WORLD TRADE
ORGANIZATIONG/SCM/Q3/GTM/10
11 June 2002
(02-3212)
Committee on Subsidies and
Countervailing MeasuresOriginal:  Spanish
SUBSIDIES
Requests Pursuant to Article 27.4 of the Agreement on Subsidies and
Countervailing Measures
Reply to the Question Posed by the UNITED STATES1
Regarding the Notification of GUATEMALA2
The following communication, dated 6 June 2002, has been received from the Permanent
Mission of Guatemala.
_______________
Pursuant to the Procedures for Extensions under Article 27.4 for Certain Developing Country
Members  (G/SCM/39) and in accordance with the timetable adopted for those procedures by the
Committee on Subsidies and Countervailing Measures, the Government of Guatemala hereby submits
its reply to the additional question posed by the United States delegation in connection with the
request for extension submitted by Guatemal a, as contained in document G/SCM/N/74/GTM.
This reply is given without prejudice to Guatemala's rights and obligations under the
Procedures for Extensions under Article 27.4 for Certain Developing Country Members , the
provisions of the Agreement on Subsidies and Countervailing Measures and other WTO agreements.
Q. Could Guatemala please provide the implementing legislation, and all relevant
amendments, for the programmes for which it is requesting an extension?
Reply
A copy of the relevant legislation is attached.  In addition, Members seeking more detailed
information may visit the home page of the Ministry of the Economy:  www.mineco.gob.gt.
                                                     
1 G/SCM/Q3/GTM/9.
2 G/SCM/N/74/GTM, G/SCM/N/71/GTM.G/SCM/Q3/GTM/10
Page 2
LAW FOR THE PROMOTION AND DEVELOPMENT OF EXPORT
AND IN-BOND PROCESSING ACTIVITY
Decree No. 29-89 of the Congress of the Republic of Guatemala
WHEREAS:
The Political Constitution of the Republic of Guatemala establishes inter alia , as fundamental
obligations of the State, the encouragement of or derly and efficient foreign trade and the creation of
suitable conditions for the promotion of national and foreign capital investment;
WHEREAS:
The State must also guide the national economy towards the proper use of natural resources
and human potential in order to increase wealth and achieve full employment and the fair distribution
of national income;
WHEREAS:
In order to fulfil the above-mentioned objectives, it is necessary to enact a law for the
promotion of exports and in-bond processing, so as to enable Guatemala to attain an adequate level ofcompetitiveness in relation to other countries;
THEREFORE:
Under the powers conferred on it by Article 171(a) and in accordance with the provisions of
Articles 118 and 119 of the Political Constitution of the Republic of Guatemala,
DECREES:
LAW FOR THE PROMOTION AND DEVELOPMENT OF EXPORT
AND IN-BOND PROCESSING ACTIVITY
CHAPTER I
SCOPE
ARTICLE 1
The purpose of this Law is to promote, st imulate and develop, on the national customs
territory, the production of goods destined for countries outside the Central American area, and to
regulate the export or in-bond processing activity of firms within the framework of the regimes
governing inward processing or export of the total domestic added component.
ARTICLE 2
The benefits granted by this Law shall not apply to the export of coffee in any form, berry,
parchment and clean cardamom;  undecorticated sesame; fresh banana, thoroughbred and ordinary
cattle;  fresh, chilled or frozen bovine meat, refined and unrefined cane sugar and molasses;  uncarded
cotton, unrefined crude petroleum and logs, roundwood and lumber.G/SCM/Q3/GTM/10
Page 3
ARTICLE 3
For the purposes of this Law, the following definitions shall apply:
(a) Régimen de perfeccionamiento activo  (inward processing regime):  customs regime
for the entry into the national customs territory of goods from third countries in order
to undergo processing for export outside the Central American area in the form of
finished manufactures, without being subject to import duties and tariffs;
(b) " Maquila " (in-bond processing):  the domestic value added generated through the
services of labour and other resources applied to the production and/or assembly of
goods;
(c) empresa  (enterprise or company):  a unit of production owned by natural or legal
persons and formed in accordance with the laws of the Republic;
(d) assembly :  the act of joining together parts, pieces, subsets or sub-assemblies and sets
or assemblies which, when combined, result in a product with characteristics different
from its component parts;
(e) export :  outward movement of domestic or imported goods from the national customs
territory, upon completion of the legal formalities;
(f) wastage or loss :  the part of the merchandise that is destroyed or lost during the
inward processing operation, due to evaporat ion, drying, leakage of gas, water, etc.;
(g) indirect exporter :  an enterprise which, in the context of its economic activity,
supplies goods, raw materials, semi-processed products, materials, containers or
packaging to another enterprise recognized under this law, for incorporation in
merchandise intended for export to countries outside the Central American area;
(h) by-product :  a useful product obtained through the manufacture of another principal
product;
(i) waste : scraps, waste material, residues or remnants left over from the raw material
used for the production or assembly of an exported good, which becomes unusable as
a result of that operation;
(j) re-export :  the outward movement from the national territory, upon fulfilment of the
legal formalities, of foreign goods that entered the country without being imported;
(k) national customs territory :  the territory in which the customs authority exercises
jurisdiction and where the provisions of the national tariff and customs legislation are
fully applicable.
ARTICLE 4
The benefits of this law shall apply to comp anies which, in their activities, use domestic
and/or foreign goods that are identifiable within their production process, as well as the by-products,losses and wastage resulting from that process.G/SCM/Q3/GTM/10
Page 4
ARTICLE 5
For the purposes of the implementation of this law, the goods that may be the subject of
inward processing regimes are those defined below:
(a) Temporary Admission Regime :  this regime enables goods destined for export or
re-export within one year of processing or assembly to be introduced into the national
customs territory without being subject to customs duties, import taxes or value added
tax (VAT);
(b) Drawback Regime :  this provides for the reimbursement, upon completion of the
export or re-export operation, of customs duties, import taxes or value added tax(VAT) paid on deposit, that may have been imposed on imported goods, products
contained therein or products consumed during the export or re-export process;
(c) Duty Free Replacement Regime :  under this regime goods with a value equivalent to
the customs duties and import taxes paid by the indirect exporter may be importedfree of customs duties and import taxes.  This exemption shall be used for the
replenishment of raw materials, semi-finished products, intermediate products,
materials, containers, packaging and labels directly related to the production process;
(d) Total Domestic Added Component Export Regime :  this regime is applicable to
companies which, within their production process, use exclusively domestic or
previously imported goods for the manufacture or assembly of export products.
ARTICLE 6
This Law applies to the following categories of enterprise:
(a) In-bond processing plants under the temporary admission regime;(b) exporters under the temporary admission regime;(c) exporters under the drawback regime;(d) exporters under the duty-free replacement regime;(e) exporters under the total domestic added component regime.
