WORLD TRADE
ORGANIZATIONG/SCM/N/71/DOM
6 March 2002
(02-1125)
Committee on Subsidies and
Countervailing MeasuresOriginal: Spanish
SUBSIDIES
New and Full Notification Pursuant to Article XVI.1 of the GATT 1994 and
Article 25 of the Agreement on Subsidies and Countervailing Measures
DOMINICAN REPUBLIC
The following communication, dated 27 February 2002, has been received from the
Permanent Mission of the Dominican Republic.
_______________
The Permanent Mission of the Dominican Republic to the United Nations Office and Other
International Organizations in Geneva presents its compliments to the World Trade Organization
(WTO) and has the honour to inform it that, pursuant to paragraphs 1(b) and 3(a) of document
G/SCM/39, the Dominican Republic hereby submits the initial notification of the programmes which
would be covered by the extension requested under Article 27 of the WTO Agreement on Subsidies
and Countervailing Measures.G/SCM/N/71/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 2001.
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 reason for this programme was to attract local and foreign investment in order
to create employment at various points within the national territory, including economically deprived
areas, such as the border areas with Haiti. This programme was created under Law No. 8-90 of15 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 customs
duties 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 for the programme established
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/71/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 the
rest 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/71/DOM
Page 4
Table 1
Balance of Exports Versus Imports for Free Zones
(1993-2000)
(Millions of US dollars)
Year Exports Imports Balance
1993 2,511.80 1,875.70 636.1
1994 2,716.10 1,911.50 804.6
1995 2,907.40 2,006.20 901.2
1996 3,596.40 2,146.30 960.8
1997 3,596.40 2,416.70 1,179.70
1998 4,100.00 2,700.70 1,399.30
1999 4,331.00 2,834.30 1,496.70
2000* 4,777.06 3,062.50 1,708.00
*  Preliminary figures
Source:  Central Bank of the Dominican Republic
Table 2
Comparison of Domestic and Free-Zone Exports
(1993-2000)
(Millions of US dollars)
Year Domestic exportsFree-zone
exportsTotal exports Free-zone ex ports/total exports (%)
1993 602.20 2,511.80 3,114.00 80.66
1994 736.40 2,716.10 3,452.50 78.60
1995 872.10 2,907.40 3,779.50 76.90
1996 945.50 3,107.10 4,052.60 76.60
1997 1,017.30 3,596.40 4,613.70 77.90
1998 880.30 4,100.00 4,980.00 82.32
1999 805.10 4,331.00 5,136.10 84.32
2000 747.20 4,777.06 5,517.26 86.46
Source:  Central Bank of the Dominican RepublicG/SCM/N/71/DOM
Page  5Table 3
Evolution of the Main Variables of Export Free Zones
(1993-2000)
YearExisting
industrial
estatesEnterprises JobsExports
(millions of US$)Foreign exchange
(millions of US$)Number of
industrial premises
builtSurface area of
industrial
premises in useTextile exports
(millions of US$)
1993 31 462 164,296 2,511.08 401 N/A 12,000,000 1,457.70
1994 32 476 179,311 2,716.01 441.04 519 12,700,000 1,616.40
1995 33 469 165,571 2,907.04 509.00 635 14,120,000 1,786.60
1996 36 436 164,639 3,107.04 545.00 664 14,782,496 1,802.10
1997 40 446 182,174 3,596.40 700.00 832 15,603,755 2,272.50
1998 43 496 195,193 4,100.00 826.50 861 17,540,409 2,395.00
1999 44 484 189,458 4,331.00 887.30 884 16,820,049 2,385.20
2000 46 481 196,924 4,770.06** 1,018.60** 936 21,068,186 2,456.00
% growth
1999-20002.2 -0.6 3.9 7.4 14.7 5.9 25.3 2.9
* Data amended with regard to previous report
** Preliminary figuresSource:  National Council for Export Free Zones
__________