WORLD TRADE G/SCM/N/3/BGR
G/SCM/N/16/BGR
ORGANIZATION 3April 1997
(97-1367)
Original: English Committee onSubsidies andCountervailing Measures
SUBSIDIES
Notifications Pursuant toArticle XVI:1 oftheGATT 1994
andArticle 25oftheAgreement onSubsidies and
Countervailing Measures
BULGARIA
Thefollowing communication, dated 20March 1997, hasbeenreceived fromthePermanent
Mission ofBulgaria.
_______________
Thenotification covers programmes/schemes oftheRepublic ofBulgaria forcalendar and
financial year1996financed totally orpartly bytheStatebudget. They arebased ontherealfinancial
capacities oftheeconomy atpresent andensure thesocial protection ofthepopulation inthetransition
ofthecountry toamarket economy aswellastheaccomplishment oftheGovernment investment
priorities. Asystem ofexport promotion intheformofinsurance ofexport credits against commercial
andpolitical risksisunder consideration. Theamount ofsubsidies notified aresubsidies paidoutin
thefinancial year1996.
General remarks onduration andlegalbasis
Support measures aregenerally decided bytheBulgarian Parliament eachyearonthebasis
oftheGovernment 'sBudget Proposal. Allbudget decisions aremade forasingle fiscal year. Inthe
following notifications specific additional legislation arereferred toinrelevant cases. Duration isstated
incases ofexplicitly time-limited schemes/programmes. Inother cases theterm"Duration hasnot
beenspecified" isused.G/SCM/N/3/BGR
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CONTENTS
PageNo.
1. Direct subsidies ............................................3
2. Heatsupplying andcoal........................................3
3. Research andinnovation schemes ..................................3
4. Internal-City passenger transport. ..................................4
5. Passenger railtransport andrailtraffic security .........................5
6. Construction ofmotorway network andwater-supplying sites
withregional importance .......................................6
7. Delivery ofbread andessential foodproducts ..........................6
8. Fund "Small-Scale Enterprises" ...................................7
9. "National Fund forProtection oftheEnvironment" .......................8
10. Project non-ferrous enterprise Elisaina ...............................9
11. Project non-ferrous enterprise Plovdiv ...............................9
12. Fund "Forestry" .............................................10
13. Oreoutput ................................................11
14. Energy ...................................................12
15. Telecommunication Development Project .............................12
16. Reconstruction andDevelopment Railway Project ........................13
17. Construction andReconstruction Motorway Project .......................14
18. State Fund forReconstruction andDevelopment .........................15
19. Projects "Sofia Subway" ........................................15
20. Protection oftheagricultural producers ..............................16
21. Support forthehandicapped .....................................17
22. Reinvestment promotion ........................................18
23. Apicultural andSericulture ......................................18G/SCM/N/3/BGR
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1. Direct subsidies
Direct subsidies aregranted fortheproduction andselling ofthecommodities andservices
ofconsiderable importance fortheBulgarian economy andsocial protection ofthepopulation inthe
transitional period tothemarket economy.
2. Heat supplying andcoal
2.1. Authority responsible forthesubsidy
Ministry ofFinance.
2.2. Legislation under which itisgranted
State Budget approved bytheParliament andRegulation oftheCouncil ofMinisters
No.65/1993.
2.3. Policy objective ofthesubsidy
Social protection ofpopulation.
2.4. Form ofthesubsidy
Grants.
2.5. Towhom andhowthesubsidy ispaid
Committee ofEnergy.
2.6. Amount ofsubsidy
Total payment in1996: BGL 4,188.8 million.
2.7. Duration
Duration hasnotbeenspecified.
2.8. Trade effects ofthesubsidy
Because oftheaims oftheprogramme, itisconsidered thatthetrade effects are
minimal.
3. Research andinnovation schemes1
Fund "Structural andTechnology Policy"
Fund "Research"
Fund "Industry Development"
1Duetostatistical datalimitations, itisnotpossible toexclude theservices sector.G/SCM/N/3/BGR
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3.1. Authority responsible forthesubsidy
TheMinistry ofFinance grants money totheMinistry ofEducation, Science and
Technology andtotheMinistry ofIndustry.
3.2. Legislation under which itisgranted
Theyearly State Budget approved bytheParliament.
