G/SCM/N/275/DOM  
15 July 2014  
(14-4071)  Page: 1/6  
Committee on Subsidies and Countervailing Measures  Original: Spanish  
 
  SUBSIDIES 
UPDATED NOTIFICATION UNDER PARAGRAPH 2(C) 
OF GENERAL COUNCIL DECISION WT/L/691 
DOMINICAN REPUBLIC  
The following communication, dated 26 June 2014, is being circulated at the request 
of the delegation of the Dominican Republic. 
 
_______________ 
  
In accordance with paragraph 2(c) of General Council Decision WT/L/691, dated 27 July 2007, 
the Dominican Republic hereby submits its updated annual notification for the calendar year 2013. Also included as an integral part of this notification, in accordance with paragraphs 1(e) and (f) 
of the Decision, is information concerning measures taken with regard to the action plan for 
eliminating the export subsidies under the notified programme and the notification of beneficiaries. 
 
 G/SCM/N/275/DOM 
- 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, located within geographic areas known as free zones.  
2. Period covered by the notification 
 This notification covers the period up to 31 December 2013. 
 
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 ba lance-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, 
to attract local and foreign investment and to create employment at various points within the national territory, including in economically depriv ed 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. grant, loan, tax concession, etc.) 
 
Enterprises manufacturing goods or providing services and operating under Law No. 8-90 are 
exempt from payment of income tax and custom s duties on the importation and exportation 
of the raw materials, equipment and machinery used to produce these goods. The subsidy 
is therefore a tax concession. 
 6. To whom and how the subsidy is provided (whether to producers, to exporters, 
or others; through what mechanism;  if the latter, how determined) 
 The programme exempts natural and legal persons e ligible under the free-zone regime established 
by Law No. 8-90 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 subsidy 
information (for the year covered by th e 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 free zones by enterprises operating under the free-zone regime, with a view to estimating the fiscal cost to the Dominican State of attracting 
private investment for the creation of sources of employment. 
 8. Duration of the subsidy and/or any other time-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 peri od, permit holders may apply for a renewal. 
 G/SCM/N/275/DOM 
- 3 - 
  9. Information on paragraph 2(a) of  General Council Decision WT/L/691 
 In order to comply fully with paragraphs 1(e) and (f) of General Council Decision WT/L/691, the Dominican Republic has implemented the following measures: 
 
(a) All 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, contained in document G/SCM/120, concerning the extension provided for in Article 27.4 of the Agreement on Subsidies 
and Countervailing Measures, adopted by the WTO General Council on 27 July 2007". 
 (b) 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 complete dismantling of export subsidies. In addition, by Law No. 139-11 
of 24 June 2011, it amended Article 17 of Law No. 8-90 in respect of export performance 
requirements so that companies under the programme can market their goods and services 
locally without quantitative limits. 
 10. Statistical data permitting an assessm ent 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 info rmation 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 , which, where possible and meaningful, 
should be the latest year preceding the introduction of the subsidy or preceding 
the last major change in the subsidy. 
   
  G/SCM/N/275/DOM  
- 4 - Evolution of the Main Variables of Free-Export Zones 
1995-2013 
 
 
Year Existing 
industrial 
estates Enterprises Jobs Exports 
(US$ million) Foreign 
exchange 
(US$ million) Average weekly salary 
(RD$) Surface area of 
industrial premises in 
use (sq. ft.) Textile 
exports 
(US$ million) Workers Technical 
staff 
1995 33 469 165,571 2,907.40 509.00 539.96 1,095.89 14,120,000.0 1,731.0 
1996 36 436 164,639 3,107.30 545.00 576.92 1,257.00 13,782,496.0 1,753.5 
1997 40 446 182,174 3,596.40 701.00 634.27 1,441.12 15,603,755.0 2,185.1 
1998 43 496 195,193 4,100.00 826.50 638.32 1,556.90 17,540,407.0 2,348.9 
1999 44 484 189,458 4,331.50 887.30 701.21 1,587.22 16,820,049.0 2,393.1 
2000 46 481 195,262 4,770.60 1,018.60 716.51 1,629.85 21,068,186.0 2,555.4 
2001 51 512 175,078 4,481.60 977.90 775.49 1,662.93 21,738,332.0 2,314.4 
2002 53 520 170,833 4,317.30 886.50 786.56 1,671.53 21,923,764.0 2,226.8 
2003 54 531 173,367 4,406.76 810.84 961.34 2,010.79 22,066,221.0 2,196.4 
2004 58 569 189,853 4,685.24 863.40 1,131.25 2,539.82 24,332,619.0 2,120.6 
2005 57 556 154,781 4,749.65 1,005.43 1,347.09 2,702.67 24,540,452.8 1,904.6 
2006 56 555 148,411 4,678.60 973.70 1,465.19 3,009.97 26,338,045.1 1,734.4 
2007 53 526 128,002 4,525.22 1,010.90 1,480.37 3,127.22 24,609,122.9 1,366.9 
2008 48 525 124,517 4,354.10 954.30 1,652.80 3,533.22 25,299,744.6 1,165.7 
2009 47 553 112,618 3,793.50 959.00 1,819.00 3,689.56 29,037,744.6 933.5 
2010 48 555 121,001 4,217.60 1,123.05 1,829.03 3,841.64 29,268,270.4 964.2 
2011 51 578 125,117 4,884.50 1,163.50 1,967.15 3,892.63 30,067,075.7 1,295.6 
2012 1/ 53 584 134,226 4,940.10 1,298.20 2,175.88 4,204.14 30,385,854.6 1,280.6 
2013 2/ 55 602 144,383 5,029.00 1,326.00 2,414.62 4,603.08 33,804,830.4 1,280.5 
% growth 
2012-2013 3.8 3.1 7.6 1.8 2. 1 11.0 9.5 11.3 0.0 
 
