WORLD TRADE  
ORGANIZATION  G/SCM/N/211/BRB 
7 July 2010 
 (10-3706) 
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  
 
BARBADOS 
  
 The following notification, dated 5 July 2010, is being circulated at the request of the 
Delegation of Barbados.    
_______________ 
 
 
 Barbados submits the following notification, a ttached hereto, for the period 2008 - 2009, in 
accordance with Article 27.4 of the WTO Agreem ent on Subsidies and Countervailing Measures and 
the General Council Decision contained in WT/L/691 on the continuation of the extension of the 
transitional period for the maintenance of expor t subsidies, with respect to the programmes
1 listed in 
the Annex of the decision under reference.   
 
 Pursuant to paragraph 1 f) of WT/L/691, th is notification includes an Action Plan for 
eliminating export subsidies under the referred programmes.   
                                                     
 
1 Please note that Notification for the Fiscal  Incentives Programme is forthcoming.   G/SCM/N/211/BRB 
Page 2  
 
  This notification is made taking into account the provisions of Article 27.4 and Article 25.7 of 
the Agreement on Subsidies and Countervailing Measures.    
EXPORT ALLOWANCE 
 1. Title of Subsidy
 
  Export Allowance.    2. Period covered by Notification
  
 
 For period 2008-2009.    3. Policy and Objective and/or purpose of subsidy 
 
 
 There has been no change in the standstill arrangements.   
 4. Background and authority of subsidy
 
  There has been no change in the standstill arrangements. 
 
5. Form of Subsidy (i.e grant, loan, tax concessions)
 
  There has been no change in the standstill arrangements.   
 6. To whom and how is the subsidy provided
 
 
 There has been no change in the standstill arrangements.   
 7. Subsidy per unit, or in cases where it is not  possible, total amount or the annual amount 
budgeted for that subsidy  
 
 The subsidy for the 2008-2009 period for this programme amounted to BDS $818,773.94.   
 8. Duration of subsidy and/or any time limits attached to it
 
  There has been no change in the standstill arrangements.   
 
9. Statistical Data permitting an assessme nt of the trade effects of a subsidy
 
  Eight companies benefitted from this programme for the 2008-2009 period.    10. Measures being Taken
 
 
 The Government of Barbados has completed its consultations in relation to notifying all 
beneficiaries, under the Act, of the General Council 17 July 2007 decision.     Barbados is in the process of drafting a polic y paper outlining the process to be under taken.  
National consultations with the private sector to  complete this policy document are ongoing.    G/SCM/N/211/BRB 
 Page 3 
 
 
  This notification is made taking into account the provisions of Article 27.4 and Article 25.7 of 
the Agreement on Subsidies and Countervailing Measures.    
RESEARCH & DEVELOPMENT ALLOWANCE 
 1. Title of Subsidy
 
  Research and Development Allowance.    2. Period covered by Notification
 
 
For period 2008-2009.   
 3. Policy and Objective and/or purpose of subsidy
 
 
 There has been no change in the standstill arrangements. 
 4. Background and authority of subsidy
 
  There has been no change in the standstill arrangements.  
5. Form of Subsidy (i.e grant, loan, tax concessions)
 
  There has been no change in the standstill arrangements.  6. To whom and how is the subsidy provided
 
 
 There has been no change in the standstill arrangements.  7. Subsidy per unit, or in cases where it is not  possible, total amount or the annual amount 
budgeted for that subsidy  
 
 The subsidy for the 2008-2009 period for this programme amounted to BDS $936,079.73.   
 8. Duration of subsidy and/or any time limits attached to it
 
  There has been no change in the standstill arrangements. 
 
9. Statistical Data permitting an assessme nt of the trade effects of a subsidy
 
 
Four companies benefitted from this programme for the 2008-2009 period. 
 10. Measures being Taken
 
 
 The Government of Barbados has completed its consultations in relation to notifying all 
beneficiaries, under the Act, of the General Council 17 July 2007 decision.    Barbados is in the process of drafting a polic y paper outlining the process to be under taken.  
National consultations with the private sector to complete this policy document are ongoing. G/SCM/N/211/BRB 
Page 4  
 
  This notification is made taking into account the provisions of Article 27.4 and Article 25.7 of 
the Agreement on Subsidies and Countervailing Measures.    
INTERNATIONAL BUSINESS INCENTIVES 
 1. Title of Subsidy
 
  International Business Incentive.    2. Period covered by Notification
  
 
For period 2008-2009.   
 3. Policy and Objective and/or purpose of subsidy
  
 
 There has been no change in the standstill arrangements.   
 4. Background and authority of subsidy
 
  There has been no change in the standstill arrangements.  
5. Form of Subsidy (i.e grant, loan, tax concessions)
 
  There has been no change in the standstill arrangements.    6. To whom and how is the subsidy provided
 
 
 There has been no change in the standstill arrangements.  7. Subsidy per unit, or in cases where it is not  possible, total amount or the annual amount 
budgeted for that subsidy  
 
 The subsidy for the 2008-2009 period for this programme amounted to BDS $4,214.955. 
 8. Duration of subsidy and/or any time limits attached to it
 
  There has been no change in the standstill arrangements. 
 
