WORLD TRADE  
ORGANIZATION   
G/SCM/N/220/LCA 
G/SCM/N/226/LCA 18 October 2011 
 
(11-5160) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
New and Full Notification Pursuant to Article XVI:1  
of the GATT 1994 and Article 25 of the Agreement  
on Subsidies and Countervailing Measures 
 
Continuation of Extension under SCM Artic le 27.4 of the Transition Period for 
the Elimination of Export Subsidies Pursuant to the Procedures Contained 
in the General Council Decision in Document WT/L/691 
 
SAINT LUCIA 
   The following communication, dated 12 October 2011, is being circulated at the request of the Delegation of Saint Lucia. 
 
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  The Ministry of Commerce, Industry and Cons umer Affairs hereby submits to the Committee 
on Subsidies and Countervailing Measures Saint Lu cia's updated notification on current incentive 
programmes under Article XVI:1 of GATT 1994 and Articles 25 and 27.4 of the Agreement on 
Subsidies and Countervailing Measures.   There are no changes to the notified programmes since our last full report as at 9 July 2010 and consequently programmes remain  consistent with previous notif ications.  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, 
and Import and Export figures have been provided.  
 Copies of all the relevant Acts were subm itted with our first full notification in 2001. 
  Not all elements of the notified progra mmes, including subsidies provided there under 
necessarily involve export subsidies.   The attached are therefore without prejudice either to the legal 
status of the measures referred to under GATT 1994 and the SCM Agreement, the effects under the 
SCM Agreement or the nature of the measure itself. 
  The Ministry of Commerce, Industry and Consumer Affairs has sought and obtained 
assistance from the Commonwealth Secretariat to ame nd all of incentives regulations to make them 
WTO compatible.  We expect all of the suggested amendments will be adopted by the end of 2011.  
 G/SCM/N/220/LCA 
G/SCM/N/226/LCA Page 2 
 
 
   The Ministry of Commerce, Industry and Consumer Affairs wishes to express sincere 
apologies for the delay in transmitting the notification and hereby applies for the extension as applied 
for hereunder, and await formal no tification of your confirmation. 
 
 
PROGRAMME 1 
 FISCAL INCENTIVES ACT 
 1. Title of the subsidy progra mme, if relevant, or brief descr iption or identification of the 
subsidy 
 
 Fiscal Incentives Act, No. 15 of 1974 – An Act of Parliament to provide incentives to 
industry. 
 
2. Period covered by the notification 
  1 July 2010 - 30 June 2011.    3. Policy objective and/or purpose of the subsidy 
  To stimulate export performance, support i nvestment and economic activity, promote 
diversification in traditional  and non-traditional products. 
 4. Background and authority for the subsidy (inc luding identification of the legislation under 
which it is granted 
 
 The Fiscal Incentives Act, No. 15 of 1974 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. Gran t, loan, tax concessions, etc.) 
 
 Income tax exemption;  exemption from import duty;  exemption from import duty on plant, machinery, spare parts and raw materials;  exemp tion from income tax on export profits and an export 
allowance.  
6. To whom and how the subsidy is provided (w hether 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 Ca binet 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. 
  Saint Lucia has no programme of subsidies contingent upon the use of local goods.  Since local value added refers to local labour and not goo ds, 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  G/SCM/N/220/LCA 
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  No. 15 of 1974 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. 
  There are currently 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 intend to continue to implement the existing programmes in keeping with our WTO obligations, including provisions 
governing the phase-out of such programmes.  Howe ver, this will have to  be conducted over an 
extended period given the smallness and extreme fragility of our economy and 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 re venue foregone no ex ante allocation is made in 
the annual budget.  Moreover, data on the total annual value of subs idies under the fiscal incentives 
programme is typically not collected.  As a result da ta on the average or per unit subsidy is currently 
unavailable.  
 8. Duration of the subsidy and/or any other limits attached to it, including date of 
inception/commencement 
 
 Group I Enterprise  - 15 years Tax Holiday 
 Group II Enterprise  - 12 years Tax Holiday  Group III Enterprise - 10 years Tax Holiday   Enclave Enterprise  - 15 years Tax Holiday  
 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 Enclav e Enterprises.  The Fiscal Incentives Act became law 
on 23 April 1974.  
 Statistical data permitting an assessment of the trade effects of the subsidy.  The specific 
nature and scope of such statistic s is left to the judgment of the notifying member.  To the extent 
possible relevant such information including sta tistics of production consumption, importers and 
exports of the subsidize product(s) or Sector(s)   It is not the practice to routinely maintain records of revenue foregone in relation to fiscal 
incentives granted.  Also, there are no provisions in  the annual budget for either actual or estimated 
revenue foregone.  However on the basis of inform ation obtained from the Ministry of Finance the 
following represents a fair estimate of revenue forg one for fiscal years as indicated, to the nearest 
million:  
 2007 - EC$46.5 (PROVISIONAL).   
 2008 - EC$37.8 (PROVISIONAL).    2009 - There is no available data. 
 2010 - There is no available data. 
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  9. Statistical data permitting an assessment of th e trade effects of the subsidy.  The specific 
nature and scope of such statis tics is left to the judgment of the notifying member.  To the 
extent possible, relevant such information include statistics of production, consumption, 
importers and exports of the s ubsidize product(s) or Sector(s) 
 
