WORLD TRADE G/SCM/N/3/CYP
G/SCM/N/16/CYP
ORGANIZATION 19November 1996
(96-4890)
Original: English Committee onSubsidies andCountervailing Measures
SUBSIDIES
Notifications Pursuant toArticle XVI:1 oftheGATT 1994
andArticle 25oftheAgreement onSubsidies and
Countervailing Measures
CYPRUS
Thefollowing communication, dated 1November 1996, hasbeenreceived fromthePermanent
Mission ofCyprus.
_______________
ThisnotificationcoversagriculturalandindustrialprogrammesgrantedormaintainedbyCyprus
fortheyears 1993-1995 unless otherwise specified.
Although Cyprus hassome doubts astowhether some ofthese programmes fallwithin the
definitionofasubsidy,orwhethertheyarespecificundertheAgreementonSubsidiesandCountervailing
Measures, theyarebeing notified fortransparency purposes.G/SCM/N/3/CYP
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Table ofContents
PageNo.
A. AGRICULTURE ...........................................2
(i) Bulkwine ...........................................2
(ii) Dried grapes (raisins) ...................................3
(iii) Groundnuts ..........................................4
(iv) Pigmeat ............................................5
B. INDUSTRY ..............................................6
(v) Resource centre fortheclothing industry .......................6
(vi) Encouragement ofestablishment orexpansion ofmanufacturing industries in
rural areas ..........................................7
(vii) Establishment ofIndustrial Estates ...........................7
(viii) Industrial FreeZone ....................................8
(ix) Assistance tomanufacturing industries toestablish pollution control
systems ............................................9
(x) Duty relief forselected industries ............................10
(xi) Promotion ofHandicrafts .................................10
(xii) Industrial Restructuring andTechnical Upgrading ..................11
(xiii) Promotion oflocally manufactured products .....................12
C. GENERAL ...............................................13
(xiv) Drawback onexported goods ...............................13
(xv) Exemption from taxation ofprofits derived from theexportation oflocally
manufactured/produced goods ..............................14
(xvi) Export Credit Insurance Scheme .............................15
(xvii) Incentives provided toexporters taking partininternational trade fairs/trade
missions abroad .......................................15
(xviii) Financial assistance formarket research inforeign markets ............16
A. AGRICULTURE
(i) Bulk wine
1. Titleofthesubsidy
Bulkwinesubsidy covering brennwein andgrape must.
2. Period covered bythenotification
Years 1993-1995.
3. Policy objective
Toenable wineries tocompete effectively intheforeign markets.G/SCM/N/3/CYP
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4. Authority ofsubsidy
Thesubsidy isdecided bytheVineProducts Commission anditisapproved bydecision of
theCouncil ofMinisters.
5. Form ofsubsidy
Export subsidy intheform ofagrant tobulkwineandgrape must.
6. Towhom andhowthesubsidy ispaid
ItispaidbytheVineProducts Commission directly tothefourmajor wineries.
7. Export subsidy perunit
£C0.13perlitreanhydrous forbulkwines.
£C65pertonforgrape must.
8. Duration ofsubsidy
Oneyear, renewable bydecision oftheCouncil ofMinisters withnoquantity limits attached.
9. Statistical data
Export subsidized 1993 1994 1995
Bulkwine(anhydrous litres) 1,191,446 6,443,492 5,361,154
Grape must (tons) 1,096 4,483 4,992
(ii) Dried grapes (raisins)
1. Titleofsubsidy
Raisins export subsidy.
2. Period covered bythenotification
Years 1993-1995.
3. Policy objective
Toenable theVineProducts Commission tocompete effectively intheforeign markets.
4. Authority ofsubsidy
Thesubsidy isdecided bytheVineProducts Commission anditisapproved bydecision of
theCouncil ofMinisters.
5. Form ofsubsidy
Export subsidy intheform ofagrant tosultana raisins.G/SCM/N/3/CYP
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6. Towhom andhowthesubsidy ispaid
Thesubsidy ispaidtotheVineProducts Commission anditrepresents thedifference between
export receipts andcosts ofpurchase, processing andpacking.
