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URUGUAY ROUND AGREEMENT

Agreement on Subsidies and Countervailing Measures

(Article 1 — 9)

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> Article 1 Definition of a Subsidy
> Article 2 Specificity
> Article 3  Prohibition
> Article 4 Remedies
> Article 5 Adverse Effects
> Article 6  Serious Prejudice
> Article 7  Remedies
> Article 8  Identification of Non-Actionable Subsidies
> Article 9 Consultations and Authorized Remedies
> Article 10  Application of Article VI of GATT 1994
> Article 11  Initiation and Subsequent Investigation
> Article 12  Evidence
> Article 13  Consultations
> Article 14 Calculation of the Amount of a Subsidy in Terms of the Benefit to the Recipient
> Article 15 Determination of Injury
> Article 16 Definition of Domestic Industry
> Article 17  Provisional Measures
> Article 18 Undertakings
> Article 19 Imposition and Collection of Countervailing Duties
> Article 20 Retroactivity
> Article 21 Duration and Review of Countervailing Duties and Undertakings
> Article 22 Public Notice and Explanation of Determinations
> Article 23 Judicial Review
> Article 24 Committee on Subsidies and Countervailing Measures and Subsidiary Bodies
> Article 25 Notifications
> Article 26 Surveillance
> Article 27 Special and Differential Treatment of Developing Country Members
> Article 28 Existing Programmes
> Article 29 Transformation into a Market Economy
> Article 30
> Article 31 Provisional Application
> Article 32 Other Final Provisions
> Annex I Illustrative List of Export Subsidies
> Annex II Guidelines on Consumption of Inputs in the Production Process
> Annex III Guidelines in the Determination of Substitution Drawback Systems as Export Subsidies
> Annex IV Calculation of the Total Ad Valorem Subsidization (Paragraph 1(A) of Article 6)
> Annex V Procedures For Developing Information Concerning Serious Prejudice
> Annex VI Procedures for On-the-Spot Investigations Pursuant to Paragraph 6 of Article 12
> Annex VII Developing Country Members Referred to in Paragraph 2(A) of Article 27


Members hereby agree as follows:

Part I: General Provisions

Article 1: Definition of a Subsidy

1.1        For the purpose of this Agreement, a subsidy shall be deemed to exist if:

(a)(1)         there is a financial contribution by a government or any public body within the territory of a Member (referred to in this Agreement as “government”), i.e. where:
 

(i)         a government practice involves a direct transfer of funds (e.g. grants, loans,  and equity infusion), potential direct transfers of funds or liabilities (e.g. loan guarantees);
 

(ii)        government revenue that is otherwise due is foregone or not collected (e.g. fiscal incentives such as tax credits)(1);
 

(iii)       a government provides goods or services other than general infrastructure, or purchases goods;
 

(iv)       a government makes payments to a funding mechanism, or entrusts or directs a private body to carry out one or more of the type of functions illustrated in (i) to (iii) above which would normally be vested in the government and the practice, in no real sense, differs from practices normally followed by governments;
 

or
 

(a)(2)      there is any form of income or price support in the sense of Article XVI of GATT 1994;
 

and
 

(b)        a benefit is thereby conferred.

1.2        A subsidy as defined in paragraph 1 shall be subject to the provisions of Part II or shall be subject to the provisions of Part III or V only if such a subsidy is specific in accordance with the provisions of Article 2.


Article 2: Specificity back to top

2.1        In order to determine whether a subsidy, as defined in paragraph 1 of Article 1, is specific to an enterprise or industry or group of enterprises or industries (referred to in this Agreement as “certain enterprises”) within the jurisdiction of the granting authority, 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 certain enterprises, such subsidy shall be specific.
 

(b)        Where the granting authority, or the legislation pursuant to which the granting authority operates, establishes objective criteria or conditions(2) governing the eligibility for, and the amount of, a subsidy, specificity shall not exist, provided that the eligibility is automatic and that such criteria and conditions are strictly adhered to.  The criteria or conditions must be clearly spelled out in law, regulation, or other official document, so as to be capable of verification.
 

