. /.  WORLD TRADE  
ORGANIZATION   
G/SCM/Q2/SAU/2 
30 August 2012 
 (12-4685) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Questions Posed by the UNITED STATES Regarding the 
New and Full Notification of SAUDI ARABIA1 
   The following communication, dated 15 August 2012,  is being circulated at the request of the 
Delegation of the United States.  
_______________ 
 
  The United States appreciates the Kingdom of Sa udi Arabia's notification under Article 25 of 
the Agreement on Subsidies and Countervailing M easures (SCM Agreement) and notes that Saudi 
Arabia states it does not grant or maintain any subs idies as defined in Article 1.1 of the Agreement on 
Subsidies and Countervailing Measures, which are sp ecific within the meaning of Article 2 of that 
Agreement.    Publically available information indicates that  certain incentives provided by the Government 
of Saudi Arabia may constitute subsidies subject to the notification requirement under Article 25 of 
the SCM Agreement. 
 
Question 1  Investment Incentives under the National Industries Protection and Encouragement 
Regulations 
  According to the OECD, Saudi Arabia provid es certain investment incentives for industrial 
projects under the National Industries Prot ection and Encouragement Regulations.
2  A number of the 
incentives described by the OECD appear to c onstitute subsidies under Article 1.1 of the 
SCM Agreement, including: 
 
 Income tax holiday. 
 Exemption from customs duties. 
 Government-provided land at reduced rates. 
 Low electricity and water rates. 
  The OECD also states that th ese incentives are often tied to dedicated industrial parks, which 
suggests they may be limited to enterprises located  in a designated geogra phical regions and thus 
specific under Article 2.2 of the SCM Agreement.  Could Saudi Arabia please provide a full 
                                                      
1 G/SCM/N/155/SAU-G/SCM/N/186/SAU-G/SCM/N/220/SAU.   
2 See "Mena – OECD Investment Programme;  Incentives and Free Zones in the Mena Region:  A 
Stocktaking", available at http://www.oecd.org/dataoecd/56/22/36086747.pdf . G/SCM/Q2/SAU/2 
Page 2  
 
  notification of these investment incentives or expl ain why it believes the incentives are not subject to 
the notification requirements of the SCM Agreement?    
Question 2 
 
Saudi Industrial Development Fund  
 The Saudi Industrial Development Fund (SIDF) provides interest free loans to support "the 
development of the private industrial sector , by extending medium to long term loans  for the 
establishment of new factories and the expansion, upgrading and modernization of existing ones in 
addition to the provision of guidance and advice in administration, finance, marketing and technology 
to industrial firms in Saudi Arabia".
3  Information from the SIDF's website indicates that its 
subsidized loans may be limited in law or in fact to certain industries or designative geographic 
regions in Saudi Arabia.4  Could Saudi Arabia please provide a full notification of SIDF loans 
programs or explain why it believes SIDF lending is not subject to the notification requirements of the 
SCM Agreement?  
 
Question 3 
 Saudi Industrial Property Authority  
  The Government of Saudi Arabia, through the Saudi Industrial Property Authority, provides 
incentives to factories in designated industrial cities,  such as subsidized industrial electricity and 
water rates and low cost land.
5  This information suggests th at these incentives are limited to 
enterprise located in designated geographical regi ons and thus specific under Article 2.2 of the 
SCM Agreement.  Could Saudi Arabia please provide a full notification of these investment 
incentives or explain why it believ es the incentives are not subject to the notification requirements of 
the SCM Agreement?   
 
 
 
__________  
                                                      
3 See http://www.sidf.gov.sa/En/AboutSI DF/Pages/HistoricalReview.aspx . 
4 See e.g.,  http://www.sidf.gov.sa/En/Achievements/Pag es/Lendingthemajorindusrialsectors.aspx , 
showing that the chemical and engineer ing industries have received 40% and 20% of SIDF loans, respectively;  
and http://www.sidf.gov.sa/En/GuidetoIndustr ialLoans/Pages/Important-Notices.aspx , financing rules for 
projects located in lower growth regions and cities.   
5 See 
http://www.modon.gov.sa/English/InformationCenter/ BecomingAClient/Pages/InvestmentAdvantages.aspx .