WORLD TRADE  
ORGANIZATION  G/SCM/N/177/JAM 
3 July 2008 
 (08-3183) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
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  
 
JAMAICA 
  
 The following communication, dated 1 July 2008,  is being circulated at the request of the 
Delegation of Jamaica.    
_______________ 
 
 
 Pursuant to the procedures contained in the General Council Decision in document 
WT/L/691, Jamaica hereby submits the followi ng updating notification for 2007 to enable the 
Committee to conduct its annual review of complianc e of the standstill and transparency requirements 
as under the Decision.    G/SCM/N/177/JAM 
Page 2  
 
  A. E
XPORT INDUSTRY ENCOURAGEMENT ACT 
1. Description of Programme  
  The Export Industry Encouragement Act was established as an incentiv e framework geared 
toward the encouragement of export industries.   
 
2. Period Covered by Notification
 
  Programme description as at 1 September 2007.    
3. Policy Objective and/or Purpose of the Subsidy
 
  The objective is to encourage investment and growth in export manufacturing industries.   
 4. Background and Authority of the Subsidy
 
 
 Law 49 of 1956.    Law 13 of 1960.    Act 11 of 1968.    Act 42 of 1969.    Act 56 of 1974.   
 
5. Form of the Subsidy
 
  Companies that export 100 per cent output to hard currency markets outside of CARICOM are exempt from income tax on profits and fu ll exemption from import duties on capital goods and 
raw materials for use by the approved exporter in the production process.   
  Partial exporters (companies exporting less th an 100 per cent of output) are entitled to an 
export allowance that may be deducted from taxable income with the level of tax relief linked to 
exports.    
6. To Whom and How the Subsidy is Provided
 
  Any company registered or incorporated in Jamaica and whose products are exclusively for 
sale to hard currency markets outside of CARICOM is  eligible to a tax holiday on profits earned from 
the manufacture of the approved product as well as dut y free importation of raw material and capital 
goods for use in the production process.   
  The company must be declared an "approved export manufacturer" in relation to an "approved export product" by the Minister of Indus try.  Having a product designated an approved 
product and the company an approved export manufact urer entitles the company to income tax and 
duty benefits as outlined above.   
 
 Partial exporters (companies exporting less th an 100 per cent of output) are entitled to an 
export allowance as described at paragraph 5 above.   To benefit from the allowance, a 5 per cent 
threshold of export sales to total sales must apply and exports must be to markets outside of the 
CARICOM region.    G/SCM/N/177/JAM 
 Page 3 
 
 
  7. Subsidy Per Unit  
  Revenue foregone is negligible as, cons istent with policy decision (from 1995), all 
manufacturing companies enjoy duty free treatment on raw materials and capital goods for use in the 
productive process.   
 
8. Duration of the Subsidy
 
  Tax and duty benefits are allowed for a period of up to ten (10) years.    
9. Statistical Data on the Impact of the Programme
 
  Historically, the programme has contributed to  significant growth in exports of the non-
traditional manufacturing sub-sectors (apparel, leather,  plastic).  Although its impact is not as robust 
as in earlier years, continuation of the programme can still yield significant income.    
B. J
AMAICA EXPORT FREE ZONES ACT 
1. Description of the Programme  
 
The Jamaica Export Free Zones Act provides an  incentive and regulatory framework for the 
operation of Free Zones in Jamaica.   
 
2. Period Covered by the Notification  
  Programme description at 1 September 2007.    
3. Policy Objective and/or Purpose of the Subsidy
 
  The objective is to encourage investment, expor ts and foreign exchange earnings and to create 
employment opportunities.    4. Background and Authority for the Subsidy
 
 
 Act No. 18 of 1982.    Act No. 12 of 1985.    Act No. 16 of 1991.    Act No. 24 of 1996.   
 
5. Form of the Subsidy
 
  Approved Free Zone enterprises are entitled to:    
• duty free importation of capital goods, consumer goods, raw materials or articles for use in 
connection with the approved product;   
• duty free treatment of articles for the constructi on, alteration, and repa ir of equipment of 
premises in the Free Zones;   
• total relief from income tax in respect of prof its or gains earned from approved activities;   
• repatriation of profits (since lib eralization of the foreign excha nge market in 1991 there are no 
restrictions on the repatriation of profit);   
• exemption from the normal fees payable with respect to work permit.   
 G/SCM/N/177/JAM 
Page 4  
 
  6. To Whom and How is the Subsidy Provided
 
  Companies approved to operate in Free Zones must  be registered or incorporated in Jamaica 
under the Companies Act to carry out any of the following prescribed activities:   
 
• warehousing and storing 
• manufacturing operations 
• transhipment operations 
• loading and unloading operations 
• exporting 
• importing 
• service operations, including banking, data processing and telemarketing insurance, 
professional services 
• packing and shipping 
• assembling 
• processing, refining, purifying, mixing, merchandising 
  Approvals for free zone status are made by the Minister of Industry on the recommendation of 
the Free Zone Council, the regulatory body appointed to supervise the operations of the Free Zones.   
 
