WORLD TRADE  
ORGANIZATION  G/SCM/N/114/DOM 
7 July 2004 
 (04-2921) 
Committee on Subsidies and 
Countervailing Measures  Original: Spanish 
 
 
 
SUBSIDIES 
Extension under SCM Article 27.4 of the Transition Period  
for the Elimination of Export Subsidies Pursuant to the  
Procedures in Document G/SCM/39  
Updating Notification  
DOMINICAN REPUBLIC 
 The following communication, dated 22 June 2004,  is being circulated at the request of the 
delegation of the Dominican Republic. 
_______________ 
 Pursuant to Article XVI.1 of the GATT 199 4 and Article 25.2 of the WTO Agreement on 
Subsidies and Countervailing Measures (SCM Agre ement), and in accordance with subparagraphs 
1(d) and (e) of the Procedures for extensions unde r Article 27.4 of the SCM Agreement for certain 
developing country Members (document G/SCM/ 39 of 20 November 2001), I hereby submit the 
annual notification with a view to a continuation of the extension granted under the Decision of 
22 November 2002, as contained in document G/ SCM/64, and the Decision of 28 October 2003, as 
contained in document G/SCM/64/Add.1. 
 This notification is being submitted in fu lfilment of the transparency and standstill 
requirements set forth in paragraphs 3 and 4 of doc ument G/SCM/39.  As required by this document, 
the programme notified in document G/SCM/N/71/DOM has not been modified in any way so as to make it more favourable.  The foregoing is without prejudice to the rights of the Dominican Republic under the WTO Agreements. 
 In accordance with the format of the ques tionnaire in document G/SCM/6, prepared and 
adopted by the Committee on Subsidies and Coun tervailing Measures, the Dominican Republic 
hereby notifies the following: 
1. Title of the subsidy programme, if relevant, or brief description or identification of the 
subsidy.  
 Law No. 8-90 to "Promote the Establishmen t of New Free Zones and Expand Existing Ones", 
which establishes a tax-exemption programme fo r enterprises manufacturing goods or providing 
services related to goods production, located w ithin geographic areas known as free zones and the 
production of which must be mainly for export. 
2. Period covered by the notification.  
 This notification covers th e period up to 31 December 2003. G/SCM/N/114/DOM 
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3. Policy objective and/or purpose of the subsidy.  
 The objectives of the programme are, inter alia , job creation, workforce training, 
development of social support programmes, prom otion of balance-of-payments equilibrium and 
establishment of regional community development programmes. 
4. Background and authority for the subsidy (including identification of the legislation 
under which it is granted).  
 The underlying reasons for this programme were to provide training, to transfer technology 
and to attract local and foreign investment in orde r to create employment at various points within the 
national territory, including economically deprived ar eas, such as the border areas with Haiti.  This 
programme was created under Law No. 8-90 of 15 January 1990. 
5. Form of the subsidy (i.e., gran t, loan, tax concession, etc.).  
 Enterprises manufacturing goods or providing a ggregate services for the production of such 
goods and operating under Law No. 8-90 will be exem pt from payment of income tax and customs 
duties on the importation of the raw materials, e quipment and machinery used to produce these goods. 
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; if the 
latter, how determined).  
 The programme exempts natural and legal pe rsons eligible under Law No. 8-90 who export 
goods produced within the free zones from the ta xes and duties specified in point 5 of this 
questionnaire. 
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 previo us year, or both) is not possible, a full 
explanation.  
 Law No. 8-90 does not provide for the auditing, on the basis of either units or operating 
results, of manufacturing operations  conducted within the free zones by the enterprises operating 
therein with a view to estimating the fiscal cost  to the Dominican State of attracting private 
investment for the creation of sources of employment. 
8. Duration of the subsidy and/or any other time limits attached to it, including date of 
inception/commencement.  
 Enterprises eligible for the benefits grante d under Law No. 8-90 are entitled to a free-zone 
operating licence, normally valid for up to 20 years in  the border region with Haiti and 15 years in the 
rest of the country.  Beyond this period , permit holders may apply for a renewal. 
9. Statistical data permitting an assessment of th e 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 include statistics of production , consumption, imports and exports of the 
subsidized product(s) or sector(s):  
 (a) For the three most recent years fo r which statistics are available;   G/SCM/N/114/DOM 
 Page 3 
 
 
 (b) for a previous representative year, which, where possible and meaningful, should 
be the latest year preceding the introduction of the subsidy or preceding the last major change in the subsidy. 
 G/SCM/N/114/DOM 
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III. HISTORICAL OVERVIEW OF THE FREE ZONES 
Table 1 
Evolution of the Main Variables of Export Free Zones 
(1993-2003*) 
Year Existing 
industrial 
estates  Enterprises  Jobs Exports  
(millions of 
US$) Foreign 
exchange 
(millions of 
US$) Number of 
industrial 
premises 
built***  Surface 
area of 
industrial 
premises in 
use (sq. ft)  Textile 
exports** 
(millions of 
US$) 
1993 31 462 164,296 2,511.1 401.0 n/a  12,000,000 1,457.70 
1994 32 476 176,311 2,716.1 441.4 563 12,700,000 1,616.40 
1995 33 469 165,571 2,907.4 509.0 620 14,120,000 1,786.60 
1996 36 436 164,639 3,107.3 545.0 657 13,782,496 1,802.10 
1997 40 446 182,174 3,596.4 701.0 714 15,603,755 2,272.50 
1998 43 496 195,193 4,100.0 826.5 786 17,540,407 2,395.00 
1999 44 484 189,458 4,331.5 887.3 803 16,820,049 2,385.20 
2000 46 481 195,262 4,770.6 1,018.6 844 21,068,186 2,451.18 
2001 51 512 175,078 4,481.6 977.9 863 21,738,332 2,274.48 
2002 53 520 170,833 4,317.3 886.5 895 21,923,764 2,173.30 
2003* 54 531 173,367 4,398.7 810.8 923 22,066,221 2,128.40 
% growth          
2002-2003 1.9 2.1 1.5 1.9 -8.5 3.1 0.6 -1.5 
 
 *Preliminary figures  **These textile exports are to the North American market 
 ***The data on industrial premises built were  revised for the entire historical series. 
 
Table 2 
Balance of Exports Versus  Imports for Free Zones 
(1993-2003*) 
(Millions of US dollars) 
Year Exports  Imports  Balance  
1993 2,511.08 1,875.70 635.4 
1994 2,716.01 1,911.50 804.5 
1995 2,907.40 2,006.20 901.2 
1996 3,107.30 2,146.30 961.0 
1997 3,596.40 2,416.70 1,179.7 
1998 4,100.00 2,700.70 1,399.3 
1999 4,331.50 2,834.30 1,497.2 
2000 4,770.60 3,062.50 1,708.1 
2001 4,481.60 2,826.40 1,655.2 
2002 4,317.30 2,600.30 1,717.0 
2003* 4,398.70 2,617.60 1,781.1 
 
 *Preliminary figures 
 Source : Central Bank of the Dominican Republic 
 
 
  G/SCM/N/114/DOM 
 Page 5 
 
 
 
 
 
 
__________ 
 
 Chart
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Saldo de las Exportaciones Versus  Importaciones de Zonas Francas 
Exportaciones
 Importaciones
0 500 1,000     1,500  2,000     2,500  3,000 3,500     4,000  4,500 5,000 
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003*  Balance of exports versus imports for free zones 
(1993-2003)  
Exports
 Imports