G/SCM/N/253/JAM  
G/SCM/N/260/JAM  
 
1 November 2013  
(13-6020)  Page: 1/6  
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES 
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVI:1  
OF THE GATT 1994 AND ARTICLE 25 OF THE AGREEMENT  
ON SUBSIDIES AND COUNTERVAILING MEASURES 
TRANSPARENCY NOTIFICATION CONCERNING THE EXTENSIONS PROVIDED FOR IN ARTICLE 27.4 
OF THE AGREEMENT ON SUBSIDIES AND COUN TERVAILING MEASURES OF THE TRANSITION 
PERIOD FOR THE ELIMINATION OF EXPORT  SUBSIDIES, GRANTED PURSUANT TO 
THE PROCEDURES IN THE GENERA L COUNCIL DECISION WT/L/691 
JAMAICA  
The following communication, dated 30 October 2013, is being circulated at the request of the 
Delegation of Jamaica. 
 
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The attached is the new and full notification  of Jamaica under Article XVI:1 of GATT 1994 and 
Article 25 of the Agreement on Subsidies and Count ervailing Measures ("the Agreement"). We also 
submit this notification for purposes of transpar ency in the context of the extensions granted to 
Jamaica under Article 27.4 of the Agreement, pursuant to the procedures in WT/L/691.   1  EXPORT INDUSTRY ENCOURAGEMENT ACT 
1. Description of the programme 
 
The Export Industry Encouragement Act was estab lished as an incentive framework geared toward 
the encouragement of export industries. 
 2. Period covered by the notification 
 Programme description for the calendar year 2012.  3. Policy objective and/or purpose of the subsidy 
 The objective is to encourage investment and growth in export manufacturing industries.  
4. Background and authority of the subsidy 
 
Law 49 of 1956 
Law 13 of 1960 
Act 11 of 1968  Act 42 of 1969  Act 56 of 1974 
 G/SCM/N/253/JAM • G/SCM/N/260/JAM 
 
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  5. Form of the subsidy 
 
Companies that export 100% output to hard cu rrency markets outside of CARICOM are exempt 
from income tax on profits and full exemption from import duties on capital goods and raw 
materials for use by the approved exporter in the production process. 
 Partial exporters (companies exporting less than  100% of output) are entitled to an export 
allowance that may be deducted from taxable income with the level of tax relief linked to exports. 
 6. To whom and how the subsidy is provided 
 
Any company registered or incorporated in Jamaic a and whose products are exclusively for sale to 
hard currency markets outside of CARICOM is eligible to a tax holiday on profits earned from the manufacture of the approved product as well as du ty-free importation of raw material and capital 
goods for use in the production process. 
 The company must be declared an "approved export manufacturer" in relation to an "approved 
export product" by the Minister of Industry. Havi ng a product designated an approved product and 
the company an approved export manufacturer entitles the company to income tax and duty benefits as outlined above.  
Partial exporters (companies exporting less than  100% of output) are entitled to an export 
allowance as described at paragraph 5 above. To benefit from the allowance, a 5% threshold of export sales to total sales must apply and expo rts must be to markets outside of the CARICOM 
region. 
 7. Subsidy per unit 
 Estimated revenue foregone as a result of  relief under the programme was US$0.5m. 
 8. Duration of the subsidy 
 Tax and duty benefits are allowed for a period of up to ten (10) years. 
 
9. Statistical data on the impact of the programme 
 
Historically, the programme has contributed to significant growth in exports of the non-traditional 
manufacturing sub-sectors (apparel, leather, plastic). This remains an important incentive 
programme for manufacturing companies wishing to export to third country markets. Five hundred (500) persons were employed under this pr ogramme during the period under review. 
 
2  JAMAICA EXPORT FREE ZONES ACT 
1. Description of the programme 
 
The Jamaica Export Free Zones Act provides an incentive and regulatory framework for the 
operation of Free Zones in Jamaica.  
2. Period covered by the notification 
 
Programme description for the calendar year 2012.  
3. Policy objective and/or purpose of the subsidy 
 
The objective is to encourage investment, exports and foreign exchange earnings and to create 
employment opportunities.  
 4. Background and authority of the subsidy 
 Act No. 18 of 1982 Act No. 12 of 1985 G/SCM/N/253/JAM • G/SCM/N/260/JAM 
 
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  Act No. 16 of 1991 
Act No. 24 of 1996  5. Form of the subsidy 
 Approved Free Zone enterprises are entitled to:  
 Duty-free importation of capital goods, consumer goods, raw materials or articles for use in 
connection with the approved product; 
 Duty-free treatment of articles for the construction, alteration, and repair of equipment of 
premises in the Free Zones; 
 Total relief from income tax in respect of profits or gains earned from approved activities; 
 Repatriation of profits (since liberalization of  the foreign exchange market in 1991 there are 
no restrictions on the repatriation of profits); 
 Exemption from the normal fees payable with respect to work permits. 
6. To whom and how the subsidy is provided 
 
Companies approved to operate in the Free Zones mu st be registered or incorporated in Jamaica 
under the Companies Act to carry out any of the following prescribed activities:   warehousing and storing 
 manufacturing operations 
 transshipment operations 
 loading and unloading operations 
 exporting 
 importing 
 service operations, including banking, data processing and telemarketing, insurance, 
professional services 
 packing and shipping 
 assembling 
 processing, refining, purify ing, mixing, merchandising 
Approvals for free zone status are made by the Minister of Industry on the recommendation of the 
Free Zone Council, the regulatory body appointed to  supervise the operations of the Free Zones.  
 
