./.WORLD TRADE
ORGANIZATIONG/SCM/Q3/VCT/8
26 July 2002
(02-4146)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Requests Pursuant to Article 27.4 of the Agreement
on Subsidies and Countervailing Measures
Replies to Follow-up Questions Posed by the UNITED STATES1
Regarding the Notification of ST. VINCENT AND THE GRENADINES2
The following communication, dated 25 July 2002, has been received from the Permanent
Mission of St. Vincent and the Grenadines.
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In keeping with Article 25.7 of the Agreement on Subsidies and Countervailing Measures,
St. Vincent and the Grenadines is indicating that the responses to the follow-up questions do not
prejudice the legal status of the notified programmes under the GATT 1994 or the said Agreement,
their effects under the Agreement or the nature of the programmes or measures.
Fiscal Incentives Act No. 5 of 1982
Q1. We remain concerned with the local va lue added requirements under this programme.
The discussion at the recent special meeting of the Committee on Subsidies and Countervailing
Measures concerning this issue was useful in explaining how this programme operates.
However, we seek further clarification con cerning the local value added requirements, and
therefore request consideration of the following additional questions:
1. Under this programme, local value added is defined as the amount realized from the
sales of the product after subtracting, among oth er things, the cost of imported raw materials,
components, parts of components, fuels and services .  We seek clarification, therefore, whether
the use of domestically sourced raw materials,  components and parts determines, in any way,
the duration of the incentives provided under this programme.
                                                     
1 G/SCM/Q3/VCT/7
2 G/SCM/N/74/VCT, G/SCM/N/71/VCTG/SCM/Q3/VCT/8
Page 2
Reply
In accordance with the Fiscal Incentive Act No. 5 of 1982 the duration of incentives is
calculated as follows:
Classification of approved Tax holiday period
Enterprises
Group  YearsGroup I Enterprise (local value added > 50%)         15
Group II Enterprise (local value added >25%<50%)     12Group III Enterprise (local value added >10%<25%)         10
Local value is weighted by the wages or salaries paid to nationals of the CARICOM Member States
expressed as a percentage of the total sales of the products manufactured.
Q2. Please provide the implementing legislation under this programme and any
accompanying regulations and decrees.
Reply
A copy of the Fiscal Incentive Act has been notified to the Committee on Subsidies and
Countervailing Measures, in document G/SCM/N/71/VCT.  There are no amendments, accompanying
regulations or decrees to this Act.
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