WORLD TRADE
ORGANIZATIONG/SCM/N/95/GRD
G/SCM/N/99/GRD
2 July 2003
(03-3532)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
New and Full Notification Pursuant to Article XVI:1
of the GATT 1994 and Article 25 of the SCM Agreement
Extension Under SCM Article 27.4 of the Transition Period for the
Elimination of Export Subsidies Pursuant to the Procedures
in Document G/SCM/39
GRENADA
The following communication, dated 23 June 2003, has been received from the Ministry of
Foreign Affairs and International Trade of Grenada.
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The Ministry of Foreign Affairs and International Trade of Grenada hereby submits to the
Committee on Subsidies and Countervailing Measures Grenada’s updated notification on current
incentive programmes under Articles 25 and 27 of the SCM Agreement and Article XVI:1 of GATT.
Grenada hereby presents an updated notification on the following programmes in accordance
with the Committee’s decision in documents G/SCM/69-71.
Programmes
Page
I Fiscal Incentives Act No. 41 of 1974........................................................................................2
II Qualified Enterprises Act No. 18 of 1978................................................................................4III Statutory Rules and Orders No. 37 of 1999............................................................................6
* * *G/SCM/N/95/GRD
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Programme I – Fiscal Incentives Act No. 41 of 1974
1. Description of the programme
The Fiscal Incentives Act is an Act to attract, mobilize and direct capital for new investment.
2. Period covered by the notification
2001 to 2002 – statistical information.
As of 15 June 2003 – programme status.
3. Policy objective and/or purpose of the subsidy
To attract private investors who will contribute to the desired explanation of national output,
thereby promoting economic growth and development.
4. Background and authority for the subsidy (including identification of the legislation under
which it is granted)
Background
The promotion of private investment is an integral part of the development plan of Grenada as
we continue to diversify production and reduce our reliance on agricultural production.  Economic
expansion generates demand for foreign exchange.  Given our narrow resource base, Grenada
continues to need resource inflows and one of the best ways to achieve this is through direct foreign
investment.
The Fiscal Incentives Act was passed to give effect to an agreement on the harmonization of
fiscal incentives to industry among CARICOM countries.
Authority
Fiscal Incentives Act No. 41 of 1974.  Chapter 107 of the 1990 Revised Laws of Grenada.
The Grenada Industrial Development Corporation (GIDC) is responsible for administrating
this incentive programme.
Since Grenada’s initial notification in February 2002, no modification was made to the
programme to improve its benefits according to paragraph 4 of document G/SCM/39.
5. Form of subsidy
The Fiscal Incentives Act provides relief from taxes in the following ways:
• Waiver from customs duty on plant, equipment, machinery, spare parts, raw materials or
components thereof, for between ten (10) to fifteen (15) years, dependant on which group of
enterprise.  This is also subject to the satisfaction of the Comptroller of Customs and Excise,
that the above list is required for:
(a) Constructing, altering, reconstructing or extending the approved enterprise, that is, an
enterprise declared by Order of the Minister responsible for industry; orG/SCM/N/95/GRD
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(b) Equipping an enterprise for the purpose of manufacturing an approved product, that
is, a product declared by Order of the Minister responsible for industry.
• Complete or partial exemption from the payment of income tax on the profits arising from the
sale of an approved product from the production day for a period not exceeding the time
given to the Enterprise, that is, 10-15 years.
Where shareholders or their nominees are not resident in Grenada, they shall be exempted
from income tax on dividends, in respect of the amount of tax that exceeds the tax liability of
the shareholder in his country of residence.
• Where the export profits of enterprises referred to in the Act amount to ten (10) per cent or
more of the entire profits of the enterprise from the export of an approved product, relief shallbe granted from income tax on the export profits.  This relief is granted by way of tax credits.
6. To whom and how the subsidy is provided
Fiscal Incentives are granted to private investors to facilitate the development of industries, in
particular manufacturing, agro-processing, agriculture, as pertain to this notification.