(c)        If, notwithstanding any appearance of non‑specificity resulting from the application of the principles laid down in subparagraphs (a) and (b), there are reasons to believe that the subsidy may in fact be specific, other factors may be considered.  Such factors are:  use of a subsidy programme by a limited number of certain enterprises, predominant use by certain enterprises, the granting of disproportionately large amounts of subsidy to certain enterprises, and the manner in which discretion has been exercised by the granting authority in the decision to grant a subsidy(3). In applying this  subparagraph, account shall be taken of the extent of diversification of economic activities within the jurisdiction of the granting authority, as well as of the length of time during which the subsidy programme has been in operation.

2.2        A subsidy which is limited to certain enterprises located within a designated geographical region within the jurisdiction of the granting authority shall be specific.  It is understood that the setting or change of generally applicable tax rates by all levels of government entitled to do so shall not be deemed to be a specific subsidy for the purposes of this Agreement.

2.3        Any subsidy falling under the provisions of Article 3 shall be deemed to be specific.

2.4        Any determination of specificity under the provisions of this Article shall be clearly substantiated on the basis of positive evidence.


Part II: Prohibited Subsidies

Article 3: Prohibition back to top

3.1        Except as provided in the Agreement on Agriculture, the following subsidies, within the meaning of Article 1, shall be prohibited:

(a)        subsidies contingent, in law or in fact(4), whether solely or as one of several other conditions, upon export performance, including those illustrated in Annex I(5);
 

(b)        subsidies contingent, whether solely or as one of several other conditions, upon the use of domestic over imported goods.

3.2        A Member shall neither grant nor maintain subsidies referred to in paragraph 1.


Article 4: Remedies back to top

4.1        Whenever a Member has reason to believe that a prohibited subsidy is being granted or maintained by another Member, such Member may request consultations with such other Member.

4.2        A request for consultations under paragraph 1 shall include a statement of available evidence with regard to the existence and nature of the subsidy in question.

4.3        Upon request for consultations under paragraph 1, the Member believed to be granting or maintaining the subsidy in question shall enter into such consultations as quickly as possible. The purpose of the consultations shall be to clarify the facts of the situation and to arrive at a mutually agreed solution.

4.4        If no mutually agreed solution has been reached within 30 days(6)  of the request for consultations, any Member party to such consultations may refer the matter to the Dispute Settlement Body (“DSB”) for the immediate establishment of a panel, unless the DSB decides by consensus not to establish a panel.

4.5        Upon its establishment, the panel may request the assistance of the Permanent Group of Experts(7) (referred to in this Agreement as the “PGE”) with regard to whether the measure in question is a prohibited subsidy. If so requested, the PGE shall immediately review the evidence with regard to the existence and nature of the measure in question and shall provide an opportunity for the Member applying or maintaining the measure to demonstrate that the measure in question is not a prohibited subsidy. The PGE shall report its conclusions to the panel within a time-limit determined by the panel. The PGE’s conclusions on the issue of whether or not the measure in question is a prohibited subsidy shall be accepted by the panel without modification.

4.6        The panel shall submit its final report to the parties to the dispute. The report shall be circulated to all Members within 90 days of the date of the composition and the establishment of the panel’s terms of reference.

4.7        If the measure in question is found to be a prohibited subsidy, the panel shall recommend that the subsidizing Member withdraw the subsidy without delay. In this regard, the panel shall specify in its recommendation the time‑period within which the measure must be withdrawn.

4.8        Within 30 days of the issuance of the panel’s report to all Members, the report shall be adopted by the DSB unless one of the parties to the dispute formally notifies the DSB of its decision to appeal or the DSB decides by consensus not to adopt the report.

4.9        Where a panel report is appealed, the Appellate Body shall issue its decision within 30 days from the date when the party to the dispute formally notifies its intention to appeal. When the Appellate Body considers that it cannot provide its report within 30 days, it shall inform the DSB in writing of the reasons for the delay together with an estimate of the period within which it will submit its report. In no case shall the proceedings exceed 60 days. The appellate report shall be adopted by the DSB and unconditionally accepted by the parties to the dispute unless the DSB decides by consensus not to adopt the appellate report within 20 days following its issuance to the Members.(8)

4.10        In the event the recommendation of the DSB is not followed within the time‑period specified by the panel, which shall commence from the date of adoption of the panel’s report or the Appellate Body’s report, the DSB shall grant authorization to the complaining Member to take appropriate(9) countermeasures, unless the DSB decides by consensus to reject the request.

