G/SCM/N/253/LCA  
G/SCM/N/260/LCA  
 
16 July 2013  
(13-3781)  Page: 1/11  
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES 
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVI:I 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 
SAINT LUCIA 
The following communication dated 30 June 2013 is being circulated at the request of the 
Delegation of Saint Lucia. 
 
_______________ 
 
 The Ministry of Commerce, Business Development, Investment, and Consumer Affairs hereby 
submits to the Committee on Subsidies and Countervailing Measures Saint Lucia’s new and full 
notification on current incentive programmes under Article XVI:1 of GATT 1994 and Article 25 the Agreement on Subsidies and Countervailing Measures ("the Agreement"). We also submit this notification for purposes of transparency in the context of the extensions granted to Saint Lucia 
under Article 27.4 of the Agreement, pursuant to the procedures in WT/L/691. 
 There is one change to the notified programmes since our last full report as at 15 August 2012. A 
copy of the relative amendment No. 3 of 2013 to th e Fiscal Incentives Act is attached for perusal. 
The programmes however 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 and herewith 
as regards to Amendment No. 3 of 2013. 
PROGRAMME 1 
FISCAL INCENTIVES ACT 
1. Title of the subsidy programme, if relevant, or brief description or identification of the 
subsidy 
 
Fiscal Incentives Act, No. 15 of 1974 – An Act of Parliament to provide incentives to industry. 
 G/SCM/N/253/LCA • G/SCM/N/260/LCA 
 
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  2. Period covered by the notification 
 
1 July 2012 – 30 June 2013.  
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. 
 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 harmonisation 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.  
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 period 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 subsidies under the fiscal incentives 
programme is typically not collected. As a result data on the average or per unit subsidy is currently unavailable.  G/SCM/N/253/LCA • G/SCM/N/260/LCA 
 
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  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 
 
Group I Enterprise - A period, continuous  or interrupted, not extending beyond 
31 December 2028 
 Group II Enterprise  - A period, continuo us or interrupted, not extending beyond 
31 December 2025 
 Group III Enterprise - A period, continuous  or interrupted, not extending beyond 
31 December 2023 
 
Enclave Enterprise  - Any period, continuo us 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 2008 to March 2009 37,729,483.53 April 2009 to March 2010 30,402,485.59 
April 2010 to March 2011 32,355,795.78 
April 2011 to March 2012 33,896,634.31 April 2012 to March 2013 24,024,909.55 
 
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 Ac t, CAP. 13.19. An Act to provide support to 
micro and small-scale enterprises. 
 2. Period covered by notification 
 1 July 2012 - 30 June 2013.  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. 
 G/SCM/N/253/LCA • G/SCM/N/260/LCA 
 
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  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. 
 5. Form of subsidy (i.e. Grant, 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 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 efforts 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 asse ss the trade effects/effort 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 - An Act of Parliament for the establishment and operation of Free Zones 
in Saint Lucia. 
 2. Period covered by the notification 
 1 July 2012 - 30 June 2013.  G/SCM/N/253/LCA • G/SCM/N/260/LCA 
 
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  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 
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 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 efforts 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/effort of this programme. G/SCM/N/253/LCA • G/SCM/N/260/LCA 
 
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Description of programme – Free Zone Act CAP. 15.17 
 There are approximately 24 beneficiaries under this programme. 
 
_______________ 
 
 G/SCM/N/253/LCA • G/SCM/N/260/LCA 
 
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  SAINT LUCIA 
_____ 
 
No. 3 of 2013 
 
ARRANGEMENT OF SECTIONS 
 Sections 
 
 1.  Short title  2.  Interpretation  3.  Amendment of section 2 
 4.  Amendment of section 6 
 5.  Amendment of section 12  6.  Amendment of section 26 
 7.  Insertion of Schedule 4 G/SCM/N/253/LCA • G/SCM/N/260/LCA 
 
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I ASSENT 
 
 
[L.S.] PEARLETTE LOUISY, 
Governor-General. 
 
 
April 18, 2013. 
SAINT LUCIA 
---- 
No. 3 of 2013 
 
 
AN ACT  to amend the Fiscal Incentives Act, Cap.15.16 and for connected purposes. 
 
