RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q3/PAN/8
12 March 2002
(02-1256)
Committee on Subsidies
and Countervailing MeasuresOriginal:  Spanish
SUBSIDIES
Requests Pursuant to Article 27.4 of the Agreement
on Subsidies and Countervailing Measures
Replies to Questions Posed by the United States1
The following communication, dated 8 March 2002, has been received from the Permanent
Mission of Panama.
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UNITED STATES (G/SCM/Q3/PAN/6)
Export Processing Zones (EPZs)
1. Please indicate whether the legal instruments establishing the EPZs also establish a
termination date.  If so, when are the EPZs scheduled to lapse?
Reply No. 1
The legislation governing EPZs in the Republic of Panama does not specify a termination
date for the programme, which is a tool for the promotion of trade and production.  Panama proposes
to adjust this programme in accordance with the Agreement on Subsidies and Countervailing
Measures, on the basis of the period of extension requested.
2. Please explain what criteria are used by the Technical Secretariat of the National
Commission on Export Processing Zones to evaluate a formal application for a licence to set up
operations in an export processing zone.
Reply No. 2
The Technical Secretariat of the National Commission on Export Processing Zones is
responsible for assisting the Commission in the fulfilment of its duties.  The Secretariat thus receives
formal applications to the Commission for licences to set up enterprises in an export processing zone.It verifies that requirements are satisfied and assesses the information in the studies submitted by
applicants.
Once a licence has been granted, the Technical Secretariat ascertains that the enterprise in
question meets its legal obligations and checks that these are being duly implemented.
                                                     
1 G/SCM/Q3/PAN/8.G/SCM/Q3/PAN/8
Page 2
3. Are all exporters in Panama eligible for rebates of customs duties, import taxes and
VAT upon exportation of finished products?
Reply No. 3
Only enterprises established and operating in an export processing zone are eligible for
benefits under the EPZ programme.
Official Industry Register (OIR)
4. Apart from the export requirement, are th ere any other eligibility requirements for
companies to be included in the Official Industry Register?
Reply No. 4
The Official Industry Register establishes the following three (3) categories of registration on
the basis of which enterprises may avail themselves of different incentives and benefits:
(a) Enterprises wholly engaged in export production;
(b) enterprises engaged in domestic production;(c) enterprises partially engaged in export production.Export is not a requirement for the registration of enterprises in the Official National Industry
Register.  To qualify for registration, an enterprise must be engaged in industrial activities involvingmanufacture or assembly.  This includes small- and medium-sized industrial enterprises.
Export is a requirement, however, for eligibility for benefits and incentives granted to
enterprises that are either wholly or partially engaged in export production, pursuant to the relevant
legislation.
5. By "special funding programmes on a preferential basis", do you mean preferential loan
programmes?  If so, please indicate at what interest rates funding is provided under this
programme.
Reply No. 5
Yes.  Panama confirms that there is no such programme with benefits of this kind, as these
have never been implemented.
6. Please indicate whether the legal instrument s establishing the Official Industry Register
also establish a termination date.
Reply No. 6
Legislation sets the deadline for enterprises to avail themselves of export-related benefits at
31 December 2002, in accordance with the commitments made under the World Trade Organization(WTO).  Registrations will remain in force, however, until the date of expiration of the last
registration of an enterprise of the same type, for benefits unrelated to export.G/SCM/Q3/PAN/8
Page 3
7. Please provide the value of tax exemptions  for enterprises included in the OIR for the
years 1998 and 2000.
Reply No. 7
There is no information available on tax exemptions for 1998 and 2000.
Granting of Tax Credit Certificates (CAT)
8. Please explain how non-traditional goods are defined.
Reply No. 8
In the case of the programme for the Granting of Tax Credit Certificates, non-traditional
goods are considered to be those wholly or partly produced or processed in Panama, as defined by the
1996 Harmonized System, with the following exceptions:
(a) Cane sugar;
(b) bananas and banana purée:
1. bananas;2. banana purée;
(c) honey and cane molasses:
1. sugarcane honey;
2. cane molasses;
(d) cocoa beans;(e) raw coffee (beans);(f) shrimps, fresh, chilled or frozen;(g) bovine meat, fresh, chilled or frozen
2;
(h) bovine cattle leather, not tanned;
(i) wooden logs;(j) bovine cattle, swine and horses:
1. bovine cattle, other than pure-bred;2. swine, other than pure-bred;
3. horses, other than pure-bred;
                                                     
2 Under Law No. 4 of 19 January 1993, bovine meat, fresh, chilled or frozen, is considered to be a non-
traditional product.G/SCM/Q3/PAN/8
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(k) fish flour;
(l) other oils of fish and marine mammals;
(m) scrap metal;
(n) hawk-bill turtles, unworked;(o) extracts of (citrus) fruit;(p) petroleum and petroleum products;(q) sales under bilateral, free or preferential trade agreements;(r) minerals, metals and metal products.
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