Hotels (Incentives) Act

Link to law: http://www.moj.gov.jm/laws/hotels-incentives-act
Published: 1968-03-21

HOTELS ( I N C E N T . )

THE HOTELS (INCENTIVES) ACT

ARRANGEMENT OF SECTIONS

1. Short title.

2. Interpretation.

3. Declaration of approved hotel enterprise.

4. Declaration of approved extension.

5. Applications for approval.

6. Amendment or revocation of orders under section 3 or 4.

7. The relevant concession period.

8. Persons entitled to benefits.

9. Income tax benefits.

10. Dividends.

11. Benefits in respect of customs duty and tax.

12. Commissioner of Customs may require records, etc.

13. Restriction upon dsposition of articles imported free of customs
duty and tax and upon use of buildings.

14. Saving of liability to comply with requirements of law relating
to income ta.u, etc.

15. Commissioner of Income Tax may refuse to neat certain receipts
and payments as received or made in a particular year of
assessment.

16. Commissioner of Income Tax may issue certificates.

17. Offences.

18. Regulations.

SCHEDULES

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Acts
16 of 1968,
30 of 1911,
23 o f 1972
S. 3 (2) (b).

THE HOTELS (INCENTIVES) ACT 12 of 198.5 Scb.
17 o f 1966. i L

[2Ist March, 1968.1 l6 s. Of a '"I

1. This Act may be cited as the Hotels (Incentives) Act. shorttitle.
2-1) In this Act unless the context otherwise Interprets-

requires- tion.
"annual allowances", "chargeable income", "initial

allowance" and "year of assessment" have the
same meanings as in the Income Tax Act, and
where pursuant to this Act any annual allowance
is made, such allowance shall be made subject
to and in accordance with the provisions of that
Act;

"approved extension" means an extension or other
alteration approved by the Minister pursuant to
section 4;

"approved hotel enterprise" means a hotel enterprise
approved by the Minister pursuant to section 3;

"company" means-
(a) any company incorporated or registered under

any law in force in Jamaica; or
(6) any company which, though incorporated or

registered outside Jamaica carries on business
or has an office or place of business therein;
or

(c) any other body approved as such by the
Minister by notice published in the Gazeire
for the purposes of this Act;

"convention type hotel" means a hotel containing an
aggregate number of not less than three hundred
and fifty bedrooms and facilities for the holding
of conferences and in relation to which an order
made under section 3 is in force;

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HOTELS (INCENTIVES)

"hotel" means any building, or group of buildings
within the same precinct containing or intended to
contain when complete an aggregate number of
not less than ten bedrooms and facilities for meals
for the accommodation of transient guests, includ-
ing tourists, for reward, together with the precinct
thereof and all other buildings and structures
within such precinct;

"hotel enterprise" means the business concerned with
the establishment or operation of a hotel;

"precinct" means the area of land within which the
buildings and structures comprising a hotel or an
extension to a hotel are constructed or intended
to be constructed, designated on any plan or
drawing referred to in section 5;

"relevant concession period" means, in relation to any
approved hotel enterprise or any approved exten-
sion, the number of years, commencing on the
specified date, in respect of which the benefits of
section 9 may be enjoyed;

"specified date" means, in relation to any approved
hotel enterprise or any approved extension, the
date specified for the commencement of the opera-
tion of such approved hotel enterprise or such
approved extension, as the case may be, in the
relevant order made under section 3 or section 4,
as the case may be.

(2) The fact that an area of land designated in any
plan or drawing referred to in section 5 is divided into two
or more segments by a public highway, street, road, path-
way, gully, river, stream or such other physical divisions
shall not preclude the segments being regarded by the
Minister as being within one and the same precinct for the
purposes of this Act.

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HOTELS (INCENTIVES) 5

3.-(1) Subject to the provisions of section 6 the Minister Declara-
tion of

may by order declare any hotel enterprise, whether the approved
hotel is in existence at the date on which such order comes :$.
into force or is proposed to be established thereafter, to be p-.
an approved hotel enterprise for the purpose of this Pct.

