G/SCM/N/284/LCA  
G/SCM/N/290/LCA  
 
1 November  2016 
(16-5979) Page: 1/5 
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES  
NEW AND FULL NOTIFICATION PU RSUANT TO ARTICLE XV I:1 OF 
THE GATT 1994 AND  ARTICLE 25 OF THE AG REEMENT ON  
SUBSIDIES AND COUNTE RVAILING MEASURES  
TRANSPARENCY NOTIFIC ATION CONCERNING  THE EXTENSIONS PROVI DED FOR IN  
ARTICLE  27.4 OF THE AGREEMEN T ON SUB SIDIES AND COUNTERVAILI NG 
MEASURES OF THE TRANSITION PE RIOD FOR THE ELIMINA TION OF  
EXPORT SUBSIDIES, GR ANTE D PURSUANT TO THE PR OCEDURES  
IN THE GENERAL COUNCIL DECISION WT/L/691  
SAINT LUCIA 
The following communication dated 24 October 2016  is being circulat ed at the request of the 
Delegation of Saint Lucia.  
 
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PROGRAMME 1  
FISCAL INCENTIVES AC T 
1. Title of the subsidy programme, if relevant, or brief description or identification of the 
subsidy  
Fiscal Incentives Act, CAP. 15.16 of the Revised Law s of Saint Lucia 2006. This is an Act of 
Parliament to provide incentives to industry.  
2. Period covered by the notification  
1 July 2014 – 30 June 2015  
3. Policy objective and/or purpose of the subsidy  
To stimulate export performance, support investment and econ omic activity, promote 
diversification in traditional and non -traditional products.  
4. Background and authority for the subsidy (including identification of the legislation under 
which it is granted ) 
The Fiscal Incentives Act, CAP. 15.16 was passed to give ef fect to an agreement on the 
harmonization of fiscal incentives to industry among CARICOM member countries.  G/SCM/N/284/LCA • G/SCM/N/290/LCA  
 
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  5. Form of subsidy (i.e. Grant, loan, tax concessions, etc. ) 
Income tax exemption; import duty exemptions on plant, machinery, spare parts and raw 
mater ials; exemption from income tax on export profits and an export allowance.  
6. To whom and how the subsidy is provided (whether to producers, to exporters, or others 
through what mechanisms; whether a fixed or fluctuating amount per unit; if the latter, how 
determined ) 
Fiscal Incentives are provided to enterprises involved in manufacturing or processing, deep -sea 
fishing and shrimping where they form part of an integrated processing operation. Applications for 
incentives under this Act are approved by the Cabin et of Ministers. An approved enterprise may be 
granted a benefit if classified in one of the following categories:  
a) Group I Enterprise  
b) Group II Enterprise  
c) Group III enterprise  
d) Enclave Enterprises  
Saint Lucia has no programme of subsidies contingent upon the  use of domestic goods. Since local 
value added refers to local labour and not goods, in our opinion this is not a prohibited subsidy 
under Article 3.1b of the SCM Agreement. While reference is made, in the Fiscal Incentives Act 
CAP 15.16, to local value a dded, this must not be confused with the generally accepted definition 
of local content. Instead it reflects the concern of the Government of Saint Lucia for employment 
to be created and for economic diversification to be encouraged. Consequently, the prov ision is 
applied according to the number of local persons employed in a domestic enterprise and expressed 
as a percentage of sales, for purposes of relief.  
The laws governing these existing programmes will be repealed or modified in the coming months 
to eliminate all references to export allowance, local content and all other trade distorting factors 
that may be contained in the body of these existing laws. New procedures and amendments are 
currently being drafted. Programmes to be implemented will be WTO c ompatible.  
Notwithstanding the provision for granting of Export Allowance, there are 
NO beneficiaries under this programme.  
7. Subsidy per unit, or in cases where this is not possible, the total 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 
previous ) 
Given that the subsidies are in the form of revenue foregone no ex ante  allocation is made in the 
annual budget. Moreover, data on the total annual value of subsidies under the fiscal incentives 
programme is typically not collected. As a result data on the average or per unit subsidy is 
currently unavailable.  
8. Duration of the subsidy and/or any other li mits attached to it, including date of 
inception/commencement as amended by No. 3 of 2013 of the Fiscal Incentive Act  
Group I Enterprise  – A period, continuous or interrupted, not extending beyond 
 31 December, 2028  
Group II Enterprise  – A period, continu ous or interrupted, not extending beyond 
 31 December  2025 
Group III Enterprise  – A period, continuous or interrupted, not extending beyond 
 31 December  2023 
Enclave Enterprise  – Any period, continuous or interrupted, not extending beyond 
 31 December 20 28 G/SCM/N/284/LCA • G/SCM/N/290/LCA  
 