By policy decision of April 1997, Free Zone manufactu ring entities are allowed to sell up to 15% of 
output on the local market. Free Zone goods so ld onto the local market are subject to the 
applicable duties and charges. 
 
7. Subsidy per unit 
 The estimated revenue foregone as a result of relief under this programme was US$2.6m. 
 
8. Duration of the subsidy 
 
Incentives granted to Free Zone entities are for an indefinite period. 
 G/SCM/N/253/JAM • G/SCM/N/260/JAM 
 
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  9. Statistical data on the impact of the programme 
 
This programme continues to be a critical factor in Jamaica's economic development. The number of persons employed in the free zones currently stands at over 4,000 and the programme plays an 
important support role in Jamaica's investment promotion and domestic capacity building efforts.  
 3  INDUSTRIAL INCENTIVES (FACTORY CONSTRUCTION) ACT 
1. Description of the programme 
 
Provides an enabling framework for the provision of factory space in Jamaica.  
2. Period covered by the notification 
 
Programme description for the calendar year 2012. 
 
3. Policy objective and/or purpose of the subsidy 
 
To facilitate and encourage the construction of factories in Jamaica. 
 4. Background and authority of the subsidy 
 
Law 9 of 1961 
Law 30 of 1961 Act 23 of 1972 
 
5. Form of the subsidy 
 
An approved builder under the Industrial Incentives Factory Construction Act is entitled to: 
  Duty-free importation of items or articles for factory construction; 
 Enter into an agreement with a recognized enterprise for the lease of the factory; 
 Be granted relief from income tax for 15 years in respect of income from the lease of the 
factory or from profits made upon its sale. 
6. To whom and how the subsidy is provided 
 
Approved builders are granted a licence by the Minister of Industry to construct factories. 
Approved builders providing factory space for companies having recognized status - i.e. status 
under the Export Industry Encouragement Act (EIEA) or the Industrial Incentives Act (IIA) - can 
qualify for the incentives mentioned above. Free Zone developers are also eligible for incentives under the Act.   
7. Subsidy per unit 
 
There are very few beneficiaries under the pr ogramme. Revenue foregone is negligible. 
 
8. Duration of the subsidy 
 
Income Tax Relief is available for fifteen (15) years in respect of income from the lease of the 
factory or from profits made upon its sale.  9. Statistical data on the impact of the programme 
 Please see section 7 above.  G/SCM/N/253/JAM • G/SCM/N/260/JAM 
 
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  4  FOREIGN SALES CORPORATION ACT 
1. Description of the programme 
 
A legislative framework for the operation of Foreign Sales Corporation (FSCs) in Jamaica.  
 
2. Period covered by the notification 
 
Programme description for the calendar year 2012.  
 3. Policy objective and/or purpose of the subsidy 
 
To attract foreign investment into the country and to promote Jamaica as an attractive FSC 
location.  
4. Background and authority of the subsidy 
 
In November 1984, Jamaica was certified as a qualifying Foreign Sales Corporation (FSC) 
jurisdiction and enabling legislation, the Foreign Sales Corporation Act, was passed shortly 
thereafter.  5. Form of the subsidy 
  FSCs are exempt from Jamaican Corporate Income  Tax on their foreign trade income as long 
as they remain designated.  
 No income tax is imposed in Jamaica on dividends paid to foreign shareholders by a 
designated FSC. 
 Investment income or carrying changes earned by an FSC are relieved from income taxes.  
 FSCs are entitled to import into Jamaica eq uipment, material and machinery free of all 
import duties.  
6. To whom and how the subsidy is provided 
 
The Minister of Industry has the authority to grant certificates of designation to FSCs locating in 
Jamaica. Incentives as outlined above are available to FSCs.   
7. Subsidy per unit 
 
Revenue foregone is negligible as there are few beneficiaries under the regime.  
 
8. Duration of the subsidy 
 The life of the certificate is fifteen (15) years, but this may be renewed for a further fifteen (15) 
years if necessary.  
 9. Statistical data on the impact of the programme 
 Please see response at section 7 above.  
10. Information referred to in Paragraph 2(a)  of the General Council  Decision of 2007 
 
All beneficiaries under the Acts have been notified individually in writing and in gazetted instruments that the programmes will not continue beyond 31 December 2015 as set out in the 
General Council Decision.  
 As mentioned in previous updating notifications in G/SCM/N/192/JAM and G/SCM/N/211/JAM, 
work on meeting Jamaica’s obligation to make the four (4) programmes covered by this 
notification WTO compatible by 31 December 2015 is being conducted as part of Jamaica’s Tax G/SCM/N/253/JAM • G/SCM/N/260/JAM 
 
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  Reform Programme, the main objectives of which are, inter alia , the simplification and 
improvement of Jamaica’s tax system and ov erhauling existing incentives programmes. 
 Work has intensified in 2013 with the establishment of the Incentives Working Group Committee 
whose primary function was to review and finalize proposals to the Ministry of Finance and Cabinet 
on the new incentives regime. That process has been completed as proposals have been submitted to Cabinet towards implementation during the next calendar year. Consultations with stakeholders 
are continuing. 
 The legislative process on the omnibus incentiv es legislation, the Industry Incentive and 
Facilitation Act, should advance during the remainder of this current fiscal year 2013/2014. 
 
  
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