(2) The Minister shall not make an order under this
section unless he is satisfied that the hotel enterprise to
which the order is proposed to apply is, or is likely to be,
a successful enterprise as respects-

(a) the manner in which it is being, or is proposed to
be operated; and

(b) the availability of adequate finances for its opera-
tion and maintenance; and

(c) the economic effects, including the effects on the
tourist trade, of its operations.

(3) Every order made under this section may include
such terms and conditions as the Minister may think fit
and shall specify a date, which shall be the date on which
the operation of the hotel shall commence or be deemed
to commence and from which the benefits of section 9 may
be enjoyed in relation to the hotel to which the order is
proposed to apply, and such date may be earlier than the
date of the coming into force of the order but shall not be
earlier than the 1st day of April, 1965.

(4) Subject to the provisions of section 6 every
approved hotel enterprise shall cease to be an approved
hotel enterprise at the expiration of the relevant concession
period.

4.-(1) Where any extension, or any other alteration ~d,,.
which increases or improves the accommodation or the :p"p"$d
amenities of any hotel is made or is proposed to be made =te-loa
to that hotel the Minister may, subject to the provisions
of this section and section 6, by order declare such exten-
sion or other alteration to be an approved extension for
the purposes of this Act.

(2) The Minister shall not make an order under this
section unless he considers that the conditions specified in

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HOTEL.!? (INCENTIVES)

subsection (2) of section 3 will br: satisfied as respects the
hotel and that-

(a) in the case of an extension or other alteration
which increases the number of bedrooms in the
hotel the increase will not, unless the requirements
of paragraph (b) are satisfied, be less than ten
bedrooms or thirty per cent of the number of
bedrooms existing before the increase, whichever
is the greater; or

(b) the extension or other alteration intended to
provide improved accommodation and oiher
amenities will entail substantial structural altera-
tions to the hotel.

(3) Every order made under this section may include
such terms and conditions as the Minister may think fit
and shall specify a date, which shall be the date on which
the operation of the approved extension shall commence
or be deemed to commence and from which the benefits
of section 9 may be enjoyed in relation to the extension or
alteration to which the order is proposed to apply, and
such date may be earlier than the date of the coming into
force of the order but shall not be earlier Lhan the 1st day
of April, 1965.

(4) Subject to the provisions of section 6 every
approved extension shall cease to be an approved extension
at the expiration of the relevant conc,:sion period.

~ p p l i u - 5. Every application for the declaration of any hotel

,
enterprise as an approved hotel enterprise or of any exten-
sion or other alteration of any hotel as an approved exten-
sion shall-

(a) be made in such form as may be approved by the
Minister; and

(b) contain such information, and be accompanied by
such plans, specifications, drawings, reports and
other documents, as may be prescribed.

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HOTELS (INCENTIVES) 7

6 . 4 1 ) Where a person to whom this subsection applies Amend-
ment or so requests the Minister may amend the relevant order

made under section 3 or section 4, as the case may be, in
respect of the specified date and any terms and conditions xction3or

section 4.
contained in such order.

(2) Subsection (1) applies to a person by whom
or on whose behalf application was made for the declara-
tion of a hotel enterprise as an approved hotel enterprise
or for the declaration of any extension or other alteration
of any hotel as an approved extension.

(3) Where the Minister is satisfied that as respects
any hotel or hotel enterprise in relation to which an order
under section 3 or section 4 applies there is failure to com-
mence the construction or operation of the hotel or
approved extension, as the case may be, in accordance with
the proposals contained in the application for the declara-
tion of the hotel enterprise as an approved hotel enterprise
or for the declaration of any extension or other alteration
as an approved extension or with the order made under
section 3 or section 4, as the case may be, he may, by notice
in writing, require the person by whom such application
was made to establish to the satisfaction of the Minister
within such period as the notice shall specify that such
failure is due to circumstances beyond the control of such
person and that there is a reasonable prospect of commenc-
ing the construction or operation of such hotel or such
approved extension within a reasonable time. If the
Minister does not receive, within the period referred to in
this subsection, information which is satisfactory to him he
may, if he thinks it expedient so to do, amend or revoke
the order by which the hotel enterprise was declared to be
an approved hotel enterprise or the extension or other
alteration was declared to be an approved extension, as
the case may require.

