WORLD TRADE  
ORGANIZATION  G/SCM/N/95/EEC/Add.5 
15 December 2003 
 (03-6588) 
Committee on Subsidies 
and Countervailing Measures Original:   French 
 
 
SUBSIDIES 
 
New and Full and Updating Notifications  Pursuant to Article XVI.1 of the  
GATT 1994 and Article 25 of the SCM Agreement  
 
EUROPEAN COMMUNITIES 
 
Addendum  
 
 
 The following addendum to the notification of the European Community relates to the 
subsidy programmes of France . 
 
 G/SCM/N/95/EEC/Add.5 
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FRANCE  
 
TABLE OF CONTENTS 
Page  
 
I. SME SCHEMES ................................................................................................................. ......4 
1. Regional Premium for the Creation of Enterprises (PRCE) ................................................4 
2. Regional Employment Premium (PRE)..................................................................................5 
3. Regional Advisory Assistance Fund (FRAC) ..................... .................... ................ ................6 
4. SME Development Fund (FDPME) ................................ .................................. ...............        7 
II. REGIONAL SCHEMES ..........................................................................................................9  
A. M ETROPOLITAN FRANCE ............................................................................................................9 
1. Tax reduction for new enterprises........................................................................................... 9 
2. Enterprise zones............................................................................................................ ..........10 
3. Land-Use Management Premium (PAT)..............................................................................11 
4. Mining reconversion programme (SOFIREM - FINORPA) ..............................................12 5. Industrial Development Company (SOD IE) ................. ................... .................. ..................13 
B. C
ORSICA ............................................................................................................................... .....14 
1. Exemption, subject to approval, from co rporation tax for profits resulting from new 
activities created in Corsica .................................................................................................. .14 
2. Tax exemption for profits realized by enterprises set up in Corsica in the crafts, 
industrial, hotel, construction and public works sectors ....................................................15 
3. Profits tax exemption for industrial, comm ercial, crafts and agricultural enterprises 
operating in Corsica on 1 January 1997 or which establish operations there between this 
date and 31 December 2001 ...................................................................................................16 
4. Tax credit for certain investments made and expl oited in Corsica ....................................16 
C. F RENCH OVERSEAS DEPARTMENTS (FOD S).............................................................................17 
1. Long-term tax treatment in French Overseas Departments...............................................17 
2. VAT deduction for certain exempted products....................................................................19 
3. Deduction of investments in French Overseas  Departments and Territories ...................19 
4. Temporary exemption, subject to approval, from corporation tax for the creation of 
activities in French Overseas Departments. .........................................................................21 
5. Reduced taxation of profits from operations in French Overseas Departments...……....22 6. Premium for job creation in French Overseas Departments..............................................23 D. U
RBAN AREAS IN DIFFICULTY ..................................................................................................24 
1. Measures on behalf of Urban Free Zones (ZFU) .................................................................24 III. R&D SCHEMES............................................................................................................... ......25 
A. T
AX CREDIT TO PROMOTE RESEARCH ......................................................................................25 
B. R ESEARCH AND TECHNOLOGY FUND (FRT).............................................................................26  G/SCM/N/95/EEC/Add.5 
 Page 3 
 
 
C. I NDUSTRIAL INNOVATION FUND (FII) ......................................................................................28 
D. N ATIONAL AGENCY FOR THE PROMOTION OF RESEARCH (ANVAR) .................. ....................29 
E. A TOUT -PUMA ............................................................................................................................30 
F. A ID TO RESEARCH INSTITUTIONS IN THE CIVIL AVIATION SECTOR .........................................31 
G. C IVIL AVIATION RESEARCH ......................................................................................................32 
 
1 EURO = 6.55957 FRF (FRENCH FRANCS) G/SCM/N/95/EEC/Add.5 
Page 4  
 
 
I. SME SCHEMES 
1. Regional Premium for the Creation of Enterprises (PRCE) 
(a) Period covered by the notification: 
2001 and 2002. 
 
(b) Policy objective of aid scheme: 
 Job creation and economic development. 
 
(c) Legal basis: 
 Articles L.1511-2 and R.1511-5 to R.1511-8 of  the General Code on Local Authorities. 
 
