antidumping purposes.  Please 
provide examples of such ‘market conditions.’ 
 
Reply
 
  Article 10 (b) of the Law refers to situations  where the normal value will not be determined 
on the basis of the price of the product in the exporti ng country.  This may be due to several different 
circumstances, one of which is the concept that th e "particular market situation" as referred to in  G/ADP/Q1/ISR/13 
 G/SCM/Q1/ISR/13 
 Page 3 
 
 
  Article 2.2. of the ADA does not allow for a prop er comparison for the purpose of determining a 
dumping margin.  The phrase used in Article 10 (b) of the ADA, "market conditions in the exporting 
country" is meant to address that same issue. We do not have a concrete example to provide since no 
such situation has arisen to date.  
 
Q3. Please provide an explanation of how the ‘reasonable profit’ referred to in 
section 10(b)(2) is to be calculated . 
 Reply
 
 
 Reasonable profit is calculated on the basis of the rate that is normally acceptable in the 
particular industry whose products are subject of the investigation or a wider industry which includes 
the products under investigation.  This informa tion is collected from data published in reliable 
publications such as official statistics or known tr ade publications or from other reliable material 
supplied by the parties to the investigation. 
 
Q4. Please provide a further explanation of the sorts of ‘compensatory arrangements,’ 
including a ‘benefit above the sale price,’ as referenced in section 10(d)(1), that may exist, precluding the use of such sales in the dumping analysis.  
Reply
 
 
 A "compensatory arrangement" referred to in  Article 10 (d)(1) could, depending on the 
circumstances,  include for example, sw ap deals  and conversion arrangements. 
 Q5. Does the term ‘special relationship’ in section 10(d)(2) refer to all typ es of affiliation or 
just certain affiliation relationships?  Are the re any affiliated party sales that Israel would use 
in calculating normal value? 
 
Reply
 
 
 The term "special relationship"  is defined in Article 4 of th e Law as a "relationship between 
parties as set forth below, provided that there is a reasonable basis to assume, in the circumstances of 
the matter, that said relationship is affecti ng the business considerations of the parties: 
  (1) One of the parties controls the other, directly or indirectly; 
 
 (2) The parties are controlled by a third party, directly or indirectly;   (3) The parties jointly control a third party, directly or indirectly;  In the matter of this definition, a person shall be d eemed to control another when he is in a legal or 
practical position enabling him to restrict or direct the activities of another." 
  If the relationship between the affiliated parti es does not affect the business considerations of 
the parties then the sales will be used in calculating normal value. 
 
Q6. How, according to section 13( a), does Israel determine whether ‘ the price of goods ... is 
affected by state intervention in trade’?  Of the various ways in which normal value may be determined under such circumstances, which has b een the most frequently used in the past? 
 
 G/ADP/Q1/ISR/13 
G/SCM/Q1/ISR/13 Page 4 
 
 
  Reply
 
  The status of the exporting country   will be  determined by the nature of its economy in 
general and in particular its intervention in influe ncing prices in the product or industry subject to the 
investigation. It should be noted that Israel has not applied, to date, the provision regarding state 
intervention influencing the price of goods; therefore none of the alternatives in Article 13(a) has been 
used.
  
 
Q7. Please describe Israel’s comparison meth odology, under section 15(a), when sales being 
compared are not made at the same level of trade. 
 
Reply  
  Article 15(a) is intended to ensure that a fa ir comparison is made between the export price 
and normal value.  As stated in the Law the comparis on should be made at the same level of trade.  If 
the circumstances are such that the sales are not at the same level of trade then certain adjustments 
must be made.  These adjustments must reflect the differences in the costs, expenses and, if 
applicable, profits of the activities betw een the varying levels of trade.  
 
Q8. Section 18 provides guidelines for calculating the rate of subsidization based on different 
forms of financial contribution.  These guidelin es specifically reference the following types of 
subsidies:  equity capital, loans, securities as well as the supply of goods or the provision of 
services.  Has Israel promulgated guidelines on ho w to determine benefit with regard to other 
types of financial contribution (e.g., gran ts, tax incentives and debt forgiveness)? 
 Reply
 
  Israel has not yet promulgated guidelines on how to determine a benefit with regard to other 
types of financial contribution not specified in the Law.   Q9. Pursuant to Section 26.(b), please clarify whet her the Commissioner is expected to notify 
all known producers and/or exporters of the im ported goods regarding initiation of an 
investigation.   (a) What steps are taken to identify a nd notify all known producers/exporters?   
 
 (b) Please explain the criteria used to determine which producers and exporters are 
to receive notification and, if applicable, which are not.  
(c) If certain producers and exporters a re known to the Commissioner but not 
notified, how will those parties be treate d (e.g. as non-participating interested 
parties, or as uncooperative respondents), and what will be the source of data 
used to calculate measures fo r those producers and exporters? 
 
