WORLD TRADE  
ORGANIZATION   
G/SCM/N/243/LCA 
4 October 2012 
 (12-5382) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
SUBSIDIES 
 
Continuation of Extension under SCM Artic le 27.4 of the Transition Period for 
the Elimination of Export Subsidies Pursuant to the Procedures Contained 
in the General Council Decision in Document WT/L/691 
 
Updating notification 
 
SAINT LUCIA 
 
  The following communication, dated 2 October 2012, is being circulated at the request of the 
Delegation of Saint Lucia. 
 
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  The Ministry of Commerce, Business Develo pment, Investment, and Consumer Affairs 
hereby submits to the Committee on Subsidies a nd Countervailing Measures Saint Lucia's updated 
notification on current incentive programmes under Article XVI:1 of GATT 1994 and Articles 25 
and 27.4 of the Agreement on Subs idies and Countervailing Measures. 
  There are no changes to the notified programmes since our last full report as at 
12
 October 2011 and consequently programmes remain  consistent with previous notifications.  
Saint Lucia has no programme of subsidies contingent upon the use of local goods.  
 Statistical information cannot be obtained in the format required, however Revenue Forgone, 
and Import and Export figures have been provided.  
 Copies of all the relevant Acts were subm itted with our first full notification in 2001. 
  The Ministry of Commerce, Business Developm ent, Investment and Consumer Affairs has 
sought and obtained assistance from the Commonwealth  Secretariat to amend all of Saint Lucia's 
incentives regulations to make them WTO compatible.  We are working assiduously to implement the proposed changes considered necessary to beco me compliant with our obligations under the 
SCM Agreement in respect of Article 27.4.  
  G/SCM/N/243/LCA 
Page 2 
 
 
  PROGRAMME 1 
 
FISCAL INCENTIVES ACT 
 1. Title of the subsidy progra mme, if relevant, or brief descr iption or identification of the 
subsidy 
 
 Fiscal Incentives Act, No. 15 of 1974 – An Act of Parliament to provide incentives to 
industry.   
 
2. Period covered by the notification 
 
 1 July 2011 – 30 June 2012 
 3. Policy objective and/or purpose of the subsidy 
  To stimulate export performance, support i nvestment and economic activity, promote 
diversification in traditiona l and non-traditional products. 
 
4. Background and authority for the subsidy (inc luding identification of the legislation under 
which it is granted 
 
 The Fiscal Incentives Act, No. 15 of 1974 was pass ed to give effect to an agreement on the 
harmonisation of fiscal incentives to industry among CARICOM member countries. 
 
5. Form of subsidy (i.e. Gran t, loan, tax concessions, etc.) 
 
 Income tax exemption;  exemption from import duty;  exemption from import duty on plant, machinery, spare parts and raw materials;  exemp tion from income tax on export profits and an export 
allowance. 
 6. To whom and how the subsidy is provided (w hether 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 Ca binet 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 
 
 Saint Lucia has no programme of subsidies c ontingent 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 our Fiscal Incentives Act 
No. 15 of 1974 to local value added, 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 provision 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. 
  G/SCM/N/243/LCA 
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   While there are no plans in place to phase out  these programmes which are essential for the 
attraction of investment and the survival of the manufacturing sector, we are pursuing all efforts to 
make all existing programmes compliant with our WTO obligations.  We intend to continue to 
implement the existing programmes in  keeping with our WTO obligation.  However, this will have to 
be conducted over an extended pe riod given the smallness and extreme fragility of our economy and 
in particular the manufacturing sector. 
 
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 subs idies under the fiscal incentives 
programme is typically not collected.  As a result da ta on the average or per unit subsidy is currently 
unavailable.  
 8. Duration of the subsidy and/or any other limits attached to it, including date of 
inception/commencement 
  Group I Enterprise  – 15 years Tax Holiday 
 Group II Enterprise  – 12 years Tax Holiday 
 Group III Enterprise – 10 years Tax Holiday  
 Enclave Enterprise  – 15 years Tax Holiday 
 
 An enterprise with capital investment of not  less than twenty-five million Eastern Caribbean 
dollars is considered as a "highly capital intensive industry".  Such enterprises, where applicable, can 
qualify for the same level of benefits as Enclav e Enterprises.  The Fiscal Incentives Act became law 
on 23 April 1974. 
 9. Statistical data permitting an assessment of th e trade effects of the subsidy.  The specific 
nature and scope of such statis tics 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 s ubsidize product(s) or sector(s) 
 
