WORLD TRADE  
ORGANIZATION  G/SCM/Q2/MAR/4 
6 October 2004 
 
 (04-4177) 
Committee on Subsidies 
and Countervailing Measures Original:   French 
 
 
 
SUBSIDIES 
 
Replies to the Additional Questions  Posed by the EUROPEAN COMMUNITIES1 
Regarding the Updated Notification of MOROCCO2 
 
  The following communication, dated 27 Septem ber 2004, has been sent to the Secretariat by 
the delegation of Morocco.  
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1. Investment incentives 
Question 1
 
 
 We note that Morocco does not have any data  on the amounts attributed or the number 
of companies that benefit under the programme.  Co uld Morocco provide at least an estimate to 
clarify the scale of the programme? 
 
Answer  
 
 As Morocco said in its original answer (G/SCM/Q2/MAR/2), the amounts attributed to 
companies as fiscal incentives under the Investment  Charter are not included in the budget, so 
Morocco has no data on either the amounts of the ince ntives or the number of enterprises that benefit. 
Consequently, no data are at present available to give  even an estimate of the scale of the programme.  
 Question 2
 
 
We have noted that various chapters of the Internet website www.invest-in 
morocco.gov.ma  provide the following explanations: 
 
 (a) The main fiscal incentives for investme nt (page 1 of the 2004 F.L.) include total 
exemption from taxation for five years, r unning from the financial year in which 
the first export transaction takes place, and a 50 per cent reduction beyond that period.  The 2004 F.L. has extended this exemption to enterprises that sell finished goods to exporters opera ting in export platforms. 
 
 (b) The section on the tax incentives scheme (page 1) also deals with tax benefits 
granted to certain sectors of activity under ordinary law in respect of general 
income tax or corporate tax.  With reference to the export sector, it states that 
                                                     
 
1 G/SCM/Q2/MAR3 
2 G/SCM/N/95/MAR  G/SCM/Q2/MAR/4 
Page 2  
 
 enterprises exporting  goods or services, and with an annual export turnover, 
shall  benefit from total exemption for the firs t five years, running from the date 
of the first export transaction, and a reduction of 50 per cent beyond that period. 
 
 Could Morocco confirm this information and,  if so, clarify to what extent these 
provisions are consistent with obligations under Article 3 of the SCM Agreement?  
Question 3
 
 
 The same website specifies that the followi ng incentives are available in the mining 
sector: 
  (a) The main fiscal incentives for investment (page 11) include a 50 per cent 
exemption, for an indefinite period, fo r mining enterprises directly involved in 
export and enterprises that sell their ou tput on the local market to export 
promotion companies; 
  (b) Under the tax incentives scheme, (page 2), mining enterprises benefit from a 
50 per cent reduction in income tax or corporate tax for a period of five years, running from the date of their first export  transaction.  Mining enterprises that 
sell their products to companies for export  after processing also benefit from this 
50 per cent reduction, and continue to enjoy these benefits beyond the five-year 
period. 
  Could Morocco confirm this information a nd, if so, clarify to what extent these 
provisions are consistent with obligations under Article 3 of the SCM Agreement? 
 
Answer to questions 2 and 3
 
  For both questions Morocco confirms the in formation given on the website www.invest-in-
morocco.gov.ma .  It should be noted, however, that in the mining sector the 50 per cent reduction in 
corporation tax and general income tax is limited for the first five years and does not, as the question 
indicates, apply for an indefinite period. 
  As to consistency with the relevant provisions of the SCM Agreement, these fiscal measures 
were established and have been maintained inso far as, in respect of Article 3.1(a) of the 
SCM Agreement, Morocco enjoys special and diff erential treatment under Article 27.2(a) of the 
Agreement, which exempts certain countries from the prohibition in Article 3.1(a). 
 
Morocco has also taken into account the Deci sion taken by the Ministers at the Doha 
Ministerial Conference (WT/MIN(01)/W/10) regard ing implementation-relate d issues and concerns, 
particularly paragraph 10.1, which stipulates that a Member remains included in Annex VII(b) to the 
Agreement on Subsidies and Countervailing Measur es until its GNP per capita reaches US$1,000 in 
constant 1990 dollars for three consecutive years. 
 
Question 4
 
 
 According to the response given by Mo rocco, the measures provided for in the 
Investment Charter with regard to fiscal incentiv es are horizontal in nature, and are related to 
the act of investment and granted automatically upon the creation of an enterprise under ordinary law.   G/SCM/Q2/MAR/4 
 Page 3 
 
 
  Could Morocco clarify how subsidies can be considered horizontal in nature, when they 
relate to exports?  
Answer
 
 
 Apart from the export-related fiscal incentives referred to in questions 2 and 3 above, the 
other incentives provided for under the Investment Code are horizontal in nature in that they are not 
expressly granted to certain companies or groups of  companies operating in certain sectors, but apply 
to all companies whether or not they expo rt and whatever their sector of activity. 
 
2. Export free zones 
 The reply indicates that measures under th is programme are not intended to stimulate 
exports, rather to promote exports in general.  However, according to Article 3 of Law No. 19-
94 on export free zones, all industrial or co mmercial export activities and related services 
activities may be authorized in export free zo nes.  Such wording seems to suggest an export 
requirement.  Could Morocco provide clarification on this point? 
 
Answer  
  Although Article 3 of Law No. 19-94 on export  free zones stipulates that all industrial or 
commercial export activities and related services activiti es may be authorized in export free zones, it 
should be noted that in order to set up in an e xport free zone companies are not required by law to 
export their output or a part thereof to other countries.   Law No.19-94 does not provide for a ban on the sale of products manufactured in the free zone in  the customs territory.  These sales are not re stricted by law and are subject to customs duties 
under Article 22 of the above Law, since sales operations  in the customs territory are treated as import 
operations.  
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