ARTICLE 7
In-bond processing under the temporary admission regime means activity geared to the
production and/or assembly of goods which, in monetary terms, contain at least fifty-one per cent
(51%) of foreign goods destined for re-export to countries outside the Central American area,provided that the stay of the temporarily admitted merchandise is guaranteed to the tax authorities by
means of a bond, a specific guarantee authorized by the Ministry of Public Finance, a bank guarantee,
or by general warehouses authorized to operate as bonded warehouses which post a special bond for
this type of operation.
ARTICLE 8
Export activity under the temporary admission regime means activity geared to the production
of goods destined for export or re-export outside the Central American area, provided that the stay ofG/SCM/Q3/GTM/10
Page 5
the temporarily admitted merchandise is guaranteed to the tax authorities by means of a bond, a
specific guarantee authorized by the Ministry of Public Finance, a bank guarantee, or by general
warehouses authorized to operate as bonded warehouses which post a special bond for this type of
operation.
ARTICLE 9
Export activity under the drawback regime m eans activity involving the production and/or
assembly of goods destined for export or re-export to countries outside the Central American area,
provided that the stay of the temporarily imported merchandise is guaranteed to the tax authorities by
means of a cash deposit.
ARTICLE 10
Export activity under the duty-free replacem ent regime means activity involving the
production of goods sold to export companies which have integrated, incorporated or added them to
merchandise previously exported to markets outside the Central American area.
ARTICLE 11
Export activity under the total national added co mponent regime means activity involving the
production or assembly of goods destined for export to countries outside the Central American area,using domestic and/or previously imported goods exclusively.
CHAPTER II
BENEFITS
ARTICLE 12
Companies owned by natural or legal persons which engage in export or in-bond processing
activities under the temporary admission regime shall enjoy the following benefits:
(a) Temporary suspension of the payment of customs duties and import taxes, including
value added tax (VAT), on raw materials, semi-finished products, intermediate
products, materials, containers, packaging and labels necessary for the export or
re-export of goods produced in the country, on the basis of the authorized lists
contained in the decision on eligibility issued by the Ministry of the Economy, up to amaximum of one year from the date of acceptance of the relevant import certificate.
This term may be extended once only, for an equal length of time, by the Directorate-
General of Customs, provided that the request for extension is submitted thirty (30)
days prior to expiry of the term.
(b) Temporary suspension of the payment of customs duties and import taxes, including
value added tax (VAT), on sample books, engineering samples, instructional material,
patterns and models needed for the production process or for demonstration, research
and educational purposes, up to a maximum of one year from the date of acceptance
of the relevant import voucher.  This term may be extended once only, for an equallength of time, by the Directorate-General of Customs, provided that the request for
extension is submitted thirty (30) days prior to expiry of the term.G/SCM/Q3/GTM/10
Page 6
(c) Total exemption from company tax on income obtained or derived exclusively from
the export of goods which have been processed or assembled in Guatemala and
exported outside the Central American area.  Such exemption shall be granted for a
period of ten (10) years from the first tax year immediately following the date of
notification of the decision on eligibility by the Ministry of the Economy.
For the purposes of the application of the above-mentioned exemption, the taxpayers
concerned shall maintain a cost accounting and perpetual inventory system,
separately identifying exports made outside the Central American area and the costs
and charges relating thereto, or failing that, a system of unit operating costs.
Natural or legal persons domiciled abroad which have permanent subsidiaries,
agencies or establishments operating in Guatemala and export goods originating from
export and in-bond processing activities shall not be accorded the exemption from
company tax if their country of origin gr ants a credit for the income tax paid in
Guatemala.
(d) Temporary suspension of customs duties and import taxes, including value added tax
(VAT), on machinery, equipment, parts, components and accessories required for the
production process and duly identified in the decision on eligibility by the Ministry of
the Economy, up to a maximum of one year from the date of acceptance of the
relevant import certificate.  This term may be extended once only, for an equal lengthof time, by the Directorate-General of Customs, provided that the request for
extension is submitted thirty (30) days prior to expiry of the term.
(e) Total exemption from customs duties and import taxes, including value added tax
(VAT), on imported machinery, equipment, parts, components and accessoriesrequired for the production process and duly identified in the decision on eligibility
by the Ministry of the Economy.
(f) Total exemption from ordinary and/or extraordinary export taxes.
ARTICLE 13
Under the drawback regime, companies owned by  eligible natural or legal persons shall
receive reimbursement for customs duties, import taxes and value added tax they have paid on deposit
to guarantee the entry of raw materials, semi-finished products, intermediate products, materials,
containers, packaging and labels used in the production or assembly of exported goods.  The time-
limit for requesting such reimbursement shall be six months from the date of acceptance of therelevant import certificate.  They shall also receive the following benefits:
(a) Total exemption from company tax on income obtained or derived exclusively from
the export of goods that have been processed or assembled in the Guatemala and
exported outside the Central American area.  Such exemption shall be granted for aperiod of ten (10) years, from the first tax year immediately following the date of
notification of the decision on eligibility by the Ministry of the Economy.
For the purposes of the application of the above-mentioned exemption, the taxpayers
concerned shall maintain a cost accounting and perpetual inventory system,separately identifying exports made outside the Central American area and the costs
and charges relating thereto, or failing that, a system of unit operating costs.  Natural
or legal persons domiciled abroad, which have permanent subsidiaries, agencies or
establishments operating in Guatemala and export goods originating from export andG/SCM/Q3/GTM/10
Page 7
in-bond processing activities, shall not be granted the exemption from company tax
if, their country of origin grants a credit for such tax paid in Guatemala.
(b) Total exemption from ordinary and/or extraordinary export taxes.
ARTICLE 14
Under the duty-free replacement regime, co mpanies owned by natural or legal persons
qualified under this law, which have used as inputs goods for which the corresponding customs duties
and import taxes have been paid, and which have used such inputs to manufacture goods exported by
third parties, shall be exempted from the equivalent of the duties and taxes paid.  This exemption shall
be used for the replenishment of raw materials, semi-finished products, intermediate products,materials, containers, packaging and labels directly related to the production process.
The time-limit for effecting such duty-free imports under this regime shall be one year from
the date of issue of the corresponding exemption.
ARTICLE 15
Under the total domestic added component regi me for exports, companies may be granted the
following benefits:
(a) Total exemption from customs duties and import taxes, including value added tax
(VAT), on the import of machinery, equipment, parts, components and accessories
required for the production process, and duly identified in the decision on eligibility
by the Ministry of the Economy.
(b) Total exemption from company tax on income obtained or derived exclusively from
the export of goods processed or assembled in the country and exported outside the
Central American area.  Such exemption shall be granted for a period of
ten (10) years, from the first tax year immediately following the date of notification
of the decision on eligibility by the Ministry of the Economy.
