G/SCM/N/275/LCA  
 
26 June 2014  
(14-3680)  Page: 1/5  
Committee on Subsidies and Countervailing Measures  Original: English  
 
 SUBSIDIES 
 
 TRANSPARENCY NOTIFICATION CONCERNI NG THE EXTENSIONS PROVIDED FOR  
IN ARTICLE 27.4 OF THE AGREEMENT ON SUBSIDIES AND COUNTERVAILING  
MEASURES OF THE TRANSITION PERIOD FOR THE ELIMINATION OF EXPORT  
SUBSIDIES, GRANTED PURSUANT TO THE PROCEDURES IN THE  
GENERAL COUNCIL DECISION WT/L/691 
SAINT LUCIA 
The following communication, dated 20 June 2014, is being circulated at the request of the 
Delegation of Saint Lucia. 
 
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The Ministry of Commerce, Business Development, Investment, and Consumer Affairs hereby submits to the Committee on Subsidies and 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 Subsidies and Countervailing Measures.  There are no changes to the notified programmes since our last full report as at 30 June 2013 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 
figures have been provided.  
Copies of all the relevant Acts were submitted with our first full notification in 2001. 
  PROGRAMME 1 
FISCAL INCENTIVES ACT 
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 La ws of Saint Lucia 2006 – An Act of Parliament to 
provide incentives to industry. 
 
2. Period covered by the notification 
 1 July 2013 - 30 June 2014 
 
3. Policy objective and/or purpose of the subsidy 
 
To stimulate export performance, support investment and economic activity, promote 
diversification in traditional and non-traditional products.  G/SCM/N/275/LCA 
 
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  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 effect to an agreement on the 
harmonization of fiscal incentives to industry among CARICOM member countries. 
 5. Form of subsidy (i.e. Grant,  loan, tax concessions, etc.) 
 
Income tax exemption; exemption from import duty; exemption from import duty on plant, 
machinery, spare parts and raw materials; exempt ion 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 Cabinet 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 our Fiscal Incentives Act 
CAP. 15.16 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.  
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 to be in place by 31 December 2015. Programmes to be implemented will 
be WTO compatible.   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 limits 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, continuo us or interrupted, not extending beyond 
31 December 2028 
  Group II Enterprise  –  A period, conti nuous or interrupted, not extending beyond 
31 December 2025 G/SCM/N/275/LCA 
 
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Group III Enterprise --  A period, continuo us or interrupted, not extending beyond 
31 December 2023 
 
Enclave Enterprise  --  Any period, conti nuous or interrupted, not extending beyond 
31 December 2028 
 
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 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 are no provisions in the annual budget for either actual or estimated revenue foregone. 
However on the basis of information obtained from the Ministry of Finance the following represents 
a fair estimate of revenue forgone for fiscal years as indicated, to the nearest million: 
 
April 2011 to March 2012 33,896,634.31 
April 2012 to March 2013 24,024,909.55 April 2013 to March 2014 11,658,030.83 
 
Description of programme – Export Allowance  
There were no beneficiaries under this programme.  
  PROGRAMME 2 
MICRO AND SMALL SCALE BUSINESS ENTERPRISES ACT 
1. Title of the subsidy programme, if relevant, or brief description or identification of the 
subsidy 
 
The Micro and Small Scale Business Enterprises Act,  CAP. 13.19 of the Revised Laws of Saint Lucia 
2006. An Act to provide support to micro and small-scale enterprises.   
 
2. Period covered by notification 
 1 July 2013 - 30 June 2014 
 
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 respect to micro and small scale business enterprises. 
 
4. Background and authority for the 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. 
 
Authority – The Micro and Small Scale Business CAP. 13.19.  G/SCM/N/275/LCA 
 
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  5. Form of subsidy (i.e. Grant, loan, tax concession, etc.) 
 
Similar to incentives provided in the Fiscal Incentives 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. 
 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) 
 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, CAP. 15.16  
 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.   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 available data to assess the trade effects of this programme.  
Description of programme – Export Allowance 
 There were no beneficiaries under 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- An Act of Parliament for the 
establishment and operation of Free Zones in Saint Lucia. 
 2. Period covered by the notification 
 1 July 2013 - 30 June 2014  3. Policy objectives and/or purpose of subsidy 
 To foster commerce, trade and investment with other countries; 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 desire of the Government to stimulate growth in trade and to increase em ployment levels through the creation of new G/SCM/N/275/LCA 
 
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  ventures. The Free Zone Area became operational in July 2000. To date, the only tenants are 
merchants and distributors. There are two manufacturers operating from the Free Zone Area.  5. Form of subsidy (i.e. grant, 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 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 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. 
 
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. 
 
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 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 the format which would facilitate an assessment of the trade effects of this programme.  
 
Description of programme – Free Zone Act CAP. 15.17 
 
There are approximately 27 beneficiaries under this programme.  
 
 
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