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HOTELS (INCENTIVES)

(4) Where the Minister is satisfied that as respects
any hotel or hotel enterprise in relation to which an ordex
made under section 3 or section 4 applies any representa-
tions made in or in connection with the application for
approval of the hotel enterprise as an approved hotel
enterprise or for approval of any extension or other altera-
tion of the hotel as an approved extension, as the case may
be, were false in any material particular or were made with
intent to deceive or were otherwise not made in good
faith and that such representations substantially influenced
the decision to declare the hotel enterprise to be an approved
hotel enterprise or the extension or other alteration to be
an approved extension he may by notice in writing, require
the person by whom such application was made to show
cause to the satisfaction of the Minister within such period
as the notice shall specify why the order by which the
hotel enterprise was declared to be an approved hotel
enterprise or the extension or other alteration was declared
to be an approved extension, as the case may require,
should not be amended or revoked, and if such person fails
to show cause accordingly, the Minister may, if he thinks
it expedient so to do, amend or revoke the order by which
the hotel enterprise was declared to be an approved hotel
enterprise or the extension or other alteration was declared
to be an approved extension, as the case may require.

(5) Where the Minister is satisfied that any hotel in
relation to which an order made under section 3 or section
4 applies has ceased to be a hotel during the relevant con-
cession period he shall revoke such order.

The 7.-(1) Subject to the provisions of this section the
relevanJ
ooncess,on relevant concession period shall, as respects an approved
period hotel enterprise or an approved extension of any hotel, be

ten years.

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HOTELS (INCENTIVES)

(2) The Minister may by order declare to be a
special development area for the purposes of this Act any
area defined in such order.

(3) It shall be lawful for the Minister by order made
under subsection (2) to specify the relevant concession
period, being not less than eleven nor more than fifteen
years, in respect of an approved hotel enterprise or an
approved extension of a hotel in a special development area
defined in such order.

(4) No amendment of an order made under subsec-
tion (2) which reduces the number of years specified in
such order shall apply in relation to any hotel enterprise
or any extension of a hotel which was declared to be an
approved hotel enterprise or an approved extension of a
hotel, as the case may be, before such amendment came
into force.

( 5 ) The Minister may by order declare that the
relevant concession period in respect of an approved hotel
enterprise relating to a convention type hotel specified in
such order shall be fifteen years.

8. The benefits of sections 9 and 11 shall be enjoyed Persons
ent~tled to

by- benefits.
(a) any company which is for the time being the

owner or tenant of the premises comprising any
hotel in relation to which an order under section 3
or under section 4 has been made, whether or
not such company is the operator or is entitled
to receive any profits arising from the operation
of such hotel; and

(b) any company which, not being the owner of such
hotel, operates it in accordance with an agreement
made between itself and the owner or tenant and
certified by the Minister to be acceptable for the
purposes of this Act:

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HOTELS (INCENTIVES)

First
Schedule.

Income tax
bcneiih.

Provided that a company which is approved, recognized
or declared for the purpose of any of the enactments
specified in the First Schedule shall not be entitled to such
benefits.

9.-(1) Any company to which section 8 applies shall be
entitled to relief from income tax in respect of profits or
gains arising or accruing during the relevant concession
period, from the approved hotel enterprise, of an approved
extension of any hotel, of which it is the owner, tenant or
operator.

(2) Notwithstanding anything in the law relating to
income tax initial allowances shall not be made in respect
of assets acquired, in relation to an approved hotel enter-
prise or an approved extension of any hotel, prior to or
during the relevant concession period.

(3) During the relevant concession period annual
allowances shall not be made.

(4) After the expiration of the relevant concession
period annual allowances may be made upon the original
cost of the assets less the allowances, if any, made before
the beginning of the relevant concession period.

(5) Any company which enjoys relief from income
tax by virtue of the provisions of subsection (1) may, for
the purpose of the assessment of income tax, carry forward
in respect of the first six years of assessment after the
expiration of the relevant concession period, losses which
were incurred during the relevant concession period and
were not written off, so, however, that the annual allow-
ances referred to in subsection (4) of this section and the
amount of any loss admitted under paragraph (h) of section
13 of the Income Tax Act, shall be taken into account.