For the purposes of the application of the above-mentioned exemption, the taxpayers
concerned shall maintain a cost accounting and perpetual inventory system separately
identifying exports made outside the Central American area and the costs attributable
thereto, or failing that, a system of unit operating costs.
Natural or legal persons domiciled abroad which have permanent subsidiaries,
agencies or establishments operating in Guatemala and export goods originating from
export and in-bond processing activities, shall not be eligible for the exemption from
company tax if their country of origin grants a credit for the company tax paid in
Guatemala.
(c) Total exemption from ordinary and/or extraordinary export taxes.
ARTICLE 16
Companies declared eligible under the temporary admission regime may subcontract the
productive services of other eligible or non-eligib le companies, subject to a prior request for the
relevant authorization from the Industrial Policy Directorate of the Ministry of the Economy, which
shall issue a decision and notify the Directorate-General of Customs.G/SCM/Q3/GTM/10
Page 8
ARTICLE 17
Companies declared eligible under the temporary admission regime and the total domestic
added component regime may, subject to prior authorization by the Industrial Policy Directorate of
the Ministry of the Economy, transfer machinery, equipment, parts, components and accessories usedin the productive activity, provided that the purchaser is entitled to the same or greater benefits than
the transferor and demonstrates that the goods to be transferred contribute directly to the productive
activity of the company; the Industrial Policy Directorate shall notify the transfer to the
Directorate-General of Customs.
ARTICLE 18
The benefits granted under this Law by the Ministry of the Economy may not be assigned on
any account without the prior authorization of the said Ministry.  For that purpose, companies owned
by natural or legal persons declared eligible under this Law may assign such benefits provided that the
assignee satisfies the same requirements as the assignor.  The request for assignment must be
submitted to the Industrial Policy Directorate of the Ministry of the Economy, which shall process therequest and issue a report.  The regulation to this Law shall establish the requirements and the
procedure to be followed in respect of the assignment of benefits.
ARTICLE 19
The same company may qualify under two different regimes, for which purpose the interested
party must submit the corresponding request in accordance with the provisions of the following
chapter.  The foregoing does not imply duplication of benefits under this Law.
CHAPTER III
PROCEDURES
ARTICLE 20
In order for a company to be declared eligible  for the benefits granted by this Law, the
interested parties must submit a request to the Industrial Policy Directorate of the Ministry of the
Economy, accompanied by a technical/economic study signed by an economist or industrial engineer
who is an active member of a professional association.  The study must meet the information and
other requirements laid down in the instructions  provided by the above-mentioned Directorate.
ARTICLE 21
Upon submission of the request for approval of eligibility, the Industrial Policy Directorate
shall issue a decision within a maximum of thirty (30) days from the date of submission of the
request.
ARTICLE 22
On the basis of the report, the Ministry of the Economy shall decide on the admissibility or
inadmissibility of the request within a maximum of fifteen (15) days from the date of the report.G/SCM/Q3/GTM/10
Page 9
ARTICLE 23
Companies declared eligible under this Law may submit a duly substantiated request for
amendment of the relevant decision.  The procedure and time-limit for a decision shall be as specified
in Articles 21 and 22 of this Law.
ARTICLE 24
Following submission of the request for ap proval under the temporary admission, drawback
or total domestic added component regimes, and before a decision is taken, the entry of the required
merchandise may be permitted, provided that the amount of the customs duties, import tax or value
added tax is guaranteed by means of a bond or cash deposit.
If approval is denied, the deposit shall be paid into the Common Fund account of the
Government of Guatemala, or the bond shall be encashed in favour of the State.
ARTICLE 25
If the Industrial Policy Directorate requires any additional information regarding a request
that has been submitted and obtains no reply, or if the processing of the request is discontinued within
sixty (60) days, it shall be deemed to have been abandoned and the case shall be officially filed.
ARTICLE 26
The interested party may request cancellation of the benefits granted under the relevant
decision on eligibility by the Industrial Policy Directorate of the Ministry of the Economy, which
shall immediately so notify the Directorate-General of Customs.
CHAPTER IV
GUARANTEES AND OBLIGATIONS
ARTICLE 27
All customs duties, import taxes and value adde d tax (VAT) on goods entering the national
customs territory shall be guaranteed to the tax authorities by the following means:
(a) Under the temporary admission regime, by means of a bond, a specific guarantee
authorized by the Ministry of Public Finance, a bank guarantee, or through the
posting of specific security by general warehouses authorized to operate as bonded
warehouses, which post a special bond for this type of operation.
(b) Under the drawback regime, by means of a cash deposit.
ARTICLE 28
The Directorate-General of Customs shall effect the full or partial release of the guarantee
posted, or reimbursement of the amount paid by way of deposit, after verifying that the goodsadmitted or entered into the national customs territo ry have been used for the object or purpose
requested or have been re-exported, exported or placed on the domestic market.G/SCM/Q3/GTM/10
Page 10
ARTICLE 29
For the purposes of the provisions of the preceding Article, the interested party must submit a
request to the Directorate-General of Customs within  a period of forty-five (45) days following the
date of acceptance of the export or re-export certificate, accompanied for the purpose by thedocuments provided for in the regulation to this Law.
If the relevant request is not submitted within the above-mentioned period, the deposit shall
be paid into the Common Fund account of the Government of Guatemala, or the bond shall be
encashed in favour of the State.
ARTICLE 30
Customs duties, import taxes or value added tax (VAT) that have been guaranteed by cash
deposits shall be refunded by means of a cheque issued by the Directorate-General of Customs or the
National Customs Authority within thirty (30) days following submission of the request by the
exporter, accompanied for the purpose by the documents specified under the regulation to this Law.
ARTICLE 31
The Ministry of Public Finance shall issue a resolution based on the report of the
Directorate-General of Customs, enabling companies owned by natural or legal persons recognized asexporters under the duty-free replacement regime to import, free of customs duties and other import
taxes, raw materials, intermediate products, semi-processed products, materials, containers, packaging
and labels directly related to their production process, within ninety (90) days following the
submission of the request by the exporter.
ARTICLE 32
Raw materials, semi-processed products, intermediate products, materials, containers,
packaging and labels intended for companies declared eligible under the temporary admission regime
or the drawback regime, which are delivered in a damaged state or do not fulfil the necessary
requirements for their incorporation in export products, may be re-exported following inspection and
verification of the above-mentioned circumstances by the Directorate-General of Customs, with a
view to their subsequent release or the reimburseme nt of duties, or may otherwise be placed on the
domestic market subject to application of the appropriate percentage of damage.
