WORLD TRADE
ORGANIZATIONG/SCM/N/95/DOM
G/SCM/N/99/DOM
17 July 2003
(03-3868)
Committee on Subsidies and
Countervailing MeasuresOriginal: Spanish
SUBSIDIES
New and Full Notifications Pursuant to Article XVI.1 of the GATT 1994 and
Article 25 of the Agreement on Subsidies and Countervailing Measures
Extension under SCM Article 27.4 of the Transition Period under Article 27.2(b)
for the Elimination of Export Subsidies
DOMINICAN REPUBLIC
The following communication, dated 23 June 2003, has been received from the Permanent
Mission of the Dominican Republic.
_______________
Pursuant to Article XVI.1 of the GATT 1994 and Article 25.2 of the WTO Agreement on
Subsidies and Countervailing Measures (SCM Agreement), and in accordance with subparagraphs
1(d) and (e) of the Procedures for extensions under 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.
This notification is being submitted in fulfilment of the transparency and standstill
requirements set forth in paragraphs 3 and 4 of document 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.G/SCM/N/95/DOM
G/SCM/N/99/DOM
Page 2
In accordance with the format of the questionnaire in document G/SCM/6, prepared and
adopted by the Committee on Subsidies and Countervailing 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 Establishment of New Free Zones and Expand Existing Ones",
which establishes a tax-exemption programme for enterprises manufacturing goods or providing
services related to goods production, located within 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 the period up to 31 December 2002.
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, promotion 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 order to create employment at various points within thenational territory, including economically deprived areas, 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 aggregate services for the production of such
goods and operating under Law No. 8-90 will be exempt from payment of income tax and customsduties on the importation of the raw materials, equipment 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 fl uctuating amount per unit; if the latter, how
determined).
The programme exempts natural and legal persons eligible under Law No. 8-90 who export
goods produced within the free zones from the taxes 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 subs idy information (for the year covered by the
notification, for the previous 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.G/SCM/N/95/DOM
G/SCM/N/99/DOM
Page 3
8. Duration of the subsidy and/or any other ti me limits attached to it, including date of
inception/commencement.
Enterprises eligible for the benefits granted 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 therest of the country.  Beyond this period, permit holders may apply for a renewal.
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 include
statistics of production, consumption, imports and exports of the subsidized product(s) or
sector(s):
(a) For the three most recent years for which statistics are available;(b) for a previous representative year, wh ich, where possible and meaningful, should
be the latest year preceding the introduc tion of the subsidy or preceding the last
major change in the subsidy.G/SCM/N/95/DOM
G/SCM/N/99/DOM
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Table 1
Balance of Exports Versus Imports for Free Zones
(1993-2002*)
(Millions of US dollars)
Year Exports Imports Balance
1993 2,511.1 1,875.7 635.4
1994 2,716.1 1,911.5 804.6
1995 2,907.4 2,006.2 901.2
1996 3,107.3 2,146.3 961.0
1997 3,596.4 2,416.7 1,179.7
1998 4,100.0 2,700.7 1,399.3
1999 4,331.5 2,834.3 1,497.2
2000 4,770.6 3,062.5 1,708.1
2001 4,481.6 2,826.4 1,655.2
2002* 4,335.9 2,645.0 1,690.9
*  Preliminary figures
Source:  Central Bank of the Dominican Republic
Chart No. 1
Exports ImportsG/SCM/N/95/DOM
G/SCM/N/99/DOM
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Table 2
Comparison of Domestic and Free-Zone Exports
(1993-2002*)
(Millions of US dollars)
Year Domestic exportsFree-zone
exportsTotal exports Free-zone ex ports/total exports (%)
1993 602.2 2,511.1 3,114.3 80.7
1994 736.4 2,716.1 3,452.5 78.7
1995 872.1 2,907.4 3,779.5 76.9
1996 945.5 3,107.3 4,052.8 76.7
1997 1,017.3 3,596.4 4,613.7 78.0
1998 880.3 4,100.0 4,980.3 82.3
1999 805.1 4,331.5 5,136.6 84.3
2000 966.1 4,770.6 5,736.7 83.2
2001 794.6 4,481.6 5,276.2 84.9
2002* 847.6 4,335.9 5,183.5 83.6
*  Preliminary figures
Source:  Central Bank of the Dominican Republic
Chart No. 2
Comparison of Domestic and Free-Zone Exports
(1993-2002)
Domestic exp. Free-Zone ex p. Total ex p.G/SCM/N/95/DOM
G/SCM/N/99/DOM
Page 6Table 3
YearExisting
industrial
estatesEnterprises JobsExports
(millions of US$)Foreign exchange
(millions of US$)Number of
industrial premises
builtSurface 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 2,716.1 441.4 519 12,700,000 1,616.40
1995 33 469 165,571 2,907.4 509.0 635 14,120,000 1,786.60
1996 36 436 164,639 3,107.3 545.0 664 14,782,496 1,802.10
1997 40 446 182,174 3,596.4 701.0 832 15,603,755 2,272.50
1998 43 496 195,193 4,100.0 826.5 861 17,540,409 2,395.00
1999 44 484 189,458 4,331.5 887.3 884 16,820,049 2,385.20
2000 46 481 195,262 4,770.6 1,018.6 897 21,068,186 2,451.18
2001 51 512 175,078 4,481.6 977.9 943 21,738,332 2,274.48
2002 53 520 170,833 4,335.9* 947.1* 955 21,923.764 2,173.41
% growth
2001-2002 3.92 1.6 -2.4 -3.3 -3.1 1.3 0.9 -4.4
* Preliminary figures
** These textile exports are to the North American market
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