3.3. Policy objective ofthesubsidy
Technologicalinnovationandcreationofnewproducts,realizationofinnovationprojects
andfundamental research.
3.4. Form ofthesubsidy
Grants.
3.5. Towhom andhowthesubsidy ispaid
Research Institutions. Theamount isavailable toresearch teams ontender terms.
3.6. Amount ofsubsidy
Total payment in1996: BGL 309.2 million.
3.7. Duration
Duration hasnotbeenspecified.
3.8. Trade effects ofthesubsidy
Statistical datamaking possible anassessment ofthetradeeffects ofthesubsidy isnot
available.
Transport Support
4. Internal-City passenger transport
4.1. Authority responsible forthesubsidy
TheMinistry ofFinance grants money totheMunicipalities.
4.2. Legislation under which itisgranted
Theyearly State Budget approved bytheParliament.
4.3. Policy objective ofthesubsidy
Social protection ofthepopulation.G/SCM/N/3/BGR
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4.4. Form ofthesubsidy
Grants.
4.5. Towhom andhowthesubsidy ispaid
Transport companies ontender terms.
4.6. Amount ofsubsidy
Total payment in1996: BGL 1,370 million.
4.7. Duration
Duration hasnotbeenspecified.
4.8. Trade effects ofthesubsidy
There arenodirect trade effects.
5. Passenger railtransport andrailtraffic security
5.1. Authority responsible forthesubsidy
Ministry ofFinance.
5.2. Legislation under which itisgranted
Theyearly State Budget approved bytheParliament.
5.3. Policy objective ofthesubsidy
Promotion thetraffic safety andsupport ofinfrastructure.
5.4. Form ofthesubsidy
Grants.
5.5. Towhom andhowthesubsidy ispaid
TheMinistry ofTransport grants money totheBulgarian Railway Company.
5.6. Amount ofsubsidy
Total payment in1996: BGL 2,400 million.
5.7. Duration
Duration hasnotbeenspecified.G/SCM/N/3/BGR
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5.8. Trade effects ofthesubsidy
There arenodirect trade effects.
Assistance toDisadvantaged Regions
6. Construction ofmotorway network andwater-supplying siteswithregional importance
6.1 Authority responsible forthesubsidy
Ministry ofRegional Development andConstruction
Ministry ofFinance andMunicipalities
6.2. Legislation under which itisgranted
State Budget Law.
6.3. Policy objective ofthesubsidy
Resolving ofmigration problems.
6.4. Form ofthesubsidy
Grants.
6.5. Towhom andhowthesubsidy ispaid
Toconstruction companies ontender terms.
6.6. Amount ofsubsidy
1996: BGL 1,280 million.
6.7. Duration
Duration hasnotbeenspecified.
6.8. Trade effects ofthesubsidy
There arenodirect trade effects.
7. Delivery ofbread andessential foodproducts
7.1. Authority responsible forthesubsidy
Ministry ofFinance.
7.2. Legislation under which itisgranted
State Budget Law.G/SCM/N/3/BGR
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7.3. Policy objective ofthesubsidy
Resolving ofmigration problems.
7.4. Form ofthesubsidy
Grants.
7.5. Towhom andhowthesubsidy ispaid
Tocompanies ontender terms.
7.6. Amount ofsubsidy
1996: BGL 170million.
7.7. Duration
Duration hasnotbeenspecified.
7.8. Trade effects ofthesubsidy
Because oftheaimsoftheprogramme itisconsidered thatthetradeeffects areminimal.
Assistance toSmall Companies
8. Fund "Small-Scale Enterprises"
8.1. Authority responsible forthesubsidy
Ministry ofIndustry.
8.2. Legislation under which itisgranted
Regulation oftheCouncil ofMinisters No.108of7June1991.
8.3. Policy objective ofthesubsidy
Development ofsmall private business.
8.4. Form ofthesubsidy
Grants andloans atpreferential interest rates.
8.5. Towhom andhowthesubsidy ispaid
Totheprivate contractors (entrepreneurs). Funds aregranted ontender terms.G/SCM/N/3/BGR
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8.6. Amount ofsubsidy
1996: BGL 70million.
8.7. Duration
Duration hasnotbeenspecified.
8.8. Trade effects ofthesubsidy
Statistical datamaking possible anassessment ofthetradeeffects ofthesubsidy isnot
available.
