WORLD TRADE  
ORGANIZATION  G/SCM/120 
17 July 2007 
 (07-3017) 
Committee on Subsidies 
and Countervailing Measures  
 
 
 
ARTICLE 27.4 OF THE AGREEMENT ON SUBSIDIES AND 
COUNTERVAILING MEASURES 
 
Decision of the Committee of 13 July 2007  
 
 
 At a special meeting held on 12-13 July 2007, the Committee on Subsidies and 
Countervailing Measures decided to forward the atta ched draft decision to the General Council, for 
consideration for adoption by the Council at its meeting scheduled for 27 July 2007.   
 
  
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 G/SCM/120 
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ARTICLE 27.4 OF THE AGREEMENT ON SUBSIDIES AND 
COUNTERVAILING MEASURES 
 
Draft Decision 
 
  
The General Council, 
  Having regard  to Articles IV:1 and 2 and IX:1 of th e  Marrakesh Agreement Establishing the 
World Trade Organization ("WTO Agreement") and Article 27.4 of the Agreement on Subsidies and 
Countervailing Measures  ("SCM Agreement ");   
  Recalling that the Members of the Committee on Subsidies and Countervailing Measures 
("SCM Committee" or "Committee"), as directed by the Ministerial Conference
1 have granted, 
pursuant to the procedures set forth in document G/SCM/39, extensions pursuant to Article 27.4 of the 
SCM Agreement  of the transition period under Article 27.2(b) of the SCM Agreement  for the 
elimination of export subsidies, in respect of certain programmes of certain developing country 
Members;    
 
 Noting the proposals submitted by those developi ng country Members to extend the 
procedures contained in G/SCM/39;2   
 
 Noting  the terms of paragraph 5 of this Decision;  
 
 Recognizing  the economic, financial and developmen t needs, as well as the capacity and 
administrative constraints, of those Members in  implementing their commitments pursuant to the 
SCM Agreement  in respect of the elimination of export subsidies;   
  On the basis of  the commitment of those Members to eliminate the export subsidies in 
question not later than 31 December 2015, with  no requests for extension beyond those foreseen 
pursuant to this Decision;    
 Decides  to adopt the following procedures.   
 
                                                     
 
1 Ministerial Decision on Im plementation-Related Issues and Concerns, (WT/MIN(01)/17), 
paragraph 10.6.   
2  See documents G/SCM/W/535 and G/SCM/W/537 and addenda.     G/SCM/120 
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  PROCEDURES FOR CONTINUATION OF EXTENSIONS PURSUANT 
TO ARTICLE 27.4OF THE SCM AGREEMENT OF THE TRANSITION 
PERIOD UNDER ARTICLE 27.2(b) OF THE SCM AGREEMENT 
FOR CERTAIN DEVELOPING COUNTRY MEMBERS 
  
 The SCM Committee shall follow the proce dures set forth below in respect of the 
continuation of extensions pursuant to Article 27.4 of the SCM Agreement  ("SCM Article 27.4") of 
the transition period under Article 27.2(b) of the SCM Agreement  for certain programmes, identified 
in the Annex.
1  
 
1. Mechanism for continuation of extension 
(a) A Member that wishes to seek a continuation, for calendar year 2008, of the 
extension under SCM Article 27.4 for a progr amme listed in the Annex, shall submit 
a request to that effect to the SCM Comm ittee not later than 3 September 2007.  The 
request also shall include a reference to the WTO document containing the 
corresponding updating notification covering calendar year 2006, which the Member shall have submitted to the SCM Committee pursuant to 1(d) of G/SCM/39.
2   
(b) Not later than 26 October 2007, Members of the SCM Committee shall agree to 
continue the extensions, for calendar year  2008, for programmes listed in the Annex 
in respect of which requests have been s ubmitted pursuant to 1(a) and for which the 
Committee has verified, in its annual re view conducted pursuant to G/SCM/393, that 
the transparency and standstill requireme nts under G/SCM/39 were fulfilled during 
2006.   
(c) As provided for in SCM Article 27.4, the continuation of extensions by the 
SCM Committee pursuant to these procedures shall be subject to annual reviews in 
the form of consultations between th e Committee and the Members receiving 
continuations of extensions.  These annual re views shall be conducted on the basis of 
annual updating notifications from the Members in question, as referred to in 2(a).  
The purpose of the annual reviews shall be to verify that the transparency and standstill requirements set forth in 2 and 3 are being fulfilled.   
(d) During the period 2008-2012, Members of the SCM Committee shall agree to 
continue the extensions pursuant to these procedures , subject to verification through 
annual reviews as provided for in 1(c) that the transparency and standstill 
requirements set forth in 2 and 3 are being fulfilled.
4  The "last authorized period" 
referred to in the last sentence of SCM Article 27.4 shall not extend beyond 
31 December 2013, and the final two-year phase-out period provided for in the last 
sentence of SCM Article 27.4 shall end not later than 31 December 2015.   
                                                      
