WORLD TRADE  
ORGANIZATION  G/SCM/N/123/DOM 
G/SCM/N/128/DOM 7 June 2005 
 
 
(05-2321) 
Committee on Subsidies and Countervailing Measures Original:   Spanish 
 
 
 
SUBSIDIES 
New and Full Notifications Pursuant to Article XVI:1 of
 
the GATT 1994 and Article 25 of the SCM Agreement  
 
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  
 
DOMINICAN REPUBLIC 
 
 The following communication, dated 3 June 2005, is being circulated at the request of the 
delegation of the Dominican Republic. 
_______________ 
 Pursuant to Article XVI:1 of the GATT 1994 and Article 25.2 of the WTO Agreement on 
Subsidies and Countervailing Measures (SCM Agre ement), and in accordance with subparagraphs 
1(d) and (e) of the Procedures for extensions unde r Article 27.4 of the SCM Agreement for certain 
developing country Members (document G/SCM/ 39 of 20 November 2001), I hereby submit the 
annual notification for 2004 with a view to a con tinuation of the extension granted under the Decision 
of 22 November 2002, as contained in document G/SCM/64 and its addenda. 
 This notification is being submitted in fulf ilment of the transparency and standstill 
requirements set forth in paragraphs 3 and 4 of doc ument G/SCM/39.  As required by this document, 
the programme notified has not been modified in any way so as to make it more favourable.  The foregoing is without prejudice to the rights of  the Dominican Republic under the WTO Agreements. 
 In accordance with the format of the ques tionnaire in document G/SCM/6, prepared and 
adopted by the Committee on Subsidies and Coun tervailing Measures, the Dominican Republic 
hereby notifies the following: 
1. Title of the subsidy programme, if relevant, or brief description or identification of the 
subsidy.  
 Law No. 8-90 to "Promote the Establishment of New Free Zones and Expand Existing Ones", 
which establishes a tax-exemption programme fo r enterprises manufacturing goods or providing 
services related to goods production, located with in geographic areas known as free zones and the 
production of which must be mainly for export. G/SCM/N/123/DOM 
G/SCM/N/128/DOM Page 2 
 
 
 2. Period covered by the notification.  
 This notification covers th e period up to 31 December 2004. 
3. Policy objective and/or purpose of the subsidy.  
 The objectives of the programme are, inter alia , job creation, workforce training, 
development of social support programmes, prom otion of balance-of-payments equilibrium and 
establishment of regional community development programmes. 
4. Background and authority for the subsidy (including identification of the legislation 
under which it is granted).  
 The underlying reasons for this programme were to provide training, to transfer technology 
and to attract local and foreign investment in orde r to create employment at various points within the 
national territory, including economically deprived ar eas, such as the border areas with Haiti.  This 
programme was created under Law No. 8-90 of 15 January 1990. 
5. Form of the subsidy (i.e., gran t, loan, tax concession, etc.).  
 Enterprises manufacturing goods or providing a ggregate services for the production of such 
goods and operating under Law No. 8-90 are exempt from payment of income tax and customs duties 
on the importation and exportation of the raw materi als, equipment and machinery used to produce 
these goods. 
6. To whom and how the subsidy is provided (whether to producers, to exporters, or 
others;  through what mechanism;  if the latter, how determined).  
 The programme exempts natural and legal pe rsons eligible under the free zone regime 
established in Law No. 8-90 who largely export goods  produced within the free zones from the taxes 
and duties specified in point 5 of this questionnaire. 
7. Subsidy per unit, or in cases where this is not possible, the total amount or the annual 
amount budgeted for that subsidy (indicating, if possible, the average subsidy per unit in 
the previous year).  Where provision of p er-unit subsidy information (for the previous 
year, or both) is not possible, a full explanation.  
 Law No. 8-90 does not provide for the auditing, on the basis of either units or operating 
results, of manufacturing operations  conducted within the free zones by the enterprises operating 
therein with a view to estimating the fiscal cost  to the Dominican State of attracting private 
investment for the creation of sources of employment. 
8. Duration of the subsidy and/or any other time-limits attached to it, including date of 
inception/commencement.  
 Enterprises eligible for the benefits grante d under Law No. 8-90 are entitled to a free-zone 
operating licence, normally valid for up to 20 years in  the border region with Haiti and 15 years in the 
rest of the country.  Beyond this period , permit holders may apply for a renewal. 
9. Statistical data permitting an assessment of th e trade effects of the subsidy.  The specific 
nature and scope of such statistics is left to the judgement of the notifying Member.  To 
the extent possible, relevant and/or determin able, however, it is desirable that such  G/SCM/N/123/DOM 
 G/SCM/N/128/DOM 
 Page 3 
 
 
 information include statistics of production , consumption, imports and exports of the 
subsidized product(s) or sector(s):  
 (a) For the three most recent years fo r which statistics are available;  
 (b) for a previous representative year, which,  where possible and meaningful, should 
be the latest year preceding the introduction of the subsidy or preceding the last 
major change in the subsidy. G/SCM/N/123/DOM 
G/SCM/N/128/DOM Page 4 
 