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  An enterprise with capital investment of not less than twenty -five million Eastern Caribbean 
dollars  (XCD) is considered as a "highly capital intensive industry ". Such enterprises, where 
applicable, can qualify for the same level of benefits as Enclave  Enterprises. The Fiscal Incentives 
Act became law on 23 April 1974.  
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 judgment of the notifying member. To the 
extent possible and relevant such information including statistics of production consumption, 
importers and exports of the subsidize product(s) or sector(s ) 
There is currently no system in place for collection of the necessary data in the format which would 
facilitate an assessment of the trade effects of this programme. Moreover, there are no provisions 
in the annual budget for either actual or estimated revenue foregone. However, customs revenue 
foregone for the previous three calendar years is estimated as follows:  
YEAR  VALUE (XCD)  
2012 20, 460, 127  
2013 16, 417, 847  
2014 15, 213, 455  
PROGRAMME 2  
MICRO AND SMALL SCAL E BUSINESS ENTERPRIS ES ACT  
1. Title of the subsidy programme, if relevant, or brief description or identification of the 
subsidy  
The Micro a nd Small Scale Business Enterprises Act, CAP. 13.19 of the Revised Laws of Saint Lucia 
2006. It is an Act to provide support to micro and small -scale enterpri ses. 
2. Period covered by notification  
 1 July 2014 - 30 June 2015  
3. Policy objective and/or purp ose of the subsidy  
To provide a legislative base for micro and small scale business enterprises, to make provision for 
developmental support and financial relief with respect to micro and small scale business 
enterprises.  
4. Background and authority for th e subsidy (including identification of the legislation under 
which it is granted ) 
The Government of Saint Lucia found it necessary to encourage and support investment flows in 
this sub -sector, in order to promote economic activity particularly in the area of self -employment 
and to contribute to the alleviation of poverty.  
The authority for the subsidy is the Micro and Small Scale Business CAP. 13.19.  
5. Form of subsidy (i.e. Grant, loan, tax concession, etc. ) 
Similar to incentives provided in the Fiscal Inc entives Act, Cap. 15.16 i.e. income tax exemption 
from import duty and exemptions from income tax on export profits. However, income tax relief 
will be in accordance with section 68 of the Income Tax Act of 1989.  G/SCM/N/284/LCA • G/SCM/N/290/LCA  
 
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  6. To whom and how the subsidy is provided (whether to producers, to exporters, or others, 
through what mechanisms; whether a fixed or fluctuating amount per unit; if the latter, how 
determined ) 
Provide to micro and small -scale businesses as described in the Act. Relief would be granted in a 
simila r manner as under the Fiscal Incentives Act, CAP. 15.16  
Notwithstanding the provision for granting of Export Allowance in the Fiscal Incentives 
Act, CAP. 15.16, there are NO beneficiaries under this programme.  
7. Subsidy per unit, or in cases where this is not possible, the total 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 
precious year, or bo th) is not possible, a full explanation  
There is no available data.  
8. Duration of the subsidy and/or any other limits attached to it, including date of 
inception/commencement  
Access to the benefits provided under the Act is based on eligibility criteria detailed in the Act in 
conjunction with the terms detailed under the Fiscal Incentives CAP. 15.16  
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 judgment of the notifying member. To the 
extent possible relevant and/or determinable however it is desirable that such information 
include statistics of production consumption, importers and exports of the subsidize 
product(s) or Sector(s ) 
There is currently no avail able data to assess the trade effects of this programme.  
PROGRAMME 3  
FREE ZONE ACT  
1. Title of the subsidy programme, if relevant, or brief description or identification of subsidy  
Free Zone Act CAP. 15.17 of the Revised Laws of Saint Lucia 2006. This is a n Act of Parliament for 
the establishment and operation of Free Zones in Saint Lucia.  
2. Period covered by the notification  
 1 July 2014 - 30 June 2015  
3. Policy objectives and/or purpose of subsidy  
To foster commerce, trade and investment with other count ries; and to promote economic growth 
and development, and related matters.  
4. Background and authority for the subsidy (including, identification of the legislation under 
which it is granted ) 
The Free Zone Act, CAP 15.17 was enacted as a result of the desi re of the Government to 
stimulate growth in trade and to increase employment levels through the creation of new 
ventures. The Free Zone Area became operational in July 2000. There are currently 24 ventures 
operating under this regime – five are manufacture rs with the remaining engaged in 
merchandising and distribution.  G/SCM/N/284/LCA • G/SCM/N/290/LCA  
 
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  5. Form of subsidy (i.e. grant, loan, tax concession, etc. ) 
 Exemption from import duty, taxes, and other charges on plant, machinery and 
equipment, raw materials and goods to be sold or expor ted within the Free Zone  Area.  
 Special Income Tax Concessions  
 Tax credits in accordance with the number of nationals employed on a continuous 
basis.  
 Exemption from income tax during the first 5 years of operations.  
 Total net losses over the 5 -year tax holi day may be carried forward and deducted 
against profits in the 3 years following the tax holiday.  
 Proceeds from sale of stock or other partial or complete ownership are also exempted 
from income tax.  
6. To whom and how the subsidy is provided (whether to p roducers, to exporters, or others, 
through what mechanisms; whether a fixed or fluctuating amount per unit; if the latter; how 
determined ) 
Subsidies are provided to businesses established within a designated Free Zone Area through 
government revenue forego ne (duty and tax concessions).  
7. Subsidy per unit, or in cases where this is not possible, the total amount budgeted for that 
subsidy (indicating, if possible, the average subsidy per unit in the previous year) where 
provision of per unit subsidy, informa tion (for the year covered by the notification for the 
precious year, or both) is not possible, a full explanation  
 There is no available data.   
8. Duration of the subsidy and/or any other limits attached to it, including date of 
inception/commencement  
 Income Tax – 5 years from date of establishment within the Free Zone Area.  
 Income Tax Credits – Indefinite. Access to such credits is subject to qualifying criteria 
as prescribed in the Act.  
 Import duty and associated charges – For the duration of tenancy.  
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 judgment of the notifying member. To the 
extent possible relevant and/or determinable however it is desirable th at such information 
include statistics of production consumption, importers and exports of the subsidize 
product(s) or Sector(s ) 
There is currently no data available and in the format which would facilitate an assessment of the 
trade effects of this progra mme.  
 
 
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