AA - Caribbean Export



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| |CARIFORUM-EU Business Forum |

| |November 24-25, 2008 |

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| |Discussion Paper Film and Audiovisual |

|Background |The 14 countries of the Caribbean ACP (CARIFORUM) and the 27 members of the European Union signed on October 15th, |

| |2008 an Economic Partnership Agreement (EPA), the first intraregional agreement of its kind in the world. This |

| |Agreement will redefine the trade and investment relationship of goods and services between the two regions. |

| |As there was already duty free access for 98% of goods from CARIFORUM countries, the novelty on market access is in|

| |services. Priority sectors were determined within the Agreement: |

| |Business services |

| |Computer and computer related services |

| |Research and Development |

| |Environmental services |

| |Management consultancy |

| |Maritime Transport |

| |Entertainment |

| |Tourism |

| |The signature of the Agreement, although a milestone, it is just the first step towards improving trade |

| |relationship. Specific implementation issues now have to be discussed for each sector, business opportunities have |

| |to be identified and actual business has to take place. |

| |In April and September of 2008, different teams of institutions and business from across the CARIFORUM countries |

| |visited several countries and met their counterpart in Brussels, Madrid and London in particular. The need for |

| |strong interlink between the private sector of both Europe and the Caribbean was important and the need for the |

| |establishment of the CARIFORUM-EU Business Forum was clearly stated. Three priority areas where there are mutual |

| |interest and important potential for growth were identified to be the lead sectors for the first meeting of the |

| |Forum: ICT, Creative Industries as it relates to film & audiovisual and architecture & interior decoration. |

| |Regarding the Film and audiovisual sector, the incentives and sector situation change depending on the country. |

| |Jamaica and Trinidad and Tobago have incentive laws to attract local and foreign investors in the film and |

| |audiovisual industry. Dominican Republic and Barbados have drafter laws that are now awaiting Congressional / |

| |Parliamentary approval. Other countries have the records of offering special deals for famous features to be |

| |filmed in their lands. The general theme is that countries recognize the importance and potential of this industry.|

| |UK and Jamaica have a co-production agreement. |

| |The Jamaican Government also offers incentives for investment in the film industry in Jamaica. Among the incentives|

| |listed by Jamaica Trade and Invest are: |

| |Duty free importation of musicians’ tools of trade |

| |Tax-free profits from overseas film and video releases for nine years |

| |Duty-free and tax free concessions on equipment, machinery and materials for the building of film studios and |

| |support facilities |

| |An investment allowance of 70% of sums spent on investment in infrastructure, with a carry forward of the unused |

| |portion |

| |No withholding tax on dividends paid to resident shareholders with investments in film companies. Non-resident |

| |shareholders earn dividends taxed according to the provisions of the Double Taxation Treaty with their respective |

| |countries: for example, the USA and UK are treaty members (thus eliminating the payment of taxes in Jamaica). |

| |General Consumption Tax (GCT) rebates of 16.5% for films on all goods and services purchased in Jamaica determined |

| |on a project by project basis. |

| |There are also co-production agreements with UK and Canada. |

| |The Trinidad and Tobago Film Company, established by the Government of Trinidad and Tobago has recently introduced |

| |a rebate program to attract International producers to Trinidad & Tobago. |

| |This incentive, the Production Expenditure Rebate Program, provides cash rebates up to 30% for expenditures accrued|

| |while filming in the twin island states. Some of the areas applicable for the rebate are: rental of local |

| |equipment, suppliers and services, location fees, accommodation and food, wardrobe, props and related items, |

| |employment of local cast and crew, local travel and transportation costs. |

| |The Dominican Republic has a new law for incentive of cinematography. The law among other things: |

| |Establish a fund, FONPROCINE which will be formed by all the taxes collected on the industry such as payment for |

| |entrance tickets, fines, etc. This fund will undertake training and promotional activities on behalf of the film |

| |industry in Dominican Republic, assist in production, offer financing through financial institutions, preserve |

| |cinematography assets of the country, legal actions against copyright infringements, among others. |