1 The programmes eligible for continuations of ex tensions under these procedures are programmes 
providing export subsidies in the form of full or partial exemptions from import duties and internal taxes for which the SCM Committee continued extensions of the transition period under SCM Article 27.4 for calendar 
year 2007 pursuant to the procedures in G/SCM/39.   
2 At the regular meeting of the Committee in April 2007, these Members were reminded to submit their 
updating notifications by 30 June 2007.   
3 The procedures in G/SCM/39 shall cease to be effec tive upon completion of this  2007 annual review.   
4 This extension mechanism shall cease to be effectiv e upon completion in 2012  of the annual review 
by the Committee to continue the extensions for calendar y ear 2013, such that there will be no basis for requests 
for extension beyond those foreseen in this Decision.   G/SCM/120 
Page 4  
 
  (e) A Member receiving a continuation of an ex tension under these procedures shall take, 
from 1 January 2008, the necessary internal steps with a view to eliminating export 
subsidies under the programme before the end of the final two-year phase-out period 
provided for in the last sentence of SCM Article 27.4.  These steps shall include 
consultations with relevant government  bodies and organisations and any necessary 
technical and/or legal assessments.  In addition, from 1 January 2008 and in no case 
later than 31 December 2009, the Member shall notify each beneficiary under the programme indicating that no export subsidies within the meaning of SCM Article 3.1(a) will be granted or  maintained beyond the end of calendar 
year 2015.   
(f) A Member receiving a continuation of an  extension under these procedures shall 
provide, for transparency purposes, an action plan for eliminating export subsidies under the programme, as an integral pa rt of the annual updating notification 
submitted for the annual review  to be conducted in 2010.
5  As part of this review, the 
SCM Committee shall undertake a mid-period assessment of each programme for 
which it has continued an extension under these procedures.  During this mid-period 
assessment, the SCM Committee shall take st ock of the steps undertaken as of that 
point by the notifying Member pursuant to  1(e), and shall discuss the action plan 
provided by the Member.   
(g) A Member receiving a continuation of an extension under these procedures may 
request the WTO Secretariat to provide technical assistance for eliminating export 
subsidies under the programme.   
2. Transparency 
(a) The annual updating notifications shall fo llow the agreed format for subsidy 
notifications under SCM Article 25 (found in  G/SCM/6/Rev.1).  Beginning with the 
updating notifications covering calendar y ear 2008, notifying Members also shall 
provide information regarding the actions they  have taken pursuant to 1(e) and 1(f).   
(b) During the annual reviews by the SCM Committee referred to in 1(c), notifying 
Members can be requested by other Me mbers to provide additional detail and 
clarification with a view to maintaining tran sparency in respect of the scope, coverage 
and intensity of benefits (the "favour ability") of the programmes in question6 and the 
form of the subsidies provided thereunder;   and in respect of the actions taken 
pursuant to 1(e) and 1(f).  Any informati on provided in response to such requests 
shall be considered part of the notified information.   
(c) A Member receiving a continuation of an  extension under these procedures shall 
ensure transparency in respect of the fi nal two-year phase-out period provided for in 
the last sentence of SCM Article 27.4 by submitting updating notifications under 
paragraph 2(a), which shall be subject to annual review by the Committee.   
                                                      
