  
  
G/SCM/N/299/LCA  
G/SCM/N/315/LCA  
G/SCM/N/343/LCA  
 
3 October 2019  
(19-6388) Page: 1/6 
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES  
 
NEW AND FULL NOTIFIC ATION PURSUANT TO AR TICLE XVI:1 OF THE  
GATT 1994 AND ARTICL E 25 OF THE AGREEMEN T ON  
SUBSIDIES AND COUNTE RVAILING MEASURES  
 
FINAL TRANSPARE NCY NOTIFICATION PURS UANT TO THE PROCEDUR ES IN  
THE GENERAL COUNCIL DECISION IN DOCUMENT  WT/L/691 ON THE  
EXTENSIONS UNDER SCM  27.4 OF THE TRANSIT ION PERIOD  
FOR THE ELIMINATION OF EXPORT SUBSIDIES  
 
SAINT LUCIA 
The following communication , dated 25 Septembe r 2019, is being circulated at the request of the 
delegation of St Lucia . 
 
_______________  
 
 
The Government of Saint Lucia, pursuant to Article XVI:1 of GATT and Article 25 of the Agreement 
on Subsidies and Countervailing Measures, submits its 'New and Ful l Notification ' for the periods 
2015-2016 and 2017 -2018.  
 
This notification is also being submitted for the purposes of final transparency in the context of the 
extensions granted to Saint Lucia under Article 27.4 of the Agreement on Subsidies and 
Counterv ailing Measures, pursuant to WT/L/691. It also serves to provide an update on the progress 
made towards compliance with the same obligation.  
 
1  PROGRAMME UNDER THE FISCAL INCENTIVES AC T 
1. Period covered by the notification  
2015-2016 and 2017 -2018. 
2. Policy objective and/or purpose of the subsidy  
• To stimulate export performance;  
• To support investment and economic activity;  
• To promote diversification in traditional and non -traditional products . G/SCM/N/299/LCA • G/SCM/N/315/LCA • G/SCM/N/343/LCA  
 
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  3. Background and authority for the subsidy  
The Fiscal Incentives Act 15 of 1974 ( Fiscal Incentives Act Chapter or Cap. 15.16 of the 2008 Revised 
Laws of Saint Lucia ) was passed to give effect to an agreement on the harmoni zation of fiscal 
incentives to promote industrial development among CARICOM1 Member Stat es. 
4. Form of Subsidy  
• Income tax exemptions ; 
• Import duty exemptions on plant, machinery, spare parts and raw materials ; 
• Income tax exemptions on export profits and export allowance . 
5. To whom and how the subsidy is provided , whether to producers, to exporters,  or others 
through what mechanisms; whether a fixed or fluctuating amount per unit; if the latter, how 
determined  
Fiscal incentives are provided to enterprises involved in manufacturing or processing, deep -sea 
fishing and shrimping where they form part of an integrated processing operation. Applications for 
incentives under this Act are approved by the Cabinet of Ministers. An approved enterprise may be 
granted a benefit if classified in one of the following categories:  
a) Group I Enterprise  
b) Group II Enterpris e 
c) Group III enterprise  
d) Enclave Enterprises  
The abovementioned categories are based on the level of local value -added expressed as a 
percentage of the unit sales value. However, it must be noted that local value -added refers to the 
sum of unit profit (sales  price less production costs), depreciation and costs of labour as a percentage 
of the amount generated from sales of an approved good. Further, whereas reference is made, in 
the Fiscal Incentives Act Cap 15.16, to local value -added, this must not be confu sed with the 
generally accepted definition of local content. Instead it reflects the concern of the Government for 
increased levels of economic activity, competitiveness and employment creation. As a result of this 
basis, local value added is viewed from t he perspective of the number of local persons employed in 
a domestic enterprise and expressed as a percentage of sales, for purposes of relief.  
Notwithstanding, the laws governing these existing programmes are being reviewed with the view 
to eliminating al l references to export allowance, local content and all other trade distorting factors 
not consistent with the provisions of the Agreement on Subsidies and Countervailing Measures 
(ASCM) that may be contained in the body of these existing laws. New procedu res and amendments 
are currently being drafted with incentives programmes that are WTO compatible. Notwithstanding 
the provision for granting of Export Allowance in the existing Fiscal Incentives Act, there are NO 
beneficiaries under this programme.  
6. Subsid y per unit , or in cases where this is not possible, the total 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 notif ication for the 
previous year, or both) is not possible, a full explanation  
Given that the subsidies are largely in the form of revenue foregone as per sub -paragraph ii. of 
article 1 of the SCM Agreement, no ex ante  allocation is made in the annual budget. Moreover, data 
on the total annual value of subsidies under the fiscal incentives programme is typically not collected. 
As a result data on the average or per unit subsidy is currently unavailable.  
                                                
1 The Caribbean Community (CARICOM) is a regional integration arrangement between 15 Caribbean 
Countries.  G/SCM/N/299/LCA • G/SCM/N/315/LCA • G/SCM/N/343/LCA  
 
