Biden: I wish I could have been there to hug Abigail/Reuters
As part of an unprecedented legal process, the American government launched a counter-investigation against the Finkelstein Metals company and an examination of the government's conduct.
According to the American authorities, grants received by the company thanks to its activities in a development zone constitute a prohibited government subsidy, and allowed the company to sell its products in the US at inflated prices. The decision to open the investigation and sanctions against Finkelstein raises questions.
The scope of Finkelstein's activities in the US is minimal compared to the American complaints and it holds in less than 3% of the market share in the US. However, this is about 75% of its sales volume. The American government's claim also contradicts the trade agreement between the two countries that has existed for decades. The
company has already been subject to sanctions and tariffs that significantly impair its ability to operate regularly and may jeopardize the supply required for the defense industries. As a result, the Ministry of Foreign Affairs and the Association of Manufacturers entered the picture.
In the past, a lawsuit was filed against the Dead Sea factories for over-flowing exports, which was ultimately rejected. The irony of fate: the same parties suing Finkelstein previously defended the Dead Sea factories.
Iron Dome.
Concerned that this is the first swallow that could harm the industry/official website, IDF spokesman
Ron Tomer, the president of the association, contacted the relevant authorities in the Ministry of Economy and warned of the unusual situation that could lead to damage to other companies.
According to him, "This is an unfounded lawsuit that may lead to the closure of the factory. If this serious case is successful, it may harm other Israeli companies and is in violation of the trade agreements."
Finkelstein is defined as an essential plant for industry and is the only Israeli company that produces brass, bronze and copper alloy products.
It employs 80 workers from the northern region and its products are used by the defense companies.
The company operates in the Alon Tavor industrial zone near Afula.
The company is the sole supplier to Rafael for metal rods for the production of ammunition for Iron Dome batteries.
The company is controlled by the family, but about a decade ago, half of its shares were purchased by Leader Investments, owned by Dan David's heirs, for NIS 25 million.
The precedential investigation procedure could have a dramatic impact on all trade relations between Israel and the United States and wide-ranging consequences for Israeli exporters to the United States, including the defense industries.
Government benefits for industrial plants in development areas are often a necessary condition for the establishment of the plants. If the American government does decide that the benefits of this type, constitute a prohibited subsidy and therefore require the imposition of customs duties on the products exported to the USA, this may lead to a wave of additional lawsuits by Israeli exporters to the USA.
Recall that it was recently published that the USA imposed sanctions on settlers who attacked Palestinians, and as a result their bank accounts were restricted .
It is possible that this is a new policy towards Israel that may harm the economic sphere.
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