WORLD TRADE  
ORGANIZATION  G/SCM/N/177/PAN 
3 July 2008 
 
 (08-3186) 
Committee on Subsidies and 
Countervailing Measures Original:   Spanish 
 
 
 
SUBSIDIES  
 
Continuation of Extension under SCM Article 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  
 
PANAMA 
  
 The following communication, dated 30 June 2008,  is being circulated at the request of the 
delegation of Panama.  
_______________ 
 
 
 The Republic of Panama is submitting the following notification pursuant to 
subparagraph 1(d) and paragraphs 3 and 4 of the Pr ocedures for extensions under Article 27.4 of the 
SCM Agreement for certain developing country  Members (G/SCM/39) and the Decisions of 
22 November 2002 on Export Processing Zones (G/SCM /85) and on the Official Industry Register 
(G/SCM/84). 
 
 In accordance with its rights and obligati ons under the procedures for extending programmes 
that comprise subsidies classified as prohibited unde r Article 3.1 of the Agreement on Subsidies and 
Countervailing Measures (SCM) of the World Trade Or ganization (WTO), the Republic of Panama is 
submitting for the Committee's consideration the following notification in order to meet its 
obligations in respect of the extension of the tr ansition period for programmes subject to renewal. 
 
 Panama confirms that its programmes subject  to extension comply with the standstill, 
favourability and transparency requirements under the procedures for extensions (G/SCM/39) in that 
none of these programmes has been modified so as to make it more favourable than it was at 
1 September 2001. G/SCM/N/177/PAN 
Page 2  
 
  Programmes 
 
I. EXPORT PROCESSING ZONES 
1. Description of the Programme
 
 See paragraph II.1 of document G/SCM/N/95/PAN. 
 
2. Period of notification  
 2006 
 3. Objective of the programme
 
 See paragraph II.3 of document G/SCM/N/95/PAN. 
 4. Background and authority
 
 See paragraph B.4 of document G/SCM/N/71/PAN. 
 
5. Form of subsidy  
 See paragraph II.5 of document G/SCM/N/95/PAN. 
 6. Beneficiaries and mechanism
 
 See paragraph II.6 of document G/SCM/N/95/PAN.  In addition, in response to question 3 
from Peru in document G/SCM/Q4/PAN/5, Panama  mentioned a variety of sectors and activities 
benefiting under the EPZ regime, including the following:  manufacture of plastic products, 
pharmaceuticals, chemicals, and articles of glass;  clothing;  aluminium articles;  recycling of waste (cardboard, steel, wood, plastic etc.);  storage, transport and cargo handling services;  international 
ship chandlery services;  assembly and electrical  plant maintenance services;  maintenance of 
underground structures;  inspection and analysis service for petroleum and petroleum products;  
assembly and repair of diesel engines;  repair and cleaning services for tuna fishing nets;  processing, 
storage and data transmission services, inter alia . 
 7. Estimated amount of the subsidy
 
 No estimate available.  However, paragr aph I.9 provides updated information, which 
represents an attempt to establish an or der of magnitude under the EPZ programme. 
 
8. Duration of the subsidy  
 Not specified in Law No. 25 of 1992. 
  G/SCM/N/177/PAN 
 Page 3 
 
 
  9. Statistical data permitting an assessment of the trade effects of the subsidy  
Table No. 1 
Panama:  Value of Exports from Processing Zones 
2001–2006 
 
Year No. of enterprises  f.o.b. value (US$ million) 
2001 57 51.9 
2002 68 52.4 
2003 74 67.2 
2004 45 69.2 
2005 56 77.8 
2006 61 88.2 
Source : Auditor-General of the Republic and Vice-Ministry of Foreign Trade of the Ministry of Trade and Industry. 
Table No. 2 
Panama:  Existing Processing Zones and 
Number of Enterprises Registered 
2006 
 