 It is not the practice to routinely maintain records of revenue foregone in relation to fiscal 
incentives granted.  Also, there are no provisions in  the annual budget for either actual or estimated 
revenue foregone.  However on the basis of inform ation obtained from the Ministry of Finance the 
following represents a fair estimate of revenue forg one for fiscal years as indicated, to the nearest 
million: 
 
 2009 – EC$ 32,084,123.24 
 2010 – EC$ 32,666,852.32  
 2011 – EC$ 34,609,096.19  G/SCM/N/243/LCA 
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  PROGRAMME 2 
 
MICRO AND SMALL SCALE BUSINESS ENTERPRISES ACT 
 1. Title of the subsidy progra mme, if relevant, or brief descr iption or identification of the 
subsidy 
 
 The Micro and Small Scale Business Enterprises Act, No. 19 of 1998.  An Act to provide 
support to micro and small-scale enterprises.    
 
2. Period covered by notification 
 
 1 July 2011 - 30 June 2012. 
 3. Policy objective and/or purpose 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 resp ect to micro and small scale 
business enterprises. 
 4. Background and authority for the subsidy (inc luding identification of the legislation under 
which it is granted) 
 
 Background--The Government of Saint Luci a found it necessary to encourage and support 
investment flows in this sub-sector, in order to pr omote economic activity particularly in the area of 
self-employment and to contribute to the alleviation of poverty. 
 
 Authority – The Micro and Small Scale Business Act No. 19 of 1998.  
5. Form of subsidy (i.e. Gran t, loan, tax concession, etc.) 
 
 Similar to incentives provided in the Fiscal In centives Act, No. 15 of 1974, i.e. income tax 
exemption from import duty and exemptions from inco me tax on export profits.  However, income tax 
relief will be in accordance with secti on 68 of the Income Tax Act of 1989. 
 
6. To whom and how the subsidy is provided (w hether to producers, to  exporters, or others, 
through what mechanisms; whether a fixed or fluctuating amount per unit; if the latter, how 
determined) 
 
 To micro and small-scale businesses as described in the Act.  Relief would be granted in a similar manner as under the Fiscal Incentives Act, No. 15 of 1974. 
 
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 both) is not possible, a full explanation 
 
There is no available data.   G/SCM/N/243/LCA 
 Page 5 
 
 
  8. Duration of the subsidy and/or any other limits attached to it, including date of 
inception/commencement 
 
 There is no specific duration under the Act.  Ac cess 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 Act of 1974. 
 
9. Statistical data permitting an assessment of th e trade efforts of the subsidy.  The specific 
nature and scope of such statis tics 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 available data to assess the trade effects/effort of this programme. 
 Description of programme – Export Allowance 
 
 There were no beneficiaries under this programme.   
 G/SCM/N/243/LCA 
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  PROGRAMME 3 
 
FREE ZONE ACT 
 1. Title of the subsidy programme , if relevant, or brief descripti on or identification of subsidy 
 
An Act of Parliament for the establishment a nd operation of Free Zones in Saint Lucia. 
 2. Period covered by the notification 
  1 July 2011 - 30 June 2012.  
3. Policy objectives and/or purpose of subsidy 
 
 To foster commerce, trade and investment with other countries;  to promote economic growth 
and development a nd related matters. 
 4. Background and authority for the subsidy (inclu ding, identification of the legislation under 
which it is granted) 
 
 The Free Zone Act, No. 10 of 1999 was enacted as  a result of the desire of the Government to 
stimulate growth in trade and to increase employme nt levels through the creation of new ventures.  
The Free Zone Area became operational in July 2000.   To date, the only tenants are merchants and 
distributors.  There are no industries or manufacturers operating from that site. 
 
5. Form of subsidy (i.e. gran t, loan, tax concession, etc.) 
 
 Exemption from import duty and other charges on plant, machinery and equipment, raw materials and goods to be sold or exported 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 holiday  may be carried forwar d 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 (w hether to producers, to  exporters, or others, 
through what mechanisms; whether a fixed or fluctuating amount per unit; if the latter; how 
determined) 
 
 To businesses established within a designated Free Zone Area.  
  Through tax concessions  and revenue foregone.  G/SCM/N/243/LCA 
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  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 both) is not possible, a full explanation 
 
 
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 associ ated charges – For the duration of tenancy. 
 9. Statistical data permitting an assessment of th e trade efforts of the subsidy.  The specific 
nature and scope of such statis tics 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 data available and in th e format which would facilitate an assessment of 
the trade effects/effort of this programme. 
 
Description of programme – Free Zone Act No 10 of 1999 
 
There are no beneficiaries under this programme. 
 
  
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