 Exports   2007 - EC$297.92 million (PROVISIONAL).    2008 -  EC$372.6 million (PROVISIONAL).   
 2009 - EC$362.28 million (PROVISIONAL).   
 2010 - Economic and Social Review 2010.    Imports (c.i.f.)  
 2007 - EC$1662.31 million (PROVISIONAL).   
 2008 - EC$1772.8 million (PROVISIONAL).    2009 - EC$1385.24 million (PROVISIONAL).    2010 - Economic and Social Review 2010.     
SAINT LUCIA'S ACTION PLAN IN ACCORDANCE WITH THE DECISION  
OF THE GENERAL COUNCIL (WT/L/691) 
 
Description of programme – Export Allowance 
  As at the date of reporting there are no benefi ciaries of export allowance as prescribed by the 
Fiscal Incentives Act.  All companies who previously  benefited from this fa cility were duly notified 
that there will be no extensions of the expor t allowance as prescribed in the Act.   
 
Description of domestic procedures n ecessary to eliminate export subsidies 
  The Government is committed to amending the Fiscal Incentives Act to eliminate any 
contingency based on exports and to proscribe in centives that are non-discriminatory and in keeping 
with its policies to grow and develop the private sector.   Various events have impeded the Ministry's ability to undertake the actions detailed in the 
previous notification however, the Ministry of Commerce remains committed to providing the 
Attorney General's Chambers and the Cabinet of Ministers with the proposed amendments to the 
legislation for review and subse quently final approval by December 2011.  The Ministry anticipates 
that the full amendments will be in effect  by next notification date, June 2012.  
 
Description of actions that have been, or, are in the process of being undertaken 
 
1. The Ministry of Commerce adopted a standstill measure as it relates to the specific export 
subsidy provisions from 2005.  This provision re mains in effect and no new companies have 
been granted export allowances. 
 
2. There are no current beneficiaries of export allowances.  The Ministry has notified all 
beneficiaries that there will be no extensions  to this specific provision as the standstill 
measures remains in effect. 
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  3. At the sub-regional (Organization of Easter n Caribbean States) level there is draft Model 
Legislation to this effect and which Saint Luci a has reviewed.  It is anticipated that the 
incentives regimes in the sub-region will be harm onized to allow for consistency of policy in 
the Economic Union.   
 
4. At the domestic level the Ministry of Comme rce has received technical assistance from the 
Commonwealth Secretariat to facilitate a review of the structure and performance of the fiscal 
incentives regime.  The review identified areas for improvement and suggested amendments 
to the existing legislation to bring it into compliance.  There is also a report relating to 
monitoring of the performance of financial incen tive schemes.  This report is being reviewed 
to determine an appropriate monitoring framework.   
  The database of all beneficiaries of fiscal incentives has been updated however, monitoring 
and reporting continues to be a weak area in  the administration of the fiscal incentives. 
 
Description of future actions 
 
1. In the previous report the Ministry of Co mmerce had proposed the establishment of an Inter-
Ministerial Committee to oversee the incentive re gime.  This proposal is still a work in 
progress.  Terms of Reference have been dr afted for discussion however the Committee has 
not been formalized. 
2. An Investment Policy Review will be conduc ted with technical assistance from UNCTAD.   
  Execution of amendments to the existing legi slation is a priority for the Ministry of 
Commerce as such the Ministry will continue to work towards implementation of the actions outlined 
above.  The Ministry is also considering the development of new incentive legislation that 
incorporates the services sector as well as the prom otion of innovation, competitiveness, growth and 
expansion of existing and new sectors.     
PROGRAMME 2 
 
MICRO AND SMALL SCALE BUSINESS ENTERPRISES ACT 
 
1. Title of the subsidy progra mme, if relevant, or brief descr iption or identification of the 
subsidy 
 
 The Micro and Small Scale Business Enterprises Act, No. 19 of 1998.  An Act to provide 
support to micro and small-scale enterprises.     2. Period covered by notification 
 
 1 July 2010 - 30 June 2011.   
 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 resp ect to micro and small scale 
business enterprises. G/SCM/N/220/LCA 
G/SCM/N/226/LCA Page 6 
 
 
  4. Background and authority for the subsidy (inc luding identification of the legislation under 
which it is granted) 
 
 The Government of Saint Lucia found it necessar y 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 – Micro and Small Scal e Business Act No. 19 of 1998. 
 
5. Form of subsidy (i.e. Gran t, 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 inco me tax on export profits.  However, income tax 
relief will be in accordance with secti on 68 of the Income Tax Act of 1989. 
 
6. To whom and how the subsidy is provided (w hether 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, No. 15 of 1974.   
 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 on the value of th e indirect assistance provided to beneficiaries 
under this Act.  8. Duration of the subsidy and/or any other limits attached to it, including date of 
inception/commencement 
  There is no specific duration under the Act.  Ac cess 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 Act of 1974.. 
 
