RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/W/471
27 October 2001
(01-5289)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
PROPOSED PROCEDURES FOR EXTENSIONS UNDER ARTICLE 27.4
FOR CERTAIN DEVELOPING COUNTRY MEMBERS
Communication from the Chairman
of the General  Council
Should Ministers so direct Members, the Committee on Subsidies and Countervailing
Measures ("SCM Committee") shall follow the procedures set forth below in respect of extensions of
the transition period under Article 27.4 of the Agreement on Subsidies and Countervailing Measures
("SCM Agreement") for certain developing country Members.  The programmes to which theseprocedures shall apply are those meeting the criteria set forth in 2.
1. Mechanism for extension
(a) A Member that maintains programmes meeting the criteria set forth in 2 and that
wishes to make use of these procedures, shall initiate Article 27.4 consultations withthe Committee in respect of an extension for its eligible subsidy programmes as
referred to in 2, on the basis of documentation to be submitted to the Committee not
later than 31 December 2001.  This documentation shall consist of (i) an
identification by the Member of those programmes for which it is seeking an
extension under SCM Article 27.4 pursuant to these procedures; and (ii) a statement
that the extension is necessary in the light of the Member's economic, financial and
development needs.
(b) Not later than 28 February 2002, the Member seeking an extension shall submit to the
SCM Committee an initial notification as referred to in 3(a) providing detailed
information about the programmes for which extension is being sought.
(c) Following receipt of the notifications referred to in 1(b), the SCM Committee shall
consider those notifications, with an opportunity for Members to seek clarification ofthe notified information and/or additional detail with a view to understanding the
nature and operation of the notified programmes, and their scope, coverage and
intensity of benefits, as referred to in 3(b).  The purpose of this consideration by the
SCM Committee shall be to verify that the programmes are of the type eligible under
these procedures as referred to in 2, and th at the transparency requirement referred to
in 3(a) and 3(b) is fulfilled.  Not later than 15 December 2002, Members of the SCM
Committee shall grant extensions for calendar year 2003 for those programmes
notified pursuant to these procedures, provided that the notified programmes meet the
eligibility criteria in 2 and that the transparency requirement is fulfilled.  The notified
information on the basis of which the extensions are granted, including informationprovided in response to requests from Memb ers as referred to above, shall form the
frame of reference for the annual reviews of the extensions as referred to in 1(d) and
1(e).G/SCM/W/471
Page 2
(d) As provided for in SCM Article 27.4, the extensions granted by the SCM Committee
pursuant to these procedures shall be subject to annual review in the form of
consultations between the Committee and the Members receiving the extensions.
These annual reviews shall be conducted on the basis of updating notifications from
the Members in question, as referred to in 3(a) and 3(b).  The purpose of the annualreviews shall be to ensure that the transparency and standstill requirements as set
forth in 3 and 4 are being fulfilled.
(e) Through the end of calendar year 2005, subject to annual reviews during that period
to verify that the transparency and standstill requirements set forth in 3 and 4 are
being fulfilled, Members of the Committee shall agree to continue the extensions
granted pursuant to 1(c).
(f) During the last year of the period referred to in 1(e), a Member that has received an
extension under these procedures shall have the possibility to seek a continuation of
the  extension pursuant to SCM Article 27.4, for the programmes in question.  The
Committee shall consider any such requests at that year's annual review, on the basis
of the provisions of SCM Article 27.4, i.e., outside the framework of these
procedures.
(g) If a continuation of the extension pursuant to 1(f) is either not requested or not
granted, the Member in question shall have the final two years referred to in the last
sentence of SCM Article 27.4.
2. Eligible programmes
Programmes eligible for extension pursuant to these procedures, and for which Members shall
therefore grant extensions for calendar year 2003 as referred to in 1(c), are export subsidy
programmes (i) in the form of full or partial exemptions from import duties and internal taxes,
(ii) which were in existence not later than 1 September 2001, and (iii) which are provided by
developing country Members (iv) whose share of world merchandise export trade was not
greater than 0.10 per cent
1, (v) whose total Gross National Income ("GNI") for the year 2000
as published by the World Bank was at or below US $ 20 billion,2 (vi) and who are otherwise
eligible to request an extension pursuant to Article 27.4,3 and (vii) in respect of which these
procedures are followed.