 By policy decision of April 1997, Free Zone manufacturing entities are allowed to sell up to 
15 per cent of output on the local market.  Free Zone  goods sold into the local market are subject to 
the applicable duties and charges.    
7. Subsidy Per Unit
 
  Revenue foregone is negligible  as, consistent with policy decision of 1995, all manufacturing 
entities are entitled to duty free treatment of raw ma terials and capital goods for use in the productive 
process.    
8. Duration of the Subsidy
 
  Incentives granted to Free Zone entities are for an indefinite period.   
 9. Statistical Data on the Impact of the Programme
 
 
 The Free Zone Regime has facilitated investment  (foreign and local) in traditional as well as 
new areas of businesses and has provided employme nt and economic opportunities for a number of 
persons.  For the period 2005-2007, exports by fr ee zone entities were valued at approximately 
US$67.7M and accounted for the employment of 4,853 persons in 2005;  US$21.3M in exports and 
the employment of 5,600 persons in 2006;  an d US$40M in exports and the employment of over 
6,000 persons in 2007.    C. I
NDUSTRIAL INCENTIVES (FACTORY CONSTRUCTION ) ACT 
1. Description of Programme  
 
Provides an enabling framework for the provi sion of factory space in Jamaica.   
 2. Period covered by Notification
 
  Programme description as at 1 September 2007.    G/SCM/N/177/JAM 
 Page 5 
 
 
  3. Policy objective and Purpose of the Subsidy  
 
To facilitate and encourage the construction of factories in Jamaica.   
 4. Background and Authority of the Subsidy
 
 
 Law 9 of 1961.    Law 30 of 1961.    Act 23 of 1972.    
5. Form of the Subsidy
 
  An approved builder under the Industrial Incen tives Factory Construction Act is entitled to:   
 
• duty free importation of items or articles for factory construction;   
• enter into an agreement with a recognized enterprise for the lease of the factory;   
• be granted relief from income tax for 15 years in respect of income from the lease of the 
factory or from profits made upon its sale.   
 
6. To Whom and How the Subsidy is Provided
 
 
Approved builders are granted a license by the Mi nister of Industry to construct factories.  
Approved builders providing factory space for compan ies having recognized status – i.e. status under 
the Export Industry Encouragement Act (EIEA) or  the Industrial Incentives Act (IIA) – can qualify 
for the incentives mentioned above.  Free Zone de velopers are also eligible for incentives under 
the Act.    7. Subsidy Per Unit
 
 
 There are very few beneficiaries under the pr ogramme.  Revenue foregone  is negligible.   
 8. Duration of the Subsidy
 
  Income Tax Relief is available for fifteen (15) years in respect of income from the lease of the 
factory or from profits made upon its sale.   
 9. Statistical Data on the Impact of the Programme
 
  As indicated above there are very few benefici aries under the Programme .  The private sector 
is being encouraged to play a more active role  in factory space provision and this incentive can 
therefore play a meaningful role in facilitating the process.   
 D. F
OREIGN SALES CORPORATION ACT 
1. Description of the Programme  
 
 A legislative framework for the operation of Fore ign Sales Corporation (FSCs) in Jamaica.   
 2. Period covered by the notification
 
  Programme description as at 1 September 2007.    G/SCM/N/177/JAM 
Page 6  
 
  3. Policy Objective and or Purpose of the Subsidy
 
  To attract foreign investment into the country  and to promote Jamaica as an attractive FSC 
location.    
4. Background and Authority for the Subsidy
 
  In November 1984, Jamaica was certified as a qualifying Foreign Sales Corporation (FSC) 
jurisdiction and enabling legislation, the Foreign Sal es Corporation Act, was passed shortly thereafter.   
 
5. Form of Subsidy
 
 
• FSCs are exempt from Jamaican Corporate Income  Tax on their foreign trade income as long 
as they remain designated.   
• no income tax is imposed in Jamaica on divide nds paid to foreign shareholders by a 
designated FSC.   
• investment income or carrying changes earned by  an FSC are relieved from income taxes.   
• FSCs are entitled to import into Jamaica equipment, material and machinery free of all import 
duties.   
 
6. To whom and how the subsidy is provided  
  The Minister of Industry has the authority to grant certificates of designation to FSCs who 
locate in Jamaica.  Incen tives as outlined above are available to FSCs.   
 
7. Subsidy per unit
 
  Revenue foregone is negligible as there are few beneficiaries under the regime.   
 8. Duration of a Subsidy
 
 
 The life of the certificate is fifteen (15) years, but this may be renewed for a further fifteen (15) years if necessary.    9. Statistical data on the impact of the programme
 
 
 As stated at Section 7 there are fe w beneficiaries under this Programme.   
   
__________