Assistance toEnvironmental Improvement
9. "National Fund forProtection oftheEnvironment"
9.1. Authority responsible forthesubsidy
Ministry ofEnvironment.
9.2. Legislation under which itisgranted
Environment Protection LawandtheState Budget Law.
9.3. Policy objective ofthesubsidy
Assistancetopromoteadaptationofexistingfacilitiestonewenvironmentalrequirements
imposed bytheEnvironment Protection Law.
9.4. Form ofthesubsidy
Grants andloans.
9.5. Towhom andhowthesubsidy ispaid
Grants totheMunicipalities; and
Loans atpreferential ratestothecompanies ontender terms.
9.6. Amount ofsubsidy
1996: BGL 530million.
9.7. Duration
Duration hasnotbeenspecified.
9.8. Trade effects ofthesubsidy
There arenodirect trade effects.G/SCM/N/3/BGR
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Project forenvironment protection innon-ferrous metals production
10. Project non-ferrous enterprise Elisaina
10.1. Authority responsible forthesubsidy
Ministry ofIndustry.
10.2. Legislation under which itisgranted
TheLawofRatification oftheLoan bytheParliament.
10.3. Policy objective ofthesubsidy
Assistancetopromoteadaptationofexistingfacilitiestonewenvironmentalrequirements
imposed bytheEnvironment Protection Law.
10.4. Form ofthesubsidy
Loan guaranteed bytheState.
10.5. Towhom andhowthesubsidy ispaid
Non-ferrous enterprise Elisaina.
10.6. Amount ofsubsidy
1996: BGL 1,600 million.
10.7. Duration
Long-term loan.
10.8. Trade effects ofthesubsidy
There arenodirect trade effects.
11. Project non-ferrous enterprise Plovdiv
11.1. Authority responsible forthesubsidy
Ministry ofIndustry.
11.2. Legislation under which itisgranted
TheLawofRatification oftheLoan bytheParliament.
11.3. Policy objective ofthesubsidy
Assistancetopromoteadaptationofexistingfacilitiestonewenvironmentalrequirements
imposed bytheEnvironment Protection Law.G/SCM/N/3/BGR
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11.4. Form ofthesubsidy
Loan guaranteed bytheState.
11.5. Towhom andhowthesubsidy ispaid
Non-ferrous enterprise -Plovdiv.
11.6. Amount ofsubsidy
1996: BGL 4,800 million.
11.7. Duration
Long-term loan.
11.8. Trade effects ofthesubsidy
There arenodirect trade effects.
Aidtoforestry sector
12. Fund "Forestry"
12.1. Authority responsible forthesubsidy
Forestry Committee.
12.2. Legislation under which itisgranted
Forestry Law.
12.3. Policy objective ofthesubsidy
Maintenance ofNational Woodland Fundanditsexpansion andconstruction offorestry
roads.
12.4. Form ofthesubsidy
Grants.
12.5. Towhom andhowthesubsidy ispaid
Forestry enterprises.
12.6. Amount ofsubsidy
1996: BGL 4,272 million.G/SCM/N/3/BGR
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12.7. Duration
Duration hasnotbeenspecified.
12.8. Trade effects ofthesubsidy
Because oftheaimsoftheprogramme itisconsidered thatthetradeeffects areminimal.
Assistance tospecific industry sectors
13. Oreoutput
13.1. Authority responsible forthesubsidy
Ministry ofFinance andMinistry ofIndustry.
13.2. Legislation under which itisgranted
Regulation oftheCouncil ofMinisters No.140/1992.
13.3. Policy objective ofthesubsidy
Restructuring oforeoutput sector andliquidation ofpoordeposits minerals mines and
tosolve thesocial andregional problems created bythetotalorpartial reductions in
theactivity oftheproduction units.
13.4. Form ofthesubsidy
Grants.
13.5. Towhom andhowthesubsidy ispaid
Oreoutput companies upon agreement ontender terms.
13.6. Amount ofsubsidy
1996: BGL 860million.
13.7. Duration
Duration hasnotbeenspecified.
13.8. Trade effects ofthesubsidy
Statistical datamaking possible anassessment ofthetradeeffects ofthesubsidy isnot
available.G/SCM/N/3/BGR
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Loans guaranteed bytheState2
14. Energy
14.1. Authority responsible forthesubsidy
National Electricity Company.