ARTICLE 33
Companies recognized as exporters or in-bond processing plants under the temporary
admission and drawback regimes must fulfil the following requirements:
(a) Initiate the production of goods for export or in-bond processing within the period
specified by the relevant decision on eligibility or, where appropriate, within theextended time-limit granted.
(b) Within the first twenty (20) days of each month, provide a certified account of goods
under the regime governed by this Law, as required by the relevant regulation, by
means of a sworn statement to the Directorate-General of Customs, and a sealed copyfrom the latter, together with a copy of the relevant import and export certificates, to
the Industrial Policy Directorate.G/SCM/Q3/GTM/10
Page 11
(c) Maintain accounting records and a perpetual inventory system with respect to goods
temporarily admitted and the quantity of such goods used in exports or re-exports.
(d) Provide to the Industrial Policy Directorate and the Directorate-General of Customs
such information as may be necessary to determine the goods required for theproduction or assembly of exportable products, as well as to determine the losses, by-
products and wastage resulting from the production process.
(e) Provide any other relevant information for the proper application of this Law, and
facilitate any inspections which are necessary in the opinion of the Industrial Policy
Directorate or the Directorate-General of Customs.
(f) Abide by the laws of the country, particularly its labour laws.
ARTICLE 34
Companies recognized as exporters under the duty-free replacement regime shall only be
required to comply with the obligations set out in subparagraphs (d), (e), and (f) of the previous
Article.
ARTICLE 35
Companies recognized as exporters under the total domestic added component regime must
comply with the obligations laid down in subparagraphs (a), (e), and (f) of Article 33 of this Law.  In
addition, they must submit a photocopy of the import certificate for machinery, equipment, parts,
components and accessories within forty-five (45) days from the date of the issue of the relevant
certificate.
ARTICLE 36
By-products and waste products resulting from the productive activity of companies
recognized as exporters or in-bond processors under the temporary admission or drawback regimes
may be cleared for domestic consumption, destroyed, re-exported or donated to charitable
organizations, subject to prior authorization by the Directorate-General of Customs.
Defective products left over from the productive activity of the companies concerned, or
products which are rejected for not meeting the quality requirements of the export market, may be
cleared for domestic consumption, destroyed, re-exported or donated to charitable organizations,
subject to prior authorization by the Ministry of Public Finance.
CHAPTER V
CONTROLS
ARTICLE 37
The Directorate-General of Customs shall be responsible for monitoring the guarantees and
deposits posted by companies recognized as exporters or in-bond processors under the temporaryadmission or drawback regimes, as well as the certificates issued for the benefit of companies whose
export activity is covered by the duty-free replacement regime.G/SCM/Q3/GTM/10
Page 12
ARTICLE 38
The Directorate-General of Customs shall be responsible for keeping an up-to-date record of
the quantity of goods that enter the national customs territory under the temporary admission or
drawback regimes, as well as of the quantity of such goods used for the processing or assembly ofexported or re-exported products.
CHAPTER VI
PROHIBITIONS AND SANCTIONS
ARTICLE 39
Companies recognized as exporters or in-bond processors under the temporary admission
regime are prohibited from in any way disposing of temporarily admitted goods on the national
territory, unless the corresponding customs duties and taxes are paid.  Exception shall be made fordonations to charitable organizations, which require prior authorization by the Ministry of Public
Finance.
ARTICLE 40
Machinery, equipment, parts, components and accessories imported under this Law may not
be disposed of or assigned a purpose different from the one for which they were authorized, except
where the relevant customs duties, import taxes and value added tax (VAT) are paid, or after
five (5) years from the date of acceptance of the im port certificate, and subject to prior authorization
by the Industrial Policy Directorate, which shall notify the Directorate-General of Customs.
ARTICLE 41
The disposal for any purpose of goods imported or admitted under this Law, or the use of
such goods for purposes other than those for which the benefit was granted, shall be punishable by a
fine equivalent to one hundred per cent (100%) of the applicable unpaid taxes, without prejudice to
any other sanctions provided for by the customs legislation in force.  In the event of non-compliance,the party disposing of the goods and the purchaser shall be jointly responsible for payment of the
amounts left uncollected by the State.
ARTICLE 42
In the event of destruction of goods admitted temporarily which are not located in the primary
zone of customs jurisdiction, they shall be subject to the payment of the duties and other taxes left
uncollected by the State, except in cases of unforeseen circumstances or force majeure , duly verified
by the Ministry of Public Finance.
ARTICLE 43
The Ministry of the Economy shall rescind ex officio the decision on eligibility and send a
copy of the rescindment to the Directorate-General of Customs and the Directorate-General of
Internal Revenue, in the following cases:
(a) Where the company does not initiate production within the time-limit laid down in
the decision on eligibility or within the relevant extended time-limit.G/SCM/Q3/GTM/10
Page 13
(b) Closure, dissolution or bankruptcy of the company.
(c) Any resulting non-compliance with the obligations contained in the relevant decision
on eligibility.
Notwithstanding the provisions of subparagraph (c) above, the Industrial Policy Directorate
may issue a single warning to the offending company, and send a copy of such warning to the
Directorate-General of Customs.
ARTICLE 44
Companies which, upon the entry into force of this Law, are in receipt of benefits under
Legislative Decree No. 21-84, shall continue to enjoy those benefits until they lapse.  Nevertheless,
any companies which so desire must secure recognition of eligibility within twelve (12) months
following the date of entry into force of this Law.
The years of exemption from company tax under Legislative Decree No. 21-84 shall be
deducted from any new benefits granted to companies recognised in this way.
CHAPTER VII
TRANSITIONAL AND FINAL PROVISIONS
ARTICLE 45
Requests for recognition of eligibility under Legislative Decree No. 21-84, which are being
processed, shall be the subject of decisions by the Ministry of the Economy within thirty (30) days
from the date of publication of this Law.
ARTICLE 46
If the interested party is not satisfied with the decisions issued by the competent
administrative authority, it may lodge the applicable appeal provided for in customs legislation or inthe Law on Administrative Proceedings.
ARTICLE 47
Matters not covered by this Law and the Regulation thereto shall be decided by the Ministry
of the Economy or the Ministry of Public Finance, or by both where appropriate, and within their
respective spheres of competence.
ARTICLE 48
The Ministries of the Economy and of Public Finance shall strictly enforce this Law and the
Regulation thereto.
ARTICLE 49
Legislative Decree No. 21-84 and the Regulation thereto, and any other provisions
inconsistent with this Law, are hereby repealed.G/SCM/Q3/GTM/10
Page 14
ARTICLE 50
The Executive, through the Ministries of the Economy and of Public Finance, shall issue
implementing regulations for this Law within a period of forty-five (45) days from the date of
publication of its Law.
ARTICLE 51
This Decree shall enter into force thirty (30) days after its publication in the Official Journal.
