WORLD TRADE
ORGANIZATIONG/SCM/N/99/URY
14 July 2003
(03-3798)
Committee on Subsidies and
Countervailing MeasuresOriginal:  Spanish
SUBSIDIES
Extension under SCM Article 27.4 of the Transition Period under
Article 27.2(b) for the Elimination of Export Subsidies
URUGUAY
The following communication, dated 30 June 2003, has been received from the Permanent
Mission of Uruguay.
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The Permanent Mission of Uruguay to the World Trade Organization (WTO) presents its
compliments to the Central Registry of Notifications of the WTO Secretariat and has the honour to
submit the following notification relating to the extension of the transition period pursuant toArticle 27.4 of the Agreement on Subsidies and Countervailing Measures, in accordance with the
obligation for an annual review by the Committee on Subsidies and Countervailing Measures as
stipulated by the Decision of 22 No vember 2002 (WTO document G/SCM/92).
This extension was granted to Uruguay until 31 December 2003, without prejudice to
authorization being given for the programme to continue until the end of 2007, subject to annual
review by the Committee of the objectives and conditions set forth in the above-mentioned rules,which require compliance with the provisions on transparency and standstill that are contained in
paragraphs 3 and 4 of the Procedures.
The reasons that led Uruguay to request the extension of the transition period for the granting
of export subsides to the automotive sector, in accordance with Article 27.4 as well as with theProcedures in document G/SCM/39, still apply and have acquired even greater force on account of the
regional financial crisis.
Consequently, the programme to restructure the domestic automotive industry has assumed
considerable importance, since the companies producing vehicles and autoparts have had to adjusttheir business strategies to the new regional realities, which have been reflected in the restriction of
consumption as a result of the difficulties in obtaining credit.
These new business strategies were based on the identification of new products, which are
suitable for low-production market segments in the regional market and which are now in the processof development.  The implementation of the current projects will help to strengthen the domestic
export sector, increase the GDP and preserve skilled sources of labour, all of which have required the
expenditure of time and large sums of money.  The interruption of the programme will make it
impossible to attain not only these objectives, but also the objective already mentioned in the initial
submission, which is to integrate the domestic automotive industry into the regional automobilesector, now in the process of transition to a customs union, which is a highly important issue for the
country in view of the balances achieved in the sectoral negotiations.G/SCM/N/99/URY
Page 2
The measures whose extension is being requested are those contained in the regulations
already notified by Uruguay, in accordance with the provisions on transparency and standstill set out
in paragraphs 3 and 4 of the Procedures.
In conclusion, the continuation of the extension granted by the Decision of
22 November 2002 is of fundamental importance in order to bolster the business measures adopted in
the past year to adjust to the new regional realities.  Some of these measures have been transformed
into projects already being implemented and others are in the development stage, but both have been
made possible by research studies or investment under the programme whose extension is being
reviewed, in strict conformity w ith the Procedures in document G/SCM/39.  It should be pointed out
that the fall in production of the automotive sector in Uruguay was due to the above-mentioned
regional financial crisis, which had a particular impact on the sector, and this is what led to the searchfor the new business strategies mentioned above.
Automotive industry
1. Title of the subsidy programme, if relevant, or brief description or identification of the
subsidy
Regulations for enterprises exporting vehicles assembled in the country.
2. Period covered by the notification
1 January 2002 to 30 June 2003.
3. Policy objective and/or purpose of the subsidy
Restructuring of the automotive sector and specialization in market segments for export.
4. Background and authority for the subsidy (including identification of the legislation
under which it is granted)
Adoption of measures to facilitate business decisions related to production and investment
programmes and in preparation for the common MERCOSUR regime.
Decree 316/92 of 7 July 1992 published in the Official Journal on 25 September 1992.Decree 583/94 of 30 December 1994.
Decree 340/96 of 23 August 1996 published in the Official Journal on 6 September 1996.
Decree 60/99 of 3 March 1999 published in the Official Journal on 12 March 1999.Decree 273/99 of 10 September 1999 published in the Official Journal on
20 September 1999.
1
5. Form of the subsidy (i.e. grant, loan, tax concession, etc.)
Enterprises which export vehicles completed or part-completed in the country, or auto-parts
of national origin, may benefit from a customs concession, applicable to the importation of motor
                                                     
1 Decrees 60/99 and 273/99 amended Decree 316/92 and prescribed a tax benefit which is not limited
strictly to the importation of vehicles but can also be used for meeting tax obligations.G/SCM/N/99/URY
Page 3
vehicles assembled in the place of origin destined for the domestic market, in accordance with the
conditions laid down in the above-mentioned regulations, or allocate it for the payment of taxes due to
the Directorate-General of Taxation, in accordance with Article 3 of Decree 60/99.
