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1. These Regulations may be cited as the
Anti-Dumping and Countervailing Duties (Subsidies) Regulations 1996.
2. In these Regulations –
"enterprise" means a commercial enterprise,
industry or a group of commercial enterprises or industries;
"general framework of
regional development" means an internally consistent and generally
applicable regional development policy consisting of a regional
subsidy programme provided that regional development subsidies granted
under the programme are not granted in isolated geographical points
having no, or virtually no influence on the development of a region;
"granting authority"
means a government or public body outside Trinidad and Tobago that
grants a subsidy;
"Industrial research"
means planned search or critical investigation aimed at discovery of
new knowledge, with the objective that such knowledge may be useful in
developing new products, processes or services, or in bringing about a
significant improvement to existing products, processes or services;
"neutral and objective
criteria" means criteria or conditions which are clearly spelled out
by written law or other official document so as to be capable of
verification and which, as the case may be, do not favour –
(a) certain enterprises over other
enterprises and which are economic in nature and horizontal in
application, such as number of employees or size of enterprise;
(b) certain regions beyond what is
appropriate for the elimination or reduction of regional disparities
within a general framework of regional development;
"pre-competitive
development activity" means the translation of industrial research
findings into a plan, blueprint or design for new, modified or
improved products, processes or services whether intended for sale or
use, including –
(a) the creation of a first prototype
which would not be capable of commercial use;
(b) pilot projects or projects
involving the conceptual formulation and design, or initial
demonstration, of alternative products, processes or services,
provided that the project cannot be converted or used for industrial
application or commercial exploitation,
but does not include routine
or periodic alterations to existing products, production lines,
manufacturing processes, services and other on-going operations,
whether those alterations are by way of improvement or not;
"region" means a
region within the territory of the country of origin or the country of
export.
3. A subsidy shall be
subject to countervailing measures only if it is specific to an
enterprise.
4. (1) Subject to
subregulation (2), for the purpose of determining whether a subsidy is
specific to an enterprise, the following principles shall apply:
(a) where the granting
authority, or the legislation pursuant to which the granting authority
operates explicitly limits access to a subsidy to an enterprise, such
subsidy shall be specific; and
(b) where the granting
authority, or the legislation pursuant to which the granting authority
operates, establishes neutral and objective criteria governing the
eligibility for, and the amount of, a subsidy, specificity shall not
exist, provided that the eligibility is automatic and that such
criteria are strictly adhered to.
(2)
Notwithstanding any appearance of non-specificity resulting from the
application of subregulation (1), if there are reasons to believe that
the subsidy may in fact be specific, the Authority may consider the
following factors:
(a) the use of a subsidy
programme by a limited number of enterprises;
(b) the predominant use of a
subsidy programme by an enterprise;
(c) the granting of
disproportionately large amounts of subsidy to an enterprise;
(d) the manner in which
discretion has been exercized by the granting authority in the
decision to grant a subsidy, including, in particular, information on
the frequency with which applications for a subsidy are refused or
approved and the reasons for such decisions;
(e) the extent of
diversification of economic activities within the jurisdiction of the
granting authority; and
(f) the length of time during
which the subsidy programme has been in operation.
(3) A subsidy
which is limited to an enterprise located within a designated
geographical region within the jurisdiction of the granting authority
shall be specific, but for the purposes of this subregulation,
"subsidy" does not include the setting or change of generally
applicable tax rates by any authority entitled to do so.
5. (1) Notwithstanding
regulation 4, the following subsidies are deemed to be specific:
(a) subsidies contingent, in
law or in fact, whether solely or as one of several other conditions,
upon export performance; and
(b) subsidies contingent,
whether solely or as one of several other conditions, upon the use of
domestic over imported goods.
(2) For the
purposes of subregulation (1)(a) –
(a) the mere fact that a
subsidy is accorded to enterprises which export shall not, for that
reason alone, make the subsidy one that is contingent upon export
performance; and
(b) subsidies shall be
considered to be contingent in fact upon export performance when the
facts demonstrate that the granting of a subsidy, without having been
made legally contingent upon export performance, is in fact tied to
actual or anticipated exportation or export earnings.
6. A determination of
specificity shall be clearly substantiated on the basis of positive
evidence.
