. /.WORLD TRADE
ORGANIZATIONG/SCM/Q3/KNA/9
25 July 2002
(02-4111)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Requests Pursuant to Article 27.4 of the Agreement
on Subsidies and Countervailing Measures
Replies to Questions Posed by JAPAN1 and to Follow-Up Questions Posed by the
UNITED STATES2 Regarding the Notification of SAINT KITTS AND NEVIS3
The following communication, dated 23 July 2002, has been received from the Ministry of
International Trade, Labour, Social Security , CARICOM Affairs, Telecommunications and
Technology in St. Kitts and Nevis.
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QUESTIONS FROM JAPAN
Fiscal Act No. 17 of 1974
The obligation of notification under Article 25 of the ASCM, in Japan's view, cannot be
exempted by any regional trade agreement like CARICOM.  Now could St. Kitts and Nevis
share Japan's view?  If so, do St. Kitts and Nevis have no subsidies which require notification
under Article 25 of the ASCM, other than the Fiscal Act No. 17 of 1974 as part of theCARICOM?
Reply
St. Kitts and Nevis has no subsidies which require notification under Article 25 of the
Agreement on Subsidies and Countervailing Measures  other than the Fiscal Incentives Act No. 17 of
1974.
QUESTIONS FROM THE UNITED STATES
Fiscal Incentives Act No. 17 of 1974
We remain concerned with the local valu e added requirements under this programme.
The discussion at the recent special meeting of the Committee on Subsidies and CountervailingMeasures concerning this issue was useful in explaining how this programme operates.
                                                     
1 G/SCM/Q3/KNA/7
2 G/SCM/Q3/KNA/8
3 G/SCM/N/74/KNA and G/SCM/71/KNA.G/SCM/Q3/KNA/9
Page 2
However, we seek further clarification con cerning the local value added requirements, and
therefore request consideration of the following additional questions:
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.
Reply
St. Kitts and Nevis maintains that the Fiscal Incentives Act does not require the use of
domestic goods.
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