. /.RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q2/CHL/13
14 September 2000
(00-3595)
Committee on Subsidies
and Countervailing MeasuresOriginal:  Spanish
SUBSIDIES
Replies to Questions from the UNITED STATES1
Regarding the Updating Notification of CHILE2
The following communication, dated 29 August 2000, has been received from the Permanent
Mission of Chile.
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Programme III
Question 1
For the "Fund for the Promotion and Development of Remote Areas ", part 5, form of
the subsidy:
(a) Does the "direct transfer " come in the form of a grant or loan?
(b) If the direct transfer is in the form of a loan, please explain the terms for which
the loans are provided.
Reply
It is a non-repayable transfer.
Question 2
For the "Fund for the Promotion and Development of Remote Areas ", part 6, to whom
and how is the subsidy provided?  Please explain in greater detail the role and function of
"Promotion Units ".
Reply
The Promotion Unit (PU) is a unit of value which takes account of movements in the
consumer price index.
                                                     
1 G/SCM/Q2/CHL/12
2 G/SCM/N/48/CHLG/SCM/Q2/CHL/13
Page 2
It was created by Ministry of Finance Supreme Decree No. 40 of 2 January 1967, with an
initial value of E100 (100 escudos, the legal currency in circulation at that time) readjustable on the
first day of each calendar quarter in line wi th the movement in the consumer price index.
Pursuant to Ministry of Finance Supreme Decree No. 280 of 12 May 1975, the readjustment
of the unit then took place on a monthly basis, and from 1 August 1997, pursuant to Ministry of
Finance Supreme Decree No. 613 of 14 August 1977, on a daily basis.
In accordance with the rules of the Central Bank of Chile (the monetary authority), the value
of the unit continues to be readjusted on a daily basis from the tenth day of each month until the ninth
of the following month, at the geometric average rate corresponding to the change in the consumer
price index as determined by the National Institute of Statistics or the body replacing it, in thecalendar month immediately preceding the period for which the unit is calculated.
Under point 6 of Programme III of the Ch ilean notification (G/SCM/N/48/CHL), the
reference to the PU indicates that it is an "index adjusted for inflation", which means that it is a
readjustment index used to bring a given amount up-to-date.
In the case of this subsidy, the PU is used to bring up-to-date the maximum amount of
investment "which must not exceed 80,000 PU".  For example, on 18 August 2000, the PU was
valued at 15,491.76 Chilean pesos, so the 80,000 PU were equivalent on that date to 1,239,340,800
Chilean pesos;  on 21 August the PU was worth 15,493.26, so 80,000 PU were equal to the amount of1,239,460,800 Chilean pesos.
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