7. The following subsidies
shall not be subjected to countervailing measures:
(a) subsidies which are not
specific within the meaning of regulations 4 and 5;
(b) subsidies which are
specific, within the meaning of regulations 4 and 5, but which meet
the conditions provided for in regulation 8, 9 or 10.
(c) the element of subsidy
which may exist in any of the measures listed in the Schedule.
8. (1) Subsidies for
research activities conducted by firms or by higher education or
research establishments on a contract basis with firms shall not be
subject to countervailing measures, if the subsidies cover not more
than 75 per cent of the costs of industrial research or 50 per cent of
the costs of pre-competitive development activity, and provided that
such subsidies are limited exclusively to –
(a) personnel costs in
relation to researchers, technicians and other supporting staff
employed exclusively in the research activity;
(b) costs of instruments,
equipment, land and buildings used exclusively and permanently (except
when disposed of on a commercial basis) for the research activity;
(c) costs of consultancy and
equivalent services used exclusively for the research activity,
including bought-in research, technical knowledge and patents;
(d) additional overhead costs
incurred directly as a result of the research activity;
(e) other running costs (such
as those of materials, supplies and the like), incurred directly as a
result of the research activity.
(2) For the
purposes of this regulation, the allowable levels of non-countervailable
subsidy shall be established with reference to the total eligible
costs incurred over the duration of an individual project.
(3) Where the
research activity consists of industrial research and pre-competitive
development activity, the allowable level of non-countervailable
subsidy shall not exceed the simple average of the allowable levels of
non-countervailable subsidy applicable to both categories, calculated
on the basis of all eligible costs as set forth in subregulation
(1)(a) to (e).
(4) This
regulation does not apply to industrial activity or pre-competitive
development activity carried on in relation to civil aircraft as
defined in the 1979 Agreement on Trade in Civil Aircraft, as amended,
or in any later agreement amending or replacing that Agreement.
9. (1) Subsidies to
disadvantaged regions within the territory of the country of origin or
the country of export, given pursuant to a general framework of
regional development, and which would be non-specific if the criteria
laid down in regulation 4 were applied to eligible region concerned
shall not be subject to countervailing measures provided that –
(a) each disadvantaged region
is a clearly designated contiguous geographical area with a definable
economic and administrative identity;
(b) the region is considered
as disadvantaged on the basis of neutral and objective criteria,
indicating that the region's difficulties arise out of more than
temporary circumstances;
(c) the criteria include a
measurement of economic development which shall be based on a
combination, or at least one, of the following factors:
(i) one of either
income per capita or household income per capita, or gross domestic
product per capita, which shall not be above 80 per cent of the
average for the territory of the country of origin or country of
export concerned;
(ii) unemployment
rate, which shall be at least 110 per cent of the average for the
territory of the country of origin or country of export concerned,
as measures over a 3
year period; and
(d) the requirements of
regulation 10 in relation to the regional subsidy programme concerned
are satisfied
(2) A measurement
of economic development under subregulation (1)(c) may include such
other factors as the Authority thinks fit.
10. In order for a subsidy
to qualify for an exemption under regulation 9, the regional subsidy
programme under which the subsidy is granted shall provide for the
following:
(a) ceilings on the amount of
subsidy which can be granted to each subsidized project, such ceilings
being –
(i) differentiated
according to the different levels of development of eligible regions;
and
(ii) expressed in terms of investment
costs or the cost of job creation;
(b) the broad and even
distribution of subsidies so as to avoid the predominant use of
subsidies by, or the granting of disproportionately large amounts of a
subsidy to, any enterprise.
11. (1) Subsidies to
promote the adaptation of existing facilities to new environmental
requirements imposed by law resulting in greater constraints and
financial burden on firms or enterprises, shall not be subject to
countervailing measures, provided that the subsidy –
(a) is a
one-time non-recurring measure;
(b) is
limited to 20 per cent of the cost of adaptation;
(c) does not cover the cost of
replacing and operating the subsidized investment, which are to be
fully borne by firms and enterprises;
(d) is directly linked to and
proportionate to a firm's planned reduction of nuisances and
pollution, and does not cover any manufacturing cost savings which may
be achieved; and
(e) is available to all firms
and enterprises which can adopt the new equipment or production
processes.
12. (1) The amount of
countervailable subsidies shall be calculated in terms of the benefit
conferred to the recipient and which is found to exist during the
investigation period for subsidization.