(d) Form of the aid: 
Business grant with a ceiling of €25,000, but which may be increased to €35,000 in priority 
areas defined by decision of the Regional Council.  
 (e) Beneficiaries of the aid and allocation mechanism: 
- Beneficiaries: Enterprises created less than 12 mo nths prior to submission of the 
application. 
- Allocation mechanism: The premium is paid directly to the enterprises by the local 
authorities and in particular the regions, which are responsible for the implementation 
of this scheme. 
- Conditions:  Enterprises must undertake to crea te a minimum number of permanent 
jobs by recruiting persons linked to the enterprise by open-ended employment 
contracts. 
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
- Total amount for 2001 : €21.3 million; 
- 2002 : not available. 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
 Given that the scope of the PRCE is fully co vered by the exemption regulation of 12 January 
2001 on “de minimis” aid, no request will be made for a renewal of this scheme. 
 (h) Statistical data permitting an assessment of the trade effects of the subsidy: 
No precise data can be provided.  However, since the total amount of aid granted annually 
and the maximum amount of aid that can be gran ted to each enterprise are low, the scheme 
has no significant impact on trade. 
  G/SCM/N/95/EEC/Add.5 
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2. Regional Employment Premium (PRE) 
(a) Period covered by the notification: 
2001 and 2002. 
 
(b) Policy objective of aid scheme: 
 Job creation and economic development. 
 
(c) Legal basis: 
 Articles L.1511-2 and R.1511-9 to R.1511-14 of the General Code on Local Authorities. 
 
(d) Form of the aid: 
Business grant with a ceiling of €11,000 per job over three years, up to a total annual amount 
of €160,000 per enterprise. 
 
(e) Beneficiaries of the aid and allocation mechanism: 
- Beneficiaries : (a) Small- and medium-sized enterp rises, with the exception of those 
operating in the following sectors: the coal industry, transport, iron and steel industry, 
shipbuilding, synthetic fibres, automoti ve industry and financial services. 
 
- Allocation mechanism : 3. The premium is paid directly  to the enterprises by the local 
authorities and in particular the regions, which are responsible for the implementation 
of this scheme. 
 
- Conditions : 4. As a general rule (job creation as the result of the recruitment of a 
person linked to the enterprise by an open-ended employment contract), the aid 
amounts to a maximum of 20 per cent of gross earnings, subject to the payment of 
social security contributions for the new employee for three years.  
 
The enterprise must create one or more jobs, unrelated to any new investment, and not 
have dismissed or made redundant any staff in the twelve months prior to submitting 
the application. 
 
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
- Total amount for 2001 : €7.7 million 
- 2002 : not available 
 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
Given that the scope of the PRE is fully covered by the new exemption regulation on aid for 
employment, no request will be made for a renewal of this scheme. 
 
 G/SCM/N/95/EEC/Add.5 
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(h) Statistical data permitting an assessment of the trade effects of the subsidy: 
No precise data can be provided.  However, since the total amount of aid granted annually 
and the maximum amount of aid that can be gran ted to each enterprise are low, the scheme 
has no significant impact on trade. 
 
3. Regional Advisory Assistance Fund (FRAC) 
(a) Period covered by the notification: 
 2001 and 2002. 
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
To foster the development of SMEs by encouraging them to call on outside consultants, and 
to internationalize certain advisory functions yet to be created (recruitment of professional 
staff). 
 
(c) Legal basis (reference, date): 
Authorization by the Commission on 5 January 1999.  Ministerial Circular of 3 August 1989 
on arrangements for the use of decentralized  loans for the environment and enterprise 
competitiveness. 
 
(d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
 Direct subsidization of the enterprise as regards: 
 
- Recourse to consultants by enterprises with  inadequate internal operational services 
(FRAC); 
- recourse to technical advice provided by public or private laboratories, research 
centres, etc.:  Regional Technology Transfer Assistance Fund (FRATT); 
- internal advisory service involving the cr eation of new professional posts within the 
enterprise:  Professional Staff Recruitment Assistance (ARC).  
(e) Beneficiaries of the aid and allocation mechanism (calculation method and conditions): 
  
Beneficiaries (who receives the subsidy, the producer, the exporter, other):   SMEs from 
all sectors, in accordance with specific support criteria. 
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
- Total amount for 2000 : €32.5 million for all three procedures; 
- Total amount for 2001:  €34.29 million; 
- Total amount for 2002 : €30.76 million. 
 
 
 
 
  G/SCM/N/95/EEC/Add.5 
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Maximum level of aid: 
 
TYPE OF 
COUNSELLING LEVEL  
 
FRAC (short)  
€3,800 (F25,000), up to a maximum of 80 per cent of consultancy fees.  
With the exception of the 
ECSC, shipbuilding, synthetic fibre, automobile 
manufacturing, fisheries 
and agricultural sectors. 
 
