WORLD TRADE  
ORGANIZATION   
G/SCM/N/226/DOM 
30 June 2011 
 (11-3226) 
Committee on Subsidies and 
Countervailing Measures Original:   Spanish 
 
 
 
SUBSIDIES 
 
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 
 
Updating Notification 
 
DOMINICAN REPUBLIC 
 
  The following communication, dated 24 June 2011,  is being circulated at the request of the 
delegation of the Dominican Republic.  
_______________ 
 
  Pursuant to Article XVI:1 of the GATT 1994 and Article 25.1 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, da ted 27 July 2007, the Dominican Republic hereby 
submits the updated annual notification for the cale ndar year 2010, for the continued extension of the 
transition period for the elimination of subsidies with  regard to the programmes listed in the Annex to 
that Decision.  Also included as an integral part of this notification, in accordance with 
paragraphs 1(e) and (f) of the Decision, is inform ation concerning measures ta ken with regard to the 
action plan for eliminating the export subsidies und er the notified programme and the notification of 
beneficiaries. 
 
 This updated notification is also being s ubmitted 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 Decision WT/L/691 have been fulfilled. G/SCM/N/226/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 establishment 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 2010. 
 
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, 
to attract local and foreign investment, and to creat e employment at various points within the national 
territory, including in 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. gr ant, loan, tax concession, etc.) 
  Enterprises manufacturing goods or providing services and operating under Law No. 8-90 are 
exempt from payment of income tax and customs duties on the importation and exportation of the raw materials, equipment and machinery used to pr oduce these goods.  The subsidy is therefore a tax 
concession.  6. To whom and how the subsidy is provide d (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 go ods produced within 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 free zones by enterprises operating under the 
free-zone regime, with a view to estimating the fiscal cost to the Dominican State of attracting private investment for the creation of sources of employment.  G/SCM/N/226/DOM 
 Page 3 
 
 
  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 paragraphs 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 was 
submitted to the National Congress on 6 July 2010, and is currently being reviewed 
and discussed by the Dominican Republic's Senate Commission on Industry, Commerce and Free Zones. 
10. Statistical data permitting an assessment of the 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 determ inable, 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/226/DOM 
Page 4 Evolution of the Main Variables of Free-Export Zones 
1996-2010 
 
Year Existing 
industrial 
estates Enterprises Jobs Exports 
(US$ million) Foreign exchange 
(US$ million) Average weekly salary 
(RD$) Surface area of 
industrial 
premises in use 
(sq. ft.) Textile exports 
(US$ million) Workers Technical 
staff 
1996 36 436 164,639 3,107.30 545.00 576.92 1,257.00 13,782,496 1,753.5 
1997 40 446 182,174 3,596.40 701.00 634.27 1,441.12 15,603,755 2,185.1 
1998 43 496 195,193 4,100.00 826.50 638.32 1,556.90 17,540,407 2,348.9 
1999 44 484 189,458 4,331.50 887.30 701.21 1,587.22 16,820,049 2,393.1 
2000 46 481 195,262 4,770.60 1,018.60 716.51 1,629.85 21,068,186 2,555.4 
2001 51 512 175,078 4,481.60 977.90 775.49 1,662.93 21,738,332 2,314.4 
2002 53 520 170,833 4,317.30 886.50 786.56 1,671.53 21,923,764 2,226.8 
2003 54 531 173,367 4,406.76 810.84 961.34 2,010.79 22,066,221 2,196.4 
2004 58 569 189,853 4,685.24 863.40 1,131.25 2,539.82 24,332,619 2,120.6 
2005 57 556 154,781 4,749.65 1,005.43 1,347.09 2,702.67 24,540,453 1,904.6 
2006 56 555 148,411 4,678.60 973.70 1,465.19 3,009.97 26,338,045 1,734.4 
2007 53 526 128,002 4,525.22 1,010.90 1,480.37 3,127.22 24,609,123 1,366.9 
2008 48 525 124,517 4,354.10 954.30 1,652.80 3,533.22 25,299,745 1,165.7 
20091/ 47 553 112,618 3,793.50 959.00 1,819.00 3,689.56 29,037,745 933.5 
2010* 48 555 121,001 4,080.10 1,123.05 1,829.03 3,841.64 29,268,270 964.2 
% growth 
2009-2010 2.1 0.4 7.4 7.6 17.1 0.6 4.1 0.8 3.3 
Source for exports and foreign exchange :  Central Bank. 
1/ Revised figures for exports, foreign exchange and industrial premises surface area.  
* Preliminary export and fo reign exchange figures.  G/SCM/N/226/DOM 
 Page 5 
 
 
  Contribution of Free Zones to th e Gross Domestic Product (GDP) 
of the Dominican Republic 
1996-2010 
(RD$ million, current values) 
 
Year GDP Free zones Contribution (%) 
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 
2009 1,678,762.60 50,939.10 3.0 
2010* 1,901,896.70 56,179.40 3.0 
 Source :  Central Bank.  
 * Preliminary figures as at September. 
 
Comparison of Domestic and Free-Zone Exports 
1996-2010 
(US$ million) 
 
Year Domestic 
exports Var. % 
Domestic Free-zone 
exports Var. % 
Free zones Total 
exports Free-zone 
exports/total 
exports (%) 
1996 945.5 … 3,107.3 … 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 4,100.0 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 2,635.1 36.4 4,525.2 -3.3 7,160.3 63.2 
2008 2,393.9 -9.2 4,354.1 -3.8 6,748.0 64.5 
20091/ 1,689.3 -29.4 3,793.5 -12.9 5,482.8 69.2 
2010* 2,518.1 49.1 4,080.1 7.6 6,598.2 61.8 
 Source :  Central Bank of the Dominican Republic . 
 1/ Revised figures. 
 *Preliminary figures. G/SCM/N/226/DOM 
Page 6  
 
  Comparison of Domestic and Free-Zone Exports 
2010 
 
 
 
  
Free-Zone Exports 2003-2010 by Principal Activities 
(US$ million) 
 
Activity 2003 2004 2005 2006 2007 2008 20091/ 2010* Share 
% 
2010 
Clothing and textiles 2,196.4 2,120.6 1,904.6 1,734.4 1,366.9 1,165.7 933.5 964.2 23.6 
Footwear 202.6 234.7 315.3 276.1 258.7 234.7 201.0 247.0 6.1 
Electrical goods 577.6 630.5 700.3 695.7 743.3 794.7 565.5 534.7 13.1 
Tobacco and 
tobacco products 287.6 308.6 334.1 366.9 393.6 429.9 403.1 445.4 10.9 
Medical and 
pharmaceutical products 320.7 583.1 647.3 712.9 774.0 855.6 963.0 1,064.1 26.1 
Jewellery 466.8 601.0 602.9 625.9 678.4 505.4 435.7 464.2 11.4 
Other 355.0 206.8 245.1 266.7 310.3 368.1 291.7 360.5 8.8 
Total 4,406.8 4,685.2 4,749.7 4,678.6 4,525.2 4,354.1 3,793.5 4,080.1 100.0 
Source :  Central Bank of the Dominican Republic . 
1/ Revised figures.  
*Preliminary figures.  Free-zone exports 
62% Domestic exports 
38%  G/SCM/N/226/DOM 
 Page 7 
 
 
  Distribution of Free-Zone Exports 2010 
by Principal Activities 
 
 
 
__________  Other 
9% Clothing 
and  
textiles 
24% 
Footwear 
6% 
Electrical
goods 
13% Tobacco 
and tobacco
products 
11% Medical and 
pharmaceutical 
products 
26% Jewellery 
11%