7. Export subsidy perunit
Notapplicable.
8. Duration ofsubsidy
Oneyear, renewable byDecision oftheCouncil ofMinisters, withnoquantity ormonetary
values attached.
9. Statistical data
1993
£C1994
£C1995
£C
Sales 134,595 141,172 233,455
Lesscostofsales 145,000 158,507 366,170
Gross loss 10,405 17,355 132,715
Lesspacking &export expenses 17,633 17,895 37,162
Subsidy 28,038 35,230 169,877
(iii) Groundnuts
1. Titleofsubsidy
Subsidy fortheexport ofgroundnut surpluses.
2. Period covered bythenotification
Years 1993-1995.
3. Policy objective
Tofacilitate theexport ofgroundnut surpluses.
4. Authority forthesubsidy
Thesubsidy wasproposed bytheMinistry ofCommerce, Industry andTourism andwasdecided
bytheCouncil ofMinisters.
5. Form ofsubsidy
Ittooktheform ofagrant.G/SCM/N/3/CYP
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6. Towhom andhowthesubsidy waspaid
Itwaspaiddirectly totheProducers 'Cooperative Union.
7. Export subsidy perunit
£C313perton.
8. Duration ofsubsidy
Oneyear, renewable ifnecessary, byDecision oftheCouncil ofMinisters.
9. Statistical data
Exports Subsidy
1995 198tons £C62,000
(iv) Pigmeat
1. Titleofsubsidy
Pigmeat export subsidy.
2. Period covered bythenotification
Years 1993-1995.
3. Policy objective
Tofacilitate theexport ofpigmeat surpluses.
4. Authority forthesubsidy
ThesubsidywasproposedbytheMinistryofCommerce,IndustryandTourismandwasapproved
bytheCouncil ofMinisters.
5. Form ofsubsidy
Ittooktheform ofagrant.
6. Towhom andhowthesubsidy waspaid
ItwaspaidbytheMinistry ofCommerce, Industry andTourism directly tothePigFarmers
Association.
7. Export subsidy perunit
£C60,000 for550tonsofpigmeat =£C109/ton.G/SCM/N/3/CYP
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8. Duration ofsubsidy
Thesubsidy wasattached totheexport of550tonsofpigmeat in1994.
9. Statistical data
Exports ofpigmeat in1994: 550tons.
B. INDUSTRY
(v) Resource centre fortheclothing industry
1. Titleofsubsidy
Resource Centre fortheClothing Industry.
2. Period
Afive-year period starting from 1996.
3. Policy objective
Toimprove thecompetitiveness oftheclothing industry.
4. Authority ofsubsidy
Granted bytheMinistry ofCommerce, Industry andTourism andapproved byaDecision of
theCouncil ofMinisters.
5. Form ofsubsidy
Agrant of£C694,000 tobedistributed overafive-year period. Amount tobegranted during
1996 £C200,000.
6. Towhom andhowthesubsidy ispaid
ItispaidtotheCyprus Association ofClothing Manufacturers.
7. Amount budgeted
1996: £C200,000
1997: £C190,000
Therestwillbedistributed overtheremaining three years.
8. Duration ofsubsidy
Fiveyears asfrom 1996.G/SCM/N/3/CYP
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9. Statistical data
Notapplicable.
(vi) Encouragement ofestablishment orexpansion ofmanufacturing industries inrural areas
1. Titleofsubsidy
Ascheme toencourage theestablishment orexpansion ofmanufacturing industries inrural
areas.
2. Period
Yearly.
3. Policy objective
Toencourage theestablishment orexpansion ofmanufacturing industries inrural areas.
4. Authority ofsubsidy
Ministry ofCommerce, Industry andTourism. Approved bytheCouncil ofMinisters Decisions
(Nos. 35.265 dated 21May1991 and38.776 dated 28January 1993).
5. Form ofsubsidy
Grant.
6. Towhom andhowthesubsidy ispaid
Toexisting andnewly established manufacturing industries incertain specified rural areas.
7. Amount budgeted
1992 1993 1994 1995
£C(thousands) 217.4 302.6 113.7 283.7
8. Duration ofsubsidy
Thescheme commenced in1991 andisstillinexistence.