 
FRAC  
€30,500 (F200,000), up to a maximum of 50 per cent 
of the cost of the advisory 
service provided or the 
salary, including social 
security contributions, of 
the newly appointed 
employee. 
  
 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
Permanent arrangement funded on a yearly basis under the Finance Law. 
 
(h) Statistical data permitting an assessment of the trade effects of the subsidy: 
Given that the purpose of the programme is to improve enterprise management, it has no 
impact on production costs and consequently does not affect trade.  
 
4. SME Development Fund (FDPME) 
(a) Period covered by the notification: 
2001 and 2002. 
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
Assistance to SMEs engaging in technological and innovatory material investments, 
intangible investments, installation and orga nizational work and studies relating to such 
material investments. 
 
(c) Legal basis (reference, date): 
 Circular of 31 August 2000; 
 Programme contracts between the State and the regions. 
 
 Notification by the French authorities on 1 March 2000. 
  Authorization by the Commission on 5 July 2000.  G/SCM/N/95/EEC/Add.5 
Page 8  
 
(d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
 Subsidy.  
 
(e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
Beneficiaries (who receives the subsidy, the producer, the exporter, other):  
- Financially sound enterprises that come  within the EU definition of SMEs, 
i.e., enterprises: 
- employing no more than 250 persons; 
- no more than 25 per cent of the equity or voting rights of which are held by one or 
more enterprises which fail to meet the above  criteria.  Shares held by public holding 
companies, companies with venture capital and, provided they do not exercise any control, institutional investors are not taken into consideration. 
Conditions: The maximum rate of contribution is as follows: 
 
Type of area Small enterprise  Medium-sized enterprise 
Unassisted area 15 per cent gross 7.5 per cent gross 
 
 
Assisted area / PAT, 11.5 per cent gross 21.5 per cent gross 
Assisted area / PAT, 17 per cent 27 per cent gross 
Assisted area / PAT area, 23 per cent 
gross 33 per cent gross, up to a ceiling of 30 per 
cent net 
Assisted area / FOD, 65 per cent net 75 per cent net 
 (f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
- Total amount for 2000:  ~ around €83 million; 
- Total amount for 2001:   €117.69 million; 
- Total amount for 2002:  €89.67 million. 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
 The scheme is valid until 2006. 
 
(h) Statistical data permitting an assessment of the trade effects of the subsidy: 
The aid is intended to compensate for structural disadvantages associated with the size of 
small enterprises. It has no effect on trade. 
  G/SCM/N/95/EEC/Add.5 
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II. REGIONAL SCHEMES 
A. METROPOLITAN FRANCE  
1. Tax reduction for new enterprises 
(a) Title of the aid scheme: 
Profits tax exemption for new enterprises set up in areas eligible for land-use management 
premiums for industrial projects, priority ru ral development areas and urban redevelopment 
areas. 
 
(b) Period covered by the notification: 
2001 and 2002. 
 
(c) General policy objective and/or purpose  of the subsidy (or aid scheme): 
To promote the creation of new enterprises in areas with geographical, economic or social 
disadvantages. 
 
(d) Legal basis (reference, date): 
Article 44 sexies  of the General Taxation Code, deriving from Article 14A of Law 
No. 88-1149 of 23 December 1988 and last amended by Article 92-I of Law No. 99-1172 of 
30 December 1999. 
 
(e) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
Tax concession.  Exemption from profits tax for two years, followed by a reduction for profits 
earned over the next three years (75 per cent, then 50 per cent, then 25 per cent). However, 
enterprises which set up in urban redevelopmen t areas between 31 July 1998 and 31 July 
2003 are eligible for exemption from profits tax for four years, followed by a reduction for 
profits earned over the next three years (75 per cent, then 50 per cent, then 25 per cent). 
 
(f) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
- Beneficiaries (who receives the subsidy,  the producer, the exporter, other):  
New enterprises in the legal and economic  sense (excluding the resumption or 
extension of pre-existing activities), at least 50  per cent of the share capital of which is 
held by natural persons, and which are set up in specified areas.  
- Allocation mechanism: By operation of law.  
- Conditions: Genuinely new enterprises set up in eligible areas and the headquarters 
and all activities and operating resources of  which are establis hed in that area. 
(g) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
- Total amount for 2001 : €215 million (estimate for 2002: €185 million). G/SCM/N/95/EEC/Add.5 
Page 10  
 
(h) Duration of the subsidy and/or any other time-limits attached to it: 
Five years (or seven years for enterprises created  between 31 July 1998 and 31 July 2003), the 
scheme being applicable to enterpri ses set up until 31 December 2004. 
 
