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Calculation of the total Ad Valorem Subsidization (Paragraph 1(A)of Article 6)

Any calculation of the amount of a subsidy for the purpose of paragraph 1(a) of Article 6 shall be done in terms of the cost to the granting government.
Except as provided in paragraphs 3 through 5, in determining whether the overall rate of subsidization exceeds 5 per cent of the value of the product, the value of the product shall be calculated as the total value of the recipient firm sales in the most recent 12-month period, for which sales data is available, proceeding the period in which the subsidy is granted.
Where the subsidy is tied to the production or sale of a given product, the value of the product shall be calculated as the total value of the recipient firm’s sales of that product in the most recent 12-month period, for which sales data is available, proceeding the period in which the subsidy is granted.
Where the recipient firm is in a start-up situation, serious prejudice shall be deemed to exist if the overall rate of subsidization exceeds 15 percent of the total funds invested. For purposes of this paragraph, a start-up period will not extend beyond the first year of production.
Where the recipient firm is located in an inflationary economy country, the value of the product shall be calculated as the recipient firm’s total sales (or sales of the relevant product, if the subsidy is tied) in the proceeding calendar year indexed by the rate of inflation experienced in the 12 months preceding the month in which the subsidy is to be given.
In determining the overall rate of subsidization in a given year, subsidies given under different programmes and by different authorities in the territory of a Member shall be aggregated.
Subsidies granted prior to the date of entry into force of the WTO Agreement, the benefit of which are allocated to future production shall be included in the overall rate of subsidization.
Subsidies which are non-actionable under relevant provisions of this Agreement shall not be included in the calculation of the amount of a subsidy for the purpose of paragraph 1(a) of Article 6

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