5 The action plan shall indicate how the Member intends to eliminate export subsidies under the 
programme not later than the end of the final two-year phase-out period provided for in the last sentence of SCM Article 27.4, including information as to legisla tive changes, administrative amendments and/or other 
procedures as may be necessary, and whether any of these actions have been undertaken  or are in the process of 
being undertaken, including how the individual beneficiaries have been notified pursuant to 1(e). 
6 The scope, coverage and intensity of benefits of the programmes in question will be determined on 
the basis of the legal instruments underlying the programmes.    G/SCM/120 
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  3. Standstill 
(a) Through the end of the final two-year phase-out period provided for in 
SCM Article 27.4, the programmes for whic h extensions are continued under these 
procedures shall not be modified so as to ma ke them more favourable than they were 
as at 1 September 2001, as specified in the notified information previously submitted 
pursuant to the procedures in G/SCM/39.  The continuation of an expiring 
programme without modification shall not be deemed to violate standstill.   
(b) The verification of standstill in respect of  the scope, coverage and intensity of 
benefits (the "favourability") of the programmes shall be based on the notified 
information referred to in 1(c), 2(a), 2(b) and 3(a).   
4. Product graduation on the basis of export competitiveness 
Notwithstanding these procedures, Articles 27.5 and 27.6 shall apply in respect of export 
subsidies for which extensions are con tinued pursuant to these procedures.   
5. Members listed in Annex VII(b) which reserved rights pursuant to the procedures in 
G/SCM/39 
(a) This Decision does not prejudge rights of Annex VII Members. 
(b) If, during the period 2008-2015, the per capita  GNP of a Member that reserved rights 
under paragraph 6(b) of G/SCM/397 reaches the level provided for in Annex VII(b) of 
the SCM Agreement  such that the Member is no longer included in Annex VII(b), that 
Member shall be able to make use of these procedures as from the date at which its per capita GNP reaches that level and for the remainder of that period.  The effective 
date for the standstill requirement referred to in 3(a) shall be the year in which that 
Member's GNP per capita reaches the level pr ovided for in Annex VII(b) such that it 
is no longer included in Annex VII(b).   
                                                     
 
7 The Members that reserved rights, and the progr ammes in respect of which these rights were 
reserved, are identified in documents G/SCM/N/74/ BOL & Suppl.1, G/SCM/N/74/HND, G/SCM/N/74/KEN, 
and G/SCM/N/74/LKA. 
 G/SCM/120 
Page 6  
 
  ANNEX 
  
LIST OF PROGRAMMES ELIGIBLE FOR CONTINUATION OF EXTENSIONS  
UNDER THE PROCEDURES
8, AND DOCUMENT REFERENCES FOR THE  
EXTENSION DECISIONS BY THE SCM COMMITTEE  
COVERING CALENDAR YEAR 2007  
  Antigua & Barbuda  
• Fiscal Incentive Act Cap 172 (December 1975) (G/SCM/50/Add.4) 
• Free Trade and Processing Zone Act No. 12 of 1994 (G/SCM/51/Add.4) 
 
Barbados  
• Fiscal Incentive Programme (G/SCM/52/Add.4) 
• Export Allowance (G/SCM/53/Add.4) 
• Research & Development Allowance (G/SCM/54/Add.4) 
• International Business Incentives (G/SCM/55/Add.4) 
• Societies With Restricted Liability (G/SCM/56/Add.4) 
 
Belize  
• Fiscal Incentives Act (G/SCM/57/Add.4) 
• Export Processing Zone Act (G/SCM/58/Add. 4) 
• Commercial Free Zone Act (G/SCM/59/Add.4) 
• Conditional Duty Exemptions Facility under Treaty of Chaguaramas (G/SCM/60/Add.4) 
 
Costa Rica  
• Free Zone Regime (G/SCM/61/Add.4) 
• Inward Processing Regime (G/SCM/62/Add.4) 
 
Dominica  
• Fiscal Incentives Programme (G/SCM/63/Add.4) 
                                                     
