WORLD TRADE  
ORGANIZATION  G/SCM/N/211/LCA 
12 July 2010 
 (10-3790) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
SUBSIDIES  
 
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 9 July 2010,  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 27.4 of the Agreemen t on Subsidies and Countervailing Measures. 
  There are no changes to the notified programm es since our last full report as at 30 June 2009 
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 suggest ed amendments will be adopted by 2011.   
 
 The Ministry of Commerce, Industry and Consum er Affairs hereby applies for the extension 
as applied for hereunder, and await formal  notification of your confirmation.   
 G/SCM/N/211/LCA 
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  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 2009 – 30 June 2010.    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 3.2b of the ASCM.  While referenc e is made in our Fiscal Incentives Act 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 Gove rnment of Saint Lucia that employment be created 
and that the economy be diversified.  Consequently , the provision is applied according to the number 
of local persons employed in a domestic enterpri se and expressed as a percentage of sales, for 
purposes of relief.   G/SCM/N/211/LCA 
 Page 3 
 
 
   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  
 
 It is not a practice to 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 information obt ained from the Ministry of Finance the following 
represents a fair estimate of revenue forgone for fiscal years as indicated, to the nearest million: 
 
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.  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 in cluding statistics of production consumption, 
importers and exports of the s ubsidize product(s) or Sector(s)  
  It is not the practice to 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 information obt ained from the Ministry of Finance the following 
represents a fair estimate of revenue forgone for fiscal years as indicated, to the nearest million: 
  2006 – EC$43.6 (PROVISIONAL)  2007 – EC$46.5 (PROVISIONAL)  2008 – EC$37.8 (PROVISIONAL) 
 2009 – There is no available data. 
 10. Duration of the subsidy and/or any othe r 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 G/SCM/N/211/LCA 
Page 4  
 
   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.  
11. Statistical data permitting an assessment of the trade eff ects 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 in clude statistics of production consumption, 
importers and exports of the s ubsidize product(s) or Sector(s ) 
 
 Exports 
  2006 – EC$251.14 million (Revised)  2007 – EC$297.92million (PROVISIONAL)  2008 – EC$372.6 million (PROVISIONAL) 
 2009 – EC$362.28 million (PROVISIONAL) 
   Imports (c.i.f.) 2006 – EC$1598.46 million (Revised) 
  2007 – EC$1662.31 million (PROVISIONAL) 
 2008 – EC$1772.8 million (PROVISIONAL) 
 2009 – EC$1385.24 million (PROVISIONAL)  
  G/SCM/N/211/LCA 
 Page 5 
 
 
  SAINT LUCIA'S ACTION PLAN IN ACCORDANCE WITH THE DECISION  
OF THE GENERAL COUNCIL (WT/L/691) 
 
Description of programme – Export Allowance 
  There were two (2) beneficiaries under the Fi scal Incentives Act who have been duly notified 
that there will be no extensions of the export allo wance as prescribed in th e Act.  These incentives 
expired in February and June 2010 respectively.  
Description of domestic procedures neces sary to eliminate export subsidies: 
 
 The Fiscal Incentives Act will be amended to e liminate the contingency based on export in 
the first instance and secondly to make it more  homogeneous in keeping with the policies of 
government as it relates to industry.  
 The Ministry of Commerce is committed to providing the Attorney General's Chambers by 
year end (2010) with the proposed amendments to  the legislation.  This will simultaneously be 
communicated to the Cabinet of Ministers for revi ew and subsequently final approval.  It is 
anticipated that the full amendments will be in effect by next notification date, June 2011.  
 
Description of actions that have been, or, are in the process of being undertaken: 
 
1. The Ministry of Commerce has undertaken to notify beneficiaries noting that not all elements of the notified programme necessarily involve export  subsidies.  Specifically, there were two (2) 
beneficiaries under the Fiscal Incentives Act who ha ve been duly notified that there will be no 
extensions of the export allowance as prescribed in the Act.  These incentives expired in February and 
June 2010 respectively.  The standstill measure wa s adopted from 2005 and no new companies were 
granted export allowances. 
 
