Prohibited Subsidies Two categories of subsidies are prohibited by Article 3 of the SCM Convention. The first category consists of subsidies that, legally or in fact, depend entirely or as conditions on export performance (export subsidies). The SCM agreement is accompanied by a detailed list of export subsidies. The second category consists of subsidies which, alone or among other conditions, refer to the use of domestic imported goods (subsidies for local content). These two categories of subsidies are prohibited because they are supposed to directly affect trade and are therefore most likely to have a negative impact on the interests of other Members. Only „specific” grants are subject to the disciplines of the SCM Convention. There are four types of „specificity” within the meaning of the SCM Convention: Laws and Countervailing Measures All members are required to notify the SCM committee of their countervailing duty laws and regulations, in accordance with Article 32.6 of the SCM Convention. Members are also required to notify all semi-annual compensatory measures as well as interim and final compensatory measures at the time of completion. Members are also required to disclose to their authorities responsibility for opening and conducting compensatory investigations. Rules of Procedure Part V of the SCM Convention contains detailed rules on the opening and implementation of counter-investigations, the establishment of interim and final measures, the use of companies and the duration of measures. One of the main objectives of these rules is to ensure that investigations are conducted in a transparent manner, that all interested parties have the full opportunity to defend their interests and that the investigating authorities adequately explain the basis of their conclusions. Here are some of the most important innovations in the WTO SCM agreement: the concept of financial participation was only incorporated into the SCM agreement after lengthy negotiations. Some Members argued that there could be no subsidies unless there was a charge on the public account.
Other MPs felt that forms of public intervention that do not cost the government, but distort competition and are therefore considered subsidies. The SCM agreement essentially took the previous approach. The agreement requires a financial contribution and contains a list of the types of measures that constitute a financial contribution, such as grants. B, loans, capital inflows, loan guarantees, tax incentives, the provision of goods or services, the purchase of goods. There is little doubt that agricultural subsidies and aid should be controlled and better targeted.