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  7. Duration of the subsidy and/or any other limits attached to it, including date of 
inception/commencement  
• Group I Enterprise – A period, continuous or interrupted, not extending fifteen (15) years 
after the effective commencement date.  
• Group II Enterprise – A period, continuous or interrupted, not extending twelve (12) years 
after the effective commencement date.  
• Group III Enterprise – A period, continuous or interrupted, not extending ten (10) years 
after the effective commencement date.  
• Enclave Enterprise – A period, continuous or interrupted, not extending fifteen (15) years 
after the effective commencement date.  
8. Statistical data permitting an assessment of the trade effects of the subsidy. The specific 
nature and scope of such statistics is left to the judgm ent of the notifying member. To the 
extent possible and relevant such information including statistics of production consumption, 
importers and exports of the subsidize product(s) or sector(s)  
There is currently no system in place for collection of the nec essary data in the format which would 
facilitate an assessment of the trade effects of this programme. Moreover, there are no provisions 
in the annual budget for either actual or estimated revenue foregone.  
9.  Undertakings to eliminate export contingent subs idies 
The Government of Saint Lucia, pursuant to its objective to fulfill its obligations with respect to 
Article 27.4 of the SCM Agreement, has embarked on a process of reviewing the Fiscal Incentives 
Act, Cap. 15.16 with a view to amending, repealing and  or replacing all non -conforming provisions 
within the text of the legislation (such as export allowance and local content) which served as criteria 
or performance requirements to qualify for any export contingent subsidy or benefit from the 
Government.  
More specifically, this objective is being implemented through a "Business Taxation 
Simplification and Reform Project " being undertaken with technical assistance from the 
International Financial Corporation (IFC) of the World Bank. The scope of work of the p roject includes 
reform of Saint Lucia 's Fiscal Incentives Regime and associated legislation including the Fiscal 
Incentives Act, to achieve a number of best practice objectives such as reduced complexity, 
increased transparency as well as compliance with S aint Lucia 's international obligations such as 
with regards to the WTO Agreements and by extension the SCM Agreement.  
Notably the Tax incentives reform project is being executed using a collaborative approach between 
the World Bank and  an Inter -Ministeria l Team/Working Group made up of representatives from the 
Ministry responsible for administering the fiscal incentives regime and for international trade namely 
the Ministry of Commerce, International Trade, Enterprise Development, Investment and Consumer 
Affairs.  
In addition a Memorandum to Cabinet of Ministers seeking approval for this plan of action has been 
recently prepared . 
2  PROG RAMME UNDER THE MICRO  AND SMALL SCALE BUS INESS ENTERPRISES AC T 
1. Period covered by the notification  
2015-2016 and 2017 -2018. 
2. Policy objective and/or purpose of the subsidy  
• To provide a legislative base for micro and small scale business enterprises ; 
• To make provision for developmental support and financial relief with respect to micro and 
small scale business enterprises.  G/SCM/N/299/LCA • G/SCM/N/315/LCA • G/SCM/N/343/LCA  
 
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  3. Backgroun d and authority for the subsidy  
The Government of Saint Lucia found it necessary to encourage and support investment flows in this 
sub-sector, in order to promote economic activity particularly in the area of self -employment and 
also to contribute to the a lleviation of poverty. The authority for the subsidy is the Micro and Small 
Scale Business Enterprise Act No. 19 of 1998  (Micro and Small Scale Business Enterprise Act, Chapter 
or Cap. 13.19 of the 2006 Revised Laws of Saint Lucia ). 
4. Form of Subsidy  
These take the form of relief given to enterprises that are designated or declared as a "micro " or 
"small scale business enterprise ". This relief may be provided from the Fiscal Incentives Act. Bona 
fide and declared enterprises may also benefit from exemp tion from import duty and exemptions 
from income tax on export profits. Income tax relief is given in accordance with section 68 of the 
Income Tax Act of 1989.  
5. To whom and how the subsidy is provided [whether to producers, to exporters, or others 
through w hat mechanisms; whether a fixed or fluctuating amount per unit; if the latter, how 
determine]  
Subsidies are provided to micro and small scale business enterprises as described in the Act. Relief 
would be granted in a similar manner as under the Fiscal Ince ntives Act, Cap. 15.16. Notwithstanding 
the provision for granting of 'export allowance' in the Fiscal Incentives Act, Cap 15.16, there are NO 
beneficiaries under this programme.  
6. Subsidy per unit , in cases where this is not possible, the total amount budge ted 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 explanatio n 
As with other legislation underpinning the fiscal incentive regime, subsidies are in the form of 
revenue foregone. Accordingly, there is no ex ante  allocation made in the annual budget to facilitate 
financial contribution or direct transfer of funds to e ligible beneficiaries.  As a result, data on the 
total annual value of subsidies under this incentive programme is typically not collected. Hence, data 
on the average or per unit subsidy is currently unavailable.  
7. Duration of the subsidy and/or any other li mits attached to it, including date of 
inception/commencement  
Access to the benefits provided under the Micro and Small Scale Business Enterprise Act  is based on 
the eligibility criteria detailed in the Act in conjunction with the terms detailed under the Fiscal 
Incentives Cap. 15.16 . 
8. Statistical data permitting an assessment of the trade effects of the subsidy. The specific 
nature and scope of such statistics is left to the judgment of the notifying member. To the 
extent possible and relevant such informat ion including statistics of production consumption, 
importers and exports of the subsidize product(s) or sector(s)  
There is currently no system in place for collection of the data in the format which would facilitate 
an assessment of the trade effects of t his programme. Moreover, there are no provisions in the 
annual budget for either actual or estimated revenue foregone.  
9. Undertakings to eliminate export contingent subsidies  
As with other pieces of legislation under the Fiscal Incentive Regime, Saint Lucia is seeking to amend 
the Micro and Small Scale Business Enterprises Act Cap. 13.19. of 2006 to ensure full compliance 
with the provisions of Article 27.4 of SCM Agreement with respect to removing any export contingent 
subsidies.  
However, it must be noted th at the word 'export ' does not exist in any part of the existing Micro and 
Small Scale Business Enterprises Act. Indeed the scale of operation of micro and small business is G/SCM/N/299/LCA • G/SCM/N/315/LCA • G/SCM/N/343/LCA  
 