9. Statistical data
Amount granted during theyears 1992-1995 isgiven inNo.7above.
(vii) Establishment ofIndustrial Estates
1. Titleofsubsidy
Establishment ofIndustrial EstatesG/SCM/N/3/CYP
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2. Period
Onayearly basis.
3. Policy objective
Toassist industrial growth byproviding thenecessary infrastructure.
4. Authority ofsubsidy
Ministry ofCommerce, Industry andTourism byDecision oftheCouncil ofMinisters.
5. Form ofsubsidy
Leasing oflandintheindustrial estates andprovision ofthenecessary infrastructure (electricity,
water, telecommunication network) atreasonable rates.
6. Towhom andhowthesubsidy ispaid
Manufacturing industries.
7. Amount budgeted
Anamount of£C9,898,320 fortheperiod 1965-1994.
8. Duration ofsubsidy
Thescheme wasintroduced in1965 anditisstillinexistence.
9. Statistical data
425manufacturing industries benefited from thescheme.
(viii) Industrial FreeZone
1. Titleofsubsidy
Industrial FreeZone.
2. Period
Yearly.
3. Policy objective
Toprovide incentives fortheestablishment ofexporting manufacturing companies inCyprus.
4. Authority ofsubsidy
Ministry ofCommerce, Industry andTourism (according totheFreeZones Law69/75).G/SCM/N/3/CYP
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5. Form ofsubsidy
Leasing oflandatreasonable rates, taxincentives.
6. Towhom andhowthesubsidy ispaid
Toapproved manufacturing companies.
7. Amount budgeted
Total expenditure since establishment (1975): £C1,023,000
8. Duration ofsubsidy
Yearly.
(ix) Assistance tomanufacturing industries toestablish pollution control systems
1. Titleofsubsidy
Agrant scheme toassist manufacturing industries toestablish pollution control systems.
2. Period
Yearly.
3. Policy objective
Toassist manufacturing industries toinstall systems fortheminimization ofpollution inthe
environment.
4. Authority ofsubsidy
Ministry ofCommerce, Industry andTourism, byDecision oftheCouncil ofMinisters.
5. Form ofsubsidy
Grant (30percentonthevalue ofthepollution control systems installed).
6. Towhom andhowthesubsidy ispaid
Tomanufacturing firms which were inoperation prior to1January 1993.
7. Amount budgeted
1995 1996
£C136,000 £C400,000
8. Duration ofsubsidy
Thescheme came intoeffect in1994 anditsduration isfiveyears.G/SCM/N/3/CYP
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(x) Duty relief forselected industries
1. Titleofsubsidy
Duty relief forselected industries:
- Food industry
- Clothing industry
- Chemical industry
2. Period
Yearly.
3. Policy objective
Toassist manufacturing industries.
4. Authority ofsubsidy
Ministry ofFinance.
5. Form ofsubsidy
Exemption from thepayment ofimport duties forcertain inputs.
6. Towhom andhowthesubsidy ispaid
Toexisting andnewly established manufacturing industries.
7. Amount budgeted
Variable depending onthelevelofimports.
(xi) Promotion ofHandicrafts
1. Titleofsubsidy
Promotion ofHandicrafts.
2. Period
Yearly.
3. Policy objective
Promotion ofCypriot cultural inheritance through popular art.
4. Authority ofsubsidy
Ministry ofCommerce, Industry andTourism.G/SCM/N/3/CYP
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5. Form ofsubsidy
Training oflocalcraftsmen andpromotion ofitems made bythem.
6. Towhom andhowthesubsidy ispaid
Local craftsmen.
7. Amount budgeted
1993 1994 1995 1996
£C60,000 £C99,000 £C155,000 £C170,000
(xii) Industrial Restructuring andTechnical Upgrading
1. Titleofsubsidy
AprojectforIndustrialRestructuringandTechnologicalUpgradingadministeredbytheInstitute
ofTechnology. TheProject comprises:
(i) Ascheme forCompetitiveness Enhancement studies tobecarried outbyindustrial
enterprises.
