WORLD TRADE  
ORGANIZATION  G/SCM/N/211/JAM 
29 July 2010 
 (10-4076) 
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  
 
JAMAICA 
  
 The following notification, dated 28 July 2010, 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 2009 to enable the 
Committee to conduct its annual review of complianc e of the standstill and transparency requirements 
as required under the Decision.  This notification also contains an Action Plan which is being 
submitted in accordance with the Decision. 
 
A. E
XPORT INDUSTRY ENCOURAGEMENT ACT 
 1. Description of the programme
 
  The Export Industry Encouragement Act was established as an incentiv e framework geared 
toward the encouragement of export industries.   
 2. Period covered by the notification
 
  Programme description for the calendar year 2009.   
 
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 
 G/SCM/N/211/JAM 
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  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 duty-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.   
 
7. Subsidy per unit
 
  Estimated revenue foregone as a result of relief under the programme was US$0.9m.   
 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).  This remains an important incentive programme for manufacturing companies wi shing to export to third country markets.  
Five hundred (500) persons were employed under th is programme during the period under review.   
 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 for the calendar year 2009.     G/SCM/N/211/JAM 
 Page 3 
 
 
  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 of 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, cons umer goods, raw materials or articles for 
use in connection with the approved product;   
• Duty-free treatment of articles for the c onstruction, alterati on, and repair of 
equipment of premises in the Free Zones;   
• Total relief from income tax in respec t of profits or gains earned from approved 
activities;   
• Repatriation of profits (since liberalizati on of the foreign exchange market in 1991 
there are no restrictions on the repatriation of profits);    
• Exemption from the normal fees payable with respect to work permits.   
 
6. To whom and how the subsidy is provided
 
  Companies approved to operate in the Free Zone s must be registered or incorporated in 
Jamaica under the Companies Act to carry out an y of the following prescribed activities:   
 
• warehousing and storing 
• manufacturing operations 
• transshipment 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 onto the local market are subject to 
the applicable duties and charges.   G/SCM/N/211/JAM 
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  7. Subsidy per unit
 
  The estimated revenue foregone as a result of relief under this programme was US$4.00m.   
 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
 
 
 This programme continues to be a critical fa ctor in Jamaica's economic development.  The 
number of persons employed in the free zones currently  stands at over 4,000 and the programme plays 
an important support role in Jamaica's investment pr omotion and domestic capacity building efforts.   
 C. I
NDUSTRIAL INCENTIVES (FACTORY CONSTRUCTION ) ACT 
 
1. Description of the programme  
  Provides an enabling framework for the pr ovision of factory space in Jamaica.   
 2. Period covered by the notification
 
 
 Programme description for the calendar year 2009.    3. Policy objective and/or 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 y ears 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 licence by the Mi nister of Industry to construct factories.  
Approved builders providing factory space for companies 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 developers are also eligible for incentives under the Act.   
  G/SCM/N/211/JAM 
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  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
 
 
 Please see section 7 above.    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 for the calendar year 2009.   
 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 of 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 the 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 di vidends 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 locating in Jamaica.  Incentives as outlined above are available to FSCs.   
 G/SCM/N/211/JAM 
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  7. Subsidy per unit
 
  Revenue foregone is negligible as there are few beneficiaries under the regime.   
 8. Duration of the 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
 
 
 Please see response at section 7 above.    10. Information referred to in Paragraph 2( a) of the General Council Decision of 2007
 
  
• The ministry responsible for the implementation and administration of the 
four (4) programmes, the Ministry of I ndustry, Investment and Commerce (MIIC), 
has conducted consultations with the relevant  stakeholders, including Jamaica's trade 
and investment promotion agency, private sector associations, government ministries and agencies, to inform them of the General Council Decision, including the 
31 December 2015 deadline for the elimina tion of the export subsidy programmes.  
• All beneficiaries under the Acts have b een notified individually in writing and in 
gazetted instruments that the programmes will not continue beyond 31 December 
2015 as set out in the General Council Decisi on.  Beneficiaries were notified in 
April 2008 in a letter from the MIIC.  New be neficiaries after this date have been 
similarly notified in the Ministerial Orders issued to them under the signature of the 
Minister of Industry, Investment and Commerce.   
• The Tax Reform Committee, which was appointed to review and provide 
recommendations on the reform of tax po licy and administration in Jamaica, 
deliberated on the matter of tax incentives, including the four (4) programmes covered by this notification.  In its repor t, the Committee recommended that given the 
limited shelf life of the export incentives programmes, Jamaica urgently needs to 
reform its tax regime as it winds down these incentives. 
• An Inter-ministerial Committee, chaire d by the MIIC, discussed recommendations on 
the reform and modification of Jamaica's incentives regime, including the four (4) programmes.  Based on the discussions on ' A Concept Paper on a Revised 
Incentive Regime ' prepared by the MIIC, the Committee supported the 
recommendation that the Export Industry Encouragement Act (EIEA), the Jamaica 
Export Free Zones Act, the Industrial Incentives (Factory Construction) Act, and the Foreign Sales Corporation Act should be repealed and replaced by an omnibus 
incentives legislation.  The new statute will be identified as the Industry Incentive and 
Facilitation Act.  It will be WTO compatible  and will not contain provisions that will 
be contingent on export performance. 
• Cabinet has been advised of the terms an d conditions of the General Council Decision 
and of the proposed way forward regarding the reform of Jamaica's incentives programmes.  
• Consultations are continuing with stake holders to achieve consensus on the policy 
and legislative framework that will guide the development of a new incentives regime.  G/SCM/N/211/JAM 
 Page 7 
 