(6) For the purposes of this section the profits or
gains arising or accruing from or the losses incurred in

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HOTELS (INCENTfiEY)

relation to or the value of any approved extension shall
be determined in such manner as may be prescribed.

10.-41) Every company which is entitled under section Diyidends.
9 to relief from income tax in respect of profits or gains
arising or accruing from an approved hotel enterprise or
an approved extension shall place in a separate account
all such profits or gains and where such company intends
to pay a dividend to its shareholders out of such profits or
gains, such dividend shall be paid out of such account.

(2 ) Unless, pursuant to the proviso to section
38(1) of the Income Tax Act, the Commissioner of Taxpayer
Audit and Assessment otherwise authorizes, income tax shall
be deducted by a company which pays any dividend to its
shareholders out of profits or gains relieved from income tax by
virtue of the provisions of section 9 of this Act as if such
dividend had been paid out of profits or gains within the
meaning of the law relating to income tax as regards the
deduction of tax by a company on the payment of a dividend by
that company.

(3) A company making deduction of income tax
pursuant to subsection (2 ) shall be deemed to be collecting
income tax on behalf of the Commissioner of Inland Re- 121198s
venue and shall pay to him or to such other person as he Sch.

may direct the amounts so deducted.

(4) A shareholder to whom any dividend is paid out
of profits or gains relieved from income tax by virtue of
the provisions of section 9 shall be exempt from income
tax in respect of such dividend-

(a) if he is resident in Jamaica; or

(6) if he is not resident in Jamaica and is not liable
to income tax in respect of such dividend in the
country in which he is resident:

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12

2311972
S. 3 (2) (b).

2311972
S. 3 (2) (b).

3011971
S. 2.
2311972
S. 3 (2) (b).

h t i t s in
resped of
customs duty
and tax.
16/1991
S. 64.
Secand
Schedule.

Provided that the exemption from income tax created
by this subsection shall not exceed, as regards the rate of the tax
from which the shareholder is relieved, the rate of the tax which
would, but for the provisions of section 9, have been paid by
the company on the profits or gains out of which the dividend is
paid.

(5) Where a shareholder to whom a dividend is
paid out of profits or gains relieved from income tax by
virtue of the provisions of section 9 is not resident in
Jamaica and is liable to income tax in respect of the
dividend in the country in which he is resident, he shall be
exempt from so much of the income tax in respect of
that dividend as the Commissioner of Taxpayer Audit and
Assessment is satisfied exceeds his liability in respect of such
dividend in the country in which he is resident:

Provided that the exemption from income tax created
by this subsection shall not exceed, as regards the rate
of the tax from which the shareholder is relieved, the rate
of the tax which would, but for the provisions of section 9,
have been paid by the company on the profits or gains
out of which the dividend is paid.

(6) Save as is otherwise provided in this section the
provisions of the law relating to income tax .in regard to
the deduction of income tax from dividends, and the rehnd
of income tax to shareholders shall apply to dividends paid
by a company out of profits or gains relieved from income tax
by virtue of the provisions of section 9.

11.-41) Any company to which section 8 applies shall,
if it hlfils the requirement specified in subsection (2), be
entitled at any time prior to the expiration of the relevant
concession period to import into Jamaica free of customs
duty and general consumption tax the articles specified in
the Second Schedule.

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HOTELS (irNCENTmS)

(2) The requirement referred to in subsection (1) is
that the company importing the articles referred to in that
subsection shall satisfy the Commissioner of Customs that iziisss
such articles are not prohibited from importa- S C ~ .
tion by law and are imported for constructing or equipping
the hotel or extension, as the case may be, referred to in
paragraph (a) of section 8 and of which it is, or, upon the
construction thereof, will be, the owner, tenant or operator. 3011971

(3) Any articles referred to in subsection (I) which S.3(a).
are imported during the period between the date of applica-
tion for declaration of any hotel enterprise or any exten-
sion or other alteration of any hotel as an approved hotel
enterprise or an approved extension, as the case may be,
and the date of such declaration shall, for the purposes of
subsection (2), be treated as if they were imported after
such declaration.