9. Statistical Data permitting an assessme nt of the trade effects of a subsidy
 
  Five companies benefitted from this programme for the 2008-2009 period.   
 10. Measures being Taken
 
 
 The Government of Barbados has completed its consultations in relation to notifying all 
beneficiaries, under the Act, of the General Council 17 July 2007 decision.   Barbados is in the process of drafting a polic y paper outlining the process to be under taken.  
National consultations with the private sector to complete this policy document are ongoing.  G/SCM/N/211/BRB 
 Page 5 
 
 
  This notification is made taking into account the provisions of Article 27.4 and Article 25.7 of 
the Agreement on Subsidies and Countervailing Measures.    
SOCIETIES WITH RESTRICTED LIABILITY 
 
1. Title of Subsidy
 
  Societies with Restricted Liability.    2. Period covered by Notification
  
 
For period 2008-2009. 
 3. Policy and Objective and/or purpose of subsidy
  
 
 There has been no change in the standstill arrangements. 
 4. Background and authority of subsidy
 
  There has been no change in the standstill arrangements.  
5. Form of Subsidy (i.e grant, loan, tax concessions)
 
  There has been no change in the standstill arrangements.  6. To whom and how is the subsidy provided
 
 
 There has been no change in the standstill arrangements.    7. Subsidy per unit, or in cases where it is not  possible, total amount or the annual amount 
budgeted for that subsidy  
 
 The subsidy for the 2008-2009 period for this programme amounted to BDS $12,672,736.   
 8. Duration of subsidy and/or any time limits attached to it
 
  There has been no change in the standstill arrangements. 
 
9. Statistical Data permitting an assessme nt of the trade effects of a subsidy
 
 
Four companies benefitted from this programme for the 2008-2009 period. 
 10. Measures being Taken
 
 
 The Government of Barbados has completed its consultations in relation to notifying all 
beneficiaries, under the Act, of the General Council 17 July 2007 decision.   Barbados is in the process of drafting a polic y paper outlining the process to be under taken.  
National consultations with the private sector to complete this policy document are ongoing. 
 G/SCM/N/211/BRB 
Page 6  
 
  ACTION PLAN TO BRING SUBSIDIES NOTIFIED IN ACCORDANCE WITH  
ARTICLE 27.4 ON THE AGREEMENT ON SUBSIDIES  
AND COUNTERVAILING MEASURES 
 
BARBADOS 
 
Outline of Programme 
 
Fiscal Incentive Programme  
 This programme offers exemptions from co rporation tax and customs duties on plant, 
equipment, machinery, spare parts, raw materials or components, as well as the Value Added Tax.  
Under the Fiscal Incentive Act Cap 71, Barbadia n or foreign owned companies may qualify for 
benefits.  The main benefits offered are exemp tions from income tax and relief from customs duty 
over a period of between 11 and 15 years.  To be  listed as an approved enterprise and thus benefit 
from the programme, the enterprise must prove that it:-  
 (a) is or will be adequately financed; 
(b) has adequate trained personnel in its employ  or is able to obtain the services of such 
personnel; 
(c) has access to the necessary technical information; 
(d) is able to obtain adequate raw materials;  and 
(e) possesses, or will possess, the necessary factory    The Act is applicable to companies wh ich may benefit from the programme through 
qualification of "local value added" or though its st atus as an "enclave enterprise".  The local value 
added component by definition does not qualify as a subsidy under Article 3 of the SCM Agreement. 
However an enclave enterprise qualifies as a prohibited subsidy based on its definition within the Act.  
The Act defines an enclave enterprise as "an en terprise which manufactures products exclusively for 
export outside of the CARICOM region".  "Enclave  Enterprises" benefit from the maximum number 
of years of tax relief.  Action to be Taken 
 
 The action to be taken will focus on the remova l of the export component under this Act.  In 
this regard application of all provisions re lated to enclave industries will be removed. 
 Actions Already Taken 
 
 The Government of Barbados has completed its consultations in relation to notifying all 
beneficiaries, under the Act, of the General Council 17 July 2007 decision.   Barbados is currently in the process of dr afting a policy paper outlining the process to be 
under taken.  National consultations with the priv ate sector to complete this policy document are 
ongoing.    
Research and Development Allowance 
  The aim of this allowance is to encourage and promote the development of export sales and 
assist exporters to penetrate new and existing mark ets.  Businesses which make an expenditure on 
market research and development for the purpose of promoting the export sales of the business 
outside of the CARICOM region are entitled to de duct from taxable income an amount equal to 
150 per cent of the actual expenditure incurred.  G/SCM/N/211/BRB 
 Page 7 
 
 
   Authorization for the provision of this allo wance is found in the In come Tax Act Cap 73, 
Section 12D and Part I of the Schedule of the In come Tax Act.  Benefits of the allowance are 
conferred not specifically based on the export performance of the business itself, but based on 
activities conducted to expand the market penetrati on of a product in to overseas markets (outside of 
the CARICOM). 
 
