WORLD TRADE  
ORGANIZATION  G/SCM/N/146/JAM 
10 July 2006 
 (06-3323) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Extension Under SCM Article 27.4 of the Transition Period for the  
Elimination of Export Subsidies Pursuant to the Procedures  
in Document G/SCM/39  
 
Updating Notification  
 
JAMAICA 
 
  The following communication, dated 7 July 2006,  is being circulated at the request of the 
Delegation of Jamaica.  
_______________ 
 
 
A. EXPORT INDUSTRY ENCOURAGEMENT ACT 
 
1. Description of the Programme 
 
 
 The Export Industry Encouragement Act was esta blished as an incentive framework geared to 
the encouragement of export industries.  2. Period Covered by Notification 
 
 
 Programme description is at 1 September 2005 
 3. Policy Objectives and/or Purpose of the Subsidy
 
  The objective is to encourage investment a nd 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/146/JAM 
Page 2  
 
  5. Form of the Subsidy
 
  Companies that export 100 per cent output to hard currency markets outside of CARICOM are exempt from income tax on profits and fu ll 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 th an 100 percent 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 Jamaica 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 dut y free importation of raw material and capital 
goods for use in the production process. 
  The company must be declared an ‘approved export manufacturer’ in re lation to an ‘approved 
export product’ by the Minister of Industry.  Having 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 th an 100 per cent of output) are entitled to an 
export allowance as described in paragraph 5 above.   To benefit from the allowance, a 5 percent 
threshold of export sales to total sales must apply and exports must be to markets outside of the 
CARICOM region. 
 
7. Subsidy Per unit
 
  Revenue foregone is negligible as there are few companies operating under this Scheme.  
 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, leathe r, plastics).  Although its impact is not as 
dramatic as in earlier years, continuation of the programme can still yield significant economic 
benefits.   
B. 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 is at 1 September 2005   G/SCM/N/146/JAM 
 Page 3 
 
 
  3. Policy Objective and/or Purpose of the Subsidy  
  The objective is to encourage investment, expor ts and foreign exchange earnings and to create 
employment opportunities.  
4. Background and Authority for the Subsidy
 
  Act No. 18 of 1982  Act No. 12 of 1985  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 constr uction, 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 profit); 
 
 - exemption from the normal fees payable with respect to work permit.  6. To Whom and How is the Subsidy Provided 
 
  Companies approved to operate in Free Zones must  be registered or incorporated in Jamaica 
under the Companies Act to carry out an y of the following prescribed activities: 
  - warehousing and storing    - manufacturing operations  
 
 - transhipment operations    - loading and unloading operations    - exporting 
 
 - importing    - service operations, including banking, data  processing and telemarketing, insurance, 
professional services 
 
 - packing and shipping    - assembling  G/SCM/N/146/JAM 
Page 4  
 
   - processing, refining, purifying, 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 manufacturing entities are allowed to sell up to 
15 per cent of output on the local market. Free Zone goods  sold into the local market are subject to the 
applicable duties and charges.   7. Subsidy Per Unit
  
 
 No statistical information is available that reflects the amount of the subsidy per unit.  
However, a comprehensive study on tax incentives ca rried out in May 2004 determined that tax loss 
in respect of fiscal incentives for 2003 was J$1.5B.  
8. Duration of the Subsidy
 
  Incentives granted to Free Zones entiti es are for an indefinite period. 
 9. Statistical Data on The Impact of the Programme
 
 
 The Free Zone regime has facilitated investme nt (foreign and local) in traditional as well as 
new areas of businesses and has provided employme nt and economic opportunities for a number of 
persons.  
  
YEAR   
EXPORTS  
(In Millions of US$)  
EMPLOYMENT 
 
2003   2004  
2005  
100,141, 048  85,816,195  
67,719,476  
5,420  6,264  
4,853 
 
C.  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 Notification 
 
  Programme description is at 1 September 2005  3. Policy Objective and Purpose of the Subsidy
 
 
 To facilitate and encourage the construction of factories in Jamaica. 
  G/SCM/N/146/JAM 
 Page 5 
 
 
  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 Incen tives (Factory Construction) Act is entitled to: 
 
 - duty free importation of items or articles for factory construction; 
  - enter into an agreement with a recogni zed 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 Licence by the Minister of Industry to construct factories.  Approved builders providing factoring 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 programme.  Revenue fo regone 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 
 
  As indicated above there are very few benefici aries under the programme .  The Private sector 
is being encouraged to play a more active role in factory space provision and this incentive therefore 
can play a meaningful role in facilitating the process.  
D. FOREIGN SALES CORPORATION ACT 
 
1. Description of the Programme
  
 
 A legislative framework for the operation of Fo reign Sales Corporation (FSCs) in Jamaica. 
 2. Period covered by the Notification
  
 
 Programme description is at 1 September 2005 
 G/SCM/N/146/JAM 
Page 6  
 
  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 for the Subsidy
 
  In November 1984, Jamaica was certified as a qualifying Foreign Sales Corporation (FSC) 
jurisdiction and enabling legislation, the Foreign Sa les Corporation Act, was passed shortly thereafter.
  
 
5. Form of Subsidy
  
  - FSCs are exempt from Jamaican Corporate In come Tax on their foreign trade income as 
long as they remain designated. 
 
 - No income tax is imposed in Jamaica on di vidends paid to foreign shareholders by a 
designated FSC. 
  - Investment income or carrying changes earned by an FSC are relieved from income tax.  
 - FSC are entitled to import into Jamaica equipment, 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 certificate of designation to FSCs who 
locate in Jamaica.  Very generous incentiv es as outlined above are available to FSCs. 
 7. Subsidy Per Unit 
 
  Revenue foregone is negligible as ther e are few beneficiaries under the regime. 
 
8. Duration of a 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 
 
  As stated at section 7 above there are very few beneficiaries under the programme.  
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