WORLD TRADE  
ORGANIZATION   
G/SCM/Q3/CRI/11 
10 October 2012 
 (12-5505) 
Committee on Subsidies and Countervailing Measures Original: Spanish 
  
 
SUBVENCIONES 
 
Continuation of Extension under SCM Ar ticle 27.4 of the Transition Period 
for the Elimination of Export Subsidies Pursuant to the 
Procedures in Document WT/L/691 
 
Replies to the questions from COLOMBIA1 concerning the Updating 
Notification of COSTA RICA2 
  
 The following communication, dated 10 October 2012, is being circulated at the request of 
the delegation of Costa Rica.  
_______________ 
 
 1. Duty-Free Zone Regime 
 
Question 1 
 
 The Government of Costa Rica says that it  does not have the comprehensive information 
required to estimate the amount of the subsidy.  In the absence of this information, how can 
Costa Rica establish the benefit levels that will ensure that the status quo of the Duty-Free Zone 
Programme is maintained?  Would it be possible,  instead, for Costa Rica to provide the annual 
value in CIF terms of goods from abroad enteri ng the duty-free zones and the rates actually 
exempted so that we can have an approximate figure for the amount of subsidies granted? 
 Reply 
 
 Paragraph 3(a) of the General Council decision WT/L/691 establishes that " the programmes 
for which extensions are continued under these proce dures shall not be modified so as to make them 
more favourable than they were as at 1 September 2001 ". 
 
 Costa Rica would like to make it clear that st andstill will not be affected, either upward or 
downward, by the amount of the subsidy resulting fro m this exemption but by the amendments to the 
provisions of the law and regulations.  Costa Rica thus confirms that this benef it (i.e. the provisions in 
the law and regulations) has not undergone any modifi cation so as to make it more favourable than it 
was at 1 September 2001. 
  We thank Colombia for its suggestion on how to  calculate the amount of subsidies granted.  
Nonetheless, we believe that it would not be possi ble to obtain accurate data on subsidy amounts by 
means of the suggested methodology. 
                                                      
1 G/SCM/Q3/CRI/10. 
2 G/SCM/N/243/CRI. G/SCM/Q3/CRI/11 
Page 2  
 
   
Question 2 
 
 Costa Rica states that it has notified all the beneficiaries under the programme that no 
more export subsidies would be granted to pr ocessing enterprises after the end of calendar 
year 2015.  How was this notification made?  Have you planned any transition programme 
towards total dismantling?  In connection with transition plans, have any domestic measures been taken yet to eliminate the subsidies?  Coul d you provide us with documentation relating to 
the process? 
 Reply 
 
 The relevant notifications have been made  through the introduction of a clause in the 
contracts with beneficiary enterprises which speci fies that the duration of the benefits under the 
regime is subject to WTO rules. 
 
 With respect to the export subsidy disman tling programme, Costa Rica has already enacted 
Law No. 8794 of 12 January 2010, entitled " Amendments to the Duty Free Zone Regime Law 
No. 7210 of 23 November 1990 " and its implementing Regulations  (Decree No. 36000-COMEX-H).  
These amendments were made precisely so that the benefits granted under the regime would be 
consistent with the WTO rules and disciplines.  Th e full texts of this law and its regulations were 
annexed to Costa Rica's notification G/SCM/N/211/CRI of 12 July 2010.  Moreover, Costa Rica's 
notification G/SCM/N/243/CRI contains a de tailed description of the amendments. 
 
Question 3 
 
 Costa Rica mentions that with the revision  of the Duty-Free Zone Law, companies that 
wish to operate under the Duty-Free Zone Regime mu st be from the following strategic sectors:  
advanced electronics;  advanced electronic compon ents;  medical devices, equipment, implants 
and inputs and the highly specialized packing or  containers for such goods;  automobiles;  
high-precision machine parts and components;  aerospace and aeronauti cs;  pharmaceuticals 
and biotechnology;  renewable energy sources;  auto mation and flexible manufacturing systems;  
and advanced materials.  
 How are these sectors chosen and on the ba sis of what criteria is a sector considered 
strategic?  Apart from the Duty-Free Zone Re gime, what other benefits are granted to these 
strategic sectors? 
 