 
  Action Plan for the elimination of export subsidies submitted pursuant to 
Paragraph 1(f) of the General Council Decision contained in WT/L/691 
 
A. Description of internal steps that have been taken or are being taken 
 
• The ministry responsible for the implementation and administration of the 
four (4) programmes, the Ministry of I ndustry, Investment and Commerce (MIIC), 
has conducted consultations with the relevant  stakeholders, including Jamaica's trade 
and investment promotion agency, private sector associations, government ministries and agencies, to inform them of the General Council Decision, including the 
31 December 2015 deadline for the elimina tion of the export subsidy programmes.  
• All beneficiaries under the Acts have b een notified individually in writing and in 
gazetted instruments that the programmes will not continue beyond 31 December 
2015 as set out in the General Council Decisi on.  Beneficiaries were notified in 
April 2008 in a letter from the MIIC.  New be neficiaries after this date have been 
similarly notified in the Ministerial Orders issued to them under the signature of the 
Minister of Industry, Investment and Commerce.   
• The Tax Reform Committee, which was appointed to review and provide 
recommendations on the reform of tax po licy and administration in Jamaica, 
deliberated on the matter of tax incentives, including the four (4) programmes covered by this notification.  In its repor t, the Committee recommended that given the 
limited shelf life of the export incentives programmes, Jamaica urgently needs to 
reform its tax regime as it winds down these incentives. 
• An Inter-ministerial Committee, chaire d by the MIIC, discussed recommendations on 
the reform and modification of Jamaica's incentives regime, including the four (4) programmes.  Based on the discussions on ' A Concept Paper on a Revised 
Incentive Regime ' prepared by the MIIC, the Committee supported the 
recommendation that the Export Industry Encouragement Act (EIEA), the Jamaica Export Free Zones Act, the Industrial Incentives (Factory Construction) Act, and the Foreign Sales Corporation Act should be repealed and replaced by an omnibus 
incentives legislation.  The new statute will be identified as the Industry Incentive and 
Facilitation Act.  It will be WTO compatible  and will not contain provisions that will 
be contingent on export performance. 
• Cabinet has been advised of the terms an d conditions of the General Council Decision 
and of the proposed way forward regarding the reform of Jamaica's incentives programmes.  
• Consultations are continuing with stake holders to achieve consensus on the policy 
and legislative framework that will guide the development of a new incentives 
regime.  
B. Description of the domestic legislat ive procedures and steps to be taken  
 
 Following the completion of stakeholder consu ltations, the MIIC will make a submission to 
Cabinet outlining the policy framework of the new regime, the objectives and features for reform, and 
seeking approval for drafting instructions to be sent to the Office of the Parliamentary Counsel (CPC) 
to repeal the 4 pieces of legislation and to replace them with WTO compatible legislation.  The CPC will prepare a bill.  Further to stakeholder review, as  well as an evaluation by an external organization 
to ensure WTO compliance, it is expect ed that the bill will be revised. G/SCM/N/211/JAM 
Page 8  
 
   Once the bill reflects all the required legal provisions, it will be submitted to the Legislation 
Committee – a Sub-Committee of Cabinet – for review.  On completion of the review, the Committee will give its recommendation for the bill to be subm itted to Cabinet.  After considering the bill, 
Cabinet approval will be given for it to be tabled in Parliament where it will be debated and enacted 
into law.  Thereafter, the Governor General will give his assent to the Legislation.   
 
 Great importance is attached throughout the pr ocess to consultations and stakeholder input to 
ensure that the issues and the goals to be achie ved in the reform process are known and understood, 
and are adequately reflected in the new legislative framework.  It is estimated  that the process outlined 
above will be completed within the next 3-4 years to allow time for the sensitization of pertinent 
sectors prior to the execution of the legislation.  Th e process will be completed in time to ensure that 
Jamaica complies with its obligation to eliminate the export subsidy programmes by 31 December 2015.   
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