(2) The
investigation period for subsidization shall normally be the most
recent accounting year of the beneficiary, but may be any other period
of at least six months prior to the initiation of the investigation
for which reliable financial and other relevant data are available.
(3) The following
principles shall apply to the calculation of the benefit conferred to
the recipient:
(a) provision by a government
of equity capital shall not be considered as conferring a benefit,
unless the investment can be regarded as inconsistent with the usual
investment practice (including for the provision of risk capital) of
private investors in the territory of the country of origin or the
country of export;
(b) a loan by a government
shall not be considered as conferring a benefit, unless there is a
difference between the amount that the firm or enterprise receiving
the loan pays on the government loan and the amount that the firm or
enterprise would pay for a comparable commercial loan which the firm
or enterprise could actually obtain on the market, in which case the
benefit shall be the difference between the two amounts;
(c) a loan guarantee by a
government shall not be considered as conferring a benefit, unless
there is a difference between the amount that the firm receiving the
guarantee pays on a loan guaranteed by the government and the amount
that the firm would pay for a comparable commercial loan in the
absence of the government guarantee, in which case the benefit shall
be the difference between the two amounts adjusted for any differences
in fees;
(d) the provision of goods or
services or purchases of goods by a government shall not be considered
as conferring a benefit unless the provision is made for less than
adequate remuneration, or the purchase is made for more than adequate
remuneration and the adequacy of remuneration shall be determined in
relation to prevailing market conditions for the product or service in
question in the country of provision or purchase (including price,
quality, availability, marketability, transportation and other
conditions of purchase or sale).
(4) The following
principles shall apply to the calculation of the amount of
countervailable subsidies:
(a) the amount of the
countervailable subsidies shall be determined per unit of the
subsidized product exported to Trinidad and Tobago;
(b) an interested party may
claim the following deductions from the total subsidy:
(i) any application
fee, or other costs necessarily incurred in order to qualify for, or
to obtain, the subsidy;
(ii) export taxes,
duties or other charges levied on the export of the product to
Trinidad and Tobago specifically intended to offset the subsidy,
but the Authority shall
not make any deduction under this paragraph, unless the interested
party proves that the claim is justified;
(c) where the subsidy is not
granted by reference to the quantities manufactured, produced,
exported or transported, the amount of countervailable subsidy shall
be determined by allocating the value of the total subsidy, as
appropriate, over the level of production, sales or exports of the
products concerned during the investigation period for subsidization;
(d) where the subsidy can be
linked to the future acquisition of fixed assets, the amount of the
countervailable subsidy shall be calculated by spreading the subsidy
across a period which reflects the normal depreciation of such assets
in the industry concerned and the amount so calculated which is
attributable to the investigation period (including that which derives
from fixed assets acquired before this period) shall be allocated as
described in paragraph (c), but where the assets are non-depreciating,
the subsidy shall be valued as an interest-free loan and be treated in
accordance with subregulation (3)(b);
(e) where a subsidy cannot be
linked to the acquisition of fixed assets, the amount of the benefit
received during the investigation period shall in principle be
attributed to this period, and allocated as described in paragraph
(c), unless special circumstances arise justifying attribution over a
different period.
SCHEDULE
[Regulation 7(c)]
DOMESTIC SUPPORT MEASURES
1. Domestic support measures for which exemption from
countervailing duty is claimed shall meet the fundamental requirement
that they have no, or at most minimal, trade-distorting effects on
production. Accordingly, all measures for which exemption is claimed
shall conform to the following basic criteria:
(a) the
support in question shall be provided through a publicly-funded
government programme (including government revenue foregone) not
involving transfers from consumers; and
(b) the
support in question shall not have the effect of providing price
support to producers;
plus policy-specific
criteria and conditions as set out below.
GOVERNMENT SERVICE
PROGRAMMES
2.