An application is made to the Minister responsible for industry, by or on behalf of the
enterprise, stating:
• The locality or proposed locality of the factory;
• The construction day;
• The production day;
• The approved product already being manufactured or intended to be
manufactured; and
• All information relevant to determine the local value added.
If the Minister is satisfied that it is in the pub lic interest to grant such enterprise incentives, he
may by Order published in the Gazette declare the enterprise to be an Approved Enterprise with effect
from the date specified in the Order.
The relief from taxes, or “tax holiday period”, is granted on import duties, income tax and
export profits, depending on the group in which the enterprise is categorized.
There are five groups of enterprises and the tax holiday applicable is as follows:
• Group I Enterprise, one in which the local value added is at least fifty per centum (50%) of the
amount realized from the sale of an approved product, up to 15 years relief;
• Group II Enterprise, one in which the local value added is between 25% and 50%, up to
12 years;
• Group III Enterprise, one in which the local value added is between 10% and 25%, up to
10 years;
• Enclave Enterprise, one in which production is exclusively for export, up to 15 years; and
• Highly capital intensive industry, one in which the capital investment is not less than
US$25 million, up to 15 years.G/SCM/N/95/GRD
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Export profits are determined by the formula E x P where “E” represents proceeds from
                                                                                               S
export sales, “P” represents profits made by the enterprise and “S” represents the proceeds of all sales.
Tax relief on export profits is as follows:
Amount of export profits expressed as a
percentage of the entire profitsMaximum percentage of tax relief
10% or more but less than 21% 25%
21% or more but less than 41% 35%
41% or more but less than 61% 45%
61% or more 50%
7. Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount
budgeted for that subsidy
Due to the nature and coverage of the programme, there are no statistical data available on the
amount of subsidy per unit.  There are no annual amounts budgeted for this programme.
8. Duration of subsidy and/or any other time limits attached to it, including date of
inception/commencement
As indicated in 6 above.
9. Statistical data permitting an assessment of the trade effects of the subsidy
Year Imports of capital goods
(in millions of US$)Total exports
(in millions of US$)
2001 46.1 26.0
2002 41.2 33.4
Programme II – Qualified Enterprise Act No. 18 of 1978
1. Title of the subsidy programme, if relevant, or brief description or identification of the
subsidy
An Act to provide for the conferment of tax benefits on certain enterprises if the Minister
responsible for industry considers it to be in the public interest to do so.
2. Period covered by the notification
As of 15 June 2003 – programme status.
3. Policy objective and/or purpose of the subsidy
To provide tax benefits and exemptions to industries which can contribute to the promotion of
economic growth and development of Grenada.G/SCM/N/95/GRD
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4. Background and authority for the subsidy (including identification of the legislation under
which it is granted)
Background
This Act was introduced to provide tax stabilization to industries, which the Fiscal Incentives
Act does not provide.  An Order under this Act is in addition to, and does not derogate from, any
benefit or advantage or similar concession enjoyed or to be enjoyed by an enterprise under any other
written law.
This Act was implemented to ensure that, where there is a tax increase, industries enjoying
concessions for a particular period under the Fiscal Incentives Act will not be affected, as their rate of
taxes and duties will remain at the same as on the day an Order under this Act comes into effect.
Authority
Qualified Enterprises Act No. 18 of 1978, Chapter 270 of the 1990 Revised Laws of Grenada.
The Grenada Industrial Development Corporation (GIDC) is responsible for administering
this incentive programme.
5. Form of subsidy
The Qualified Enterprises Act provides for tax benefits and exemptions on taxes, duties and
imposts payable by an Approved Enterprise at a rate or amount not exceeding that subsisting on the
date of the Order.
6. To whom and how the subsidy is provided
This subsidy is available to all enterprises, but is rarely used.  At present only the three
enclave enterprises established in Grenada benefit under this Act.