9. Statistical data permitting an assessment of the trade efforts of  the subsidy.  The specific 
nature and scope of such statis tics 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 assess th e trade effects/effort of this programme.   
  G/SCM/N/220/LCA 
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  SAINT LUCIA'S ACTION PLAN IN ACCORDANCE WITH THE DECISION 
OF THE GENERAL COUNCIL (WT/L/691) 
 
Description of programme – Export Allowance 
 
 There were no beneficiaries under the Micro and Small Scale Business Enterprises Act No 19 of 1998 and therefore no beneficiaries to notify.   
Description of domestic procedures n ecessary to eliminate export subsidies 
 
 The Micro and Small Scale Business Enterpri ses Act No 19 of 1998 takes the lead from the 
Fiscal Incentives Act on which it is contingent.  Theref ore by virtue of the amendments in the former 
Act coming to effect, the Micro and Small Scale Business Enterprises Act No 19 of 1998 will be amended.  
 
Description of actions that have been, or, are in the process of being undertaken  
 
1. The Ministry of Commerce completed all c onsultations with stakeholders and business 
support organizations to explain the proposed actions in the first quarter of 2011.   
 
2. The technical assistance from the Commonwealth Secretariat included the Micro and Small 
Scale Business Enterprises Act No 19 of 1998.   
 3. A database of all beneficiaries of incen tives under the Micro and Small Scale Business 
Enterprises Act No 19 of 1998 was prepared by  the Ministry of Commerce to facilitate 
monitoring of the incentives granted and allow for ease of reporting on the same. 
 
Description of future actions 
 
1. An Advisory Committee to oversee the development of the Micro and Small Scale 
Enterprises Sector has been established.  The Committee is also responsible for providing 
policy advice to the Minister on the administra tion of the incentive regime and the future 
development of the sector. 
 2. The Micro and Small Business Register (dat abase) will facilitate monitoring of companies 
who are beneficiaries of fiscal incentives and track their performance.  The Ministry expects 
that the use of this database will improve m onitoring and reporting requirements so as to 
facilitate informed decision making by policy makers. 
 3. A the sub-regional level Saint Lucia will con tinue to work towards harmonization of the 
incentive regime in support of micro and sm all business formation and formalization. 
 
 
PROGRAMME 3 
 FREE ZONE ACT 
 1. Title of the subsidy programme , if relevant, or brief descripti on or identification of subsidy 
 
 An Act of Parliament for the establishment and operation of Free Zones in Saint Lucia. G/SCM/N/220/LCA 
G/SCM/N/226/LCA Page 8 
 
 
  2. Period covered by the notification 
 
 1 July 2010 - 30 June 2011.    
3. Policy objectives and/or purpose of subsidy 
 
 To foster commerce, trade and investment with other countries;  to promote economic growth and development a nd related matters. 
 
4. Background and authority for the subsidy (inclu ding, identification of the legislation under 
which it is granted) 
 
 The Free Zone Act, No. 10 of 1999 was enacted as a result of the desire of the Government to 
stimulate growth in trade and to increase employment  levels through the creation of new ventures.   
 
5. Form of subsidy (i.e. gran t, 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 (w hether to producers, to exporters, or others, 
through what mechanisms;  whether a fixed or fl uctuating 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 
 
 The Free Zone Area became operational in Ju ly 2000.  To date, the only tenants are 
merchants and distributors.  There are no industr ies or manufacturers operating from that site. 
 
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.     G/SCM/N/220/LCA 
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   Income Tax Credits – Indefinite.  Access to su ch credits is subject to qualifying criteria as 
prescribed in the Act.  Import duty and associ ated 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 statis tics 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 th e format which would facilitate an assessment of 
the trade effects/effort of this programme.   
SAINT LUCIA'S ACTION PLAN IN ACCORDANCE WITH THE DECISION  
OF THE GENERAL COUNCIL (WT/L/691) 
 
Description of programme – Free Zone Act No 10 of 1999 
 
 There are no beneficiaries under the programme and thus no beneficiaries to notify.  Description of domestic procedures n ecessary to eliminate export subsidies  
 
 The Ministry of Commerce commits to the am endment of the legislation to eliminate any 
contingency and eligibility to bene fit under the Act based on export. 
 Description of actions that have been, or, are in the process of being undertaken  
1. The consultation process at both the national and sub-regional levels on the Industrial Policy 
to inform on a new approach to administer ing and modernizing the Free Zone is still 
continuing. 
 
2. The Advisory Board of the Free Zone has id entified areas for amendment in the legislation 
which are currently being reviewed at the Ministerial level. 
 
Description of future actions 
 1. The proposed Inter-Ministerial Committee to oversee the Free Zone Modernization Project 
has not been established however, the Advisory  Board of the Free Zone  has been consulting 
internally on this matter.   
 2. Saint Lucia continues to pursue the harmonizati on of the Free Zone Legislation at the regional 
level.   
 
  
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