The Commissioner of Trade Levies at the Ministry of Economy and Industry issued a preliminary decision following a complaint filed by Extal Ltd. and Alubin Aluminum Industries Ltd. The complaint concerns the dumped import of aluminum profiles and aluminum tubes (the complaint products) from China.
In this review, we will elaborate on the essence of anti-dumping duties.
“Dumping” is defined as the export of goods to another country at a price lower than their “Normal Value.” The “Normal Value” is typically the price at which the same goods are sold in the domestic market of the exporting country – although there are cases where a different price may be determined as representing the Normal Value. The purpose of anti-dumping duties is not to block imports comprehensively or to provide artificial and excessive protection to domestic industry. Its purpose is to neutralize the unfair advantage created for the importer as a result of selling goods at dumped prices, thereby enabling fair competition in the domestic market. The imposition of anti-dumping duties is anchored both in Israeli legislation (Trade Levies and Safeguard Measures Law, 1991) and in international agreements, primarily the GATT Agreement of the World Trade Organization (WTO).
Three cumulative conditions are required in order to impose anti-dumping duties:
- Existence of dumping:It must be factually proven that the imported goods are indeed sold at a price lower than their Normal Value in the exporting country. This proof requires a comparison between the export price and the Normal Value.
- Existence of material injury to the domestic industry:It must be proven that the domestic industry, which produces “like products” to those imported at dumped prices, suffers material injury or threat of material injury. “Like products” are goods that are identical or have very similar characteristics to the imported goods. The injury can be manifested in various economic parameters, such as decline in sales, decrease in profits, loss of market share, reduction in output, decline in employment, impact on production capacity utilization, and more.
- Existence of a causal link:A direct causal link must be demonstrated between the dumped imports and the injury caused to the domestic industry. That is, it must be shown that dumping is the cause of the injury, or at least a significant contributor to it, and not other factors unrelated to the dumped imports.
The imposition of anti-dumping duties is not a simple process and involves a complex and detailed investigation. This investigation is conducted by the Commissioner of Trade Levies at the Ministry of Economy and Industry. During the investigation, extensive economic and legal data are collected, both from the complaining domestic industry and from the foreign importers and exporters involved. At the conclusion of the investigation, the Commissioner submits findings and recommendations to the Advisory Committee on Trade Levies, and the responsible Minister (Minister of Economy and Industry) makes the final decision whether to impose a duty and at what rate.
Regarding the duty rate, the article mentions the “Lesser Duty Rule.” According to this rule, the rate of duty imposed will not exceed the dumping margin (i.e., the difference between the Normal Value and the export price). Moreover, the duty may be even lower than the dumping margin if it is found that a lower duty is sufficient to prevent injury to the domestic industry.
As mentioned, a preliminary decision was recently issued by the Commissioner of Trade Levies at the Ministry of Economy and Industry, following a complaint filed by Extal Ltd. and Alubin Aluminum Industries Ltd. The complaint concerns the dumped import of aluminum profiles and aluminum tubes (the complaint products) from China.
For full disclosure, we note that the undersigned and his team represent the companies that submitted the complaint to the Ministry of Economy.
After examining the complaint and the evidence presented, the Commissioner opened an investigation on July 25, 2024. The investigation period for dumping was set for January-December 2023, and for injury for the years 2021-2023.
Existence of Dumping:
Due to the large number of foreign manufacturers, the Commissioner decided to limit the examination to a sample of four main manufacturers from China: SHEUNGYIN HARVEST ALUMINIUM CO, GUANGDONG YONGLONG ALUMINUM CO, GUANG YA, and Guangdong Huachang.
The Commissioner determined that the “Normal Value” in China should be established based on production cost data in a surrogate country (Turkey), rather than on sales data in the Chinese market. This is due to findings indicating significant government intervention in the aluminum market in China, affecting production costs (such as government ownership of producers, raw material procurement, labor costs, energy, credit, and tax distortions).
After adjusting the production costs of the examined Chinese companies to the standard costs in Turkey, dumping margins ranging from 61% to 146% were calculated for the examined companies, a rate of 110% for other companies that cooperated but were not included in the sample, and 146% for the rest of China.
Injury to the Domestic Manufacturing Sector:
The investigation found that material injury was caused to the domestic manufacturing sector. These findings include:
Import Development: Significant increase in imports from China and Hong Kong between 2021-2023.
Impact on Prices:
o Price Undercutting: Import prices from China were significantly lower than the prices of domestic producers.
o Price Depression: Decline in the prices of domestic products, especially in 2023.
o Price Suppression: Prices of domestic producers did not rise sufficiently considering the increase in input prices and raw material (aluminum).
Additional Effects: Impact on sales and profitability of domestic producers, decline in quantitative sales, decrease in market share of the domestic industry, decline in capacity utilization, reduction in the number of employees and wage costs, impact on productivity, impact on growth and competition, impact on return on investments, impact on ability to raise capital, and increase in inventory.
Causal Link:
The Commissioner determined that there is a causal link between the dumped imports from China and the material injury caused to the domestic manufacturing sector. Other factors were ruled out as the main cause of injury, such as imports from other countries not at dumped prices or a decline in demand.
Decision on Temporary Security:
In light of the findings of dumping and injury, the Commissioner decided to impose a temporary security for six months, to prevent further injury to the domestic sector during the continuation of the investigation. The temporary security rates were determined according to the “Lesser Duty Rule” (the lower of the dumping margin and the injury rate) and range from 61% to 146% depending on the Chinese manufacturer. Following appeals from importers regarding shipments ordered before the imposition of the temporary security and en route to Israel, the Commissioner decided that the temporary security would come into effect towards the end of June.
On June 25, 2025, the Commissioner decided to postpone the entry into force of the temporary security by three additional months, until September 27, 2025, due to the Iran–Israel war.
The content in this update is provided for informational purposes only and is not intended to be comprehensive. It does not serve to replace professional legal advice required on a case by case basis.
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