4.11        In the event a party to the dispute requests arbitration under paragraph 6 of Article 22 of the Dispute Settlement Understanding (“DSU”), the arbitrator shall determine whether the countermeasures are appropriate.(10)

4.12        For purposes of disputes conducted pursuant to this Article, except for time‑periods specifically prescribed in this Article, time‑periods applicable under the DSU for the conduct of such disputes shall be half the time prescribed therein.


Part III: Actionable Subsidies

Article 5: Adverse Effects back to top

No Member should cause, through the use of any subsidy referred to in paragraphs 1 and 2 of Article 1, adverse effects to the interests of other Members, i.e.:

(a)        injury to the domestic industry of another Member(11);
 

(b)        nullification or impairment of benefits accruing directly or indirectly to other Members under GATT 1994 in particular the benefits of concessions bound under Article II of GATT 1994(12);
 

(c)        serious prejudice to the interests of another Member.(13)

This Article does not apply to subsidies maintained on agricultural products as provided in Article 13 of the Agreement on Agriculture.


Article 6: Serious Prejudice back to top

6.1        Serious prejudice in the sense of paragraph (c) of Article 5 shall be deemed to exist in the case of:

(a)        the total ad valorem subsidization(14) of a product exceeding 5 per cent(15):
 

(b)        subsidies to cover operating losses sustained by an industry;
 

(c)        subsidies to cover operating losses sustained by an enterprise, other than one-time measures which are non-recurrent and cannot be repeated for that enterprise and which are given merely to provide time for the development of long-term solutions and to avoid acute social problems;
 

(d)        direct forgiveness of debt, i.e. forgiveness of government-held debt, and grants to cover debt repayment.(16)

6.2        Notwithstanding the provisions of paragraph 1, serious prejudice shall not be found if the subsidizing Member demonstrates that the subsidy in question has not resulted in any of the effects enumerated in paragraph 3. 

6.3        Serious prejudice in the sense of paragraph (c) of Article 5 may arise in any case where one or several of the following apply:

(a)        the effect of the subsidy is to displace or impede the imports of a like product of another Member into the market of the subsidizing Member;
 

(b)        the effect of the subsidy is to displace or impede the exports of a like product of another Member from a third country market;
 

(c)        the effect of the subsidy is a significant price undercutting by the subsidized product as compared with the price of a like product of another Member in the same market or significant price suppression, price depression or lost sales in the same market;
 

(d)        the effect of the subsidy is an increase in the world market share of the subsidizing Member in a particular subsidized primary product or commodity(17) as compared to the average share it had during the previous period of three years and this increase follows a consistent trend over a period when subsidies have been granted.

6.4        For the purpose of paragraph 3(b), the displacement or impeding of exports shall include any case in which, subject to the provisions of paragraph 7, it has been demonstrated that there has been a change in relative shares of the market to the disadvantage of the non‑subsidized like product (over an appropriately representative period sufficient to demonstrate clear trends in the development of the market for the product concerned, which, in normal circumstances, shall be at least one year). “Change in relative shares of the market” shall include any of the following situations: (a) there is an increase in the market share of the subsidized product; (b) the market share of the subsidized product remains constant in circumstances in which, in the absence of the subsidy, it would have declined; (c) the market share of the subsidized product declines, but at a slower rate than would have been the case in the absence of the subsidy.

6.5        For the purpose of paragraph 3(c), price undercutting shall include any case in which such price undercutting has been demonstrated through a comparison of prices of the subsidized product with prices of a non-subsidized like product supplied to the same market. The comparison shall be made at the same level of trade and at comparable times, due account being taken of any other factor affecting price comparability. However, if such a direct comparison is not possible, the existence of price undercutting may be demonstrated on the basis of export unit values.