Reply 
  The " Special Commission on the Definition of Strategic Sectors " ("the Commission"), 
established by Executive Decree No. 35999 of 28 April 2010
3, is responsible for defining 
strategic sectors.  When defining a strategic sector, the Commission must take into consideration the 
National Development Plan, the views of the re presentatives of the sectors concerned, and the 
following guidelines:  
 The projects are deemed to make a substan tial contribution to social development and 
create quality jobs;  
                                                      
3 The full text of this Decree is available as an Annex to Costa Rica's notification G/SCM/N/220/CRI 
and G/SCM/N/226/CRI.  G/SCM/Q3/CRI/11 
 Page 3 
 
 
   the projects make an effective contributi on to modernizing the country's production 
structure as a result of the high technology involved;  
 the projects encompass research and development activities; 
 
 the projects foster technological innovation and transfer;  and 
 
 the projects promote the incorporation of clean technology, integrated waste 
management, energy savings and efficient water management. 
  Based on these parameters, the Commission decided in 2010
4 to define as strategic sectors 
those projects in which the companies operating under the Duty-Free Zone Regime are in one of the industries mentioned by Colombia in its question. 
 
2. Inward Processing Regime 
 Question 1 
 
 The Government of Costa Rica states that " the information required to estimate the 
amount of the subsidy granted under this Regime is not available ".  In the absence of this 
information, how can the Government of Costa Rica establish the benefit levels that would 
ensure that the status quo of the Inward Processing Regime is maintained?  Would it be possible to produce an estimate using as a basis the exempted CIF imports so that the magnitude of the subsidies granted can be established? 
 
Reply 
  Paragraph 3(a) of the General Council decision WT/L/691 establishes that " the programmes 
for which extensions are continued under these proce dures shall not be modified so as to make them 
more favourable than they were as at 1 September 2001 ". 
 
 Costa Rica would like to make it clear that st andstill will not be affected, either upward or 
downward, by the amount of the subsidy resulting fro m this exemption but by the amendments to the 
provisions of the law and regulations.  Costa Rica thus confirms that this benef it (i.e. the provisions in 
the law and regulations) has not undergone any modifi cation so as to make it more favourable than it 
was at 1 September 2001. 
  We thank Colombia for its suggestion on how to  calculate the amount of subsidies granted.  
Nonetheless, we believe that it would not be possi ble to obtain accurate data on subsidy amounts by 
means of the suggested methodology.  Question 2 
 
 Costa Rica indicates in the Action Plan that the inter-institutional commission has 
focused its efforts on establishing which provi sions of the Inward Processing and Drawback 
Regimes (Executive Decree No. 26285-H-COMEX of 19 August 1997) need to be amended.  
Once this process has been completed, the correspo nding amendments can begin to be prepared 
and implemented (page 15). 
 
                                                      
4 Agreement of the Special Commissi on on the Definition of Strategic Sectors of 12 November 2010, 
published in Official Journal La Gaceta  No. 229 of 25 November 2010 (the full text is available as an Annex to 
Costa Rica's notification G/SCM/N/220/CRI and G/SCM/N/226/CRI of 29 July 2011). G/SCM/Q3/CRI/11 
Page 4  
 
   When does Costa Rica intend to complete this  analysis?  Do such changes have to be 
approved by Congress?  Does the time-frame for congressional approval of the changes coincide 
with the deadline for dismantling the subsidies under the SCM Agreement?  Is it clear that the changes target the elimination of the subsidies granted? 
 Reply 
 
 There is already a preliminary analysis of the changes that need to be  made to the inward 
processing regime.  This analysis shows that most of  the changes that would have to be made would 
not require legal but regulatory amendments.  Obvi ously the changes would be aimed at eliminating 
the export subsidies granted and would be ready in accordance with WTO d eadlines for dismantling. 
 
Question 3 
 
 Costa Rica does not include in its notifica tion any information as to whether it has 
introduced changes to the original programme  and whether it has increased the number of 
companies involved in the programmes.  We would be grateful if Costa Rica could inform the Committee or send information in this respect before the SCM Committee meeting. 
 
Reply 
 
 Costa Rica has not introduced changes to the original programme so as to make it more 
favourable than it was at 1 September 2001.  Costa Rica has included data on the number of companies involved in the inward processing regime in its notifications
5, showing that considerable 
increases in the number of companies benefiti ng from the regime have not been recorded. 
 
__________ 
                                                      
5 See notifications made in the last three years:  G/SCM/N/243/CRI, G/SCM/N/226/CRI, and 
G/SCM/N/211/CRI.