No. Processing Zone No. of enterprises registered 
1 PANEXPORT 17 
2 COROZAL (Marpesca, S.A.) 14 
3 Estatal de Davis 9 
4 Isla Margarita 6 
5 Albrook 7 
6 Telepuerto Panamá, S.A. 2 
7 PROINEXPORT 2 
8 Schlobhom 2 
9 Rail Road Export Processing Zone 1 
10 Eurofusion 1 
11 Tocumen Export Processing Zone 0 
12 PROEXPORT International 0 
13 Zona Espanam Iberoamérica 0 
  TOTAL 61 
Source : Vice-Ministry of Foreign Trade, Ministry of Trade and Industry. 
II. OFFICIAL INDUSTRY REGISTER 
1. Description of the subsidy  
See paragraph III.1 of document G/SCM/N/95/PAN. 
 
2. Period of notification  
2006. 
 G/SCM/N/177/PAN 
Page 4  
 
  3. Objective of the programme
 
See paragraph III.3 of document G/SCM/N/95/PAN. 
 4. Background and authority
 
See paragraph C.4 of the notification contained in document G/SCM/N/71/PAN.  See also 
Resolution No. 32 of 31 December 2002 of the Ministry of Trade and Industry, notified in 
Annex 1 of document G/SCM/N/95/PAN. 
 5. Form of subsidy
 
See paragraph III.5 of document G/SCM/N/95/PAN. 
 
6. Beneficiaries and mechanism  
See paragraph III.6 of document G/SCM/N/95/PAN.   In addition, the following table provides 
a list of the number of beneficiary enterprises, established in the Official Industry Register, according to type of activity. 
Table No. 3 
Official Industry Register:  Number of Enterprises According to Type of Activity/Product 
June 2007 
 
No. Activity/Product No. of Enterprises 
 TOTAL 194 
1 ANIMAL FEED 5 
2 SUGAR CANE 5 
3 MANUFACTURE OF CLOTHING 18 
4 POULTRY BREEDING 6 
5 MILK BY-PRODUCTS 5 
6 DETERGENTS AND OTHER CHEMICAL PRODUCTS 8 
7 MANUFACTURE OF FOOTWEAR 5 
8 BREWING OF BEER 2 
9 MANUFACTURE OF MATTRESSES 3 
10 MANUFACTURE OF BROOMS AND MOPS 3 
11 MANUFACTURE OF FURNITURE 7 
12 WOOD AND WOOD ARTICLES 4 
13 ARTICLES OF ALUMINIUM AND OTHER METALS 15 
14 CEMENT ARTICLES 1 
15 PAPER AND PAPERBOARD AND ARTICLES THEREOF 18 
16 COFFEE PROCESSING 4 
17 PROCESSING OF HIDES AND SKINS 4 
18 FOOD PRODUCTS 30 
19 MARINE PRODUCTS 20 
20 PHARMACEUTICALS 3 
Table No. 3 (cont'd)   G/SCM/N/177/PAN 
 Page 5 
 
 
  No. Activity/Product No. of Enterprises 
21 PLASTIC PRODUCTS 14 
22 PRINTING 1 
23 OTHER PRODUCTS 13 
Note: Only covers all the enterprises listed in th e OIR as exporting all or part of their production. 
Source : Directorate General of Industry of the Ministry of Trade and Industry. 
7. Estimated amount of the subsidy  
Table No. 4 
Value of Tax Incentives Granted Under the Official Industry Register, 2004-2006 
(US$ million) 
 
Year  
Type of  Benefit  
2004 2005 2006 
Import tax exemption or rebate 17.5 14.1 n.a. 
Income tax exemption or rebate for reinvestment 11.6 9.7 n.a. 
Other incentives* 10.7 16.6 n.a. 
Total  39.8 40.4 n.a. 
n.a. Figure not yet available. 
 
 *Exemption from income tax only. 
Source : Fiscal Studies Department, Direct orate-General of Revenue, Minist ry of the Economy and Finance. 
8. Duration of the subsidy  
 See paragraph III.8 of document G/SCM/N/95/PAN. 
 9. Statistical data permitting an assessment of the trade effects of the subsidy
 
 No statistical information available to  assess the trade effects of the programme. 
 
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