WORLD TRADE  
ORGANIZATION  G/SCM/N/186/DOM 
G/SCM/N/192/DOM 8 July 2009 
 
(09-3332) 
Committee on Subsidies and 
Countervailing Measures Original:   Spanish 
 
 
 
SUBSIDIES 
 
New and Full Notification Pursuant to Article XVI:1 of the GATT 1994  
and Article 25 of the SCM Agreement  
 
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  
 
DOMINICAN REPUBLIC 
   The following communication, dated 26 June 2009,  is being circulated at the request of the 
delegation of the Dominican Republic.  
_______________ 
 
  Pursuant to Article XVI.1 of the GATT 199 4 and Article 25.2 of the WTO Agreement on 
Subsidies and Countervailing Measures (SCM Agreem ent), and in accordance with paragraphs 1(c) 
and 2(a) of General Council Decision WT/L/691 , dated 27 July 2007, the Dominican Republic 
herewith submits the update d annual notification for the calendar year 2008, for the continuation of 
the extension for the calendar year 2009 of the transition period for the elimination of subsidies with 
regard to the programmes listed in the Annex of that Decision.   This updated notification is being submitte d so that the Committee on Subsidies and 
Countervailing Measures may verify, in its annual review, that the transparency and standstill 
requirements set forth in paragraphs 2 and 3 of Deci sion WT/L/691 have been fulfilled.  Furthermore, 
the programme notified has not been modified in an y way so as to make it more favourable and two 
additional paragraphs have been added in accordance with the provisions of subparagraphs 1(e) and 
(f) of the Decision concerned. 
 G/SCM/N/186/DOM 
G/SCM/N/192/DOM Page 2 
 
 
   In accordance with the format of the ques tionnaire in document G/SCM/6, prepared and 
adopted by the Committee on Subsidies and Coun tervailing Measures, the Dominican Republic 
hereby notifies the following:  1. Title of the subsidy programme, if relevant, or brief description or identification of the 
subsidy 
 Law No. 8-90 to "Promote the Establishmen t of New Free Zones and Expand Existing Ones", 
which establishes a tax-exemption programme fo r enterprises manufacturing goods or providing 
services related to goods production, located with in geographic areas known as free zones and the 
production of which must be mainly for export. 
 
2. Period covered by the notification 
 This notification covers th e period up to 31 December 2008. 
 3. Policy objective and/or purpose of the subsidy 
 The objectives of the programme are, inter alia , job creation, workforce training, 
development of social support programmes, prom otion of balance-of-payments equilibrium and 
establishment of regional community development programmes.  
4. Background and authority for the subsidy (including identification of the legislation 
under which it is granted) 
 The underlying reasons for this programme were to provide training, to transfer technology 
and to attract local and foreign investment in orde r to create employment at various points within the 
national territory, including economically deprived ar eas, such as the border areas with Haiti.  This 
programme was created under Law No. 8-90 of 15 January 1990. 
 
5. Form of the subsidy (i.e. gran t, loan, tax concession, etc.) 
 Enterprises manufacturing goods or providing a ggregate services for the production of such 
goods and operating under Law No. 8-90 are exempt from payment of income tax and customs duties 
on the importation of the raw materials, equipmen t and machinery used to produce these goods.  The 
subsidy is therefore a tax concession. 
 
6. To whom and how the subsidy is provided (whether to producers, to exporters, or 
others;  through what mechanism;  if the latter, how determined) 
 The programme exempts natural and legal pe rsons eligible under the free zone regime 
established by Law No. 8-90 who largely export good s produced within the free zones from the taxes 
and duties specified in point 5 of this questionnaire. 
 