TO BE TRANSMITTED TO THE EXECUTIVE FOR PUBLICATION AND
IMPLEMENTATION.
DONE AT THE LEGISLATIVE PALACE, GUATEMALA CITY, ON THE TWENTY-
THIRD DAY OF MAY NINETEEN HUNDRED AND EIGHTY-NINE.
JOSE FERNANDO LOBO DUDON
PRESIDENT
RAMIRO GARCIA DE PAZ
SECRETARYCLAUDIO COXAJ TZUN
SECRETARYG/SCM/Q3/GTM/10
Page 15
DECREE 65-89
THE CONGRESS OF THE REPUBLIC OF
GUATEMALA
WHEREAS:
It is in the national interest to guide Guatemala's economy towards complete development, by
strengthening production and marketing in general, generating employment, and making use of the
transfer of technology and of the country's comparative advantages in order to compete efficiently onthe international market;  and the establishment of free zones makes an important contribution to this
aim.
WHEREAS:
It is necessary to make available new national and foreign investment options within a secure
framework and to provide the benefits and fiscal neutrality required for the establishment of free
zones and the activities carried out in those zones.
WHEREAS:
It is necessary to enact clear rules for the es tablishment and operation of free zones, so that
the promoters and users of such zones may enjoy the legal certainty required for the promotion of this
activity.
THEREFORE,
By virtue of the powers conferred on it by Article 171(a) of the Constitution of the Republic
of Guatemala,
DECREES  as follows:
LAW ON FREE ZONES
CHAPTER I
GENERAL PROVISIONS
ARTICLE 1.   The purpose of this Law is to encourage and regulate the establishment in
Guatemala of free zones which promote national development through their activities, and inparticular through measures to boost foreign trade, create employment and stimulate technology
transfer.
ARTICLE 2.   The term "free zone" means a physical area of land delimited, planned and
designed under a special customs regime established by this Law, in which natural or legal personsmay engage without distinction in the production or marketing of goods for export or re-export, as
well as in the provision of services related to international trade.  Free zones shall be supervised by
the customs authority.G/SCM/Q3/GTM/10
Page 16
Free zones may be public or private;  the area housing industrial and services users shall be
kept physically separate from the area housing commercial users;  they may be established in any part
of the country, in accordance with the legislation currently in force.
ARTICLE 3.   "Administrative entity" means the legal person registered and authorized by
law to operate in the country, responsible for inve sting, organizing, developing and administering free
zones.
ARTICLE 4.   "User" means the natural or legal person authorized by the Ministry of the
Economy to operate in a free zone, subject to compliance with the requirements laid down in the
Commercial Code, in this Law and in the regulation thereto.  Users may be of three types, depending
on their activities:
(a) Industrial users engage in the production or assembly of goods for export outside the
national customs territory, re-export, or in research and technological development.
(b) Service users engage in the provision of services related to international trade.(c) Commercial users engage in the marketing of goods for export outside the national
customs territory, as well as for re-export, without conducting any activities which
change the characteristics of the product or modify the origin thereof.
ARTICLE 5.  Administrative entities and users shall be subject to special exchange
regulations, for the purpose of regulating the possession and negotiation of foreign currency within
the area of jurisdiction of the respective free zones.
CHAPTER II
BODIES RESPONSIBLE FOR FREE ZONES
ARTICLE 6.   The Ministries of the Economy and of Public Finance shall be the bodies
responsible for free zones, in accordance with the provisions of this Law and the Regulation thereto
and within their respective spheres of authority.
ARTICLE 7.   The Ministry of the Economy shall have the following powers among others:
(a) To authorize or refuse the establishment of free zones.
(b) To authorize or refuse the operation of free zones.
(c) To authorize or refuse the establishment of natural or legal persons as users of a free
zone.
(d) To participate, together with other ministries or institutions and in coordination with
the Ministry of Foreign Relations, in the negotiation of international agreements
relating to the activities of free zones, and to give effect to such agreements.
(e) To deal with violations of this Law and regulation, over which it has jurisdiction, and
to impose appropriate penalties.
(f) To establish the necessary administrative conditions for the implementation of this
Law.G/SCM/Q3/GTM/10
Page 17
(g) To entertain and decide on any other matter within its sphere of competence.
ARTICLE 8.   The National Council for Export Promotion (CONAPEX) shall act as the
advisory body on free zones.
CHAPTER III
ESTABLISHMENT AND ADMINISTRATION
OF FREE ZONES
ARTICLE 9.   Public free zones shall be decentralized entities established under the laws of
the Republic.
ARTICLE 10.  The administrative entities for private free zones, whose only function shall
be the one defined in Article 3 of this Law, shall be legal persons established by public deed.  Theirestablishment, development and operation shall be authorized by decision of the Ministry of the
Economy.
ARTICLE 11.  In order to secure authorization for the establishment and development of the
private free zones referred to in the preceding paragraph, thus qualifying for fiscal incentives underthis Law, the administrative entity shall submit a request to the Industrial Policy Directorate, attaching
thereto the economic/financial study signed by an economist who is an active member of a
professional association, together with the documentation required by the regulation to this Law.
ARTICLE 12.   Following submission of the request for authorization, the Industrial Policy
Directorate shall issue a report within a maximum of thirty (30) days from the date of the submission.
ARTICLE 13.   The Ministry of the Economy, on the basis of the report referred to in the
preceeding Article, shall decide on the admissibility or inadmissibility of the authorization requested
within a maximum of fifteen (15) days from the date of issue of the report.
ARTICLE 14.   Any administrative entity with authorization under this Law may submit a
duly substantiated request for modification of the relevant decision.  The procedure for handling the
request and the time-limit for reaching a decision shall be as specified in Articles 12 and 13 of this
Law.
ARTICLE 15.   If the Industrial Policy Directorate requires any additional information with
regard to the request submitted and obtains no reply, or if the processing of the request is discontinued
within a period of sixty (60) days, it shall be d eemed to have been abandoned and the case shall be
officially filed.
CHAPTER IV
USERS
ARTICLE 16.   The authorized administrative entity is directly responsible for the
supervision, administration and management of the free zone.  It shall have the following powers:G/SCM/Q3/GTM/10
Page 18
(a) To process requests submitted by interested parties for authorization to establish
themselves in the zone under its administration, in accordance with the provision of
Article 17 of this Law and the regulation thereto.
(b) To negotiate with natural or legal persons the conditions of their establishment in the
free zone.
(c) To establish the rental rates for user premises as well as the selling prices of
immovable property it owns and services in the free zone.
(d) Any other matters relating to the supervision, administration and management of the
free zone.
ARTICLE 17.   The administrative entity shall apply to the Industrial Policy Directorate for
the authorization of user operations.  To that end,  the administrative entity shall submit the relevant
request on the official form established for that purpose, together with copies of the documents
required by the regulation.