6. To whom and how the subsidy is provided (whether to producers, to exporters, or
others;  through what mechanism;  whether a fixed or fluctuating amount per unit;  ifthe latter, how determined)
For every United States dollar of exports (based on the f.o.b. values declared in the relevant
customs declarations) imports may be made with a concession of 13 per cent of the TGA (global
tariff), applicable to the surcharge element, for new vehicles assembled in the place of origin (based
on c.i.f. imports declared to the Banco de la Re publica Oriental de Uruguay (BROU)), or payments
may be allocated to the Directorate-General of Taxation.
7. Subsidy per unit, or in cases where this is not possible, the total amount or the annual
amount budgeted for that subsidy (indicating, if possible, the average subsidy per unit in
the previous year).  Where provision of per unit subsidy information (for the year
covered by the notification for the previous year, or both) is not possible, a fullexplanation
Thirteen per cent of TGA (global tariff), applicable to the surcharge element, for new vehicles
assembled in the place of origin.
8. Duration of the subsidy and/or any other ti me-limits attached to it, including date of
inception/commencement
Decree 60/99 entered into force in 1999 and continues in force by virtue of Decree 273/99.
9. Statistical data permitting an assessment of the trade effects of the subsidy.  The specific
nature and scope of such statistics is left to the judgement of the notifying member.  To
the extent possible, relevant and/or determinable, however, it is desirable that such
information includes statistics of production, consumption, imports and exports of the
subsidized products(s) or sector(s)
Exports (f.o.b.) 2002 US$163,319,143.70
The corresponding statistics for the period from 1 January to 30 June 2003 are not yet
available.G/SCM/N/99/URY
Page 4
Decree No 316/992
Publication : 25/09/1992
National Register of Laws and Decrees: Volume: 1
Semester: 2Year: 1992
Page: 26
LACALLE HERRERA - EDUARDO ACHE - IGNACIO DE POSADAS MONTERO
Having regard to the measures adopted for the purpose of deregulating the automotive
industry.
Whereas the special characteristics of the national automotive industry and of the domestic
motor vehicle market make it advisable to adopt meas ures to encourage the growth of exports of the
products of the sector, thereby enabling it to be restructured.
Considering:(I) the effects on local industry of the policie s developed in this sector by the MERCOSUR
member countries;
(II) that the measures to be applied will facilitate the adoption of sectoral agreements within the
framework of the aforementioned treaty with a view to accelerating the integration of regional
industry;
(III) that it is desirable to establish the exclusion of the benefit consisting of the refunding of
indirect taxes in respect of the products whose exportation is encouraged by this Decree;
(IV) that it is necessary to find mechanisms for preventing the distortions which in the process of
restructuring may be caused by commercial practices such as the importation of used
vehicles, or the assembly of vehicles from used parts;
Mindful of the above and the provisions of Article 2.2(c) of Law 12.670 of 17 December
1959,
The President of the Republic
HEREBY DECREES:
Article 1
Enterprises which export completed or part-completed vehicles assembled in the country, or
auto-parts of national origin, may avail themselves  of the following mechanism, applicable to the
importation of motor vehicles assembled in the place of origin destined for the domestic market and to
products they import under Tariff Heading 8708.99.90.50. of the MERCOSUR Common
Nomenclature.
They may make imports with a concession of up to 13 per cent of the TGA (global tariff),
which includes the 3 per cent increase resulting from Article 1 of Decree No 484/997, of
29 December 1997, subject to a ceiling of the equivalent of US$0.10 (ten United States cents) for
every United States dollar of exports, based on th e f.o.b. value declared in customs declarations.G/SCM/N/99/URY
Page 5
Enterprises that cumulate the benefit provided under Decree No 558/994, of
21 December 1994, may reduce the ceiling provided for in the preceding paragraph to US$0.07 (seven
United States cents) and may allocate US$0.005 (zero point five United States cents) to be used in the
manner established in Decree No 558/994 under reference, in which case the ceiling shall fall to
US$0.065 (six point five United States cents).
The enterprises covered in the first paragraph of this Article which, within a period of 90 days
counted as from the date of the export declaration, fail to make use of the TGA benefit in any of the
alternatives envisaged, may allocate the balances for the payment of taxes due to the Directorate-
General of Taxation. (*)
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(*) Wording of Decree No 60/999 of 3 March 1999, Article 1. The original text can be viewed in
Official Journal No 23.648 of 25 September 1992. See Article 4.---------------------------------------------------------------------------------------------------------------------------
Article 2
The following products shall be considered elig ible for the benefits for which this Decree
provides:
- Auto-parts produced in the country from domestic or imported raw materials, which have
undergone a change in their original compositio n, shape or structure, provided their ultimate
destination is an Automotive Terminal or the motor vehicle replacement parts market, or theycan reliably be shown to have been used in motor vehicles;
- Auto-parts assembled in the country and consisting of vehicle assemblies or sub-assemblies,
provided that they are the result of a significant industrial process.