Action to be Taken 
 
 The action to be taken involves the removal of the export component under the Income Tax 
Act. Section 12D (1) of the Income Tax Act shoul d be amended to remove the application of any 
provisions relating to exporting outlined in Part 1 of the Second Schedule to the Act. Section 12 D (2) 
of the Income Tax Act will also be deleted.  
Actions Already Taken 
  The Government of Barbados has completed its consultations in relation to notifying all 
beneficiaries, under the Act, of the General Council 17 July 2007 decision.   Barbados is currently in the process of dr afting a policy paper outlining the process to be 
under taken.  National consultations with the priv ate sector to complete this policy document are 
ongoing. 
 
Export Allowance  
 
 The Export Allowance is provided under the Authority of the Income Tax Act Cap 73 
(Section 14A and the first Schedule of the Income  Tax Act).  The programme aims to stimulate 
exports to foreign markets and provides a rebate of income or corporation tax on the export profits of 
the business.  By virtue of the fact that the rebate  is based on the percentage of export sales to total 
sales, it constitutes a prohibited subsidy in accord ance with Article 3 of the SCM Agreement. 
 
Action to be Taken 
  In order to bring this allowance in line with WTO rules
2 Barbados proposes to remove 
Section 14A (2) (b) and (c).  Section 14A 1 (1) wh ich makes provision for an enclave enterprise to be 
entitled to an allowance calculated in accordance with section 14A in th e manner specified in the First 
Schedule, will also be deleted.  Actions Already Taken 
 
 The Government of Barbados has completed its consultations in relation to notifying all 
beneficiaries, under the Act, of the General Council 17 July 2007 decision.   Barbados is currently in the process of dr afting a policy paper outlining the process to be 
under taken.  National consultations with the priv ate sector to complete this policy document are 
ongoing.  
International Business Companies 
  The International Business (IBC) Act provides for incentives to those companies licensed and 
defined under the Act and allows for exemptions fro m withholding tax and tax on income on a sliding 
scale.  The Act also makes provision for duty free c oncessions to licensed IBCs for the importation of 
                                                     
 
2 As contained in the provisions of Paragraph 1 e) of the General Council Decision WT/L/691.   G/SCM/N/211/BRB 
Page 8  
 
  plant, machinery, equipment, fixtures, appliances,  apparatus, tools and spare parts and such raw 
materials, goods, components and articles, as is ne cessary for the company to carry on its business. 
  The International Business Companies Act Cap 77, specifies that one of the key objectives is 
to provide tax reduction, exemptions  and benefits for companies enga ged in the act of international 
manufacturing. International Manufacturing is defined as "the business of making, processing, 
preparing or packaging, within Barbados, any prod uct which is exclusively for export" and can be 
found in Section IV of the Act.  
Actions Already Taken 
 
 The Government of Barbados is currently unde rtaking national consultations in an effort to 
derive policies which treat with the WTO inconsistent aspects of the Act.   Barbados has however, completed its consultations in relation to notifying all beneficiaries, 
under the Act, of the General Council 17 July 2007 decision. 
  Barbados is in the process of drafting a polic y paper outlining the process to be under taken.  
National consultations with the private sector to complete this policy document are ongoing. 
 
Societies with Restricted Liabilities 
 
 The Societies with Restricted Liability Act was enacted in 1995.  Beneficiaries receive 
exemptions from withholding tax and tax on income  is assessed on a sliding scale.  The Act also 
makes provision for duty free concession to licensed SRLs for the importation of plant, machinery, 
equipment, fixtures, appliances, apparatus, tool s and spare parts and such raw materials, goods, 
components and articles necessary for the company to conduct business. 
 
Actions Already Taken 
 
 The Government of Barbados is currently unde rtaking national consultations in an effort to 
derive policies which treat with the WTO inconsistent aspects of the Act. 
 
 Barbados has however, completed its consultations in relation to notifying all beneficiaries, 
under the Act, of the General Council 17 July 2007 decision.   Barbados is in the process of drafting a polic y paper outlining the process to be under taken.  
National consultations with the private sector to complete this policy document are ongoing. 
 
Process and Sequencing 
 
 The execution of the internal st eps that are required to be undertaken to bring these subsides 
into conformity with the SCM Agreement are as follows: 
 
(a) Finalization of the preparation of a polic y paper for discussion with the stakeholders. 
(b) Submission of the Policy Paper to the Cabinet for approval. (c) The issuance of instructions to Chief Pa rliamentary Council to amend the legislation. 
(d) Submission of Bills to Cabinet for approval. 
(e) Submission to Parliament for debate and approval. 
  The processes will be completed in time for Barb ados to honour its obligation to make these 
programmes WTO compatible by December 2015.   
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