ARTICLE 18.  Upon submission of the user authorization request, the Industrial Policy
Directorate shall issue a report within a maximum of thirty (30) days from the date of submission of
the request.
ARTICLE 19.  The Ministry of the Economy, on the basis of the report referred to in the
preceding Article, shall decide on the admissibility or inadmissibility of the user operation request
within a maximum of fifteen (15) days from the date of issue of the report.
ARTICLE 20.  Authorized users under this Law may submit a duly substantiated request for
amendment of the relevant decision through the administrative entity.  The procedural formalities and
the time-limit for deciding on such a request shall be as specified in Articles 18 and 19 of this Law.
CHAPTER V
FISCAL INCENTIVES AND BENEFITS
ARTICLE 21.  The duly authorized free zone administrative entities shall be granted the
following tax incentives:
(a) Total exemption from taxes, customs duties and charges applicable to the import of
machinery, equipment, tools and materials intended exclusively for the construction
of infrastructure, buildings and installations to be used for the development of the free
zone, and duly identified in the decision on authorization for the establishment and
development of the zone.
(b) Total exemption from company tax on income derived exclusively from their
activities as free zone administrator for a period of ten (10) years from the date of
commencement of the tax period immediately following the date of issue of the
authorization referred to in Article 6(b) of this Law.  Administrative entities
domiciled abroad which operate in Guatemala shall not be accorded this exemption iftheir country of origin grants a tax credit for company tax paid in Guatemala.G/SCM/Q3/GTM/10
Page 19
(c) Exemption from the single immovable property tax payable to the central
Government, for a period of five (5) years with respect to immovable property
intended exclusively for the development of a free zone.
(d) Exemption from the tax on the sale and exchange of immovable property (sales tax),
intended exclusively for the development and expansion of the free zone.
(e) Exemption from the stamp duty payable on documents used for the transfer to the
administrative entity of ownership of immovable assets intended for the development
and expansion of the free zone.
(f) Exemption from the stamp duty payable on documents used to transfer ownership of
immovable property to users of the zone.
(g) Full exemption from taxes, customs duties and other charges applicable to the import
and consumption of fuel oil, bunker oil, butane gas and propane, strictly necessary for
the generation of electrical power used for operational activities and service provisionby free zone users, as from the date on which the operation of the free zone was
authorized.
The incentives referred to in subparagraphs (a), (c), (d) and (e) of this Article shall begin to
take effect as from the date of authorization by the Ministry of the Economy for the establishment anddevelopment of the free zone.
ARTICLE 22.  Industrial or service users authorized to operate in free zones shall enjoy the
following tax incentives:
(a) Exemption from taxes, customs duties and charges applicable to imports into the free
zone of machinery, equipment, tools, raw materials, inputs, semi-processed products,
containers, packaging, components and any merchandise used for the production of
goods and the provision of services.
(b) Total exemption from company tax on income derived exclusively from their
activities as free zone industrial or service users, for a period of ten (10) years fromthe date of commencement of the tax period immediately following the date of issue
of the authorization referred to in Article 6(c) of this Law.  Industrial or service users
domiciled abroad which operate in Guatemala shall not be eligible for this exemption
if their country of origin grants a tax credit for the company tax payable in
Guatemala.
(c) Exemption from value added tax on transfers of goods within and between free zones.(d) Exemption from the tax on the sale and exchange of fixed assets (sales tax) located in
the free zone, by means of transactions carried out in conjunction with theadministrative entity or with users of the zone.
(e) Exemption from the stamp duty payable on documents used for the transfer of
ownership of fixed assets located within the free zone.
The incentives referred to in subparagraphs (a), (c), (d) and (e) of this Article shall begin to
take effect as from the date of authorization granted by the decision of the Ministry of the Economy.G/SCM/Q3/GTM/10
Page 20
ARTICLE 23 .  Commercial users authorized to operate in free zones shall enjoy the
following tax incentives:
(a) Exemption from taxes, customs duties and charges applicable in general terms to the
importation into the free zone of goods or components warehoused in the free zonefor marketing purposes.
(b) Exemption from the company tax on income derived exclusively from their activities
as commercial users of the free zone, for a period of five (5) years from the date of
commencement of the tax period immediately following the date of issue of the
authorization referred to in Article 6(c) of this Law.  Commercial users domiciled
abroad which operate in Guatemala shall not benefit from this exemption if theircountry of origin grants a tax credit for the company tax payable in Guatemala.
(c) Exemption from value added tax on transfers of goods carried out within and between
free zones.
(d) Exemption from the tax on the sale and exchange of fixed assets (sales tax) located in
the free zone by means of transactions carried out in conjunction with the
administrative entity or with users of the zone.
(e) Exemption from the stamp duty payable on documents used for the transfer of the
ownership of fixed assets located within the free zone.
The incentives referred to in subparagraphs (a), (c), (d) and (e) of this article shall come into
effect from the date of authorization by the Ministry of the Economy.
ARTICLE 24.  For the purposes of Articles 21, 22 and 23(b), dividends or profits distributed
both by administrative entities and by free zone users to natural or legal persons domiciled in
Guatemala shall also be considered as tax exempt income.
ARTICLE 25.  Industrial users which set up under the free zone regime may export up to a
maximum of twenty per cent (20%) of their total output to the national customs territory, subject to
prior authorization by the Industrial Policy Directorate, which shall notify the Directorate-General ofCustoms.  In such cases, each sale may involve no less than the domestic currency equivalent of five
thousand United States dollars (US$ 5000) and only one consignee in the national customs territory.
Products exported under this provision shall be subject, upon entry into the national customs territory,
to the definitive import regime governing goods from countries outside the Central American area.
The industrial users referred to in the preceding paragraph shall not be eligible for the benefit
granted under Article 22(b) in respect of income derived from the export of the goods in question to
the national customs territory.
ARTICLE 26.  In order to determine the share of company tax exempted under Article 22(b),
industrial users which export to the national customs territory shall proportionally distribute the tax
applicable to their activities as a whole between the gross income from their exports and re-exports as
industrial users and the gross income derived from their other activities.  The proportion
corresponding to the former shall be the tax for which exemption is granted and that corresponding to
the latter shall be the tax payable.
ARTICLE 27 .  Foreigners who work for the administrative entities and users in the free zone
may stay and work in Guatemala in accordance with the provisions of the Migration Law and the
Labour Code.G/SCM/Q3/GTM/10
Page 21
CHAPTER VI
THE CUSTOMS REGIME
ARTICLE 28 .  Goods of any kind which enter or leave the free zones shall be subject to the
goods transit requirements provided for in national legislation.
