  
  
G/SCM/N/343/DOM  
12 July 2019 
(19-4630) Page: 1/6 
Committee on Subsidies and Countervailing Measures  Original:  Spanish  
 
  
SUBSIDIES  
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVI:1 OF THE GATT 1994 AND  
ARTICLE 25 OF THE AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES  
DOMINICAN REPUBLIC  
The following communication, dated 29 March 2 019, is being circulated at the request of the 
delegation of the Dominican Republic.  
 
_______________  
 
 
In accordance with the format of the questionnaire in document G/SCM/6, prepared and adopted by 
the Committee on Subsidies and Countervailing Measures, the Dominican Republic hereby notifies 
the following:  
 
1. Title of the subsidy programme, if relevant, or brief description or identification of 
the subsidy  
 
Law No. 8-90 to "promote the establishment of new free zones and expand existing ones", which 
establishes a tax -exemption programme for enterprises manufacturing goods or providing services, 
located within geographic areas known as free zones.  
 
2. Period covered by the notification  
 
This notification covers the period 1 January  to 31 December 2 018. 
 
3. Policy objective and/or purpose of the subsidy  
 
The objectives of the programme are, inter alia , job creation, workforce training, development of 
social responsibility programmes, promo tion of balance -of-payments equilibrium (foreign exchange 
generation) and establishment of regional economic and social development programmes.  
 
4. Background and authority for the subsidy (including identification of the legislation 
under which it is gran ted) 
 
The underlying reasons for this programme were to provide training, to transfer technology, to 
attract local and foreign investment and to create employment at various points within the national 
territory, including in economically deprived areas, su ch as the border areas with Haiti . 
This programme was created under Law No. 8-90 of 1 5 January 1 990. 
 
5. Form of the subsidy (i.e. grant, loan, tax concession, etc.)  
 
Enterprises manufacturing goods or providing services and operating under Law No. 8-90 are exempt 
from payment of income tax and customs duties on the importation and exportation of the raw 
materials, equipment and machinery used to produce these goods . The subsidy is therefore a tax 
concession.  G/SCM/N/343/DOM  
- 2 - 
  6. To whom and how the subsidy is provided (wh ether to producers, to exporters, or 
others ; through what mechanism ; if the latter, how determined)  
 
The programme exempts natural and legal persons eligible under the free -zone regime established 
by Law No. 8-90 from the taxes and duties specified in poin t 5 of this questionnaire.  
 
7. Subsidy per unit or, in cases where this is not possible, the total amount or the 
annual amount budgeted for that subsidy (indicating, if possible, the average 
subsidy per unit in the previous year) . Where provision of per -unit subsidy 
information (for the year covered by the notification, for the previous year, or both) 
is not possible, a full explanation.  
 
Law No. 8-90 does not provide for the auditing, on the basis of either units or operating results, of 
manufacturing oper ations conducted within free zones by enterprises operating under the free -zone 
regime, with a view to estimating the fiscal cost to the Dominican State of attracting private 
investment for the creation of sources of employment.  
 
8. Duration of the subsidy and/or any other time -limits attached to it, including date 
of inception/commencement  
 
Enterprises eligible for the benefits granted under Law No. 8-90 are entitled to a free zone operating 
licence, normally valid for up to 20 years in the border r egion with Haiti and 15 years in the rest of 
the country . Beyond this period, permit holders may apply for a renewal.  
 
9. Information on paragraph 2(a) of General Council Decision WT/L/691  
 
In order to comply fully with paragraphs 1(e) and (f) of General Council Decision WT/L/691, 
the Dominican Republic completed its action plan and eliminated export subsidies . For example, by 
means of Law No. 139-11 of 2 4 June 2 011, it amended Article 17 of Law No. 8-90 in respect of 
export performance requirements to enable companies under the programme to market their goods 
and services locally without quantitative limits and without the proviso that they use local raw 
materials in preference to imported on es. 
 