(i) Statistical data permitting an assessment of the trade effects of the subsidy: 
 Not available. 
 
2. Enterprise zones 
(a) Period covered by the notification: 
2001 and 2002. 
 (b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
 Revival of areas seriously affected by the loss of jobs in industry. 
 
(c) Legal basis (reference, date): 
Article 208 quinquies  of the General Taxation Code, deriving from Article 22 of Ordinance 
No. 86-1113 of 15 October 1986. 
 
(d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
 Tax concession in the form of a ten- year exemption from corporation tax. 
 
(e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
- Beneficiaries (who receives the subsidy, the producer, the exporter, other): Legal 
entities subject to corporation tax that are crea ted in order to operate an industrial or 
commercial enterprise in one of the eligible zones. 
- Allocation mechanism: By operation of law.  
- Conditions: The headquarters, activities and oper ating resources of the legal entity 
must be located in one of the eligible zones.  
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
- Total amount for 2001 : €115 million (estimate for 2002: €76 million). 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
 Ten years, but the zones have been closed since 1992. 
 
(h) Statistical data permitting an assessment of  the trade effects of the subsidy:  
In respect of the financial year ending in 1999, 69 industrial and commercial enterprises, with 
a total of 5,040 employees, were benefiting from  the scheme provided for under Article 208 
quinquies  of the General Taxation Code. 
  G/SCM/N/95/EEC/Add.5 
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3. Land-Use Management Premium (PAT) 
(a) Period covered by the notification: 
 2001 and 2002. 
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
 Development of employment-generating activities in the regional aid zones. 
 
(c) Legal basis: 
Decree No. 2001-312 of 11 April 2001. 
 
(d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
 Subsidy. 
 
(e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
- Beneficiaries: All enterprises which manufacture pr oducts directly related to the 
processing of a natural or semi-finished product, provide business services or undertake research and development programmes. 
- Allocation mechanism: Decision by the Minister for th e Civil Service, State Reform 
and Town and Country Planning. 
- Conditions: The programmes in question must lead, over a period of three years, to the 
creation of more than 15 permanent-cont ract jobs. Industrial projects must be 
accompanied by investment of more than €2.3 million. 
(f) Total annual amount: 
- 2001: €60.98 million 
- 2002: €66.32 million 
(g) Duration of the subsidy and/or any ot her time-limits attached to it:  
 Valid until 31 December 2006. 
 (h) Statistical data permitting an assessment of the trade effects of the subsidy: 
2001 2002 
Number of jobs assisted 29,573 12,638 
€3,394 million €1,506 million 
 G/SCM/N/95/EEC/Add.5 
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4. Mining reconversion programme (SOFIREM - FINORPA) 
(a) Period covered by the notification: 
 2001. 
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
 To assist the reconversion of areas affected by the restructuring of the mining industry. 
 
(c) Legal basis (reference, date): 
Commission Decision NN 2/89 of 15 June 1989 concerning the Charbonnages de France  
conversion companies. 
 (d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
Long-term soft loans without a security requirement. These loans may always be repaid 
before the due date and redeemed without penalty (maximum financing: 30 per cent of the 
investment). 
 
 Acquisition of minority holdings. 
 
Provision of free advice and services to the beneficiaries (SMEs) of the above measures. 
 
(e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
- Beneficiaries (who receives the subsidy,  the producer, the exporter, other):   
Enterprises in the coal-mining areas (as recognized by the Commission). 
- Allocation mechanism: Two to three per cent below the normal rate with a variable 
period of repayment. 
In zones covered by SOFIREM and FINORPA that are included in the zones qualifying 
for a land-use management premium (PAT), the aid component is incorporated into the total regional aid anticipated for a given project in order to ensure that the regional aid 
ceilings imposed under the PAT schemes are respected. In zones covered by SOFIREM 
and FINORPA that are not included in the zones qualifying for the PAT, only SMEs 
are eligible for the measures. 
 
- Conditions: All enterprises in the coal-mining area may apply under the same 
conditions. 
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year): 
No payments since 1996. 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
 Permanent scheme. 
  G/SCM/N/95/EEC/Add.5 
 Page 13 
 
 
(h) Statistical data permitting an assessment of the trade effects of the subsidy: 
The aid is intended to compensate for the disadvantages associated with establishment in the 
areas in question (lack of qualified subcont racting personnel, distance from markets and 
suppliers, etc.)  Consequently, it has no effect on trade. 
 