 
 
[29th April, 2013] 
 
 
BE IT ENACTED  by the Queen's Most Excellent Majesty, by and with the advice and consent of the 
House of Assembly and the Senate of Saint Lucia, and by the authority of the same, as follows: G/SCM/N/253/LCA • G/SCM/N/260/LCA 
 
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  Short title  
 
1. This Act may be cited as the Fiscal Incentives 
(Amendment) Act, 2013. 
 
Interpretation  
2. In this Act— 
 
"principal Act " means the Fiscal Incentives Act, Cap.15.16. 
 
Amendment of section 2 
 
3. Section 2 of the principal Act is amended by repealing the definition of "construction 
day" and substituting the following — 
 
""construction day " means the day specified in an order 
made under section 6;". 
 Amendment of section 6  
4. Section 6 of the principal Act is amended — 
 
(a) by inserting a new subsection (1A) as follows — 
 
"(1A) Despite subsection (1), Cabinet may, on an application made by or on behalf of 
an enterprise that at the commencement of this subsection, manufactures a 
product declared to be an approved product before the commencement of this 
subsection, if it is satisfied that it is in the public interest so to do, by Order made on or before 31 December 2014 and published in the Gazette, declare such enterprise to be an approved enterp rise with effect from the date specified 
in the Order."; and 
 
(b) by repealing subsections (3) and (4) and replacing with the following- 
 
"(3) An order made under this section — 
 
(a) shall specify the construction day, production day or both such 
days; 
 
(b) may declare that in its application it shall be restricted to a part of 
a factory, or to a particular grade, quality, description, type or 
classification of product; 
 
(c) may impose continuing obligations on the approved enterprise; 
 
(d) may confer certain benefits on the approved enterprise; 
 
(e) may provide for its revocation in any case of breach of or non-
compliance with its requirements. 
 
 (4) An application under this section shall be  submitted in writing through the 
Minister and shall specify — 
 
(a) the locality or proposed locality of the factory in which the 
enterprise is manufacturing or intends to manufacture the approved product; 
 
(b) the construction day which shall not be later than 12 months after 
the date of the granting of the application, except that where a 
factory is already in existence, the application shall contain all 
information that may enable Cabinet to specify a construction day; G/SCM/N/253/LCA • G/SCM/N/260/LCA 
 
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(c) the production day which shall not be later than 18 months from 
the construction day, except that where the production of an approved product has already commenced, the application shall 
contain all information that may enable Cabinet to specify a 
production day; 
 
(d) the approved product already being manufactured or intended to be 
manufactured; 
 
(e) all information supported by documentary evidence; relevant to the 
determination of the local value added.". 
 Amendment of section 12 
 
5. Section 12(1) of the principal Act is repealed and replaced by the following- 
 
 " (1) Cabinet 
may, in its absolute discretion, grant complete or partial exemption from 
income tax to an enterprise declar ed to be an approved enterprise— 
 
(a) under section 6(1) —from the production day for a period not exceeding 
the period specified in Schedule 3 (hereinafter referred to as "the tax holiday 
period");  
(b) under section 6(1A)—from the production day for a period not exceeding 
the period specified in Schedule 4 (hereinafter referred to as "the tax holiday period").". 
 
Amendment of section 26  
6. Section 26 of the principal Act is amended by inserting a 
new subsection (3) as follows - 
 
 " (3) Cabinet may give retrospective effect to an Order made pursuant to 
section 6(1A), if it is satisfied that it is equitable for such Order to have retrospective 
effect, in order to confer a benefit on or to remove a disability from an approved 
enterprise.".  
 Insertion of Schedule 4  
7. The principal Act is amended by inserting the following as 
Schedule 4 after Schedule 3 - G/SCM/N/253/LCA • G/SCM/N/260/LCA 
 
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  SCHEDULE 4 
(Section 12(1)) 
TAX HOLIDAY PERIOD 
   _______________________________________________________________ 
Classification of Approved 
Enterprises Group Tax Holiday Period 
________________________________________________________________ 
Group I Enterprise A period, continuous or interrupted, not 
extending beyond 31 December 2028 
Group II Enterprise A period, continuous or interrupted, not 
extending beyond 31 December 2025 
Group III Enterprise A period, continuous or interrupted, not 
extending beyond 31 December 2023 
Enclave Enterprise Any period, continuous or interrupted, not 
extending beyond 31 December 2028 
   ______________________________________________________________ 
 
Passed in the House of Assembly this 2nd day of April, 2013 
  
PETER I. FOSTER, 
Speaker of the House. 
Passed in the Senate this 4th day of April, 2013. 
 
 
CLAUDIUS J. FRANCIS, 
President of the Senate. 
SAINT LUCIA 
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