(4) The Minister may fiom time to time by order
vary or amend the Second Schedule. Second

Schedule.
(5) For the purposes of this section the expression ,,

"any company to which section 8 applies" includes any ~ . 3 ( b ) .
company which will, upon the construction of any hotel
or any extension to a hotel in relation to which an order
under section 3 or section 4 has been made, be the owner,
tenant or operator of that hotel or extension.

12. Every person who imports into Jamaica any articles T?:;
free of customs duty and general consumption tax under --may
the provisions of section 1 1 shall- requue

records, etc.
1211985 (a) keep such record in such form and containing Sch

such particulars as the Commissioner of Customs
may fiom time to time require in rela-
tion to such articles;

(b) cause such articles to be marked with such mark
and in such manner as the Commissioner of Cus- iuisss
toms may require; Sch

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HOTELS (INCFNn/Es)

I2 1985
Sch.

( c ) permit the Commissioner of Customs or any
person authorized by him at all reasonable times
to inspect such record and to have access to any
premises under the control of the person by whom
such articles were imported for the purpose of
examining any of such articles which the
Commissioner of Customs may believe to be in
those premises and of satisfying himself of the
accuracy of the particulars in relation to such articles
contained in such record.

13.-(1) No article imported into Jamaica free of customs
upon disposi-
tion of duty and general consumption tax under the provisions of
afliC'z\ection 1 1 shall be used for any purpose other than the
importzd frzz
ot.customs purpose for which the Commissioner of C\.stoms was satisfied
dutvandtas under that section that it would be u s d , nor shall it be
and upon usz
ofbuildinns. sold, given away or otherwise disposed of by the person
16i1991 - by whom it was imported-
S. 64.

(a) unless prior permission is given by the Minister
for the use thereof for such other purpose or for

12!1985
Sch.
16/1991
S. 64.

- -
such sale, gift or other disposal; or

(b) unless the person by whom such article was
imported pays or gives security to the satisfaction
of the Commissioner of Customs for the payment
of an amount equivalent to the amount
of customs duty and general consumption
tax which would have been payable upon the
importation of such article but for the provisions
of this Act; or

(c) except after the expiration of five years from the
date of importation into Jamaica of such article.

(2) No building forming part of any hotel in rela-
tion to which an order has been made under section 3 or
section 4 shall be used, during the period between the
coming into force of such order and the expiration of the
relevant concession period, for purposes other than hotel
purposes without the prior permission of the Minister:

[The inclusion of this page is authorized by L.N. 87120041

Provided that the Minister may, as a condition for the
grant of his permission, require that all the sums or in his
discretion, any part of such sums, which but for the pro-
visions of section 11 would have been payable as customs
duty or general consumption tax on the importation of any
articles used in the construction or equipping of such building
shall be paid to the Commissioner of Customs.

14. Nothing in this Act shall exempt any company to
which section 8 applies fiom making any return to the
Commissioner of Taxpayer Audit and Assessment or fiom
complying with the law relating to income tax in any other
respects so as to establish the liability, if any, of that company
to income tax or from complying with the law relating to the
collection of customs duty and general consumption tax so as to
establish the liability, if any, of that company to customs
duty or general consumption tax.

15. For the purpose of assessment to income tax of the
chargeable income of any company to which section 8
applies the Commissioner of Taxpayer Audit and Assessment
may refbe to accept an amount as payable or paid to such
company or as an expense incurred by it in a particular year of
assessment which is shown by such company in its accounts as
payable, paid or incurred, as the case may be, in that year
of assessment on the ground that such an amount relates
to a transaction entered into by such company otherwise
than in the normal course of business, either with the
object of inflating its profits or gains in a year of assess-
ment in which its profits or gains were, by virtue of the
provisions of this Act, relieved of income tax or with the
object of artificially reducing its profits or gains in a year
of assessment in which its profits or gains were nct, t7;.
virtue of the provisions of this Act relieved from income
tax.