General Services
Policies in this category involve expenditures (or revenue
foregone) in relation to programmes which provide services to
agriculture or a rural community. These programmes shall not involve
direct payments to producers or processors. These programmes include
but are not restricted to the following:
(a)
research, including general research, research in connection with
environmental programmes, and research programmes relating to
particular products;
(b) pest
and disease control, including general and product-specific pest and
disease control measures, such as early-warning systems, quarantine
and eradication;
(c)
training services, including both general and specific training
facilities;
(d)
extension and advisory services, including the provision of means to
facilitate the transfer of information and the results of research to
producers and consumers;
(e)
inspection services, including general inspection services and the
inspection of particular products for health, safety, grading or
standardization purposes;
(f)
marketing and promotion services, including market information, advice
and promotion relating to particular products but excluding
expenditure for unspecified purposes that could be used by sellers to
reduce their selling price or confer a direct economic benefit to
purchasers; and
(g)
infrastructural services, including electricity, reticulation, roads
and other means of transport, market and port facilities, water supply
facilities, dams and drainage schemes, and infrastructural works
associated with environmental programmes. In all cases the
expenditure shall be directed to the provision or construction of
capital works only, and shall exclude the subsidized provision of
on-farm facilities other than for the reticulation of generally
available public utilities. It shall not include subsidies to inputs
or operating costs, or preferential user charges.
3.
Public stockholding for food security purposes
Expenditure (or revenue foregone) in relation to
accumulation and holding of stocks of products which form an integral
part of a food security programme identified in national legislation.
This may include government aid to private storage of products as
part of such a programme.
The volume and accumulation of such stocks shall correspond
to predetermined targets related solely to food security. The process
of stock accumulation and disposal shall be financially transparent.
Food purchases by the government shall be made at current market
prices and sales from food security stocks shall be made at no less
than the current domestic market price for the product and quality in
question.
4.
Domestic food aid
Expenditures (or revenue foregone) in relation to provision
or domestic food aid to sections of the population in need.
Eligibility to receive the food aid shall be subject to
clearly-defined criteria related to nutritional objectives. Such aid
shall be in the form of direct provision of food to those concerned or
the provision of means to allow eligible recipients to buy food either
at market or at subsidized prices. Food purchases by the government
shall be made at current market prices and the financing and
administration of the aid shall be transparent.
5.
Direct payments to producers
Support provided through direct payments (or revenue
foregone, including payments in kind) to producers for which exemption
from reduction commitments is claimed shall meet the basic criteria
set out in paragraph 1, plus specific criteria applying to individual
types of direct payment as set out in paragraphs 6 through 13. Where
exemption from reduction is claimed for any existing or new type of
direct payment other than those specified in paragraphs 6 through 13,
it shall conform to the criteria (b) through (e) in paragraph 6, in
addition to the general criteria set out in paragraph 1.
6.
Decoupled income support
(a)
Eligibility for such payments shall be determined by clearly-defined
criteria such as income status as a producer or landowner, factor use
or production level in a defined and fixed base period.
(b) The
amount of such payments in any given year shall not be related to, or
based on, the type or volume of production (including livestock units)
undertaken by the producer in any year after the base period.
(c) The
amount of such payments in any given year shall not be related to, or
based on, the prices, domestic or international, applying to any
production undertaken in any year after the base period.
(d) The
amount of such payments in any given years shall not be related to, or
based on, the factors of production employed in any year after the
base period.
(e) No
production shall be required in order to receive such payments.
7.
Government
financial participation in income insurance and income safety-net
programmes
(a)
Eligibility for such payments shall be determined by an income loss,
taking into account only income derived from agriculture, which
exceeds 30 per cent of average gross income or the equivalent in net
income terms (excluding any payments from the same or similar schemes)
in the preceding three-year period or a three-year average based on
the preceding five-year period, excluding the highest and the lowest
entry. Any producer meeting this condition shall be eligible to
receive the payments.
(b) The
amount of such payments shall compensate for less than 70 per cent of
the producer's income loss in the year the producer becomes eligible
to receive this assistance.
(c) The
amount of any such payments shall relate solely to income; it shall
not relate to the type or volume of production (including livestock
units) livestock undertaken by the producer; or to the prices,
domestic or international, applying to such production; or to the
factors of production employed.
(d) Where
a producer receives in the same year payments pursuant to this
paragraph and pursuant to paragraph 8 (relief from natural disasters),
the total of such payments shall be less than 100 per cent of the
producer's total loss.
8.
Payments (made
either directly or by way of a government financial participation in
crop insurance schemes) for relief from natural disasters
(a)
Eligibility for such payments shall arise only following a formal
recognition by government authorities that a natural or like disaster
(including disease outbreaks, pest infestations, nuclear accidents,
and war on the territory of the Member concerned) has occurred or is
occurring; and shall be determined by a production loss which exceeds
30 per cent of the average of production in the preceding three-year
period or a three-year average based on the preceding five-year
period, excluding the highest and lowest entry.
