. /.   WORLD TRADE  
ORGANIZATION  G/SCM/Q2/MYS/12 
1 February 2010 
 (10-0490) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Questions Posed by the UNITED STATES Regarding the  
New and Full Notification of MALAYSIA1 
 
  The following communication, dated 26 January 2 010, is being circulated at the request of the 
Delegation of the United States.  
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I. GENERAL COMMENTS 
 The Report by the Secretariat for the latest Trade Policy Review of Malaysia 
(WT/TPR/S/225, 14 December 2009), at Section II, page 15, para. 16, notes that Malaysia has stated 
that it makes regular notifications to the WTO.  Ho wever, prior to the current subsidy notification, 
which covers the years 2007-2009, Malaysia had not made a subsidy notification as required by 
Article 25 of the SCM Agreement since 1996 (G/SCM/W/546, 28 April 2009).  Therefore, to date, Malaysia has not submitted a subsidy noti fication covering the years 1996-2006.   
 
 a. Does Malaysia intend to provide a subsidy notification for the years 1996-2006?  If 
not, please explain how Malaysia views its subsidy obligations under Article 25 of 
the Subsidies Agreement?   
 b. What steps has Malaysia taken to en sure that it will provide timely subsidy 
notifications in the future?   
 II. CURRENT NOTIFICATION QUESTIONS 
 The United States submits the following questions  on the programs that Malaysia included in 
its current notification.    
1. SMIDEC Programs (Matching Grant for SM Es & Grant for Enhancing Marketing 
Skills of SMEs) 
a. Please explain to what "SMIDEC" refers.   
 b. Please explain how "small medium enterp rises" is defined under this programme.   
 
2. MIDA Programmes (Pioneer Status & Investment Tax Allowance) 
a. Please explain to what "MIDA" refers. 
                                                     
 
1 G/SCM/N/186/MYS.   G/SCM/Q2/MYS/12 
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   b. Please identify which "approved promot ed products/activ ities" and "approved 
sectors" are eligible for incen tives under these programmes.   
 c. How is it determined whether a particular promoted product, activity or sector 
"contributes to the future growth and development of the economy".   
 d. For the Pioneer Status programme, please explain what criteria are used for 
determining the extent of the income tax exemption ( e.g., whether it is a partial or full 
exemption) for a particular beneficiary.   
 e. For the Investment Tax Allowance, plea se explain what types of capital expenditures 
qualify for the allowance.   
 III. OUTSTANDING ARTICLE 25.8 QUESTIONS 
 Additionally, the United States previously subm itted questions pursuant to Article 25.8 of the 
Subsidies Agreement regarding certain measures mainta ined by Malaysia, some of which appear to be 
prohibited subsidies and which are not addressed in  Malaysia's current "new and full" subsidies 
notification.  See, G/SCM/Q2/MYS/10 (10 October 2006).  These measures, which are described in 
more detail in the cited document, are as follows:   
  a. Single or Double Deduction for the Promotion of Exports  b. Local Content Requirement Attached to Incentives under the Pioneer Status and 
Investment Tax Allowance Programmes 
 c. Income Tax Exemption Based on the Value of Increased Exports 
 d. National Automotive Policy (NAP) Framework Incentives 
 e. Industrial Linkage Programme (ILP) / Vendor Development Programme  f. National Biotechnology Policy Tax Incentives  g. Import Duty and Sales Tax Exemptions for Spares and Consumables  h. Market Development Grants 
 i. Brand Promotion Grants 
 j. Tax Exemption for Malaysia International Trading Companies (MITCs)  k. Free Industrial Zone Duty Exemption for Machinery and Equipment  l. Added Incentives for Reinvestme nt in Resource-Based Industries 
  The United States respectfully takes this opport unity to reiterate its request for a complete 
written response from Malaysia, consistent with Ma laysia's obligations under Article 25.9 of the 
SCM Agreement, to the Article 25.8 questions submitted by the United States regarding these 
programmes.   
  
 
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