Source for exports and fore ign exchange: Central Bank. 
1/ Corrected export figures. 
2/ Preliminary export and foreign exchange figures. 
 G/SCM/N/275/DOM 
- 5 - 
  Contribution of Free Zones to the Gross Domestic Product (GDP) 
of the Dominican Republic 1995-2013 
(RD$ million, current values) 
Year GDP Free zone s Contribution (%) 
1995 211,024.60 8,765.20 4.2 
1996 233,833.30 9,380.50 4.0 
1997 274,423.90 11,510.80 4.2 
1998 311,282.80 15,159.60 4.9 
1999 343,745.30 16,728.80 4.9 
2000 388,301.90 19,990.30 5.1 
2001 415,520.90 21,026.40 5.1 
2002 463,624.30 25,249.90 5.4 
2003 617,988.90 46,076.50 7.5 
2004 909,036.80 66,405.10 7.3 
2005 1,020,002.00 49,395.80 4.8 
2006 1,189,801.90 53,296.30 4.5 
2007 1,364,210.30 51,917.00 3.8 
2008 1,576,162.80 56,084.60 3.6 
2009 1,678,762.60 50,939.10 3.0 
2010 1,901,896.70 56,179.40 3.0 
2011 2,119,301.80 68,763.00 3.2 
2012 2,316,783.70 72,074.50 3.1 
2013* 2,534,067.80 81,001.70 3.2 
 
Source: Central Bank of the Dominican Republic. 
* Preliminary figures.   
Comparison of Domestic and Free-Zone Exports 1995-2013 
(US$ million)
 
Year Domestic 
exports Growth % 
Domestic Free-zone 
exports Growth % 
Free zones Total 
exports Free-zone 
exports/total 
exports (%) 
1995 872.1 --- 2,907.4 --- 3,779.5 76.9 
1996 945.5 8.4 3,107.3 6.9 4,052.8 76.7 
1997 1,017.3 7.6 3,596.4 15.7 4,613.7 78.0 
1998 880.3 -13.5 4,100.0 14.0 4,980.3 82.3 
1999 805.2 -8.5 4,331.5 5.6 5,136.7 84.3 
2000 966.1 20.0 4,770.6 10.1 5,736.7 83.2 
2001 794.7 -17.7 4,481.6 -6.1 5,276.3 84.9 
2002 847.7 6.7 4,317.3 -3.7 5,165.0 83.6 
2003 1,064.0 25.5 4,406.8 2.1 5,470.8 80.6 
2004 1,250.7 17.5 4,685.2 6.3 5,935.9 78.9 
2005 1,395.1 11.5 4,749.7 1.4 6,144.8 77.3 
2006 1,931.4 38.4 4,678.6 -1.5 6,610.0 70.8 
2007 2,635.1 36.4 4,525.2 -3.3 7,160.3 63.2 
2008 2,393.9 -9.2 4,354.1 -3.8 6,748.0 64.5 
2009 1,689.3 -29.4 3,793.5 -12.9 5,482.8 69.2 
2010 2,536.1 50.1 4,217.6 11.2 6,753.7 62.4 
2011 3,727.8 47.0 4,884.5 15.8 8,612.3 56.7 
2012 1/ 4,129.0 10.8 4,940.1 1.1 9,069.1 54.5 
2013 2/ 4,622.1 11.9 5,029.0 1.8 9,651.1 52.1 
 
Source: Central Bank of the Dominican Republic. 
1/ Corrected figures.2/ Preliminary figures. G/SCM/N/275/DOM 
- 6 - 
  Comparison of Domestic and Free-Zone Exports 
2013 
 
 
 
Free-Zone Exports by Principal Activities, 2004-2013 
(US$ million) 
 
Activity 2004 2005 2006 2007 2008 2009 2010 2011 20121/ 20132/ % 
share  
2013 
Clothing and textiles 2,120.6 1,904.6 1,734.4 1,366.9 1,165.7 933.5 983.9 1,295.6 1,280.6 1,280.5 25.5
 
Medical and 
pharmaceutical products 583.1 647.3 712.9 774.0 855.6 963.0 1,070.7 1,178.5 1,213.3 1,230.4 24.5
 
Electrical 
goods 630.5 700.3 695.7 743.3 794.7 565.5 581.6 623.9 638.7 650.8 12.9  
Jewellery 601.0 602.9 625.9 678.4 505.4 435.7 466.2 527.2 450.5 357.8 7.1  
Tobacco and 
tobacco 
products 308.6 334.1 366.9 393.6 429.9 403.1 426.6 424.7 506.4 584.1 11.6  
Footwear 234.7 315.3 276.1 258.7 234.7 201.0 312.8 389.1 406.5 420.9 8.4  
Other 206.8 245.1 266.7 310.3 368.1 291.7 375.7 445.5 444.0 504.5 10.0  
Total 4,685.2 4,749.7 4,678.6 4,525.2  4,354.1  3,793.5  4,217.5  4,884.5 4,940.1 5,029.0  100.0  
 
Source: Central Bank of the Dominican Republic. 
1/ Corrected figures.2/ Preliminary figures. 
 
 
Free-zone Exports by Principal Activities 
2013 
 
Clothing and 
textiles
26%
Medical and 
pharmaceutical  
products
24%
Electrical  goods
13%Jewellery
7%Tobacco and 
tobacco products
12%Footwear
8%Other
10%
 
 
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