The Ministry of Public Finance, through the Directorate-General of Customs, shall in each
free zone establish a government office and the necessary mechanisms for goods to be checked upon
entry and exit.
ARTICLE 29.   Goods produced or entered by a free zone user may be transferred to another
free zone user which fulfils the relevant customs transit requirements, under the control and
supervision of the Directorate-General of Customs.
ARTICLE 30.   Exports of goods and services by natural or legal persons established in the
national customs territory to an administrative entity or a user of a free zone shall be treated as
customs transactions involving outright export to countries outside the Central American area.
Natural or legal persons located in the national customs territory which produce, process,
export or re-export goods to free zones may rely on the specific laws granting export incentives, and
the foreign currency equivalent of the value of the domestic added component incorporated in the
goods shall be paid in accordance with the legislation in force and the regulations of the Currency
Board on that subject.
ARTICLE 31 .  Goods may be temporarily exported from the national customs territory to a
free zone in order to undergo processing, working, preparation or repair.  The maximum time-limit for
re-export to the national customs territory shall be six (6) months from the date of issue of the
certificate of export to the free zone.  On being re-exported to the national customs territory, the goods
in question shall be subject to the payment of the customs duties and other taxes applicable to
importation, only on the part corresponding to the added component incorporated in the
above-mentioned process, this operation being treated as one of importation from a country outsidethe Central American area.
ARTICLE 32.   In the event of failure to comply  with the maximum time-limit for re-export
to the national customs territory, the temporary export to the free zone shall be treated as definitive
and the foreign currency equipment of the added goods component shall be paid in accordance withthe legislation in force and the regulations of the Currency Board on the subject.  Alternatively, if
temporarily exported goods are re-exported, after six (6) months they shall be treated as goods
originating in third countries and shall be subject to the payment of import taxes, customs duties,
value added tax (VAT) and other appropriate taxes, fines and charges.
ARTICLE 33.   Goods may be temporarily exported from a free zone to the national customs
territory in order to undergo processing, working, preparation or repair, provided that the stay of the
temporarily admitted goods is guaranteed to the tax authorities, by means of a special bond authorized
by the Ministry of Public Finance or a cash deposit.  The maximum time-limit for re-export to the free
zone or to a foreign country shall be six (6) months.  The operation in question shall be treated as oneof export to countries outside the Central American area.
The Directorate-General of Customs shall effect the full or partial release of the bond posted
or reimbursement of the amount paid by way of a deposit, after verifying that the goods admittedG/SCM/Q3/GTM/10
Page 22
temporarily to the national customs territory have been re-exported to free zones or to a foreign
country.
ARTICLE 34 .  The by-products resulting from the productive activity of companies that set
up in a free zone may be treated as domestic goods or donated to charitable organizations subject, inthe latter instance, to authorization by the Ministry of Public Finance.
ARTICLE 35.   Defective products left over from the productive activity of the companies
concerned, or products which are rejected for not meeting the quality requirements of the export
market, may be treated as domestic products or donated to charitable organizations, subject to prior
authorization by the Ministry of Public Finance.
CHAPTER VII
OBLIGATIONS AND PROHIBITIONS
ARTICLE 36.   The administrative entities of free zones are placed under the following
obligations:
(a) To physically separate the commercial users' areas from the areas housing industrial
and services users;
(b) to install, authorize, administer, supervise, control and maintain services intended for
users of the free zone;
(c) to post a bond or bank guarantee payable on demand or a special security authorized
by the Ministry of Public Finance, in order to ensure fulfilment of their obligations.
The bond or guarantee in question shall be equivalent in value to ten per cent (10%)
of their total assets;
(d) to make provision, in the design of the free zone, for the availability of areas for the
provision of services to staff working in the zone, so as to comply with labour and
social welfare laws;
(e) to pay monthly to the Ministry of Public Finance, for allocation to a special fund for
the development and promotion of free zones and for export support and promotion,
the equivalent in domestic currency of ten (10) United States cents for each square
metre of the area rented, occupied or sold to users of free zones;  the annual technicaland economic plan of the special fund shall be produced by CONAPEX;
(f) to provide any information on their operations requested by the Ministries of Public
Finance and of the Economy;
(g) to establish within their administrative organization a goods transaction system
coordinated with the office of the Directorate-General of Customs;
(h) to inform the Industrial Policy Directorate of the Ministry of the Economy and the
Ministry of Public Finance of notifications of the termination of operations that itreceives from users of the zone within a maximum of fifteen (15) days from the date
of notification by the user;G/SCM/Q3/GTM/10
Page 23
(i) any other obligation relating to the supervision, administration and management of
the free zone.
ARTICLE 37.   The design, planning and functioning of the free zone must satisfy fiscal
security requirements set by the Ministry of Public Finance.  The administrative entity must createinstallations and provide facilities for the functioning of the office of the Directorate-General of
Customs, and shall be responsible for the costs incurred by the latter's functioning.
ARTICLE 38 .  The users of free zones shall have the following obligations:
(a) To provide the Industrial Policy Directorate with information on their operations, as
required by the administrative entity;
(b) to inform the administrative entity, sixty (60) days in advance, of any closure of
operations in the free zone;
ARTICLE 39 .  The administrative entities and users of free zones are under an obligation to
comply with the laws of Guatemala, particularly the rules laid down in the Labour Code.
ARTICLE 40 .  The possibility of establishment with no prior authorization by the Ministry
of the Economy, but without entitlement to the benefits and fiscal incentives under this law, is
available to natural or legal persons who engage in the following activities within a free zone:
(a) Travel agencies and airlines;(b) air, sea or land transport;
(c) activities governed by the banking and financial laws of Guatemala;
(d) services unrelated to international trade,  in accordance with the provisions of the
regulation to this Law.
ARTICLE 41 .  Production and marketing may not be carried out in free zones, nor may the
following activities be pursued:
(a) Oil and natural gas production;(b) fisheries and breeding of maritime or freshwater species;
(c) leisure centres and hotels;
(d) logs and lumber;(e) cane sugar, refined or unrefined, and molasses;(f) coffee beans, unthreshed coffee and "café oro";(g) berry, parchment and clean cardamom and "cardamomo oro";
(h) uncarded cotton;
(i) fresh banana;G/SCM/Q3/GTM/10
Page 24
(j) undecorticated sesame;
(k) natural rubber;(l) reproduction, breeding and fattening of cattle;(m) extractive mining;(n) polluting goods;(o) processing and handling of explosives and radioactive materials;
(p) breeding, cultivation and processing of flora and fauna species protected or prohibited
by special agreements or laws;
(q) packaging, packing or labelling of products to which quotas apply in Guatemala.