Reply
 
 
Pursuant to Article 26(b) the Commissioner is required to notify all known produces and/or 
exporters of the imported goods regard ing initiation of an investigation. 
  G/ADP/Q1/ISR/13 
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 Page 5 
 
 
  (a) The Commissioner relies on the information provided for in the complaint itself and 
additional information provided by the customs authority in order to identify all known producers/exporters. 
(b) All known producers/exporters will be notified. Up till now the number of known 
producers/exporters has not been so large as to make it infeasible to notify all of 
them.  
(c) There has not been a case where a known producer/exporter has not been notified. 
 
Q10. Are the governments of exporting countries co nsidered interested parties in their own 
right?  How and at what point in the process ar e foreign governments notified of investigations 
of their producers and exporters? 
 
Reply
 
 
 Governments of exporting countries are consid ered interested parties pursuant to the 
definition of that phrase under Article 4 of the Law.  In accordance with Article 26 (b) of the Law the 
Commissioner must notify the competent authority of the exporting country within 5 days of his decision to initiate an investigation.  In addition,  Article 23 (a) and (b) in accordance with Articles 5.5 
and 13.1 of the ADA and SCM Agreement respectiv ely, obligate the Commissioner to notify the 
competent authority of the exporting country of the receipt of a complaint before a decision to initiate 
has been made.   
  
Q11. What provisions (e.g. a reading room or an office that will provide copies upon request) 
are made for public access to non- confidential documents, i.e. those not deemed confidential 
under the provisions of Section 32.2(a) ITLL? 
 Reply
 
  A room is made available as well as a c opy machine for access to non confidential 
documents.  A clerk is also present fo r any assistance that may be needed. 
 Q12.  Please explain how Section 29 ITLL compli es with the requirements set forth in 
Articles 7.1 and 7.3 of the AD Agreement and Articles 17.1 and 17.3 of the SCM Agreement.     (a) Please provide information as to wh ether Israel has previous experience 
applying provisional measures prior to 60 days from the date of initiation.   
 
 (b) What is the maximum period for wh ich provisional measures may remain in 
effect?   
  (c) Are provisional measures set at the rate of the dumping margin?    
 (d) Does Israel have discretion to apply the lesser duty rule?   
 
Reply
 
 
(a) Since Israel's accession to the WTO no provisional measures have been adopted 
prior to 60 days from the date of initiation. 
 (b) In accordance with Article 29 (c) of the Law, a provisional measure may be imposed 
for a period of six months and up to nine months upon decision of the Commissioner G/ADP/Q1/ISR/13 
G/SCM/Q1/ISR/13 Page 6 
 
 
  if such a request has been submitted by the exporters representing a significant 
percentage of the exports to Israel.  
 (c) Provisional measures are set at the rate of the estimated rate of the anti dumping duty. 
 
(d) Pursuant to Article 32.19(b) of the Law, if a duty that is lower than the dumping rate 
is found to be sufficient to prevent material injury to the domestic industry, the anti dumping duty shall be set at the rate required to prevent said injury.  
 
Q13. Please explain the effect of the “temporary  guarantee” (Section 29 ITLL) on the overall 
provisional measures.  
 
 (a) Were the final determination to result in a lower rate than established in the 
preliminary determination, what is the process for refunding overpayment of 
provisional measures?   
  (b) Will interest be paid on the overpaid funds?  Reply
 
 
 (a) In Israel, a provisional measure takes the form of a temporary guarantee which is 
deposited with the customs authority. Pursua nt to Article 32.23 (a) of the Law if the 
final duty is a lower rate than establis hed in the preliminary determination the 
guarantee shall be forfeited only in the amount of the duty and the difference shall be returned. 
 
 (b) The difference as stated above is returned with the addition of linkage (to the cost of 
living index) differentials and interest. 
 
Q14.  Section 30(b) ITLL states that “[t]he Commissioner may invite
 a notified party to also 
present its claims orally, as submitted in writing.” (Emphasis added.) 
 
 (a) Please explain whether a notified party has the right to request a hearing, and 
the means by which a notified party may make such a request. 
  (b) If the opportunity for a hearing is so lely at the discretion of the Commissioner, 
please explain the criteria used to determ ine which notified parties will receive 
an invitation to participate in an oral presentation.  
 
Reply
 
  (a) As opposed to the hearings conducted by the Advisory Committee, the notified parties 
have no guaranteed right to a hearing be fore the Commissioner.  In practice, the 
Commissioner does allow for interested parties, who so request, to meet with him and present their claims orally. 
  (b) The Commissioner in all investigatio ns meets with the domestic industry and 
importers to allow them to present their case orally. 
  G/ADP/Q1/ISR/13 
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 Page 7 
 
 
  Q15.  Please explain the following details of Section 30.(c) ITLL:   
  (a) What steps must a notified party take in order to see non-confidential 
information pertaining to the investigation? 
 
