  
  
G/SCM/Q2/GAB/3  
20 January  2022 
(22-0457) Page: 1/3 
Committee on Subsidies and  
Countervailing Measures  Original:  French  
 
  
SUBSIDIE S 
RESPONSE TO THE QUESTION POSED BY T HE UNITED STATES1 REGARDING THE NEW  
AND FULL  NOTIFICATION OF GABON2 
The following communication, dated 28 October 2021 and received on 20 January 2022, is being 
circulated at the request of the delegation of Gabon.  
 
_______________  
 
 
Question  
 
Could the Government of Gabon please explain why each of the above -mentioned 
programmes is not notifiable, as provided under Article 25 of the SCM Agreement?  
 
Response  
 
Gabon was questioned at the meeting of the World Trade Organization (WTO) Committee on 
Subsidies and Countervailing Measures on 27 April 2021  by the United States of America and 
Turkey about  its policy on subsidies and support measures for some domestic in dustries . 
 
On the basis of the reports produced by the WTO Secretariat during the Trade Policy Reviews of 
Gabon in 2007 and 2013, these two countries wished to know why Gabon had not notified some 
national measures and practice s that, in their view, constituted subsidies.  
 
What was identified as subsidies in the WTO reports?  
 
Information  in the  2007  report : 
 
• Around 20% of the  annual State budget  goes to finance "transfers and aid" ,3 including  
CFAF 13.9 billion in subsidies in 2006.4 
 
• In 2006, a subsidy amounting to CFAF  110 billion  was given to the Gabonese Refining 
Company (SOGARA) (Chapter IV(3)(ii )).5 
 
• Other support measures are provided to companies approved under the SME -SMI regime 
(Chapter II(4)) , the Forestry Code (Chapter IV(2)(iii)(x)), the Mining Code (Chapter 
IV(3)(i)), the oil prospecting and exploration regime (Chapter IV(3)(ii)), or the special 
regime for tourism investment (Chapter IV(5)(ii)) . 
 
• In principle, private companies must pay 35% tax on their profits, lowered to 20% for 
public entities  and certified real estate development companies, and to 18% for the 
Gabonese Development Bank . 
 
1 G/SCM/Q2/GAB/ 1. 
2 G/SCM/N/186/GAB.  
3 World Bank  (2006).  
4 Ministry of the Economy, Finance, Budget and Privatization (2006a), accompa nying  the amended 
Finance Law for  2006 of 7 July 2006.  
5 IMF (2006e).  G/SCM/Q2/GAB/3  
- 2 - 
  • Public services , such as electricity (Chapter IV(3)(iii)), water (Chapter IV(3)(iv)), urban 
transport services (Chapter IV(5)(i)) and postal services (Chapter IV(5)(iii)) , also receive 
State support.  
 
• The privatization programme has also written off the liabilities of the companies concerned 
(section (iv)) . 
 
Information  in the  2013  report : 
 
• Since 2008, Gabon has granted companies that export plywood to the European Union a 
corporation tax credit equivalent to 50% of the customs duties paid . 
 
• Exports are eligible for the zero VAT rate regime. VAT on inputs is refunded at the request 
of the economic operators concerned; the repayment period is three months . 
 
• Under the CEMAC Customs Code, customs duties may be suspended for export -oriented 
activities under the inward processing regime, and the same appl ies to materials and 
equipment under the temporary admission procedure ( Common report, Chapter 3).  
 
• The drawback regime allows full or partial refund of import duties and taxes levied on 
inputs used in goods exported.  
 
• Around 20% of the annual State budget  goes to finance "transfers and aid", including 
CFAF 327,194 billion in subsidies in 2011 (CFAF 27,472 billion for SOGARA) and 
CFAF 247,014 billion in 2012 (CFAF 28 billion for SOGARA).  
 
• Other support measures are provided to companies approved under the S ME/SMI regime, 
the Forestry Code, the Mining Code, the oil prospecting and exploration regime, or the 
special regime for tourism investment . 
 
• Public services , such as electricity, water, urban transport services and postal services , 
also receive State supp ort (section 4).  
 
Partial r esponse : 
 
Analysis of the information in these reports reveals that the WTO should only be notified of certain  
subsidies as they are "specific" and could distort international trade. This is case with the tax credit 
granted to companies that export plywood to the European Union . 
 
Why has the State implemented this tax credit scheme for this sector?  
 
In discussions on the Economic Partnership Agreement between the European Union and Central 
Africa, Gabon, unlike many developing countries, did not initial the interim agreement because of 
its aim to achieve a comprehensive regional agreement. This meant that, as of 1 January  2008 , 
Gabon  was switched to the European Union's Generalized System of Preferences  (GSP)  . 
 
As a result, the rate of customs duty applied to plywood , for example,  rose from 3% to 6.5% , 
leading to  this sector experiencing a relative loss of market competitiveness in comparison to 
products from competitor countries.  
 
It should also be noted that the 2008 financial crisis had a significant impact on the domestic wood 
sector. Gabonese wood processing companies, which have seen most of their orders from European 
markets put on hold, approached the government seeking  financial support.  
 
It was therefore with the intention of protecting jobs in this area that, in 2009, the government 
decided to support companies operating in this sector by granting them tax credits.  
 
As to the other subsidies detailed in the reports, the Gabonese ministry responsible for trade has 
started to make  enquiries  among the various relevant ministries on the basis of 
questionnaire  G/SCM/6/Rev.1 . The WTO Secretariat wil l be notified of the results of these 
investigations.  
 G/SCM/Q2/GAB/3  
- 3 - 
  Why did we not notify at that time ? 
 
The relevant authorities were unaware of the notification procedure for subsidies, consequently the 
Committee responsible for this specific issue  was not formally notified . 
 
This suggests that it is highly necessary for Gabon, through its human resources, to receive technical 
support from relevant experts.  
 
__________  