14.2. Legislation under which itisgranted
TheLawofRatification oftheLoan bytheParliament.
14.3. Policy objective ofthesubsidy
Reconstruction, modernization anddevelopment oftheNational Electricity Network.
14.4. Form ofthesubsidy
Loans guaranteed bytheState.
14.5. Towhom andhowthesubsidy ispaid
National Electricity Company.
14.6. Amount ofsubsidy
USD 200million.
14.7. Duration
Long-term loan.
14.8. Trade effects ofthesubsidy
Statistical datamaking possible anassessment ofthetradeeffects ofthesubsidy isnot
available.
15. Telecommunication Development Project
15.1. Authority responsible forthesubsidy
Bulgarian Government.
15.2. Legislation under which itisgranted
TheLawofRatification oftheLoan bytheParliament.
2Loans from international financial institutions suchastheWorld Bank, EIBandEBRD.G/SCM/N/3/BGR
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15.3. Policy objective ofthesubsidy
Reconstruction,modernization anddevelopment ofthenational telecommunication
network.
15.4. Form ofthesubsidy
Loan Guaranteed bytheState.
15.5. Towhom andhowthesubsidy ispaid
Bulgarian Telecommunication Company.
15.6. Amount ofsubsidy
USD 165million.
15.7. Duration
Long-term loan.
15.8. Trade effects ofthesubsidy
Statistical datamaking possible anassessment ofthetradeeffects ofthesubsidy isnot
available.
16. Reconstruction andDevelopment Railway Project
16.1. Authority responsible forthesubsidy
Bulgarian Government.
16.2. Legislation under which itisgranted
TheLawofRatification oftheLoan bytheParliament.
16.3. Policy objective ofthesubsidy
Reconstruction, modernization anddevelopment ofBulgarian Railways.
16.4. Form ofthesubsidy
Loan guaranteed bytheState.
16.5. Towhom andhowthesubsidy ispaid
National company "Bulgarian State Railways".
16.6. Amount ofsubsidy
USD 170million.G/SCM/N/3/BGR
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16.7. Duration
Long-term loan.
16.8. Trade effects ofthesubsidy
Statistical datamaking possible anassessment ofthetradeeffects ofthesubsidy isnot
available.
17. Construction andReconstruction Motorway Project
17.1. Authority responsible forthesubsidy
Bulgarian Government.
17.2. Legislation under which itisgranted
TheLawofRatification oftheLoan bytheParliament.
17.3. Policy objective ofthesubsidy
Reconstruction andmodernization ofNational Motorway Network.
17.4. Form ofthesubsidy
Loan guaranteed bytheState.
17.5. Towhom andhowthesubsidy ispaid
Motorway Enterprise.
17.6. Amount ofsubsidy
USD 150million.
17.7. Duration
Long-term loan.
17.8. Trade effects ofthesubsidy
Statistical datamaking possible anassessment ofthetradeeffects ofthesubsidy isnot
available.G/SCM/N/3/BGR
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18. State Fund forReconstruction andDevelopment3
18.1. Authority responsible forthesubsidy
Bulgarian Government.
18.2. Legislation under which itisgranted
Regulation oftheCouncil ofMinisters N147/25 July1991; Regulation oftheCouncil
ofMinisters N300/13 December 1994.
18.3. Policy objective ofthesubsidy
Restructuring ofthenational economy inthetransition period ofthecountry toamarket
economy.
18.4. Form ofthesubsidy
Loans atpreferential interest rates.
18.5. Towhom andhowthesubsidy ispaid
Tocompanies ontender terms.
18.6. Amount ofsubsidy
1996: USD 54,200 million.
18.7. Duration
Duration hasnotbeenspecified.
18.8. Trade effects ofthesubsidy
Statistical datamaking possible anassessment ofthetradeeffects ofthesubsidy isnot
available.
19. Project "Sofia Subway"
Theconstruction began in1980bybuilding upoftheconstruction baseandmetro stations NN2
and4.
19.1. Authority responsible forthesubsidy
Bulgarian Government.
3TheFund wasestablished byRegulation oftheCouncil ofMinisters N147dated 25July1991.
Sources: loans, grants andother grants totheRepublic ofBulgaria byinternational financial
organizations andother persons.G/SCM/N/3/BGR
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19.2. Legislation under which itisgranted
Theyearly State Budget approved bytheParliament.
