RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/CPV/29 
19 October 2007 
 
 (07-4539) 
Working Party on the 
Accession of Cape Verde Original:   English 
 
 
 
ACCESSION OF CAPE VERDE 
 
Subsidies Timetable Action Plan  
 
 
 The following submission, dated 16 October 2007, is being circulated at the request of the 
Delegation of the Republic of Cape Verde.   
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 WT/ACC/CPV/29 
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   In WTO document WT/ACC/CPV/27, Cape Ve rde provided a "Notification Pursuant to 
Article XVI:1 of the GATT 1994 and Article 25 of  the Agreement on Subsidies and Countervailing 
Measures (SCM). 
 The notification provided information on six incentive programs, as follow: 
− Foreign Investment Law (Law No. 89/93 of 13 December 1993); 
− Industrial Statute (Decree Law No. 108/89 of 30 December 1989); 
− Tourism Utility Statute (Law No. 42/IV/92 of 6 April 1992 and Law No. 55/IV/2005 
of 10 January 2005) 
− Free Zone (Franc) Enterprise Statute (Law No. 99/IV/93 of 30 December 1993); 
− Incentives for Exportation (Law No. 92/IV/93 of 15 December 1993); and 
− Duty Drawback (Provisions in 1942 Customs Law of Portugal). 
 Certain Members believe that many of the Cape Verde incentive provisions constitute 
prohibited subsidies within the meaning of the Subsidies and Countervailing Measures Agreement. 
This document is provided to provide additional cl arification concerning the Cape Verde Subsidies 
Notification, and provide a timetable for removal of prohibited Subsidies. 
 Article 3 of the SCM provides that "subsidies contingent, in law or in fact upon export 
performance, including those illustrated in Annex 1" shall be prohibited. 
 Article 2 of the SCM is entitled "Specificity" and outlines the conditions wherein a subsidy is 
specific. In general, when a subsidy is grante d to a specific enterprise or industry or group of 
enterprises or industries, it is considered a specific subsidy if meets the criteria provided in Article 2. 
 Applying the above criteria of the SCM, a c onsultant's analysis of the above-listed six 
Cape Verde laws follows: 
1. Foreign Investment Law  
 This law is a framework law.  In and of it self, it does not grant any incentives but sets forth 
the procedures and the agency (Cape Verde Inv estment) to be used in becoming approved as a 
foreign investment company in Cape Verde. Th e purpose of this law is to attract foreign 
capital to Cape Verde in the form of goods  and services without the expenditure of 
Cape Verdean funds.  No incentive is granted or  bestowed by the Foreign Investment Law. 
 Since the Foreign Investment Law is neither sp ecific nor related to export performance, it is 
not a prohibited subsidy within the meaning of the SCM Agreement. 
2. Industrial Statute  
 The objective of the Industrial Statute is to a ttract investment to industrial areas, such as 
factories, industrial facilities, etc. in order to increase Cape Verde's productive base. 
 The Industrial Statute is not related to expor t performance and is not specific. Therefore, 
incentives under the industrial statute are not prohibited subsidies.  WT/ACC/CPV/29 
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  3. Tourism Utility Statute  
 The purpose and objective of the tourism utility st atute is to attract investment into tourist 
areas, such as hotels, restaurants, transportation, etc. 
 The Tourism Utility Statute is not related to e xport performance and is not specific within the 
meaning of Article 2 of the SCM Agreemen t.  Thus, incentives under the Tourism Utility 
Statute are not prohibited subsidies. 
4. Free Zone (Franc) Enterprise Statute  
 The purpose of this law is for all enterprises (domestic or foreign) to engage in activities 
exclusively related to goods and services for exportation. 
 Since this law is directly related to export performance, it is a prohibited subsidy within the 
meaning of the SCM Agreement. 
5. Incentives for Exportation  
 The purpose and objective of this law is to s timulate exportations and obtain foreign currency. 
 As with the Enterprise Statute above, this law is  related to export performance and is clearly a 
prohibited subsidy within the m eaning of the SCM Agreement. 
6. Duty Drawback  
 As stated in the Subsidies Notification, th e 1942 Customs Law of Portugal is the legal 
authority for duty drawback. However, the dut y drawback provision has not been use in 
Cape Verde since 1975 (date of independence). 
 It should be noted that duty drawback is not a prohibited subsidy within the meaning of the 
SCM provided that the amount or rate of duty drawback does not exceed the amount of duty 
collected. 
 The purpose of this document is to provide clarification to the Subsidies Notification 
(document WT/ACC/CPV/27) and to focus Cape Verde's efforts on phasing out "Prohibited Subsidies," specifically the Franc Enterpri se Law and the Incentives for Exportation Law. 
 Cape Verde is committed to the elimination of prohibited subsidies, and a revised Action Plan 
(or Timetable) follows as part of this document. 
 However, Cape Verde needs time, or a tran sition period, to take the steps necessary to 
eliminate prohibited subsidies.  This includes colla boration between the Ministry of Finance and the 
Ministry of Economy. 
 Further, Cape Verde is prepared to include  a commitment paragraph in the Draft Working 
Party Report.  A suggested commitment paragraph will be included at the end of this document. WT/ACC/CPV/29 
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  Prohibited Subsidies Action Plan (Timetable)
 
Action to be Taken Responsible Ministry Completion Date 
Diagnostic period to evaluate effectiveness 
and impact of cu rrent programs Ministry of Economy 
Ministry of Finance 
Cape Verde Investment 2007 through 31 March 2008 
 Review of current incentive program to 
formulate comprehensive legal and regulatory regime Ministry of Economy 
Ministry of Finance 1 July 2008 
Discussion  and approval of draft plan for 
proposed incentives program before Council 
of Ministers Ministry of Economy 
Ministry of Finance 31 October 2008 
Financial impact study of elimination of 
current incentives and implementation of 
new plan. Ministry of Economy 
Ministry of Finance 31 December 2008 
Draft legislation and implementing 
regulations for WTO conforming incentives 
plan Ministry of Economy 
Ministry of Finance 31 March 2009 
Approval of legislation by National 
Assembly Ministry of Economy 
National Assembly 31 July 2009 
Implementation of WTO compliant 
incentives regime for Cape Verde Ministry of Economy 
Ministry of Finance 31 December 2009 
 
Draft Language for the Draft Working Party Report  
Hereafter follows suggested draft language to  be included in the Working Party Report: 
[paragraph describing the prohibited subsidies and c iting the draft notification and clarification to 
subsidies notification] 
xx.    The representative of Cape Verde confirmed that Cape Verde would progressively eliminate all 
measures which meet the definition of a prohibited s ubsidy, within the meaning of Article 3 of the 
Agreement on Subsidies and Countervailing Measures,  including those prohibited subsidies covered 
by Law No. 92/IV/93 of 15 December 1993 and La w No. 99/IV/93 of 30 December 1993, no later 
than 1 January 2010.  These subsidy measures would be notified upon accession, as provided for in 
Article 25 of the WTO Agreement on Subsidies a nd Countervailing Measures and Article XVI:1 of 
the GATT 1994.  Cape Verde also would provide explanatory information in its subsequent 
notifications under Article 25 to enable other Memb ers to confirm that such programmes are being 
progressively eliminated.  The Working Party took note of these commitments. 
 
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