10. Statistical data permitting an assessment of the trade effects of the subsidy . The 
specific nature and scope of such statistics is left to the judgement of the notifying 
Member . To the extent possible, relevant and/or determinable, however, it is 
desirable that such information include statistics of production, consumption, 
imports and exports of the subsidized product(s) or sector(s).  
 
a. For the three most recent years for which statistics are available;  
b. For a previous representative year, which, wh ere possible and meaningful,  
should be the latest year preceding the introduction of the subsidy or 
preceding the last major change in the subsidy.    
  G/SCM/N/343/DOM  
- 3 - 
 
Evolution of the Main Variables of Free Export Zones  
1999-2018 
Year Existing 
industrial 
estates  Enterprises  Jobs Exports  
(USD million ) Total 
accumulated 
investment 
(USD million ) Local 
expenditure 
(USD million ) Average weekly salary  
 (DOP) Surface area of 
industrial 
premises in use 
(sq. ft.)  
       Workers  Technical 
staff  
1999 44 484 189,458 4,331.5  
887.3 701.21 1,587.22 16,820,049.0 
2000 46 481 195,262 4,770.6 1,222.4 1,018.6 716.51 1,629.85 21,068,186.0 
2001 51 512 175,078 4,481.6 1,264.9 977.9 775.49 1,662.93 21,738,332.0 
2002 53 520 170,833 4,317.3 1,215.2 886.5 786.56 1,671.53 21,923,764.0 
2003 54 531 173,367 4,406.8 1,329.6 810.8 961.34 2,010.79 22,066,221.0 
2004 58 569 189,853 4,685.2 1,690.2 863.4 1,131.25 2,539.82 24,332,619.0 
2005 57 556 154,781 4,749.7 1,989.6 1,005.4 1,347.09 2,702.67 24,540,452.8 
2006 56 555 148,411 4,678.6 2,471.7 973.7 1,465.19 3,009.97 26,338,045.1 
2007 53 526 128,002 4,525.2 2,457.3 1,010.9 1,480.37 3,127.22 24,609,122,9  
2008 48 525 124,517 4,354.1 2,611.2 954.3 1,652.80 3,533.22 25,299,744.6 
2009 47 553 112,618 3,793.5 2,738.1 959.0 1,819.00 3,689.56 29,037,744.6 
2010 48 555 121,001 4,194.4 2,881.6 1,123.1 1,829.03 3,841.64 29,268,270.4 
2011 51 578 125,117 4,767.1 2,913.7 1,163.5 1,967.15 3,892.63 30,067,075.7 
2012 53 584 134,226 4,918.9 3,133.9 1,298.2 2,175.88 4,204.14 30,385,854.6 
2013 55 602 144,383 4,976.4 3,442.8 1,326.0 2,352.49 4,483.04 33,804,830.4 
2014 60 614 153,342 5,261.7 3,794.9 1,368.1 2,508.76 4,773.39 34,899,477.3 
2015 65 630 161,257 5,423.6 4,043.1 1,434.5 2,536.18 4,850.50 35.869.810,4  
2016 68 645 163,147 5,503.9 4,326.8 1,457.9 2,659.03 5,148.21 36,958,201.7 
2017*  71 665 165,724 5,709.6 4,473.1 1,482.7 2,798.37 5,302.91 37,283,897.4 
2018**  74 673 171,726 6,230.0 4,977.8 1,621.4 3,003.60 5,921.50 39,545,337.9 
Growth % 
2017 -18 4.2 1.2 3.6 9.1 11.3 9.4 7.3 11.7 6.1 
Source for exports : Central Bank  
*  Corrected export figures  
**  Preliminary export figures  
 G/SCM/N/343/DOM  
- 4 - 
  Contribution of Free Zones to the Gross Domestic Product (G DP) of the  
Dominican Republic, 1999-2018 
(USD million ) 
Year GDP Free zones  Contribution  (%) 
1999 350,520.1 17,726.8 5.1 
2000 393,303.0 21,336.9 5.4 
2001 427,319.1 22,605.9 5.3 
2002 477,430.2 27,344.1 5.7 
2003 628,611.0 50,260.7 8.0 
2004 935,984.7 72,961.9 7.8 
2005 1,083,445.0 54,667.7 5.0 
2006 1,261,399.7 59,413.2 4.7 
2007 1,458,416.5 58,296.4 4.0 
2008 1,661,642.7 57,838.6 3.5 
2009 1,736,041.1 59,002.2 3.4 
2010 1,983,201.7 64,621.3 3.3 
2011 2,210,213.9 73,420.6 3.3 
2012 2,386,016.2 81,678.1 3.4 
2013 2,619,769.7 88,554.8 3.4 
2014 2,877,527.8 98,757.6 3.4 
2015 3,099,651.2 103,677.5 3.3 
2016 3,333,419.3 108,383.2 3.3 
2017*  3,613,147.1 117,080.7 3.2 
2018**  4,025,092.4 132,661.5 3.3 
Source : Central Bank of the Dominican Republic  
* Preliminary figures  
Percentage contribution of Free Zones to the Gross Domestic Product (GDP) of the 
Dominican Republic  
1999-2018 
 