2. At the sub regional level there is already draft Model Legislation to this effect and Saint Lucia 
has committed to providing comments by 7 Ju ly 2010 to the OECS Secretariat.   
 
3. At the domestic level the Ministry of Comme rce has received technical assistance from the 
Commonwealth Secretariat to:     
(a) Review the structure and performance of incentive regimes. The review identified 
areas for improvement and suggested amendments to existing legislation.  
(b) A report in respect of the monitoring of the performance of financial incentive 
schemes in Saint Lucia was also received. 
4. A database of all beneficiaries of fiscal in centives was prepared by the Ministry of Commerce 
to facilitate monitoring of the incentives gran ted and allow for ease of reporting on the same.  
 
Description of future actions: 
 
1. The Ministry of Commerce has proposed that an  inter-ministerial committee be established to 
oversee the incentive regime. 
 
2. Investment Policy Review will be conducted  with Technical Assistance from UNCTAD.   
 
3. With the use of the database it is antic ipated that monitoring will be improved. 
 4. At the sub-regional level Saint Lucia will c ontinue to work towards harmonization of the 
incentives regime. G/SCM/N/211/LCA 
Page 6  
 
  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 2009 - 30 June 2010.    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.    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 contribute to the alleviation of poverty. 
 
 Authority – Micro and Small Scal e Business Act No. 19 of 1998. 
 5. Form of subsidy (i.e. Gr ant, 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 pertains to 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.  G/SCM/N/211/LCA 
 Page 7 
 
 
  8. Duration of the subsidy and/or any other limits attached to it, including date of 
inception/commencement  
  In accordance with terms in the Fiscal  Incentives Act of 1974, as applicable. 
 
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 no available data.   G/SCM/N/211/LCA 
Page 8  
 
  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 neces sary 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.  Therefore 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 h as commenced the process of consulting with stakeholders and 
business support organizations to e xplain the proposed actions.   
 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 fo r ease of reporting on the same.   
 
Description of future actions: 
 
1. The Ministry of Commerce has proposed that an  inter-ministerial committee be established to 
oversee the incentive regime for Micro and Small S cale Enterprises and advocates the development of 
policy for the same.    
2. Investment Policy Review will be conduct ed with Technical Assistance from UNCTAD. 
 3. With the use of the database it is antic ipated that monitoring will be improved. 
 4. A the sub-regional level Saint Lucia will con tinue to work towards harmonization of the 
incentive regime in support of  micro and small business formation.   
  G/SCM/N/211/LCA 
 Page 9 
 
 
  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. 
 2. Period covered by the notification
 
 
 1 July 2009 - 30 June 2010.   
 3. Policy objectives and/or purpose of subsidy
 
  To foster commerce, trade and investment with other countries; to promote economic growth 
and development and 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 the result of the desire of the Government 
to stimulate growth in trade, increase employment  levels through the creation of new ventures and to 
improve the distribution of income.  5. Form of subsidy (i.e. gr ant, 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 fluctuation amount per unit;  if the latter; how 
determined ) 
  To businesses established within a designated Free Zone Area.    Through tax concessions  and revenue foregone. G/SCM/N/211/LCA 
Page 10  
 
  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.     Income Tax Credits – Indefinite.  However subj ect to qualifications as prescribed in the Act.  
Import duty and associated 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 no data available to date in the format required.   G/SCM/N/211/LCA 
 Page 11 
 
 
  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 neces sary to eliminate export subsidies: 
 
 The Ministry of Commerce commits to the am endment of the legislation to eliminate the 
contingency based on export. 
 
Description of actions that have been, or, are in the process of being undertaken: 
 
1. The Ministry of Commerce has commenced the process of consulting at the national and sub-
regional level on the Industrial Policy to inform on a new approach to administering and modernizing 
the Free Zone. 
 
Description of future actions:  
1. The Ministry of Commerce has proposed that an  inter-ministerial committee be established to 
oversee the Free Zone modernization project.   
 2. Saint Lucia is also pursing harmonization of th e Free Zone Legislation at the regional level.  
  
 
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