 
 8 Programmes for which the SCM Committee continued ex tensions of the transition period under SCM 
Article 27.4 for calendar year 2007 pursuant to the procedures in G/SCM/39.   It is recalled that the eligibility 
criteria in G/SCM/39 on the basis of which the original extension decisions pursuant to those procedures (for 
calendar year 2003) were taken for the listed programmes were as follows (footnotes omitted):   
"Programmes eligible for extension pursuant to these procedures, and for which Members shall 
therefore grant extensions for calenda r year 2003 [...], are export subsidy programmes (i) in the form of 
full or partial exemptions from import duties and intern al taxes, (ii) which were in existence not later 
than 1 September 2001, and (iii) which are provided  by developing country Members (iv) whose share 
of world merchandise export trade was not greater than 0.10 per cent, (v) whose total Gross National 
Income ("GNI") for the year 2000 as published by th e World Bank was at or below US$20 billion, (vi) 
and who are otherwise eligible to request an extension pursuant to Article 27.4, and (vii) in respect of which these procedures are followed."   
It is further recalled that, in respect of the above eligibility criteria, G/SCM/39 also provided that:   
"The criteria set forth in these procedures are solely  and strictly for the purpose of determining whether 
Members are eligible to invoke thes e procedures.  Members of the Co mmittee agree that these criteria 
have no precedential value or relevance, dire ct or indirect, for an y other purpose."    G/SCM/120 
 Page 7 
 
 
  Dominican Republic  
• Law No. 8-90 to "Promote the Establishment of New Free Zones and Expand Existing Ones"  
(G/SCM/64/Add.4) 
 
El Salvador  
• Export Processing Zones and Marketing Act, as amended (G/SCM/65/Add.4) 
 
Fiji 
• Short-Term Export Profit Deduction (G/SCM/66/Add.4) 
• Export Processing Factories/Export Processing Zones Scheme (G/SCM/67/Add.4) 
• The Income Tax Act (Film Making and Audio Visual Incentive Amendment Decree 2000) 
(G/SCM/68/Add.4) 
 
Grenada  
• Fiscal Incentives Act No. 41 of 1974 (G/SCM/69/Add.4) 
• Statutory Rules and Orders No. 37 of 1999 (G/SCM/70/Add.4) 
• Qualified Enterprises Act No. 18 of 1978 (G/SCM/71/Add.4) 
 
Guatemala  
• Exemption from Company Tax, Customs Duti es and Other Import Taxes for Companies 
under Special Customs Regimes (G/SCM/72/Add.4) 
• Exemption from Company Tax, Customs Duties and Other Import Taxes for the Production 
Process Relating to Activities of Managers and Users of Free Zones (G/SCM/73/Add.4) 
• Exemption from Company Tax, Customs Duties and Other Import Taxes for the Production 
Process of Commercial and Industrial Enterprises Operating in the Industrial and Free Trade 
Zone (G/SCM/74/Add.4) 
 
Jamaica  
• Export Industry Encouragement Act (G/SCM/75/Add.4) 
• Jamaica Export Free Zone Act (G/SCM/76/Add.4) 
• Foreign Sales Corporation Act (G/SCM/77/Add.4) 
• Industrial Incentives (Factory Construction) Act (G/SCM/78/Add.4) 
 
Jordan  
• Partial or Total Exemption from Income Tax of Profits Generated from Exports under Law 
No. 57 of 1985, as amended (G/SCM/79/Add.4) 
 
Mauritius  
• Export Enterprise Scheme (G/SCM/80/Add.4) 
• Pioneer Status Enterprise Scheme (G/SCM/81/Add.4) 
• Export Promotion (G/SCM/82/Add.4) 
• Freeport Scheme (G/SCM/83/Add.4) 
 
Panama  
• Official Industry Register (G/SCM/84/Add.4 
• Export Processing Zones (G/SCM/85/Add.4) 
 
Papua New Guinea  
• Section 45 of the Income Tax (G/SCM/86/Add.4) G/SCM/120 
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  St. Kitts and Nevis  
• Fiscal Incentives Act No. 17 of 1974 (G/SCM/90/Add.4) 
 
St. Lucia  
• Fiscal Incentives Act No. 15 of 1974 (G/SCM/87/Add.4) 
• Free Zone Act, No. 10 of 1999 (G/SCM/88/Add.4) 
• Micro and Small Scale Business Enterprises Ac t, No. 19 of 1998 (G/SCM/89/Add.4) 
 
St. Vincent & Grenadines  
• Fiscal Incentives Act No. 5 of 19 82, as amended (G/SCM/91/Add.4) 
 
Uruguay  
• Automotive Industry Export Promotion Regime  (G/SCM/92/Add.4) 
 
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