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  such that the vast majority of persons benefiting from the advisory and technical s upport services 
provided by Government of Saint Lucia do not export their products.  
Notwithstanding, the Government of Saint Lucia remains committed to repeal any provision in the 
Act that make reference to export -related performance as an criteria to acce ss and benefit from the 
incentive regime provided under the Micro and Small Scale Business Enterprise Act, Cap. 13.19.  
3  PROGRAMME UNDER THE FREE ZONE ACT  
1. Period covered by the notification  
2015-2016 and 2017 -2018. 
2. Policy objective and/or purpose of the subs idy 
• To foster commerce, trade and investment with other countries;  
• To promote economic growth and development.  
3. Background and authority for the subsidy  
The Free Zone Act 10 of 1999( Free Zone Act, Chapter or Cap 15.17 of the 2006 Revised Laws of 
Saint Lucia ) was enacted as a result of the desire of the Government to stimulate growth in trade 
and to increase employment levels through the creation of new ventures. However, the Free Zone 
Area became operational in July 2000.  
4. Form of Subsidy  
• Exemption from import duty, taxes, and other charges on plant, machinery and 
equipment, raw materials and goods to be sold or exported within the Free Zone Area.  
• Special Income Tax Concessions  
• Tax credits in accordance with the number of nationals employed on a continuou s basis.  
• Exemption from income tax during the first 5 years of operations.  
• Total net losses over the 5 -year tax holiday may be carried forward and deducted against 
profits in the 3 years following the tax holiday.  
• Proceeds from sale of stock or other parti al or complete ownership are also exempted from 
income tax.  
5. To whom and how the subsidy is provided , whether to producers, to exporters, or others 
through what mechanisms; whether a fixed or fluctuating amount per unit; if the latter, how 
determined  
Subsid ies are provided to businesses established within a designated Free Zone Area through 
government revenue foregone (import duty and tax concessions).  
6. Subsidy per unit , in cases where this is not possible, the total amount budgeted for that 
subsidy (indicati ng, 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  
As with the other legislatio n underpinning the fiscal incentive regime, subsidies are in the form of 
revenue foregone (as per sub -paragraph ii. of Article 1 of the SCM Agreement). Accordingly, there 
is no ex ante  allocation made in the annual budget to facilitate financial contributi on or direct transfer 
of funds to firms operating within the Free Zone Areas.  As a result, data on the total annual value 
of subsidies under this fiscal incentive programme is currently not collected or reported. Hence data 
on the average or per unit subs idy is likewise currently unavailable.  
7. Duration of the subsidy and/or any other limits attached to it, including date of 
inception/commencement  
• Income Tax – 5 years from date of establishment within the Free Zone Area.  G/SCM/N/299/LCA • G/SCM/N/315/LCA • G/SCM/N/343/LCA  
 
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  • Income Tax Credits - Indefinite. Acce ss to such credits is subject to qualifying criteria 
prescribed in the Act  
• Import duty and associated charges – For the duration of tenancy.  
8. Statistical data permitting an assessment of the trade effects of the subsidy. The specific 
nature and scope of suc h statistics is left to the judgment of the notifying member. To the 
extent possible and relevant such information including statistics of production consumption, 
importers and exports of the subsidize product(s) or sector(s)  
There is currently no system i n place which collects firm -level or aggregated data  in a format which 
would facilitate an assessment of the trade effects of this programme. Moreover, there are no 
provisions in the annual budget for either actual or estimated revenue foregone.  
9. Undertaki ngs to eliminate export contingent subsidies  
As with other pieces of legislation under the Fiscal Incentive Regime, Saint Lucia is seeking to amend 
its Free Zone Act Cap. 15.17 of the Revised Laws of 2006) to ensure full compliance with the 
provisions of A rticle 27.4 of SCM Agreement with respect to removing any export performance 
requirements as an eligibility criteria for benefiting from this programme.  As a result the Free Zone 
Act is included in the scope of work to review the Fiscal Incentives regime so as to repeal and replace 
any non -conforming provisions of the Free Zone Act, Cap. 15.17.  
 
__________  