| |There are also incentives for companies using Dominican Republic as a location with an exemption of all taxes, |

| |special facilities in customs as well as a reimbursement of 100% of the VAT prior departing DR. There is also |

| |incentive of no income revenue tax for a period of 15 years for movie theatres and production facilities. These |

| |companies will also be exempt of import duties on their first equipments. The law also establishes a system for the|

| |registration and information on films in the DR. |

| |Barbados has the Film Group as well as a recently formed Barbados Film and Video Association on Thursday July 3, |

| |2008. Barbados priority is not film location, but promoting production. It has already a good audiovisual market. |

| |The next logical step in the business facilitation after the EPA signature: |

| |Co-Production Agreements: EPA establishes the framework for co-production agreement to be negotiated either |

| |bilateral or one EU country with the entire CARIFORUM region. |

| |There are other issues as: |

| |The double taxation treaties |

| |How the facilitation of movement of people in this sector in the EU markets is going to take place. |

| |Certain EU countries offer extraordinary incentives to their film industries. Is there an opportunity for Caribbean|

| |firms to tap into this wealth of opportunities? What would be the ideal mechanisms for it? |

| |Although there has been movies filmed in the Caribbean from a long time ago, the local movie making industries is |

| |still recent. However, a critical mass of film makers, crew, actors, etc is being developed. How can the region tap|

| |into the national, regional and international opportunities? |

| | |

| |The sector is still very poorly organized, with very few institutions throughout the region. Pooling resources from|

| |across the region to form a critical mass for negotiations of co-production agreements is the idea currently being |

| |discussed. There are examples of very good organizations across Europe with the Spanish EGEDA and FAPAE being two |

| |looked at example of organization and public private sector partnership which has boosted the movie industry in |

| |Spain. The Mutual Guarantee Fund established by EGEDA is an excellent example how the industry, the government and|

| |the financial institutions can come together to find creative alternatives to support the film industry. |

| |What are the lessons learnt and how can the Caribbean organize itself and partner with key EU institutions for |

| |transferring of know how? |

| |How can there be support for such initiatives? |

| |How can both regions partner to deepen the relationship and allow for the parts to still be negotiated like |

| |co-production agreement to take place? |

| |Discussion issues: |

| |What institutional framework would work best for a Caribbean film industry? Is there need for a Caribbean Film |

| |Commission, should there be a Caribbean Producer Associations? |

| |Which countries to begin negotiations for co-production agreement: France (including French Departments in the |

| |Caribbean), Spain, expanding UK-Jamaica Agreement to include all CARIFORUM countries? |

| |What would the Caribbean countries need to put in place to negotiate co-production agreement? |

| |Importance of double taxation treaties and how can they impact on the industry? Should this part of a broader EPA |

| |implementation mandate? |

| |Issues of financing and organizations of regional institution/s. |

| |Incentives laws, what is most effective to attract foreign companies and joint partnership? |

| |Initial findings of the visit to Brussels and Madrid indicate there are opportunities for co-production for feature|

| |films, advertising films and others. Complete legal framework such as co-production agreement, double taxation |

| |treaties and incentives laws as well as availability of the human resources and equipment are the key issues to be |

| |further discussed. |

| |Discussion issues: |

| |How the industry representatives are going to organize themselves to interact better with their government and EU |

| |counterpart? |

| |How to pool together regional resources to establish a critical mass for co-production? |

| |Which mechanism to us to have ready available information on the industry and on individual companies? Would it |

| |make sense to have one stop shop? |

| |How to target EU markets? How to mount promotion of Caribbean films? |

| |Which are the most important market for film and how to target them? |

| |What business arrangements producers and other industry workers need to have in place to be able to tap into |

| |opportunities? |

| |How to lobby for the implementation mechanism needed to support the industry? |

| |Possible work plan for the industry including actions on: Policy and enabling environment, Institutional support, |

| |Business Development Support, Marketing |

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CARIFORUM-EU Business Forum

Film & Audiovisual Discussion Paper

November 2008

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