(ii) Ascheme fortheDevelopment -Accreditation ofConsultants involved inthestudies
mentioned in(i)above.
2. Period
Yearly.
3. Policy objective
(i) Toassist andencourage localenterprises toupgrade theirunitsbysubsidizing thecost
ofspecialized studies carried outbyaccredited consultants.
(ii) Topromote theupgrading ofconsultancy services forthemanufacturing industry.
4. Authority ofsubsidy
Institute ofTechnology
5. Form ofsubsidy
Grant ofupto40percentofthecostofcompetitiveness enhancement study.
6. Towhom andhowthesubsidy ispaid
Toexisting andnewly established manufacturing industries.G/SCM/N/3/CYP
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7. Amount budgeted
1992 1993 1994 1995 1996
£C104,000 £C253,000 £C300,000 - £C290,000
8. Duration ofsubsidy
Theschemes were introduced in1992 andarestillinprogress.
(xiii) Promotion oflocally manufactured products
1. Titleofsubsidy
Promotion oflocally manufactured products.
2. Period
Yearly.
3. Policy objective
Promotion oflocally manufactured products.
4. Authority ofsubsidy
Ministry ofCommerce, Industry andTourism.
5. Form ofsubsidy
Grant ofupto50percentofcostofadvertising campaign organized byanindustrial association.
6. Towhom andhowthesubsidy ispaid
Toindustry associations.
7. Amount budgeted
1994 1995 1996
£C8,000 £C18,000 £C70,000
8. Duration ofsubsidy
Thescheme wasintroduced in1994 andisstillinexistence.G/SCM/N/3/CYP
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C. GENERAL
(xiv) Drawback onexported goods
1. Titleofthesubsidy programme, ifrelevant, orbriefdescription oridentification ofthesubsidy
Drawback onexported goods.
Thedrawback procedure provides fortherefund ofduties andTemporary Refugees 'Levy paid
onprescribed materials andgoods usedinthemanner specified intheLaw, when exported, shipped
foruseasstores ordelivered locally topersons, bodies, authorities ororganizations entitled tothe
dutyfreeimportation ofsuchgoods.
2. Period covered bythenotification
January toDecember 1995.
3. Policy objective and/or purpose ofthesubsidy
Export promotion andsupport ofindustry
4. Background andauthority forthesubsidy (including identification ofthelegislation under which
itisgranted)
Customs andExcise Duties LawNo.4(I)/1995.
Temporary Refugees 'Levy Law14/77.
5. Form ofthesubsidy (i.e.grant, loan, taxconcession etc.)
Refund oftheimport dutyandTemporary Refugees 'Levy paidonimportation ofthegoods.
6. Towhom andhowthesubsidy ispaid
Itispaid(i)toanynatural orlegalperson being theactual payer ofdutyandT.R.L. or(ii)
totheexporter, shipper etc.provided adisclaimer from theactual payer isproduced together with
theclaim.
Itispaidafterexportation orloading ofthegoods onships oraircraft foruseasstores orafter
delivery ofthegoods topersons, bodies ororganizations entitled todutyfreeimportations ofsuch
goods.
Drawback canbeclaimed onthegoods specified intheFifth Schedule oftheCustoms and
Excise Duties LawNo.4(I)/1995 andtotheextent shown foreachcategory ofgoods.
7. Amount refunded in1994: £C2,687,194
Amount refunded in1995: £C2,279,297G/SCM/N/3/CYP
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8. Duration ofthesubsidy and/or anyother time limits attached toit(including dateof
inception/commencement)
Year coming intoforce: 1962
Duration hasnotbeenspecified.
9. Statistical dataisnotavailable.
(xv) Exemption from taxation ofprofits derived from theexportation oflocally
manufactured/produced goods
1. Titleofsubsidy
Taxation ofprofits from theexportation oflocally manufactured/produced goods at50per
centofthenormal rates(Petroleum products arenotcovered).
2. Period
Foreachtaxyear.
3. Policy objective
Encourage theexports oflocally manufactured products.
4. Authority ofsubsidy
GrantedbytheMinistryofFinance,InlandRevenueDepartment.IncomeTaxLawArticle28E.