7. Subsidy per unit, or in cases where this is not possible, the total amount or the annual 
amount budgeted for that subsidy (indicating, if possible, the average subsidy per unit in 
the previous year).  Where provision of p er-unit subsidy information (for the previous 
year, or both) is not possible, a full explanation 
 Law No. 8-90 does not provide for the auditing, on the basis of either units or operating 
results, of manufacturing operations  conducted within the free zones by the enterprises operating  G/SCM/N/186/DOM 
 G/SCM/N/192/DOM 
 Page 3 
 
 
  under the free-zone regimes with a view to estima ting the fiscal cost to the Dominican State of 
attracting private investment for the creation of sources of employment.  
8. Duration of the subsidy and/or any other time-limits attached to it, including date of 
inception/commencement 
 Enterprises eligible for the benefits grante d under Law No. 8-90 are entitled to a free-zone 
operating licence, normally valid for up to 20 years in  the border region with Haiti and 15 years in the 
rest of the country.  Beyond this period , permit holders may apply for a renewal. 
 9. Information on paragraph 2(a) of General Council Decision WT/L/691 
 In order to comply fully with subparagra phs 1(e) and (f) of General Council Decision 
WT/L/691, the Dominican Republic has implemented the following measures:  
(a) All resolutions and/or operating licences issued under the free-zone regime 
established by Law No. 8-90 contain the following paragraph:  "As of 2015, the 
Dominican Republic will reserve the right to  review and/or withdraw some of the 
incentives contained in Law No. 8-90, pursu ant to the Decision of the World Trade 
Organization (WTO) Committee on Subs idies and Countervailing Measures, 
contained in document G/SCM/120, concerning the extension provided for in Article 27.4 of the Agreement on Subsidi es and Countervailing Measures, adopted by 
the WTO General Council on 27 July 2007". 
(b) The Dominican Republic has recently drawn up a new draft law on free zones which 
provides for the complete dismantling of export subsidies.  The draft law will shortly be submitted for review and approval by the National Congress and the Executive of 
the Dominican Republic. 
10. Statistical data permitting an assessment of th e trade effects of the subsidy.  The specific 
nature and scope of such statistics is left to the judgement of the notifying Member.  To 
the extent possible, relevant and/or determin able, however, it is desirable that such 
information include statistics of production , consumption, imports and exports of the 
subsidized product(s) or sector(s): 
(a) For the three most recent years fo r which statistics are available; 
(b) for a previous representative year, which, where possible and meaningful, 
should be the latest year preceding the introduction of the subsidy or preceding the last major change in the subsidy.  
  G/SCM/N/186/DOM 
G/SCM/N/192/DOM 
Page 4 HISTORICAL OVERVIEW OF THE FREE ZONES 
  
Evolution of the Main Variables of Export Free Zones 
1995-2008 
 
 
Average weekly salary 
(RD$) Year Existing 
industrial 
estates Enterprises Jobs Exports 
(millions of US$) Foreign 
exchange 
(millions 
of US$) Workers Technical 
staff Surface area 
of industrial 
premises in 
use (sq. ft.) Textile exports 
(millions of US$) 
1995 33 469 165,571 2,907.40 509.0 539.96 1,095.89 14,120,000 1,731.00 
1996 36 436 164,639 3,107.30 545.0 576.92 1,257.00 13,782,496 1,753.50 
1997 40 446 182,174 3,596.40 701.0 634.27 1,441.12 15,603,755 2,185.10 
1998 43 496 195,193 4,100.20 826.5 638.32 1,556.90 17,540,407 2,348.92 
1999 44 484 189,458 4,331.50 887.3 701.21 1,587.22 16,820,049 2,393.11 
2000 46 481 195,262 4,770.60 1,018.6 716.51 1,629.85 21,068,186 2,555.42 
2001 51 512 175,078 4,481.60 977.9 775.49 1,662.93 21,738,332 2,314.40 
2002 53 520 170,833 4,317.30 886.5 786.56 1,671.53 21,923,764 2,226.80 
2003 54 531 173,367 4,406.76 810.8 961.34 2,010.79 22,066,221 2,196.40 
2004 58 569 189,853 4,685.24 863.4 1,131.25 2,539.82 24,332,619 2,120.56 
2005 57 556 154,781 4,749.65 1,005.4 1,347.09 2,702.67 24,540,453 1,904.64 
2006 56 555 148,411 4,678.60 973.7 1,465.19 3,009.97 26,338,045 1,734.40 
2007 1/ 53 526 128,002 4,525.22 1,010.9 1,480.37 3,127.22 24,609,123 1,366.87 
2008* 48 525 124,517 4,544.80 1,032.1 1,652.80 3,533.22 25,299,745 1,144.72 
% growth 
2007-2008 -9.4 -0.2 -2.7 0.4 2.1 11.6 13.0 2.8 -16.3 
 