- Completed or part-completed vehicles assembled in the country from imported kits with a
degree of disassembly approved by the National Department of Industry.
- Vehicle and auto-part manufacturing or assembly plants must demonstrate a National or
Regional Value Added, as appropriate, in accordan ce with the origin requirements of bilateral
or multilateral agreements concluded between the country and the importing countries.
The National Department of Industry of the Mi nistry of Industry, Energy and Mines shall be
responsible for verifying compliance with the provisions of this Article. (*)
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(*) See Article 10.
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Article 3
The National Department of Industry of the Mi nistry of Industry, Energy and Mines shall
monitor the values imported and exported by the re spective enterprises and shall issue the appropriate
certificates certifying that the importation qualifies for a concession of up to 10 per cent of the TGA,
which shall be submitted to the Banco de la República Oriental del Uruguay, together with the form
giving entitlement to import vehicles assembled in the place of origin, upon presentation of the import
application.
Article 4G/SCM/N/99/URY
Page 6
The exporting enterprises referred to in Articl e 1 may assign their rights derived from prior
exports to enterprises that import vehicles for sale on the domestic market, which in this case shall be
the beneficiaries of the tax exemption for which this Decree provides. The National Department of
Industry of the Ministry of Industry, Energy and Mines shall check the respective assignment and
authorize it, where appropriate.
Article 5
 (*)
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 (*) Revoked by Decree No 583/994 of 30 December 1994, Article 1. The original text can be viewed
in Official Journal No 23.648, of 25 September 1992.
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Article 6
The certificate of origin of vehicles assembled in the country for export to the Federal
Republic of Brazil under the Trade Expansion Protocol (PEC) shall be issued by the NationalDepartment of Industry of the Mini stry of Industry, Energy and Mines.
Article 7
The vehicle category G established by Article 1 of Decree 128/970 of 13 March 1970 is
abolished.  Articles 7 and 8 of Decree 464/978 of 11 August 1978 are revoked.
Article 8
The importation of goods referred to in Article 1 of Decree 494/990, of 29 October 1990, and
Article 1 of Decree 583/990, of 18 December 1990, is prohibited for a period of 120 (one hundred and
twenty) days from the entry into effect of this Decree.
Article 9
The importation of used vehicles of NADI heading 87.02 and subheading 07.01.02 is
prohibited for a period of 120 (one hundred and twenty) days from the entry into effect of this Decree.
Article 10
Products covered by the provisions of Article 2 of this Decree in accordance with a resolution
of the National Department of Industry of the Mi nistry of Industry, Energy and Mines are excluded
from the benefits accorded by Article 5 of Decree 393/991 of 29 July 1991.
Article 11
This Decree shall enter into effect upon publication in the newspapers of the capital.
Article 12
Proclaimed, published, etc.G/SCM/N/99/URY
Page 7
Decree No 583/994
Promulgation : 30/12/1994 Publication : 13/01/1995
National Register of Laws and Decrees: not included.
LACALLE HERRERA - MIGUEL ANGEL GALAN - IGNACIO DE POSADAS MONTERO
Having regard to the regime adopted by Decree No 316/992 of 7 July 1992, for the purpose o f
encouraging the restructuring of the national automotive industry;
Whereas:
(I) The Council of the Common Market of MERCO SUR has decided (Dec. 29/994) to establish
(a) a Common Automotive Regime to operate from 1 January 2000;
(b) a provisional regime to operate from 1 June 1995;  and
(c) that no restrictive changes in Intra-Zonal automotive sector trade shall be unilaterally 
introduced.
(II) it is considered desirable to extend the period of validity of the regime established in Decree 
No 316/992, since domestic enterprises are in the midst of a process of restructuring under cover 
of that Decree.
(III) The extension to be granted does not involve a restriction on Intra-Zonal automotive sector trade.
In the light of the above:
The President of the Republic
HEREBY DECREES:
Article 1
Article 5 of Decree No 316/992 of 7 July 1992 is revoked, the TGA (global tariff) concessions
established by that Decree being maintained in force until the Mercosur member countries agree the
provisional regime referred to in recital (I).G/SCM/N/99/URY
Page 8
Decree No 340/996
Promulgation : 28/08/1996 Publication : 06/09/1996
National Register of Laws and Decrees: Volume: 1
Semester: 2
Year: 1996
Page: 634
SANGUINETTI - JULIO HERRERA - LUIS MOSCA
Having regard to the regime that regulates the national automotive industry;Considering:
(I) The present transitional situation through which the Mercosur automotive sector is passing
and the initiation of definitions by Argentina and Brazil in connection with the final regime to
operate from the year 2000;
(II) the prospect of Uruguay occupying a competitive position in the industry of the region,
specializing in segments of the market and consolidating the changes made with a view to
exporting to the region;
(III) the existence of an unfavourable regional economic climate which has limited exports under
the CAUCE and PEC agreements and affected levels of industrial production;
Whereas it is desirable to adopt measures to facilitate business decisions concerning
production schedules and investment and in preparation for the common MERCOSUR regime;
Mindful of the provisions of Article 2 of  Law 12.670 of 17 December 1959 and Article 2 of
Law 16.492 of 2 June 1994;
The President of the Republic
HEREBY DECREES:
Article 1
Motor vehicle components or auto-parts (parts, assemblies and subassemblies) imported as
kits, in accordance with the lists authorized for each model by the National Department of Industry of
the Ministry of Industry, Energy and Mines, shall be subject to a global tariff (TGA) of 2 (two per
cent) by way of minimum surcharge.