ARTICLE 42 .  The users of free zones are prohibited from importing the following articles
under this law:
(a) firearms, gunpowder, ammunition and accoutrements of war in general;
(b) jewellery, wrist watches, non-industrial cameras;
(c) industrial waste and other residues whose polluting effect poses a threat to health and
the environment;
(d) goods originating outside the Central American area, for use or personal consumption
by persons working or entering the free zones.
ARTICLE 43 .  The administrative entities and users are prohibited from disposing in any
way, on the national territory, of goods entered into free zones, whether or not they are exempt from
or subject to the payment of customs duties, import taxes and value added tax (VAT).
ARTICLE 44 .  Machinery, equipment, parts, components and accessories which are entered
under this Law for use by the administrative entity or the users of free zones, may not be disposed of
or assigned a purpose different from the one for which they were authorized in the decision by the
Ministry of the Economy.
ARTICLE 45.  The carrying and possession of firearms within the free zones shall be subject
to the applicable laws in force.
CHAPTER VII
SANCTIONS
ARTICLE 46 .  The disposal for any purpose, within the national customs territory, of
machinery, equipment, parts, components, accessories and goods admitted under this Law, or the usethereof for purposes other than those for which the benefit was granted, shall be punishable by a fine
equivalent to one hundred per cent (100%) of the applicable unpaid taxes, without prejudice to any
other penalties provided for by the customs legisla tion in force.  In the event of non-compliance, theG/SCM/Q3/GTM/10
Page 25
party disposing of the goods and the purchaser shall be jointly responsible for payment of the amounts
left uncollected by the State.
ARTICLE 47 .  Where goods enter or leave free zones without fulfilling the necessary legal
formalities, the offending party shall incur a fine equivalent to one hundred per cent (100%) of theapplicable unpaid taxes, without prejudice to any other penalties provided for by the customs
legislation in force and the specific civil and criminal statutes applicable to the case.
ARTICLE 48.  The Ministry of the Economy shall rescind ex officio the decision on the
eligibility of the free zone administrative entity, and send a copy of the rescindment to the
Directorate-General of Customs and the Directorate-General of Internal Revenue, in the following
cases:
(a) non-compliance with the objectives, obligations and requirements contained in the
decision on authorization;
(b) where for a reason attributable to the said entity, operations were not initiated within
the period provided for in the decision on admissibility or within the relevant
extended time-limit;
(c) unlawful traffic in goods;
(d) where goods which pose a threat to the environment or public health enter the free
zone.
With regard to the provisions of subparagraphs (b) and (d) above, the Industrial Policy
Directorate may issue a single warning to the administrative entity, and send a copy of such warningto the Directorate-General of Customs and the Directorate-General of Internal Revenue.
ARTICLE 49.  The Ministry of the Economy shall rescind ex officio the decision on the
eligibility of any user of a free zone, and shall send a copy of the rescindment to the
Directorate-General of Customs and the Directorate-General of Internal Revenue in the following
cases:
(a) Non-compliance with the objectives, obligations and requirements contained in the
decision on authorization;
(b) unlawful traffic in goods;
(c) where goods that pose a threat to the environment or public health enter the free zone.
With regard to the provisions of subparagraph (c) above, the Industrial Policy Directorate
may issue a single warning to the administrative entity, and send a copy of such warning to the
Directorate-General of Customs and the Directorate-General of Internal Revenue.
ARTICLE 50.  In the cases described in Article 48(c) and Article 49(b), the competent
authority shall impound the goods and place them at the disposal of the courts for assessment of the
corresponding liability;  the penalty shall not exem pt the offending party from any civil and criminal
liability that may be assessed in accordance with other laws.
In the cases described in Article 48(d) and Article 49(c), the relevant authority shall
immediately take appropriate action.G/SCM/Q3/GTM/10
Page 26
ARTICLE 51.   Where the payment referred to in Article 36(c) of this Law is not made or is
not made at the proper time, the administrative entity concerned shall become liable to a fine
equivalent to fifty per cent (50%) of the said payment, without prejudice to the charging of
compensatory interest, without any notification being required, for each day of delay, calculated on
the basis of the highest interest rate in effect on the banking market.
In the cases referred to in the preceding paragraph, the Directorate-General of Internal
Revenue of the Ministry of Public Finance shall determine ex officio the amount not paid in time.
The administrative entity shall be summoned to a hearing in order to make good its failure to submit
an assessment of settlement and to effect payment within ten (10) working days following notification
of the relevant measure.
If payment has not been effected upon expiry of the above-mentioned time-limit, the
Directorate-General of Internal Revenue shall issue a decision confirming its preliminary
determination and shall initiate proceedings to secure payment.  The determination in question shall
be considered payment on account in respect of the determination to be made by the administrative
entity itself through its own inspection and assessment procedures.
CHAPTER IX
TRANSITIONAL AND FINAL PROVISIONS
ARTICLE 52.  If the development imperatives of the free zones so require, the Ministry of
the Economy may establish a special administrative unit to discharge the functions entrusted by this
Law to the Industrial Policy Directorate of the said Ministry.
ARTICLE 53.   Natural or legal persons who, upon the entry into force of this Law, are in
receipt of benefits under Legislative Decree No. 21-84 or Decree No 29-89 of the Congress of the
Republic, and who wish to come under the provisions of this Law, shall have their earlier years of
exemption from company tax duly deducted from the new benefits.
ARTICLE 54.   If the interested party is not satisfied with the decisions issued by the
competent administrative authority, it may lodge an y of the appeals provided for in the relevant
legislation.
ARTICLE 55.   Matters not covered by this Law and the Regulation thereto shall be decided
by the Ministries of the Economy and of Public Finance, or by both, where appropriate and within
their respective fields of competence.
ARTICLE 56.   The Currency Board shall issue the special exchange regulations referred to
in Article 5 of this Law within ninety (90) days from the date on which this Law enters into force.
ARTICLE 57.   The Ministry of Public Finance, following submission of a plan of activities
and of the required budget, shall allocate to the Ministry of the Economy the resources required for
fulfilment of the functions referred to in this Law.
ARTICLE 58.   The Executive, through the Ministries of the Economy and of Public Finance,
shall issue implementing regulations for this Law within a period of ninety (90) days from the date ofits publication.
ARTICLE 59  This Decree shall enter into force thirty (30) days after its publication in the
Official Journal.G/SCM/Q3/GTM/10
Page 27
TO BE TRANSMITTED TO THE EXECUTIVE FOR PUBLICATION AND
IMPLEMENTATION.
DONE AT THE LEGISLATIVE PALACE, GUATEMALA CITY, ON THE FOURTEENTH
DAY OF NOVEMBER NINETEEN HUNDRED AND EIGHTY NINE.
JOSE FERNANDO LOBO DUBON
PRESIDENT
WALDEMAR HIDALGO PONCE
SECRETARYRAMIRO GARCIA DE PAZ
SECRETARY
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