 Source for exports and foreign exchange:  Central Bank . 
 1/ Revised export and foreign exchange figures. 
 * Preliminary export and foreign exchange figures.  G/SCM/N/186/DOM 
 G/SCM/N/192/DOM 
 Page 5 
 
 
  Comparison of Domestic and Free-Zone Exports 
2006 
 
 
Contribution of free zones to the gross domest ic product (GDP) of the Dominican Republic 
1995-2008 
 
Year GDP  Free zones  Contribution (%) 
1995 211,024.60 8,765.20 4.2 
1996 233,833.30 9,380.50 4.0 
1997 274,423.90 11,510.80 4.2 
1998 311,282.80 15,159.60 4.9 
1999 343,745.30 16,728.80 4.9 
2000 388,301.90 19,990.30 5.1 
2001 415,520.90 21,026.40 5.1 
2002 463,624.30 25,249.90 5.4 
2003 617,988.90 46,076.50 7.5 
2004 909,036.80 66,405.10 7.3 
2005 1,020,002.00 49,395.80 4.8 
2006 1,189,801.90 53,296.30 4.5 
2007 1,364,210.30 51,917.00 3.8 
2008* 1,576,162.80 56,084.60 3.6 
Source:  Central Bank.  
* Preliminary figures. Free-zone exports 
63% Domestic exports 
37% G/SCM/N/186/DOM 
G/SCM/N/192/DOM Page 6 
 
 
  Comparison of Domestic and Free-Zone Exports 
1995-2008 
(Millions of US dollars) 
 
Year Domestic 
exports Var. % 
Domestic Free-zone 
exports Var. % 
Free zones Total 
exports Free-zone 
exports/total 
exports (%) 
1995 872.1 --- 2,907.4 --- 3,779.5 76.9 
1996 945.5 8.4 3,107.3 6.9 4,052.8 76.7 
1997 1,017.3 7.6 3,596.4 15.7 4,613.7 78.0 
1998 880.3 -13.5 4,100.2 14.0 4,980.5 82.3 
1999 805.2 -8.5 4,331.5 5.6 5,136.7 84.3 
2000 966.1 20.0 4,770.6 10.1 5,736.7 83.2 
2001 794.7 -17.7 4,481.6 -6.1 5,276.3 84.9 
2002 847.7 6.7 4,317.3 -3.7 5,165.0 83.6 
2003 1,064.0 25.5 4,406.8 2.1 5,470.8 80.6 
2004 1,250.7 17.5 4,685.2 6.3 5,935.9 78.9 
2005 1,395.1 11.5 4,749.7 1.4 6,144.8 77.3 
2006 1,931.4 38.4 4,678.6 -1.5 6,610.0 70.8 
2007 1/ 2,635.1 36.4 4,525.2 -3.3 7,160.3 63.2 
2008* 2,404.0 -8.8 4,544.8 0.4 6,948.8 65.4 
Source:  Central Bank of the Dominican Republic . 
1/ Revised figures. 
*Preliminary figures. 
 
 
Comparison of Domestic and Free-Zone Exports 
2008 
 
__________ Free-zone exports 
65% Domestic exports 
35%