6.6        Each Member in the market of which serious prejudice is alleged to have arisen shall, subject to the provisions of paragraph 3 of Annex V, make available to the parties to a dispute arising under Article 7, and to the panel established pursuant to paragraph 4 of Article 7, all relevant information that can be obtained as to the changes in market shares of the parties to the dispute as well as concerning prices of the products involved.

6.7            Displacement or impediment resulting in serious prejudice shall not arise under paragraph 3 where any of the following circumstances exist(18) during the relevant period:

(a)        prohibition or restriction on exports of the like product from the complaining Member or on imports from the complaining Member into the third country market concerned;
 

(b)        decision by an importing government operating a monopoly of trade or state trading in the product concerned to shift, for non-commercial reasons, imports from the complaining Member to another country or countries;
 

(c)        natural disasters, strikes, transport disruptions or other force majeure substantially affecting production, qualities, quantities or prices of the product available for export from the complaining Member;
 

(d)        existence of arrangements limiting exports from the complaining Member;
 

(e)        voluntary decrease in the availability for export of the product concerned from the complaining Member (including, inter alia, a situation where firms in the complaining Member have been autonomously reallocating exports of this product to new markets);
 

(f)        failure to conform to standards and other regulatory requirements in the importing country.

6.8        In the absence of circumstances referred to in paragraph 7, the existence of serious prejudice should be determined on the basis of the information submitted to or obtained by the panel, including information submitted in accordance with the provisions of Annex V.

6.9        This Article does not apply to subsidies maintained on agricultural products as provided in Article 13 of the Agreement on Agriculture.


Article 7: Remedies back to top

7.1        Except as provided in Article 13 of the Agreement on Agriculture, whenever a Member has reason to believe that any subsidy referred to in Article 1, granted or maintained by another Member, results in injury to its domestic industry, nullification or impairment or serious prejudice, such Member may request consultations with such other Member.

7.2        A request for consultations under paragraph 1 shall include a statement of available evidence with regard to (a) the existence and nature of the subsidy in question, and (b) the injury caused to the domestic industry, or the nullification or impairment, or serious prejudice(19) caused to the interests of the Member requesting consultations.

7.3        Upon request for consultations under paragraph 1, the Member believed to be granting or maintaining the subsidy practice in question shall enter into such consultations as quickly as possible. The purpose of the consultations shall be to clarify the facts of the situation and to arrive at a mutually agreed solution.

7.4        If consultations do not result in a mutually agreed solution within 60 days(20), any Member party to such consultations may refer the matter to the DSB for the establishment of a panel, unless the DSB decides by consensus not to establish a panel.  The composition of the panel and its terms of reference shall be established within 15 days from the date when it is established.

7.5        The panel shall review the matter and shall submit its final report to the parties to the dispute. The report shall be circulated to all Members within 120 days of the date of the composition and establishment of the panel’s terms of reference.

7.6        Within 30 days of the issuance of the panel’s report to all Members, the report shall be adopted by the DSB(21) unless one of the parties to the dispute formally notifies the DSB of its decision to appeal or the DSB decides by consensus not to adopt the report.

7.7        Where a panel report is appealed, the Appellate Body shall issue its decision within 60 days from the date when the party to the dispute formally notifies its intention to appeal. When the Appellate Body considers that it cannot provide its report within 60 days, it shall inform the DSB in writing of the reasons for the delay together with an estimate of the period within which it will submit its report. In no case shall the proceedings exceed 90 days. The appellate report shall be adopted by the DSB and unconditionally accepted by the parties to the dispute unless the DSB decides by consensus not to adopt the appellate report within 20 days following its issuance to the Members.(22)

7.8        Where a panel report or an Appellate Body report is adopted in which it is determined that any subsidy has resulted in adverse effects to the interests of another Member within the meaning of Article 5, the Member granting or maintaining such subsidy shall take appropriate steps to remove the adverse effects or shall withdraw the subsidy.

7.9        In the event the Member has not taken appropriate steps to remove the adverse effects of the subsidy or withdraw the subsidy within six months from the date when the DSB adopts the panel report or the Appellate Body report, and in the absence of agreement on compensation, the DSB shall grant authorization to the complaining Member to take countermeasures, commensurate with the degree and nature of the adverse effects determined to exist, unless the DSB decides by consensus to reject the request.