 
 HISTORICAL OVERVIEW OF THE FREE ZONES 
 
Evolution of the Main Variables of Export Free Zones
 
 
Table No. 1 
(1993-2004) 
Year Existing 
industrial 
estates Enterprises Jobs Exports  
(millions of 
US$) Foreign 
exchange 
(millions 
of US$) Surface area of 
industrial 
premises in use 
(sq. ft.) Textile exports 
(millions of US$) 
1993 31 462 164,296 2,511.1 401.0 12,000,000 1,457.70 
1994 32 476 176,311 2,716.1 441.4 12,700,000 1,616.40 
1995 33 469 165,571 2,907.4 509.0 14,120,000 1,786.60 
1996 36 436 164,639 3,107.3 545.0 13,782,496 1,802.10 
1997 40 446 182,174 3,596.4 701.0 15,603,755 2,272.50 
1998 43 496 195,193 4,100.0 826.5 17,540,407 2,395.00 
1999 44 484 189,458 4,331.5 887.3 16,820,049 2,385.20 
2000 46 481 195,262 4,770.6 1, 018.6 21,068,186 2,451.18 
2001 51 512 175,078 4,481.6 977.9 21,738,332 2,274.48 
2002 53 520 170,833 4,317.3 886.5 21,923,764 2,173.30 
2003 54 531 173,367 4,398.7 810.8 22,066,221 2,128.40 
2004* 58 569 189,853 4,416.45* 869.43* 24,332,619 2,076.20 
% growth        
2002-2004 7.4 7.2 9.5 0.2 7.2 10.3 -5.5 
 
 *Preliminary figures  G/SCM/N/123/DOM 
 G/SCM/N/128/DOM 
 Page 5 
 
 
 Balance of Exports Versus Imports for Free Zones  
(1993-2004) 
(Millions of US dollars) 
Year Exports Imports Balance 
1993 2,511.08 1,875.70 635.4 
1994 2,716.01 1,911.50 804.5 
1995 2,907.40 2,006.20 901.2 
1996 3,107.30 2,146.30 961.0 
1997 3,596.40 2,416.70 1,179.7 
1998 4,100.00 2,700.70 1,399.3 
1999 4,331.50 2,834.30 1,497.2 
2000 4,770.60 3,062.50 1,708.1 
2001 4,481.60 2,826.40 1,655.2 
2002 4,317.30 2,600.30 1,717.0 
2003 4,398.70 2,617.60 1,781.1 
2004* 4,416.45 2,474.70 1,941.8 
 
 *Preliminary figures 
Source : Central Bank of the Dominican Republic 
 
 
Chart No. 5  
 
 
 
 Balance of Exports Versus Imports for Free Zones 
(1993-2004) 
Imports Exports G/SCM/N/123/DOM 
G/SCM/N/128/DOM Page 6 
 
 
 Comparison of Domestic and Free-Zone Exports
 
 
(1993-2004) 
(Millions of US dollars) 
 
 
Year Domestic exports Free-zone 
exports Total exports  Free-zone exports/total exports (%) 
1993 602.2 2,511.1 3,114.3 80.7 
1994 736.4 2,716.1 3,452.5 78.7 
1995 872.1 2,907.4 3,779.5 76.9 
1996 945.5 3,107.3 4,052.8 76.7 
1997 1,017.3 3,596.4 4,613.7 78.0 
1998 880.3 4,100.0 4,980.3 82.3 
1999 805.1 4,331.5 5,136.6 84.3 
2000 966.1 4,770.6 5,736.7 83.2 
2001 794.6 4,481.6 5,276.2 84.9 
2002 847.6 4,335.9 5,183.5 83.6 
2003 1,064.0 4,406.8 5,470.8 80.6 
2004* 1,333.4 4,416.5 5,749.9 76.8 
 
 *  Preliminary figures 
Source :  Central Bank of the Dominican Republic 
 
Chart No. 6  
 
 
 
 
 
__________  Comparison of Domestic and Free-Zone Exports 
(2004)  
Domestic ex ports
Free-zone 
exports