RESTRICTED
WORLD TRADE G/SCM/N/2/MYS
27April 1995
ORGANIZATION(95-1071)
Original: English Committee onSubsidies andCountervailing Measures
NOTIFICATION PURSUANT TOARTICLE 28.1(A)
OFSUBSIDIES INCONSISTENT WITH THE AGREEMENT
MALAYSIA
Thefollowing communication, dated 31March 1995, hasbeenreceived fromthePermanent
Mission ofMalaysia.
_______________
Withreference todocument PC/IPL/11 dated 2December 1994andtoArticle 28.1oftheWTO
Agreement onSubsidies andCountervailing Measures, wehereby notify theCommittee onSubsidies
andCountervailing Measures that:
(a) Malaysia provides incentives toitsexporters, without maintaining direct export subsidies.
Theincentives areasfollows:
(i) Double deduction forpromotion ofexports whereby certain expenses incurred by
resident companies fortheepurpose ofseeking opportunities toexport products
manufactured inMalaysia areeligible fordouble deduction under thePromotion of
Investments Act1986; and
(ii) Double TaxDeduction isallowed onpremium payments forexport credit insurance
taken forsuchmarkets withacompany approved bytheMinister ofFinance. The
objective ofthisincentive istoencourage Malaysian exporters topenetrate intonon-
traditional markets.
(b) Theuseoflocalcontent istaken intoaccount inthegranting ofinvestment incentives provided
bytheGovernment. Thisadministrative encouragement wasintroduced in1991. Local content
usage isonlyoneofthequalifying criteria butitisneither anecessary norsufficient onefor
thegranting ofinvestment incentives. Theobjective ofthislocal content requirement isto
developsupportingindustriestostrengthenMalaysia'sindustrialstructureandencouragelinkages
between Small andMedium Scale Industries (SMIs) andlarger firms.