 (b) Does the Commissioner k eep a publicly-available reco rd of all information, 
including confidential information, ex parte  communications, etc., so that 
interested parties are aware of the existence of such information? 
 
Reply
 
  (a) A notified party may submit an oral or written request in order to see non confidential 
information. 
 
 (b) The Commissioner does not maintain a public ly available record of all information. 
Interested parties may see all non confidential information as stated above. 
 
Q16.  Does Israel permit disclosure of confidential information to representatives of interested 
parties pursuant to an administrative protective order, as permitted by footnote 17 to Article 6.5 of the ADA and footnote 42 of Article 12.4 of the ASCM?  
 
Reply
 
  The Israeli legal system does not permit disclosure of confidential information to 
representatives pursuant to an administrative protectiv e order as is the practice in the United States. 
 
Q17. Please explain the process undertaken by the Minister in determining the circumstances 
in which the Commissioner is entitled to rel y on the information and evidence available, 
pursuant to Section 32.1 ITLL.  Please also a ddress whether interested parties are provided an 
opportunity to cure deficient submissions.  Wh at role, if any, is played by the Advisory 
Committee in this process? 
 Reply
 
  The circumstances in which the Commissioner is entitled to rely on the information and 
evidence available pursuant  to in Article 32.1 (a) will be on the b asis of regulations to be promulgated 
by the Minister.  The regulations are expected to , in essence, adopt the provisions of Annex II of the 
ADA.  In practice, interested parties are indeed give n the opportunity to cure deficient submissions in 
accordance with the rules as set fo rth in Annex II of the ADA.  
 
Q18. Please explain how Section 32.3(b) ITLL complies with the provisions of Annex I ADA 
and Annex VI ASCM, as follows: 
 
 (a) If a company and its government are willing to permit a verification, under what 
circumstances will the Commissioner choose no t to perform on-site verification?   
 
(b)  If verification is not performed fo r any reason other than non-cooperation by 
the foreign company, what other opportunities will the foreign company have to 
make all necessary records availabl e to the administering authority? 
 G/ADP/Q1/ISR/13 
G/SCM/Q1/ISR/13 Page 8 
 
 
  (c) If the Commissioner does not verify  a foreign company for any reason other 
than non-cooperation, will the lack of verification result in the use by the Commissioner of facts available?  
 
Reply
 
  (a) Due to time constraints or budgetary restrictions it may be the case that the 
Commissioner is not in a position to perform an on site verification. 
  (b) The foreign company will be provided an opportunity to submit records or documents 
to the Commissioner. 
  (c) In the case where the Commissioner did not perform an on site investigation not as a 
result of non cooperation, he will not, no rmally, be able to reject any of the 
information supplied by the foreign company by virtue of the fact that an on site 
verification did not take place. 
 
 Q19.  Section 32.7(c)(1)(b) provides that the Co mmissioner may determine “for special 
reasons” that the volume of dumped imports is not negligible.  Please explain the “special 
reasons” under which the Commissioner may dete rmine that the volume of imports is not 
negligible.  How is a determination that impo rts are not negligible for “special reasons” 
consistent with Article 5.8 of the ADA ?  
 Reply
 
 
 Article 32.7 (c)(1)(b) of the Trade Levies Law in fact grants some degree of discretion in  
determining that the import volumes are not negligible  when they are below the thresholds established 
under  Article 5.8 of the ADA.  It should be noted that  this mirrors the situation as set forth in Article 
5.8 of the ADA:  "The volume of dumped imports shall normally be regarded as negligible…". The 
word "normally" in this context  connotes  that there may be unusual cases in which despite being 
below the numerical  thresholds, the import volumes w ill not be considered negligible.  To date there 
have been no cases in Israel establishing import volum es as being not negligible when they are below 
the thresholds set forth in Article 5.8.   Q20. Sections 32.8-32.11 of the ITLL describes the procedures Israel uses to make final 
determinations in original investigations.  Does Israel use the same procedures in reviews? 
 
Reply
 
  The detailed procedures for reviews are found in Title Nine, Articles 32.25 – 32.31 of the 
Law. In accordance with Article 32.29 the Commis sioner's findings are submitted to the advisory 
committee which submits its recommendation to the Mi nister for his decision as is in the case of the 
original determination. 
 