(b)
Payments made following a disaster shall be applied only in respect of
losses of income, livestock (including payments in connection with the
veterinary treatment of animals, land or other production factors) due
to the natural disaster in question.
(c)
Payments shall compensate for not more than the total cost of
replacing such losses and shall not require or specify the type or
quantity of future production.
(d)
Payments made during a disaster shall not exceed the level required to
prevent or alleviate further loss as defined in criterion (b).
(e) Where
a producer receives in the same year payments pursuant to this
paragraph and pursuant to paragraph 7 (income insurance and income
safety-net programmes), the total of such payments shall be less than
100 per cent of the producer's total loss.
9.
Structural
adjustment assistance provided through producer retirement programmes
(a)
Eligibility for such payments shall be determined by reference to
clearly defined criteria in programmes designed to facilitate the
retirement of persons engaged in marketable agricultural production,
or their movement to non-agricultural activities.
(b)
Payments shall be conditional upon the total and permanent retirement
of the recipients from marketable agricultural production.
10. Structural
adjustment assistance provided through resource retirement programmes
(a)
Eligibility for such payments shall be determined by reference to
clearly defined criteria in programmes designed to remove land or
other resources, including livestock, from marketable agricultural
production.
(b)
Payments shall be conditional upon the retirement of land from
marketable agricultural production for a minimum of three years, and
in the case of livestock on its slaughter or definitive permanent
disposal.
(c)
Payments shall not require or specify any alternative use for such
land or other resources which involves the production of marketable
agricultural products.
(d)
Payments shall not be related to either type or quantity of production
or to the prices, domestic or international, applying to production
undertaken using the land or other resources remaining in production.
11. Structural
adjustment assistance provided through investment aids
(a)
Eligibility for such payments shall be determined by reference to
clearly-defined criteria in government programmes designed to assist
the financial or physical restructuring of a producer's operations in
response to objectively demonstrated structural disadvantages.
Eligibility for such programmes may also be based on a clearly-defined
government programme for the reprivatization of agricultural land.
(b) The
amount of such payments in any given year shall not be related to, or
based on the type or volume of production (including livestock units)
undertaken by the producer in any year after the base period other
than as provided for under criterion (e).
(c) The
amount of such payments in any given year shall not be related to, or
based on, the prices, domestic or international, applying to any
production undertaken in any year after the base period.
(d) The
payments shall be given only for the period of time necessary for the
realization of the investment in respect of which they are provided.
(e) The
payments shall not mandate or in any way designate the agricultural
products to be produced by the recipients except to require them not
to produce a particular product.
(f) The
payments shall be limited to the amount required to compensate for the
structural disadvantage.
12. Payments under
environmental programmes
(a)
Eligibility for such payments shall be determined as part of a
clearly-defined government environmental or conservation programme and
be dependent on the fulfilment of specific conditions under the
government, including conditions related to production methods or
inputs.
(b) The
amount of payment shall be limited to the extra costs or loss of
income involved in complying with the government programme.
13. Payments under
regional assistance programmes
(a)
Eligibility for such payments shall be limited to producers in
disadvantaged regions. Each such region must be a clearly designated
contiguous geographical arts with a definable economic and
administrative identity, considered as disadvantaged on the basis of
neutral and objective criteria clearly spelt out in a law or
regulation and indicating that the region's difficulties arise out of
more than temporary circumstances.
(b) The
amount of such payments in any given year shall not be related to, or
based on, the type or volume of production (including livestock units)
undertaken by the producer in any year after the base period other
than to reduce that production.
(c) The
amount of such payments in any given year shall not be related to, or
based on, the prices, domestic or international, applying to any
production undertaken in any year after the base period.
(d)
Payments shall be available only to producers in eligible regions, but
generally available to all producers within such regions.
(e) Where
related to production factors, payments shall be made at a degressive
rate above a threshold level of the factor concerned.
(f) The
payments shall be limited to the extra costs of loss of income
involved in undertaking agricultural production in the prescribed
area.
Dated this 30th
day of January 1996
M. ASSAM
Minister of Trade and Industry
Laid in the House of Representatives this 16th
day of February 1996
J. SAMPSON
Clerk of the House
Laid in the Senate this 6th day of
February 1996.
N. COX
Clerk of the Senate
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