Article 105: Subsidies Causing Injury, Nullification, Impairment or Serious Prejudice

A Member State may take action against subsidised imports from any other Member State where it can be established, based on an investigation, that the effect of the subsidy has been:

(a)        injury to its domestic industry;

(b)        nullification or impairment of benefits which it expects under this Treaty; or

(c)        serious prejudice to its interests.

  1.         Serious prejudice shall be deemed to exist in the case where:

(a)        the total ad valorem subsidisation of a product exceeds 5 per cent; (b)        subsidies cover operating losses sustained by an industry;

(c) subsidies 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; or

(d) subsidies are granted in the form of  forgiveness of government-held debt and government grants to cover debt repayment.

  1.         Notwithstanding the provisions of this Article, serious prejudice shall not be found if the Member State granting the subsidy in question demonstrates that the effect of the subsidy has not been:

(a) to displace or impede the imports of like products from the Member State exporting to the Member State which has introduced or maintains the subsidy;

(b) to displace or impede the exports of a like product from the affected exporting Member State into the market of a third Member State;

(c) a significant price undercutting by the subsidised product as compared with the price of a like product of another Member State in the same market or a significant price suppression or price depression;

(d)        lost sales of another Member State in the same market; or

(e)        an increase in its market share within the CSME.

  1.         The provisions of this Article shall not apply to Part Three.