1611991
S. 64.

1211985
Sch.

Saving of
liability to
comply with
requirements
of law relat-
ing to income
tax, etc.

Commis-
sioner of
Taxpayer
Audit and
Assessment
may refuse to
treat certain
receipts and
pa\nients as
received or
made in a
p,~rlicular
vear of
assessmmt.

[The inclusion of this page is authorized by L.N. 8-120041

16

Commis-
sioner of
Tqayer
Audit and
Assessment
may issue
certificates.

Offences.

Regulations.

HOTELS (OVCENTNES)

16. Notwithstanding the provisions of section 4 of the
Income Tax Act, it shall be lawfbl for the Commis-
sioner of Taxpayer Audit and Assessment to certify in such
form as may be prescribed the benefits enjoyed by any
company to which section 8 of this Act applies in order that
such certificates may be produced by such company to the
fiscal authorities in any other country in which such company
may be liable to suffer taxation.

17.-41) The provisions of section 99 of the Income Tax
Act shall apply to any false statement or representation
made or any false return delivered or any false accounts
kept or prepared with reference to any of the benefits of
section 9 of this Act as if such false statement or representa-
tion had been made, or such false return had been
delivered, or such false accounts had been kept or prepared,
with reference to income tax or profits or gains chargeable
under the Income Tax Act.

(2) Every person who contravenes the provisions of
section 12 or of section 13 shall be guilty of an offence and
shall be liable on summary conviction before a Resident
Magistrate to a fine not exceeding one thousand dollars and
in default of payment to imprisonment for a term not
exceeding twelve months.

18. The Minister may make regulations generally for the
better carrying out of the purposes of this Act and in
particular but without prejudice to the generality of the
foregoing may make regulations-

(a) in regard to the adjustment of profits or gains
when the accounting period of any company to
which section 8 applies falls partly within and
partly outside the period during which relief from
income tax is enjoyed by such company under
this Act;

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HOTEL3 (INCENTIVES)

(6) for the adjustment of profits or gains, including
the adjustment of allowances and the carrying
forward of losses, when any company to which
section 8 applies was at the time at which it
became the owner, tenant or operator of an
approved hotel enterprise or an approved exten-
sion, already engaged in business;

(c) prescribing any other matter or anything which
may be. or is required by this Act to be, prescribed.

17

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18 HOTELS (INCENTIVE$

FIRST SCHEDULE .' - ' ( w o n 8)

The Motion Picture Industry (Enwuragement) Act.
The Industrial Incentives Act.
The Export Industry Encouragement Act

, .

SJTOND SCHEDULE (Section 11)

All building materials.
Bedsprings. buiard tables and their apprianccs. pianon, organs. radios.
dynamos, air-condihoning apparatus and appliances. refrigerating
apparatus and appliances, mhors, mattresses, crockery, silver and
plated tableware, table glassware, cutlery, kitcben utensils hdudmg
stoves, iceboxes. bed linen, table l i e n , towels, rugs and carpets.
Fire extinguishers and appara,tus.
Water pumps.
Blankets.
Electric light, bell and telephone equipment and appliances (not to
include electric light bulbs).
Electric fans.
Electric and gas aooking equipment.
Hot water equipment, boilers and tanks.
Kjtchen sinks and other kitchen fixtures.
Bath tubs, basins, toilets, showers and other bathroom fittingS.
Elevators.

L.N. Swimming pool equipment.
3711991. Computer hardware.

Golf carts.
Bar equipment.
Laundry equipment.
Sewerage plant and equipment.
Security vaults and safes.
Conference Room equpmeot (for example, acoustical equipment).
Sports and gym equipment.
Television and radio equipment.
Satellite communications systems (not more than one such system.)
Electrical transformers and panel board.
Commercial floor polishers.
Commercial vacuum cleaners.
Ice-making machines.
Drapery material and upbdstery fabrics.
Water treatment plant and equipment.
Waterspom equipment. boats, other t m of seacraft (excluding jet
skis and wave runners) and parts therefor. L. N. Z I K , 1993.

_ _
[The inclusmn of t h s page i s authorized by LN. 42 /195]
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