Part I provides that the SCM agreement applies only to subsidies granted specifically to a company or industry or group of companies or industries and defines both the subsidy and the concept of specificity. In Parts II and III, all specific grants are categorized into two categories: prohibited and applicable (1), and they define specific rules and procedures for each category. Part V defines the physical and procedural requirements that must be met before a member can apply a countervailing measure against subsidized imports. Parts VI and VII define the institutional structure and the modalities for notification and monitoring of the implementation of the SCM Convention. Part VIII contains specific and differentiated treatment rules for different categories of members from developing countries. Part IX contains transitional rules for members of the developed country and the former central plan economy. Parts X and XI include dispute resolution and final rules. (a) Where the granting authority or the legislation under which the responsible authority acts expressly limits access to a subsidy to specific companies, this subsidy is specific. Under the grant agreement, a WTO member government, if it believes that a prohibited or applicable subsidy is granted or maintained by another member government, may request consultations with that government as part of WTO dispute settlement procedures. In the case of prohibited subsidies, the complaining country does not have to show any adverse effects on its own industrial sector (the exceptions apply to developing countries). For achievable grants, the complaining country must demonstrate that it has a negative effect. 2.2 A subsidy limited to certain companies located in a specific geographic area under the jurisdiction of the responsible authority is specific. It is considered that setting or amending general tax rates by all eligible levels of authority is not considered a specific subsidy for the purposes of this agreement.
Definition of subsidies Unlike the Tokyo Round Subsidies Code, the WTO SCM agreement contains a definition of the subsidy. The definition contains three fundamental elements: (i) a financial contribution (ii) from a government or public body in the territory of a member (iii) that awards a benefit. All three elements must be completed for a grant to be completed. In line with the objectives of U.S. legislation, WTO subsidy notifications play an important role in U.S. government oversight and enforcement to protect U.S. rights and benefits under the subsidy agreement. The notification of a subsidy program does not prejudge whether it is prohibited or likely to act under the agreement.
7.8 In the event of the adoption of a panel report or an appellate body report finding that a grant has had a negative impact on the interests of another member under Article 5, the member who grants or maintains the grant takes appropriate steps to eliminate the adverse effects or withdraws the subsidy.