Q21. Please provide additional explanation of the following provisions of Title Six: 
Undertakings: 
  (a) What is the latest opportunity in th e course of an investigation at which an 
exporter and the Commissioner may agree to an undertaking, pursuant to Section 32.13? 
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 Page 9 
 
 
   (b) Please explain the circumstances under which the Commissioner would accept 
an undertaking but continue complaint proceedings, as permitted by Section 32.15. 
 Reply
 
  (a) The Law does not specify the latest opport unity for accepting an undertaking. In fact 
an undertaking may be accepted up until the signing of the anti dumping order depending on the particular facts of the case. 
 
 (b) The Commissioner will continue complaint proceedings if the concerned exporter so 
requests or in the case where the undertaking was not taken by all exporters involved 
in the investigation.  
 Q22.  Section 32.18(a) of the ITLL specifies “the tr ade relationship between Israel and foreign 
countries” as a factor the Minister of Finance sh all take into account in determining whether to 
accept the advisory committee’s re commendations.  Could Israel please elaborate on how this 
provision is applied?  
Reply
 
 
 Firstly, it should be clarified that according to Article 32.18(a) of the Law it is actually the Minister of Industry, Trade and Labor and not the Finance Minister, who is authorized to consider 
whether to impose a duty taking into account Israel's trade relations with foreign countries.  To date 
the Minister has always followed the recommendati ons of the advisory committee so it would be 
difficult to elaborate on this provision at this point in time. 
 
Q23. Please identify the criteria Israel examin es in determining whether to impose a lesser 
duty pursuant to Section 32.19(b) of the ITLL. 
 
Reply
 
 
 The authorities in all cases determine the level of the duty required to prevent injury to the 
domestic industry.  If the margin of dumping is above that level, the lesser duty is imposed.  
 
Q24.  Section 32.25(a)(3) of the ITLL authorizes Israel to conduct reviews to ascertain 
whether the “duty that was levied is not sufficient to prevent injury to the domestic industry.”  
What criteria does Israel examine in conducting such a review?  
Reply
 
  The criteria used in conducting such a review  are similar to those used in conducting the 
original investigation: the level of the injury to the domestic industry is calculated and compared to 
the level of the duty in force.  
 
Q25. Please clarify whether a re-examination, as described in Section 32.25(c), may be undertaken if the investigation ended without measures being imposed. 
 
Reply
 
 A review may not be carried out if the original investigation ended without measures being imposed. 
 G/ADP/Q1/ISR/13 
G/SCM/Q1/ISR/13 Page 10 
 
 
  Q26.  Does Section 44 ITLL, authorizing the Minist er to prescribe fees to be paid by 
applicants, apply to producers/exporters requesting a re-examination or new shipper investigation?  
 Reply
 
  Article 44 of the Law authorizes the Minister to  prescribe fees for applicants for the original 
investigation as well as for a review, but in fact  there have been no fees prescribed for either 
procedure. 
 
Q27.  Sections 52-55  ITLL provide for criminal penalties (including imprisonment and 
monetary penalties), for a person or a “body corpor ate” that commits certain “violations” in the 
course of an investigation, such as submitting  false information, failing to submit necessary 
information, and unlawfully disclosing confidential  information.  Please explain the justification 
for such criminal penalties, and their basis und er the ADA.  Are these penalties enforced?   
 
Reply
 
  We see no relevance to the provisions of the ADA to the criminal penalties established under 
the Law.  The criminal penalties included in the Law are imposed in order to ensure the proper 
management of internal administrative procedures. In any case, the violations cited are considered 
violations pursuant to Israel's Penal Code.  The failure to submit a questionnaire or calculation under 
section 32 does not constitute a violation of Article 52.  The penalties are enforced on the same basis 
as the general principles regarding enforcement of Israeli criminal law which determines jurisdiction 
based on the place where the violati on takes place regardless of the de fendant’s citizenship, residency, 
or place of business. 
 
Q28. (a) Sections 24.(b) and 32.5(d)(1) ITLL refer to “section 32(g)”.  However, no 
section 32(g) appears in the ITLL.  Please clarify what section of the ITLL is referred to in sections 24.(b) and 32.5(d)(1). 
  
 (b) Section 32.5(c) of the ITLL references Section 21(3)(2), which does not appear in 
the ITLL.  Is the correct reference to Section 21(b)(2)? 
  (c)  Section 32.5(d) of the ITLL referenc es section 32(g), which does not appear in 
the ITLL.  Is the correct reference to Section 32.7(c)?   
 
Reply
 
 
 (a) The references in 24 (b) and 32.5 (d) (1 ) refer to 32.7 and not 32(g) as appears in the 
English translation (the Hebrew e quivalent of "g" is number 7). 
 
 (b) The correct reference is to 21(b) (2).  The reference appears correctly in the Hebrew 
version and in the translation a mistake was made. 
  (c) The correct reference is to 32.7. 
 
Corrections to the English translation will be made accordingly. 
  
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