The provisions of this Article shall apply during the period of validity of Decree No 316/992
of 7 July 1992.
Article 2
The benefits for which Decree No 316/992 of 7 July 1992 provides may be cumulated with
those established by Decree No 558/994 of 21 December 1994, under the conditions laid down in the
next Article.   (*)
---------------------------------------------------------------------------------------------------------------------------(*) See Article 3.G/SCM/N/99/URY
Page 9
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Article 3
 (*)
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(*) Revoked by Decree No 60/999 of 3 March 1999, Article 4. The original text can be viewed in
Base DIAR .
     See Articles 5 and 6.
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Article 4
The motor vehicles of headings 87.02, 87.03 and 87.04 are incorporated in the regime
established by Decree No 558/994 of 21 December 1994, the tax refund percentage being fixed at3.3% (three point three per cent).
Article 5
Exporters of products covered by Decree No  316/992 of 7 July 1992 who have not had a tax
refund percentage fixed within the context of the above-mentioned Decree No 558/994 and wish to
opt for the cumulation of both benefits under the conditions laid down in Article 3 must apply to the
Ministry of the Economy and Finance with a reasoned request for the fixing of a tax refund
percentage.
Article 6
For the purpose of obtaining the “Tax Refund Certificates” referred to in Article 6 of the
above-mentioned Decree No 558/994, the beneficiary enterprises must lodge with the Banco de la
República Oriental del Uruguay a certificate issued by the National Department of Industry of theMinistry of Industry, Energy and Mines, showing that they are operating within the framework of
Article 3 of this Decree.
Article 7
Account shall be rendered to the General Assembly.
Article 8
This Decree shall enter into effect on 1 September 1996.
Article 9
Proclaimed, published, etc.G/SCM/N/99/URY
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Decree No 60/999
Promulgation : 03/03/1999 Publication : 12/03/1999
National Registry of Laws and Decrees: Volume: 1
Semester: 1
Year: 1999
Page: 368
SANGUINETTI - LUIS MOSCA - JULIO HERRERA
HAVING REGARD to the regime governing the Automotive Industry;WHEREAS it is necessary to amend that regime in order that it may more efficiently attain
the objectives for which it was adopted;
ACCORDINGLY
The President of the Republic
HEREBY DECREES:
Article 1
(*)
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(*) This Article reworded Decree No 316/992 of 7 July 1992, Article 1, and should therefore be
viewed in the latter.
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Article 2
The National Department of Industry of the Mi nistry of Industry, Energy and Mines shall
monitor the use of the benefit for which Article 1 provides and shall issue the corresponding
certificates for presentation to the competent government authorities.
Article 3
(Transitional provision).  The enterprises covered by Article 1 may earmark for the payment
of taxes due to the Directorate-General of Taxation such balances as may exist on the effective date of
this Decree owing to the non-use of the TGA concession envisaged under the present regime andwhich are no older than 90 days as from the said date.
Article 4
Article 3 of Decree No 340/996, of 28 August 1996, and all provisions conflicting with the
present Decree are hereby revoked.G/SCM/N/99/URY
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Article 5
(*)
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(*) Revoked by Decree No 273/999 of 10 September 1999, Article 1. The original text can be viewed
in Base DIAR .
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Article 6
Proclaimed, published, etc.G/SCM/N/99/URY
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Decree No 273/999
Promulgation : 10/09/1999           Publication: 20/09/1999
National Register of Laws and Decrees: Volume: 1
Semester: 2
Year: 1999
Page: 610
SANGUINETTI - JULIO HERRERA - LUIS MOSCA
HAVING REGARD to the regime governing the Automotive Industry and the provisions of
Decree 60/999 of 3 March 1999;
WHEREAS it is necessary to main tain in force the regime governing the Automotive Industry
as from 1 January 2000, with the amendments introduced by Decree 60/999 of 3 March 1999;
ACCORDINGLY
The President of the Republic
HEREBY DECREES:
Article 1
Article 5 of Decree 60/999 of 3 March 1999 is hereby revoked.
Article 2
Proclaimed, published, etc.
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