A Qualified Enterprise enjoys such tax benefits and exemptions as under the Fiscal Incentive
Act No. 41 of 1974, for up to 15 years at the rate subsisting on the date of the Order.
An Approved Enterprise under the Fiscal Incentive Act No. 41 of 1974 may make an
application to the Minister responsible for industry, providing information as indicated in 6 of
Programme I.  If the Minister is satisfied it is in the public interest to, he may, by Order under thisAct, declare the Approved Enterprise to also be a Qualified Enterprise.
7. Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount
budgeted for that subsidy
Due to the nature and coverage of the programme, there are no statistical data available on the
amount of subsidy per unit.  Also no annual amount is budgeted for this programme.
8. Duration of subsidy and/or any other time limits attached to it, including date of
inception/commencement
As indicated in 6 above.G/SCM/N/95/GRD
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9. Statistical data permitting an assessment of the trade effects of the subsidy
There is no such statistical data available.
Programme III – Statutory Rules and Orders No. 37 of 1999 (List of Conditional Duty
Exemption – CARICOM Common External Tariff)
1. Title of the subsidy programme, if relevant, or brief description or identification of the
subsidy
The list of Conditional Duty Exemptions sets out the goods which, when imported, may be
admitted free of import duty or at a rate that is lower than set out in the Schedule of Rates.
2. Period covered by the notification
As of 15 June 2003 – programme status.
3. Policy objective and/or purpose of the subsidy
To allow manufacturing enterprises that do not qualify for benefits under the Fiscal Incentives
Act to possibly benefit from import duty concessions under this Act.
4. Background and authority for the subsidy (including identification of the legislation under
which it is granted)
Background
This legislation was passed in order to introduce the new Common External Tariff based on
the Harmonized Commodity Description and Coding System, in accordance with legal obligations
falling upon Grenada by virtue of our adherence to membership in the Caribbean Common Market
(CARICOM).
Since Grenada’s initial notification in February 2002, no modification was made to the
CARICOM Common External Tariff, Statutory Rules and Orders No. 37/1999 according to paragraph
4 of document G/SCM/39.
Authority
CARICOM Common External Tariff, Statutory Rules and Orders No. 37 of 1999.
The relevant Ministries, together with the Comptroller of Customs, are responsible for
administering this legislation.
5. Form of subsidy
The List of Conditional Duty Exemptions allows enterprises, organizations or persons to be
exempted from duty or be charged a lower rate than that laid down by the Customs Tariff
Regulations.
The classification structure of the Schedule of Rates is based on the Harmonized Commodity
Description and Coding System.  The rates of duty in the Schedule are applicable to imports fromG/SCM/N/95/GRD
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third countries into the Member states of the Caribbean Common Market as well as goods traded
among the Member states.
On some inputs the rate applied by Grenada, as a Least Developed Country within the
Caribbean Common Market, may be from 0% to 5%.
6. To whom and how the subsidy is provided
In order to benefit, an enterprise must have a local value added of 40% and over, or create
employment for ten or more persons, or generate export earnings.
Dependant on the nature of the enterprise and the products to be imported, an application
must be made to that competent authority.  If the en terprise is involved in or intends to establish an
agricultural industry, the application must be submitted to the Minister responsible for agriculture, or
any person designated with authority to approve exemptions under the Order.  If the Minister or
competent authority is satisfied that the enterprise has met any of the above-stated criteria and that it
is in the public interest so to do, they may approve the exemption requested.
The Comptroller of Customs, once satisfied that the product imported is solely for the use
approved of, grants the exemption.
7. Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount
budgeted for that subsidy
Due to the nature and coverage of the programme, there are no statistical data available on the
amount of subsidy per unit or annual amounts budgeted for this programme.
8. Duration of subsidy and/or any other time limits attached to it, including date of
inception/commencement
This exemption from customs duty is only applicable for the product(s) applied for and does
not extend for any duration or involve any time limits; it’s a one-off situation.
9. Statistical data permitting an assessment of the trade effects of the subsidy
There is no such statistical information available.
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