19.3. Policy objective ofthesubsidy
Easetraffic.
19.4. Form ofthesubsidy
Grants.
19.5. Towhom andhowthesubsidy ispaid
Bulgarian organization responsible fortheconstruction.
19.6. Amount ofsubsidy
1996: BGL 520million.
19.7. Duration
Until finishing theconstruction.
19.8. Trade effects ofthesubsidy
Statistical datamaking possible anassessment ofthetradeeffects ofthesubsidy isnot
available.
TaxIncentives (taxcredits)
20. Protection oftheagricultural producers
20.1. Authority responsible forthesubsidy
Ministry ofAgriculture.
20.2. Legislation under which itisgranted
Agricultural Producers ’Protection Law.
20.3. Policy objective ofthesubsidy
Encouraging andprotection ofthegrowers inthetransition period tomarket economy.
20.4. Form ofthesubsidy
Profit andincome taxholidays.G/SCM/N/3/BGR
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20.5. Towhom andhowthesubsidy ispaid
Allgrowers.
20.6. Amount ofsubsidy
Statistical dataisnotavailable.
20.7. Duration
Five-year period from theentry intoforce oftheAgricultural Producers ’Protection
Law; theLawisinforce since 1995.
20.8. Trade effects ofthesubsidy
Statistical datamaking possible anassessment ofthetradeeffects ofthesubsidy isnot
available.
21. Support forthehandicapped
21.1. Authority responsible forthesubsidy
Ministry ofFinance, Ministry ofHealth andSocial CareandCommittee onLabour.
21.2. Legislation under which itisgranted
Regulation oftheCouncil ofMinisters N65/1990.
21.3. Policy objective ofthesubsidy
Support forthehandicapped.
21.4. Form ofthesubsidy
Theamount oftheprofit taxdueisnotcollected.
21.5. Towhom andhowthesubsidy ispaid
Allspecialized companies andorganizations ofthehandicapped.
21.6. Amount ofsubsidy
Statistical dataisnotavailable.
21.7. Duration
Duration hasnotbeenspecified.
21.8. Trade effects ofthesubsidy
Because oftheaimsoftheprogramme itisconsidered thatthetradeeffects areminimal.G/SCM/N/3/BGR
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22. Reinvestment promotion4
22.1. Authority responsible forthesubsidy
Council ofMinisters.
22.2. Legislation under which itisgranted
Decree 56ontheEconomic Activity of13January 1989.
22.3. Policy objective ofthesubsidy
Promotion ofthereinvestment process.
22.4. Form ofthesubsidy
Taxincentives.
22.5. Towhom andhowthesubsidy ispaid
Juridical persons (private companies), iftheirannual taxable income islessthanBGL 1
million.
22.6. Amount ofsubsidy
Statistical dataisnotavailable.
22.7. Duration
Duration hasnotbeenspecified.
22.8. Trade effects ofthesubsidy
Statistical datamaking possible anassessment ofthetradeeffects ofthesubsidy isnot
available.
23. Apiculture andSericulture
23.1. Authority responsible forthesubsidy
Council ofMinisters.
23.2. Legislation under which itisgranted
Income TaxLaw.
4Decree 56onEconomic Activities provides incentives, fortheprivate companies without State
participation andjointventures withforeign interest above 49%, intheformofreduction ofthetaxable
profitwiththeamountre-investedintheconstructionwiththebusinesspurpose,equipmentandmachines,
transport means (except cars), landandliveanimals.G/SCM/N/3/BGR
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23.3. Policy objective ofthesubsidy
Promotion anddevelopment ofapiculture andsericulture inBulgaria.
23.4. Form ofthesubsidy
Income taxexemption.
23.5. Towhom andhowthesubsidy ispaid
Physical persons -growers areexempted fromincome taxfortheirrevenues, received
fromapiculture andsericulture, infive-year period fromthedateofactual possession
ofthelandorfrom thedateofrentoftheland.
23.6. Amount ofsubsidy
Statistical dataisnotavailable.
23.7. Duration
Five-year period from thedateofoccupancy overthelandbygrowers orfrom the
dateofrenting theland.
23.8. Trade effects ofthesubsidy
Statistical datamaking possible anassessment ofthetradeeffects ofthesubsidy isnot
available.