RESTRICTED
WORLD TRADE G/SCM/Q2/GMB/2
16April 1998
ORGANIZATION(98-1524)
Original: English Committee onSubsidies
andCountervailing Measures
SUBSIDIES
Replies toQuestions Posed byJAPAN1
Regarding theNewandFullNotification ofGAMBIA2
Thefollowing communication, dated 6April 1998, fromthePermanent Mission ofGambia.
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Inthenotification (document G/SCM/N/3/GMB), Gambia describes that"(t)he Gambia
does grant subsidies within themeaning ofArticle 1.1byforegoing revenue through theoffer
ofdutywaiver concessions tocertain areas ofbusiness operations toenhance ourexports."
Questions
Dothesubsidies constitute export subsidies within themeaning ofArticle 3.1(a) ofthe
SCM Agreement?
That being thecase, doesGambia plantophase outthesubsidies? Ifso,provide details
oftheplan.
Thatbeing notthecase, could Gambia explain thereason andprovide details ofeligibility
oftherecipients inthisprogramme?
Answers
1. TheGambia 'snotification indeed refers tosubsidies asdefined under Article 1.1(a)(1)(ii) of
theAgreement onSubsidies andCountervailing Measures.
2. Thesubsidy consists offoregoing orthenon-collection ofgovernment revenue thatisotherwise
due. Thisisessentially aninvestment incentive thattakes various forms: taxcredit, customs duty
deferral, dutywaivers, andother fiscal incentives.
3. Itdoesnot,however, constitute prohibited export subsidy within themeaning ofArticle 3.1(a)
oftheSCM Agreement. Neither doesitrepresent acountervailing measure. Itisalsonotspecific
1G/SCM/Q2/GMB/1
2G/SCM/N/3/GMB
./.G/SCM/Q2/GMB/2
Page2
inthesense ofArticle 2.1(a) oftheSCM Agreement; andeligibility forthefacility isbased onobjective
criteria asprovided forunder Article 2.1(b) oftheSCM Agreement.
4. Even where themeasure isdeemed toconstitute prohibited export subsidy asdefined under
Article 3.1(a) oftheSCM Agreement, itwould berecognized thatbyvirtue oftheprovisions of
Article 27.2oftheAgreement, theprohibition doesnotapply toTheGambia, since itisoneofthe
countries referred toinAnnex VIItotheSCM Agreement.
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