3. Transparency
(a) The initial notification referred to in 1(b), and the updating notifications referred to in
1(d), shall follow the agreed format for subsidy notifications under SCM Article 25
(found in G/SCM/6).
(b) During the SCM Committee's consideration/review of the notifications referred to in
1(c) and 1(d), notifying Members can be requested by other Members to provide
additional detail and clarification, with a view to confirming that the programmes
meet the criteria set forth in 2, and to establishing transparency in respect of the
scope, coverage and intensity of benefits (the "favourability") of the programmes in
                                                     
1 According to the calculations performed by the WT O Secretariat as reflected in Appendix 3 to the
Report of the Chairman (G/SCM/38).
2 The SCM Committee shall consider other appropriate data sources in respect of Members for whom
the World Bank does not publish total GNI data.
3  The fact that a Member is listed in Annex VII(b) shall not be deemed to make that Member otherwise
ineligible to request an extension pursuant to Article 27.4.G/SCM/W/471
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question.4  Any information provided in response to such requests shall be considered
part of the notified information.
4. Standstill
(a) The programmes for which an extension is granted shall not be modified during the
period of extension referred to in 1(e) so as to make them more favourable than theywere as at 1 September 2001.  The continuation of an expiring programme without
modification shall not be deemed to violate standstill.
(b) The scope, coverage and intensity of benefits (the "favourability") of the programmes
as at 1 September 2001 shall be specified in the initial notification referred to in 1(b),
and standstill as referred to in 4(a) shall be verified on the basis of the notified
information referred to in 1(d) and 3(b).
5. Product graduation on the basis of export competitiveness
Notwithstanding these procedures, Articles 27.5 and 27.6 shall apply in respect of export
subsidies for which extensions are granted pursuant to these procedures.
6. Members listed in Annex VII(b)
(a) A Member listed in Annex VII(b) whose GNP per capita has reached the level
provided for in that Annex and whose prog ramme(s) meet the criteria in 2 shall be
eligible to make use of these procedures.
(b) A Member listed in Annex VII(b) whose GNP per capita has not reached the level
provided for in that Annex and whose programme(s) meet the criteria in 2 may
reserve its right to make use of these procedures, as referred to in 6(c), by submitting
the documentation referred to in 1(a) not later than 31 December 2001.
(c) If the per capita GNP of a Member referred to in 6(b) reaches the level provided for
in that Annex during the period referred to in 1(e), that Member shall be able to make
use of these procedures as from the date at which its per capita GNP reaches that
level and for the remainder of the period referred to in 1(e), as well as for any
additional periods as referred to in 1(f) and 1(g), subject to the remaining provisionsof these procedures.
(d) For a Member referred to in 6(b), the effective date for the standstill requirement
referred to in 4(a) shall be the year in which that Member's GNP per capita reaches
the level provided for in Annex VII(b).
                                                     
4 The scope, coverage and intensity of the programmes in question will be determined on the basis of
the legal instruments underlying the programmes.G/SCM/W/471
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7. Final provisions
(a) The decision by Ministers, these procedures, and the SCM Article 27.4 extensions
granted thereunder, are without prejudice to any requests for extensions under
Article 27.4 that are not made pursuant to these procedures.
(b) The decision by Ministers, these procedures, and the SCM Article 27.4 extensions
granted thereunder, shall not affect any other existing rights and obligations under
SCM Article 27.4 or under other provisions of the SCM Agreement.
(c) The criteria set forth in these procedures are solely and strictly for the purpose of
determining whether Members are eligible to invoke these procedures.  Members of
the Committee agree that these criteria have no precedential value or relevance, direct
or indirect, for any other purpose.
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