WORLD TRADE
ORGANIZATIONG/SCM/N/99/JAM
3 July 2003
(03-3557)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
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
JAMAICA
The following communication, dated 30 June 2003, has been received from the Permanent
Mission of Jamaica.
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Pursuant to the decision taken at the 2001 Doha Ministerial Conference concerning the
extension of the transition period for the elimination of certain export subsidy programmes provided
for under Article 27.4 of the SCM Agreement and,  as contained in G/SCM/39 and paragraph 10.6 of
the Decision on Implementation-related Issues and Concerns, and the decision taken by the
Committee on 22 November 2002 to approve the requests made by Jamaica, contained in
documents G/SCM/75-78, Jamaica  hereby submits its notification to enable the Committee to conduct
its annual review of compliance of the standstill and transparency requirements as under the decision
in G/SCM/39.G/SCM/N/99/JAM
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A. EXPORT INDUSTRY ENCOURAGEMENT ACT
1. Description of Programme
The Export Industry Encouragement Act was established as an incentive framework geared to
the encouragement of export industries.
2. Period Covered by Notification
Programme description is as of 1 September 2002.
3. Policy Objective and/or Purpose of the Subsidy
The objective is to encourage investment and growth in export manufacturing industries.
4. Background and authority of the Subsidy
Law 49 of 1956
Law 13 of 1960
Act 11 of 1968
Act 42 of 1969
Act 56 of 1974
5. Form of the Subsidy
Companies that export 100 per cent output to hard currency markets outside of CARICOM
are exempt from income tax on profits and full exemption from import duties on capital goods andraw materials for use by the approved exporter in the production process.
Partial exporters (Companies exporting less th an 100 per cent of output) are entitled to an
export allowance that may be deducted from taxable income, with the level of tax relief linked to
exports.
6. To Whom and How the Subsidy is Provided
Any company registered or incorporated in Jamaica and whose products are exclusively for
sale to hard currency markets outside of CARICOM is eligible to a tax holiday on profits earned from
the manufacture of the approved product as well as duty free importation of raw material and capital
goods for use in the production process.
The company must be declared an “approved export manufacturer” in relation to an
“approved export product” by the Minister of Indus try and Tourism.  Having a product designated an
approved product and the company an approved expo rt manufacturer entitles the company to income
tax and duty benefits as outlined above.
Partial exporters (companies exporting less than 100 per cent of output) are entitled to an
export allowance as described at paragraph 5 above.  To benefit from the allowance a 5 per cent
threshold of export sales to total sales must apply and exports must be to markets outside of the
CARICOM region.G/SCM/N/99/JAM
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7. Subsidy Per Unit
There are no statistics available which reflect the amount of the subsidy per unit.  However,
estimated revenue foregone as a result of relief under the programme was US$2.7 million in 2000,
US$1.5 million in 1999 and US$1.7 million in 1998.
8. Duration of the Subsidy
By statute tax and duty benefits are allowed for a period of up to ten (10) years.  As stated in
Notification Communication dated 20 December 2001.  Jamaica was working towards the phase out
of this incentive regime by the year 2003.  However, in light of decisions taken regarding extensions
of the transition period under Article 27.4 of the Agreement on Subsidies and CountervailingMeasures (SCM) for certain developed countries, Jamaica requests extension of the transition period
beyond 2002 for this incentive.
9. Statistical Data on the Impact of the Programme
Year Exports
(in Millions of US$)Jamaican Exports
(in Millions of US$)
1998
1999
2000193 (2.4)
326 (6.6)
109 (7.1)1,316.3
1,245.6
1,300.7
B. JAMAICA EXPORT FREE ZONES ACT
1. Description of the Programme
The Jamaica Export Free Zones Act provides an incentive and regulatory framework for the
operation of Free Zones in Jamaica.
2. Period Covered by the Notification
Programme description is at 1 September 2002.
3. Policy Objective and/or Purpose of the Subsidy
The objective is to encourage investment, exports and foreign exchange earnings and to create
employment opportunities.
4. Background and Authority for the Subsidy
Act No. 18 of 1982
Act No. 12 of 1985
Act No. 16 of 1991Act No. 24 of 1996G/SCM/N/99/JAM
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5. Form of the Subsidy
Approved Free Zone enterprises are entitled to:
• duty free importation of capital goods, consumer goods, raw materials or articles for use
in connection with the approved product;
• duty free treatment of articles for the construction, alteration, and repair of equipment of
premises in the Free Zone;
• total relief from income tax in respect of profits or gains earned from approved activities;
• repatriation of profits (since liberalization of the foreign exchange market in 1991 there
are no restrictions on the repatriation of profit);
• exemption from the normal fees payable with respect to work permit.