7.10        In the event that a party to the dispute requests arbitration under paragraph 6 of Article 22 of the DSU, the arbitrator shall determine whether the countermeasures are commensurate with the degree and nature of the adverse effects determined to exist.


Part IV: Non-Actionable Subsidies

Article 8: Identification of Non-Actionable Subsidies back to top

8.1        The following subsidies shall be considered as non-actionable(23);

(a)        subsidies which are not specific within the meaning of Article 2;
 

(b)        subsidies which are specific within the meaning of Article 2 but which meet all of the conditions provided for in paragraphs 2(a), 2(b) or 2(c) below.

8.2        Notwithstanding the provisions of Parts III and V, the following subsidies shall be non-actionable:

(a)        assistance for research activities conducted by firms or by higher education or research establishments on a contract basis with firms if:(24), (25), (26)the assistance covers(27) not more than 75 per cent of the costs of industrial research(28) or 50 per cent of the costs of pre-competitive development activity(29), (30); and provided that such assistance is limited exclusively to:

 

(i)        costs of personnel (researchers, technicians and other supporting staff employed exclusively in the research activity);
 

(ii)        costs of instruments, equipment, land and buildings used exclusively and permanently (except when disposed of on a commercial basis) for the research activity;
 

(iii)        costs of consultancy and equivalent services used exclusively for the research activity, including bought‑in research, technical knowledge, patents, etc.;
 

(iv)        additional overhead costs incurred directly as a result of the research activity;
 

(v)        other running costs (such as those of materials, supplies and the like), incurred directly as a result of the research activity.
 

(b)        assistance to disadvantaged regions within the territory of a Member given pursuant to a general framework of regional development (31) and non-specific (within the meaning of Article 2) within eligible regions provided that:
 

(i)        each disadvantaged region must be a clearly designated contiguous geographical area with a definable economic and administrative identity;
 

(ii)        the region is considered as disadvantaged on the basis of neutral and objective criteria(32), indicating that the region’s difficulties arise out of more than temporary circumstances; such criteria must be clearly spelled out in law, regulation, or other official document, so as to be capable of verification;
 

(iii)        the criteria shall include a measurement of economic development which shall be based on at least one of the following factors:
 

—         one of either income per capita or household income per capita, or GDP per capita, which must not be above 85 per cent of the average for the territory concerned;
 

—           unemployment rate, which must be at least 110 per cent of the average for the territory concerned;
 

as measured over a three-year period; such measurement, however, may be a composite one and may include other factors.
 

(c)        assistance to promote adaptation of existing  facilities(33) to new environmental requirements imposed by law and/or regulations which result in greater constraints and financial burden on firms, provided that the assistance:
 

(i)        is a one-time non-recurring measure; and
 

(ii)        is limited to 20 per cent of the cost of adaptation; and
 

(iii)        does not cover the cost of replacing and operating the assisted investment, which must be fully borne by firms; and
 

(iv)        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
 

(v)        is available to all firms which can adopt the new equipment and/or production processes.

8.3        A subsidy programme for which the provisions of paragraph 2 are invoked shall be notified in advance of its implementation to the Committee in accordance with the provisions of Part VII. Any such notification shall be sufficiently precise to enable other Members to evaluate the consistency of the programme with the conditions and criteria provided for in the relevant provisions of paragraph 2. Members shall also provide the Committee with yearly updates of such notifications, in particular by supplying information on global expenditure for each programme, and on any modification of the programme.  Other Members shall have the right to request information about individual cases of subsidization under a notified programme.(34)

8.4        Upon request of a Member, the Secretariat shall review a notification made pursuant to paragraph 3 and, where necessary, may require additional information from the subsidizing Member concerning the notified programme under review. The Secretariat shall report its findings to the Committee. The Committee shall, upon request, promptly review the findings of the Secretariat (or, if a review by the Secretariat has not been requested, the notification itself), with a view to determining whether the conditions and criteria laid down in paragraph 2 have not been met. The procedure provided for in this paragraph shall be completed at the latest at the first regular meeting of the Committee following the notification of a subsidy programme, provided that at least two months have elapsed between such notification and the regular meeting of the Committee. The review procedure described in this paragraph shall also apply, upon request, to substantial modifications of a programme notified in the yearly updates referred to in paragraph 3.

