WORLD TRADE  
ORGANIZATION  G/SCM/N/146/PAN 
4 July 2006 
 (06-3207) 
Committee on Subsidies and 
Countervailing Measures Original:   Spanish 
 
 
 
SUBSIDIES 
 
Extension under SCM Article 27.4 of the Transition Period for the  
Elimination of Export Subsidies Pursuant to the Procedures  
in Document G/SCM/39  
 
Updating Notification  
 
PANAMA 
 
  The following communication, dated 30 June 2006,  is being circulated at the request of the 
delegation of Panama.  
_______________ 
 
  On behalf of the Government of the Republic  of Panama, I have the honour of transmitting 
the attached updating subsidy notification for 2005, pursuant to subparagraph 1(d) of the Procedures 
for extensions under Article 27.4 of the SCM Agre ement for certain developing country Members. G/SCM/N/146/PAN 
Page 2  
 
   The Republic of Panama is submitting the following notification pursuant to 
subparagraph 1(d) and pa ragraphs 3 and 4 of the Procedures for extensions under Article 27.4 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. 
 
 
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 
 2005 
 3. Objective of the programme 
 See paragraph II.3 of document G/SCM/N/95/PAN. 
 
4. Background and authority 
 See paragraph II.4 of document G/SCM/N/95/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. 
 
7. Estimated amount of the subsidy 
 No estimate available. 
 
8. Duration of the subsidy 
 See paragraph II.8 of document G/SCM/N/95/PAN. 
  G/SCM/N/146/PAN 
 Page 3 
 
 
  9. Statistical data permitting an assessment of the trade effects of the subsidy 
 
Table 1  
 
PANAMA:  Value of Exports from the Processing Zones, 2001-2005  
 
Year No. of enterprises F.O.B. value 
(in US$ million) 
2001 57 51.9 
2002 68 52.4 
2003 74 67.2 
2004 45 69.2 
2005 56 77.8 
 
Source : Auditor-General of the Republic and Vice-Ministry of Foreign Trade of the Ministry of Trade and Industry. 
 
 
Table 2  
 
PANAMA:  Existing Processing Zones and Number of Enterprises Registered, 2005  
 
No. Processing Zone No. of enterprises 
registered 
1 Zona Procesadora PANEXPOR6 18 
2 Zona Procesadora Marpesca, S.A. 11 
3 Zona Procesadora Estatal de Davis 10 
4 Zona Procesadora Isla Margarita 6 
5 Zona Procesadora de Albrook 7 
6 Telepuerto Panamá, S.A. 2 
7 Zona Procesadora Proinexport 2 
8 Zona Procesadora Schlobhom 2 
9 Tocumen Export Processing Zone 0 
10 Zona Espanam Iberoamérica 0 
 TOTAL 56 
 
Source : Vice-Ministry of Foreign Trade of the 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 
 2005 
 3. Objective of the programme 
 See paragraph III.3 of document G/SCM/N/95/PAN. G/SCM/N/146/PAN 
Page 4  
 
   
4. Background and authority 
 See paragraph III.4 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. 
 7. Estimated amount of the subsidy 
 
 
Table 3
 
 
Value of Tax Incentives Granted Under the Official Industry Register, 2002-2005  
(in US$ million ) 
 
Year Type of benefit 2003 2004 2005 
Import tax exemption or rebate 18.7 17.5 14.1 
Income tax exemption or rebate for reinvestment 8.7 11.6 9.7 
Other incentives* 9.8 10.7 16.6 
Total ……….  37.2 39.8 40.4 
 
* 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. 
  
__________