6. To Whom and How is the Subsidy Provided
Companies approved to operate in Free Zones must be registered or incorporated in Jamaica
under the Companies Act to carry out any of the following prescribed activities:
• warehousing and storing
• manufacturing operations
• transshipment operations
• loading and unloading operations
• exporting
• importing
• service operations, including banking, data processing and telemarketing insurance
professional services
• packing and shipping
• assembling
• processing, refining, purifying, mixing, merchandising
Approvals for free zone status are made by the Minister of Industry and Tourism on the
recommendation of the Free Zone Council – the regulatory body appointed to supervise the operations
of the Free Zones.
By policy decision of April 1997, Free Zone manufacturing entities are allowed to sell up to
15 per cent of output on the local market.  Free Zone goods sold into the local market are subject tothe applicable duties and charges.
7. Subsidy Per Unit
No statistical information is available that reflects the amount of subsidy per unit. However,
the estimated revenue foregone as a result of relief under this programme was US$315 million in
2000, US$300 million in 1999, and US$108 million in 1998.
8. Duration of the Subsidy
Incentives granted to Free Zone entities are for an indefinite period.G/SCM/N/99/JAM
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9. Statistical Data on the Impact of the Programme
Year Exports
(in Millions of US$)Total Jamaican Exports
(in Millions of US$)
1998
1999
2000115.76
97.12
115.341,316.0
1,245.6
1,300.6
C. INDUSTRIAL INCENTIVES (FACTORY CONSTRUCTION) ACT
1. Description of Programme
Provides an enabling framework for the provision of factory space in Jamaica.
2. Period Covered by Notification
Programme description is at 1 September 2002.
3. Policy objective and Purpose of the Subsidy
To facilitate and encourage the construction of factories in Jamaica.
4. Background and Authority of the Subsidy
Law 9 of 1961
Law 30 of 1961
Act 23 of 1972
5. Form of the Subsidy
An approved builder under the Industrial Incentives Factory Construction Act is entitled to:
• duty free importation of items or articles for factory construction;
• enter into an agreement with a recognized  enterprise for the lease of the factory;
• be granted relief from income tax for 15 years in respect of income from the lease of the
factory or from profits made upon its sale.
6. To Whom and How the Subsidy is Provided
Approved builders are granted Licence by the Minister of Industry and Tourism to construct
factories.  Approved builders providing factory space for companies having recognized status – i.e.
status under the Export Industry Encouragement Act (EIEA) or the Industrial Incentives Act (IIA) can
qualify for the incentives mentioned above.  Free Zone developers are also eligible for incentives
under the Act.G/SCM/N/99/JAM
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7. Subsidy Per Unit
No statistical information is available.
8. Duration of the Subsidy
Income Tax Relief is available for fifteen (15) years in respect of income from the lease of the
factory or from profits made upon its sale.
9. Statistical Data on the Impact of the Programme
Information on the trade effect of the subsidy is not available.
D. FOREIGN SALES CORPORATION ACT
1. Description of the Programme
A legislative framework for the operation of Foreign Sales Corporation (FSCs) in Jamaica.
2. Period covered by the notification
As at September 2002.
3. Policy Objective and or Purpose of the Subsidy
To attract foreign investment into the country and to promote Jamaica as an attractive FSC
location.
4. Background and authority for the Subsidy
In November 1984 Jamaica was certified as a qualifying Foreign Sales Corporation (FSC)
jurisdiction and enabling legislation, the Foreign Sales Corporation Act was passed shortly thereafter.
5. Form of Subsidy
• FSCs are exempt from Jamaican Corporate Income Tax on their foreign trade income as
long as they remain designated.
• No income tax is imposed in Jamaica on dividends paid to foreign shareholders by a
designated FSC.
• Investment income or carrying changes earned by an FSC are relieved from income tax.
• FSC are entitled to import into Jamaica equipment, material and machinery free of all
import duties.
6. To whom and how the subsidy is provided
The Minister of Industry, Commerce and Technology has the authority to grant certificate of
designation to FSCs who locate in Jamaica.  Very generous incentives as outlined above are available
to FSCs.G/SCM/N/99/JAM
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7. Subsidy per unit
Information on subsidy unit is not available.
8. Duration of a Subsidy
The life of the certificate is fifteen (15) years, but this may be renewed for a further fifteen
(15) years if necessary.
9. Statistical data on the impact of the programme
Information on the trade effect of the subsidy is not available.
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