8.5        Upon the request of a Member, the determination by the Committee referred to in paragraph 4, or a failure by the Committee to make such a determination, as well as the violation, in individual cases, of the conditions set out in a notified programme, shall be submitted to binding arbitration. The arbitration body shall present its conclusions to the Members within 120 days from the date when the matter was referred to the arbitration body. Except as otherwise provided in this paragraph, the DSU shall apply to arbitrations conducted under this paragraph.


Article 9: Consultations and Authorized Remedies back to top

9.1        If, in the course of implementation of a programme referred to in paragraph 2 of Article 8, notwithstanding the fact that the programme is consistent with the criteria laid down in that paragraph, a Member has reasons to believe that this programme has resulted in serious adverse effects to the domestic industry of that Member, such as to cause damage which would be difficult to repair, such Member may request consultations with the Member granting or maintaining the subsidy.

9.2        Upon request for consultations under paragraph 1, the Member granting or maintaining the subsidy programme in question shall enter into such consultations as quickly as possible. The purpose of the consultations shall be to clarify the facts of the situation and to arrive at a mutually acceptable solution.

9.3        If no mutually acceptable solution has been reached in consultations under paragraph 2 within 60 days of the request for such consultations, the requesting Member may refer the matter to the Committee.

9.4        Where a matter is referred to the Committee, the Committee shall immediately review the facts involved and the evidence of the effects referred to in paragraph 1. If the Committee determines that such effects exist, it may recommend to the subsidizing Member to modify this programme in such a way as to remove these effects. The Committee shall present its conclusions within 120 days from the date when the matter is referred to it under paragraph 3. In the event the recommendation is not followed within six months, the Committee shall authorize the requesting Member to take appropriate countermeasures commensurate with the nature and degree of the effects determined to exist.

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Notes:

1. In accordance with the provisions of Article XVI of GATT 1994 (Note to Article XVI) and the provisions of Annexes I through III of this Agreement, the exemption of an exported product from duties or taxes borne by the like product when destined for domestic consumption, or the remission of such duties or taxes in amounts not in excess of those which have accrued, shall not be deemed to be a subsidy. back to text

2. Objective criteria or conditions, as used herein, mean criteria or conditions which are neutral, which do not favour certain enterprises over others, and which are economic in nature and horizontal in application, such as number of employees or size of enterprise. back to text

3. In this regard, in particular, information on the frequency with which applications for a subsidy are refused or approved and the reasons for such decisions shall  be considered. back to text

4. This standard is met 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. The mere fact that a subsidy is granted to enterprises which export shall not for that reason alone be considered to be an export subsidy within the meaning of this provision. back to text

5. Measures referred to in Annex I as not constituting export subsidies shall not be prohibited under this or any other provision of this Agreement. back to text

6. Any time-periods mentioned in this Article may be extended by mutual agreement. back to text

7. As established in Article 24. back to text

8. If a meeting of the DSB is not scheduled during this period, such a meeting shall be held for this purpose. back to text

9. This expression is not meant to allow countermeasures that are disproportionate in light of the fact that the subsidies dealt with under these provisions are prohibited. back to text

10. This expression is not meant to allow countermeasures that are disproportionate in light of the fact that the subsidies dealt with under these provisions are prohibited. back to text

11. The term “injury to the domestic industry” is used here in the same sense as it is used in Part V. back to text

12. The term “nullification or impairment” is used in this Agreement in the same sense as it is used in the relevant provisions of GATT 1994, and the existence of such nullification or impairment shall be established in accordance with the practice of application of these provisions. back to text

13. The term “serious prejudice to the interests of another Member” is used in this Agreement in the same sense as it is used in paragraph 1 of Article XVI of GATT 1994, and includes threat of serious prejudice. back to text

14. The total ad valorem subsidization shall be calculated in accordance with the provisions of Annex IV. back to text

15. Since it is anticipated that civil aircraft will be subject to specific multilateral rules, the threshold in this subparagraph does not apply to civil aircraft. back to text