G/SCM/N/343/DOM  
- 5 - 
  Free-Zone Exports by Principal Activities , 2011-18 
(USD million ) 
Activity  2011  2012  2013  2014  2015  2016  2017*  2018**  Share  
% Growth 
% 
Medical and 
pharmaceutical 
products  1,177.4 1,213.2 1,230.5 1,274.2 1,361.1 1,497.0 1,487.1 1,556.5 25.0 4.7 
Clothing and 
textiles  1,207.0 1,222.8 1,219.1 1,241.9 1,247.9 1,102.8 1,095.9 1,106.7 17.8 1.0 
Electrical and 
electronic goods  604.1 638.8 658.2 752.8 707.3 750.6 883.1 1,150.3 18.5 30.3 
Tobacco and 
tobacco products  396.8 475.9 531.6 586.9 660.3 695.9 798.4 850.3 13.6 6.5 
Footwear and 
footwear 
components  375.5 406.5 422.2 449.5 443.0 424.7 386.8 351.6 5.6 -9.1 
Jewellery  487.9 405.3 315.6 283.7 369.9 407.0 422.2 490.5 7.9 16.2 
Other  518.4 556.4 599.2 672.7 634.1 625.9 636.1 724.1 11.6 13.8 
Total  4,767.1 4,918.9 4,976.4 5,261.7 5,423.6 5,503.9 5,709.6 6,230.0 100.0 9.1 
Source : Central Bank of the Dominican Republic  
* Corrected figures  
** Preliminary figures  
 
Free-Zone Exports by Principal Activities  
2018 
 
 
Medical and 
pharmaceutical 
products
25%
Clothing and textiles
18%
Electrical and 
electronic goods
18%Tobacco and tobacco 
products
14%Footwear and
footwear components
6%Jewellery
8%Other
11%G/SCM/N/343/DOM  
- 6 - 
  Comparison of Domestic and Free -Zone Exports , 1999-2018 
(USD million ) 
Year Domestic 
exports  Growth %  Free-zone 
exports  Growth 
% Total 
exports  Free-zone 
exports/total 
exports (%)  
1999 805.2 --- 4,331.5 --- 5,136.7 84.3 
2000 966.1 20.0 4,770.6 10.1 5,736.7 83.2 
2001 794.7 -17.7 4,481.6 -6.1 5,276.3 84.9 
2002 847.7 6.7 4,317.3 -3.7 5,165,0  83.6 
2003 1,064.0 25.5 4,406.8 2.1 5,470.8 80.6 
2004 1,250.7 17.5 4,685.2 6.3 5,935.9 78.9 
2005 1,395.1 11.5 4,749.7 1.4 6,144.8 77.3 
2006 1,931.4 38.4 4,678.6 -1.5 6,610.0 70.8 
2007 2,635.1 36.4 4,525.2 -3.3 7,160.3 63.2 
2008 2,393.9 -9.2 4,354.1 -3.8 6,748.0 64.5 
2009 1,689.3 -29.4 3,793.5 -12.9 5,482.8 69.2 
2010 2,621.6 55.2 4,194.4 10.6 6,816.0 61.5 
2011 3,594.8 37.1 4,767.1 13.7 8,361.9 57.0 
2012 4,016.6 11.7 4,918.9 3.2 8,935.5 55.0 
2013 4,448.0 10.7 4,976.4 1.2 9,424,4 52.8 
2014 4,637.2 4.3 5,261.7 5.7 9,898.9 53.2 
2015 4,018.2 -13.3 5,423.6 3.1 9,441.8 57.4 
2016 4,335.7 7.9 5,503.9 1.5 9,839.6 55.9 
2017*  4,425.0 2.1 5,709.6 3.7 10,134.6 56.3 
2018**  4,677.6 5.7 6,230.0 9.1 10,907.6 57.1 
Source : Central Bank of the Dominican Republic  
* Corrected figures  
** Preliminary figures  
Comparison of Domestic and Free -Zone Exports  
2018 
 
 
__________  Domestic 
exports
42.9%
Free -zone 
exports
57.1%