5. Form ofsubsidy
Special method oftaxation.
6. Towhom andhowthesubsidy ispaid
Itisprovided totheexporters provided thatprofits from theexportation oflocally
manufactured/produced goods aretransferred backtotheRepublic ofCyprus.
7. Amount budgeted
Total taxbenefits provided were:
1992 =£C88,334
1993 =£C485,323
Dataforother yearwillbeavailable afterthenewcomputerized system iscompleted.
8. Duration ofsubsidy
Thescheme commenced in1990 andisstillinexistence.G/SCM/N/3/CYP
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(xvi) Export Credit Insurance Scheme
1. Titleofsubsidy
Export Credit Insurance Scheme
2. Period
Yearly.
3. Policy objective
ToprovideinsurancecoverforCyprusmanufacturers/exportersaimingatencouraging,facilitating
anddeveloping trade withother countries.
4. Authority ofsubsidy
Ministry ofCommerce, Industry andTourism
LawNo.41of1974
5. Form ofsubsidy
Commercial andpolitical risks covered fornon-payment incaseofinsolvency/or failure of
buyer topayforgoods delivered andaccepted.
6. Towhom itisprovided:
ToallCypriot interested manufacturers/exporters.
7. Amount budgeted
Varies according tothecover.
8. Duration ofsubsidy
Thescheme commenced in1975 andisstillinexistence.
9. Manufacturers/exporters benefited, varies every yearaccording tomembership tothescheme.
(Approximately 100members peryear.)
(xvii) Incentives provided toexporters taking partininternational trade fairs/trade missions
abroad
1. Titleofsubsidy
Export promotion ofindustrial products byproviding financial incentives totheCyprus
manufacturers/exporters whoparticipate inTrade Fairs/Mission abroad.
2. Period
Yearly.G/SCM/N/3/CYP
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3. Policy objective
Topromote exporters ofCyprus industrial products exhibited inforeign Trade FairsandTrade
Missions abroad.
4. Authority ofsubsidy
Granted bytheMinistry ofCommerce, Industry andTourism.
5. Form ofsubsidy
When theexporter participates inaTrade Fairorganized bytheMinistry, therentforspace
andconstruction expenses ofthestand ispaidbytheMinistry.
Formanufacturers/exporters participating ininternational exhibitions ontheirowntheMinistry
covers 50percentoftherental andconstruction costs ofthestand upto£C1,000.
ForTrade Missions abroad theMinistry covers therentofthestand andconstruction costs
ofthestand.
6. Towhom thesubsidy ispaid
Thisincentive isprovided toCypriot interested exporters/manufacturers forexport promotion
purposes.
7. Duration ofsubsidy
Thescheme isprovided every yearandisstillinexistence.
8. Amount budgeted
Varies according tothenumber ofinternational exhibitions theMinistry orthe
manufacturers/exporters decide toparticipate andtheTrade Missions organized.
9. Statistical data
Vary according tointerest shown every yearbyexporters/manufacturers.
(xviii) Financial assistance formarket research inforeign markets
1. Titleofsubsidy
Schemeforgrantingfinancialassistancetomanufacturers/exportersformarketresearchinforeign
markets.
2. Period
Yearly.G/SCM/N/3/CYP
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3. Policy objective/purpose ofthesubsidy
Theobjective ofthescheme istoencourage Cypriot manufacturers/exporters toundertake on
theirownmarket research inforeign markets forthepurpose ofidentifying export potentials forCyprus
products.
4. Background authority
Ministry 'sdecision. Notbound byanylegislation.
5. Form ofsubsidy
Grant ofasumupto£C500foreachapplicant forcovering thecostofareturn airfare
(economy).
6. Towhom andhowthesubsidy isprovided
Thegrant isprovided bytheMinistry toCypriot manufacturers/exporters onpresentation of
valid evidence (airticket, receipt ofpayment ofcostofticket) andacompleted questionnaire.
7. Subsidy
Thetotalamount budgeted eachyearforthesubsidy (grant) is£C20,000.
8. Duration
Thescheme wasintroduced in1994 andcontinues eversince.
9. Statistical data
Notapplicable.