16. Members recognize that where royalty-based financing for a civil aircraft programme is not being fully repaid due to the level of actual sales falling below the level of forecast sales, this does not in itself constitute serious prejudice for the purposes of this subparagraph. back to text

17. Unless other multilaterally agreed specific rules apply to the trade in the product or commodity in question. back to text

18. The fact that certain circumstances are referred to in this paragraph does not, in itself, confer upon them any legal status in terms of either GATT 1994 or this Agreement.  These circumstances must not be isolated, sporadic or otherwise insignificant. back to text

19. In the event that the request relates to a subsidy deemed to result in serious prejudice in terms of paragraph 1 of Article 6, the available evidence of serious prejudice may be limited to the available evidence as to whether the conditions of paragraph 1 of Article 6 have been met or not. back to text

20. Any time-periods mentioned in this Article may be extended by mutual agreement. back to text

21. If a meeting of the DSB is not scheduled during this period, such a meeting shall be held for this purpose. back to text

22. If a meeting of the DSB is not scheduled during this period, such a meeting shall be held for this purpose. back to text

23. It is recognized that government assistance for various purposes is widely provided by Members and that the mere fact that such assistance may not qualify for non-actionable treatment under the provisions of this Article does not in itself restrict the ability of Members to provide such assistance. back to text

24. Since it is anticipated that civil aircraft will be subject to specific multilateral rules, the provisions of this subparagraph do not apply to that product. back to text

25. Not later than 18 months after the date of entry into force of the WTO Agreement, the Committee on Subsidies and Countervailing Measures provided for in Article 24 (referred to in this Agreement as “the Committee”) shall review the operation of the provisions of subparagraph 2(a) with a view to making all necessary modifications to improve the operation of these provisions. In its consideration of possible modifications, the Committee shall carefully review the definitions of the categories set forth in this subparagraph in the light of the experience of Members in the operation of research programmes and the work in other relevant international institutions. back to text

26. The provisions of this Agreement do not apply to fundamental research activities independently conducted by higher education or research establishments. The term “fundamental research” means an enlargement of general scientific and technical knowledge not linked to industrial or commercial objectives. back to text

27. The allowable levels of non-actionable assistance referred to in this subparagraph shall be established by reference to the total eligible costs incurred over the duration of an individual project. back to text

28.  The term “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. back to text

29. The term “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 the creation of a first prototype which would not be capable of commercial use. It may further include the conceptual formulation and design of products, processes or services alternatives and initial demonstration or pilot projects, provided that these same projects cannot be converted or used for industrial application or commercial exploitation. It does not include routine or periodic alterations to existing products, production lines, manufacturing processes, services, and other on-going operations even though those alterations may represent improvements. back to text

30. In the case of programmes which span industrial research and pre-competitive development activity, the allowable level of non-actionable assistance shall not exceed the simple average of the allowable levels of non-actionable assistance applicable to the above two categories, calculated on the basis of all eligible costs as set forth in items (i) to (v) of this subparagraph. back to text

31. A “general framework of regional development” means that regional subsidy programmes are part of an internally consistent and generally applicable regional development policy and that regional development subsidies are not granted in isolated geographical points having no, or virtually no, influence on the development of a region. back to text

32. “Neutral and objective criteria” means criteria which do not favour certain regions beyond what is appropriate for the elimination or reduction of regional disparities within the framework of the regional development policy. In this regard, regional subsidy programmes shall include ceilings on the amount of assistance which can be granted to each subsidized project. Such ceilings must be differentiated according to the different levels of development of assisted regions and must be expressed in terms of investment costs or cost of job creation. Within such ceilings, the distribution of assistance shall be sufficiently broad and even to avoid the predominant use of a subsidy by, or the granting of disproportionately large amounts of subsidy to, certain enterprises as provided for in Article 2. back to text

33. The term “existing facilities” means facilities which have been in operation for at least two years at the time when new environmental requirements are imposed. back to text

34. It is recognized that nothing in this notification provision requires the provision of confidential information, including confidential business information. back to text