WORLD TRADE  
ORGANIZATION   
G/SCM/Q3/DOM/18 
4 October 2012 
 (12-5385) 
Committee on Subsidies and 
Countervailing Measures Original: Spanish 
 
 
 
SUBSIDIES 
 
Continuation of Extension under SCM Ar ticle 27.4 of the Transition Period 
for the Elimination of Export Subsidies Pursuant to the 
Procedures in Document WT/L/691 
 
Replies to the Questions from COLOMBIA1 concerning the Updating 
Notification of the DOMINICAN REPUBLIC2 
 
 
 The following communication, dated 2 October 2012, is being circulated at the request of the delegation of the Dominican Republic.  
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 Programme:  Law No. 8-90 to "promote the establishment of new free zones and expand 
existing ones". 
 
Question 1 
 
 Has the Dominican Republic explicitly noti fied the beneficiaries of the tax exemption 
programme contained in Law No. 8-90 that, in accordance with the obligations under the SCM Agreement and specifically the provisions of  Article 27.4 thereof, the measure will not be 
extended beyond 31 December 2015 and that its dism antling will begin by 2013 at the latest?  
If so, what is the procedure for notifying th ese beneficiaries, and does the Dominican Republic 
envisage any transition programme towards tota l dismantling?  Have any domestic measures 
been taken yet to eliminate the subsidies?  Coul d you provide us with documentation relating to 
this process? 
 
Reply 
 
 In accordance with the obligations under  the SCM Agreement and specifically the 
provisions of Article 27.4 thereof, the Do minican Republic must phase out its exports 
subsidies by 31 December 2015 at the latest.  It is not under any obligation to explicitly notify the beneficiaries of the exemption programme that it will not be extended beyond 31 December 2015.  Besi des, that programme provides for 
exemptions that do not constitute export subsidies. 
 
                                                      
1 G/SCM/Q3/DOM/17. 
2 G/SCM/N/243/DOM. G/SCM/Q3/DOM/18 
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   As part of the transition plan towards the dismantling of the export subsidies, 
Law 139-11 of 24 June 2011 amends Artic le 17 of Law 8-90 as regards export 
performance requirements so that compani es under the programme can market their 
goods and services locally without quantitative limits. 
Question 2 
 
 Point 9(a) of the Dominican Republic's no tification states that resolutions and/or 
operating licences issued under the free-zone regime established by Law No. 8-90 contain the 
following paragraph:  " As of 2015, the Dominican Republic will reserve the right to review and/or 
withdraw some of the incentives contained in Law No. 8-90, pursuant to the Decision of the World 
Trade Organization (WTO) Committee on Subsidies and Countervailing Measures, … ". 
 
 (a) Could the Dominican Republic please explain why it is stated that " As of 2015, 
the Dominican Republic will reserve the righ t to review and/or withdraw some of 
the incentives … " when pursuant to Decision WT/L/691 dismantling must be 
envisaged by 2013 at the latest?  Is the Dominican Republic planning to review 
and/or withdraw some of the incentives?  As we all know, the Decision 
establishes that the "last authorized period" referred to in the last sentence of 
SCM Article 27.4 shall not extend beyo nd 31 December 2013, and the final 
two-year phase-out period provided for in the last sentence of SCM Article 27.4 shall end not later than 31 December 2015 . 
 Reply 
 
 Where the incentives are inconsistent with  Article 27.4 of the SCM Agreement, the 
Dominican Republic plans to review or eliminat e them by 31 December 2015 at the latest. 
  (b) Could the Dominican Republic also explain why it uses the wording "review 
and/or withdraw" instead of explicitly saying "withdraw"? 
 
Reply 
  As explained in the reply to question 1, once it has been brought into line with Article 27.4 of 
the SCM Agreement, the exemption programme cont ained in Law 8-90 will provide for exemptions 
that do not constitute export subsidies, which is  why the word "withdraw" alone is not enough. 
 
Question 3 
 
 Point 9(b) of the Dominican Republic's notification states that a draft law on free zones which provides for the complete dismantling of  export subsidies was submitted to Congress 
on 6 July 2010 and is currently being reviewe d and discussed by the Dominican Republic's 
Senate Commission on Industry, Commerce and Free Zones.  Given that more than two years 
have passed since this draft law was submi tted to Congress, could the Dominican Republic 
please share with Members the result s of its passage through Congress? 
 
Reply 
  The draft law on free zones submitted to Congr ess in 2010 was transmitted to the Senate 
Commission on Industry, Commerce and Free Zones fo r examination and opinion.  However, that 
Commission did not issue its opinion or recommendati ons within the stipulated time-frame, with the 
result that the deadline for examination by Co ngress during the corresponding session elapsed.  The 
plan is to resubmit the draft to Congress in the next few days.  G/SCM/Q3/DOM/18 
 Page 3 
 
 
  Question 4 
 
 Point 7 of the notification appears to indicate that the Government of the 
Dominican Republic does not have the informat ion required to estimate the amount of the 
subsidies granted.  If this is the case, how can the Dominican Republic ensure that the status 
quo of the programme is maintained?  Would it be possible, instead, for the Dominican 
Republic to provide the annual value in CIF term s of goods from abroad entering the free zones 
and the rates actually exempted from taxes, so that we can have an approximate figure for the 
amount of the subsidies granted? 
 Reply 
 
 The Dominican Republic ensu res that the status quo is maintained by keeping the 
programmes in place without improving the benefits  they provide.  According to information 
compiled by official Dominican government agencies, the amount of subsidies granted totals 
RD$8 billion (approximately US$205 million). 
 
Question 5 
 
 When does the Dominican Republic plan to submit its action plan for eliminating export 
subsidies, as required under paragraph 1(f) of Decision WT/L/691? 
 
Reply 
  The Dominican Republic has already launched its action plan for the elimination of export subsidies.  For example, it submitted to Congress a draft law on free zones which provides for the 
total dismantling of export subsidies.  In add ition, by Law 139-11 of 24  June 2011, it amended 
Article 17 of Law 8-90 as regards export perform ance requirements so th at companies under the 
programme can market their goods and ser vices locally without quantitative limits. 
 
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