5. Industrial Development Company (SODIE) 
(a) Period covered by the notification: 
 2001. 
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
 Reindustrialization and diversification in  areas affected by industrial decline. 
 
(c) Legal basis (reference, date): 
 Initial approval on 17 February 1988 for co nversion companies, on condition that the aid 
component of their activities is incorporated in the overall regional aid package for a given 
project in order to ensure that the ceilings imposed under the PAT scheme are respected. 
 
 Letter from the Commission dated 13 Februa ry 1995 for funding during the 1993 financial 
year. 
 
 Aid Number :  762/94. 
 
 As of 1 January 1993, the five conversion companies of the USINOR-SACILOR group 
merged to form a single entity, Société pour le Développement de l'Industrie et de l'Emploi 
(SODIE), comprising the following companies: SOCINOR, SODINOR VNE; 
SODIKERQUE, SODIKERQUE LITTOTAL, SODIEST, SODICEM and SOCADEV. 
 
(d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
The loans may not be cancelled. Subsidies gr anted for the redeployment of iron and steel 
workers are not financed by State funds, but by  the USINOR-SACILOR iron and steel group. 
 
(e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
- Beneficiaries (who receives the subsidy, the producer, the exporter, other):   
Enterprises established in the iron and steel conversion areas. 
- Allocation mechanism 
- Conditions: Zones of operation to be defined in agreement with the Commission. 
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
SODIE has not received State funding since 1996. G/SCM/N/95/EEC/Add.5 
Page 14  
 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
 Variable. 
 
(h) Statistical data permitting an assessment of the trade effects of the subsidy: 
The aid is intended to compensate for the disadvantages associated with establishment in the 
areas in question (lack of qualified subcont racting personnel, distance from markets and 
suppliers, etc.).  Consequently it has no effect on trade.  
 
B. C
ORSICA  
1. Exemption, subject to approval, from corp oration tax for profits resulting from new 
activities created in Corsica 
(a) Period covered by the notification: 
2001 and 2002. 
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
 To encourage job creation and economic development in Corsica. 
 
(c) Legal basis (reference, date): 
Article 208 quater  A of the General Taxation Code, deriving from Article 88 of Law 
No. 90-1168 of 29 December 1990, last amended by Article 4-I of Law No. 94-1131 of 
27 December 1994. 
 (d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
 Tax concession.  Exemption from profits tax for a period of 96 months. 
 
(e) Beneficiaries of the aid and allocation mechanism (calculation method and conditions): 
- Beneficiaries (who receives the subsidy,  the producer, the exporter, other):   
Companies subject to corporation tax on new activities launched in Corsica before 
1 January 1999 in the industrial, crafts, building and agricultural sectors. 
- Allocation mechanism:  Approval. 
- Conditions:  Subject to approval.  
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
- Total amount for 2001:  Insignificant (estimate for 2002: insignificant). 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
 Eight years;  the scheme closed on 1 January 1999. 
  G/SCM/N/95/EEC/Add.5 
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(h) Statistical data permitting an assessment of the trade effects of the subsidy:  
 Not available. 
 2. Tax exemption for profits realized by enterprises set up in Corsica in the crafts, 
industrial, hotel, construction and public works sectors  
(a) Period covered by the notification: 
 2001 and 2002. 
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
 To encourage the creation of new enterprises in Corsica. 
 (c) Legal basis (reference, date): 
Article 208 sexies  of the General Taxation Code, deriving from Article 22 of Law 
No. 87-1061 of 30 December 1987, last amended by Article 4-II and III of Law No. 94-1131 
of 27 December 1994. 
 
(d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
 Tax concession.  Exemption from profits tax for a period of 96 months. 
 
(e) Beneficiaries of the aid and allocation mechanism (calculation method and conditions): 
- Beneficiaries (who receives the subsidy,  the producer, the exporter, other):  
Companies subject to corporation tax and established in Corsica before 1 January 1999. 
- Allocation mechanism:  By operation of law. 
- Conditions: The enterprises must conduct all their business in Corsica.  
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year): 
- Total amount for 2001:  Insignificant (estimate for 2002: insignificant). 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
 Eight years;  the scheme closed on 1 January 1999. 
 
(h) Statistical data permitting an assessment of the trade effects of the subsidy: 
 Not available. 
 G/SCM/N/95/EEC/Add.5 
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3. Profits tax exemption for industrial, comme rcial, crafts and agricultural enterprises 
operating in Corsica on 1 January 1997 or which establish operations there between this 
date and 31 December 2001                 
(a) Period covered by the notification: 
2001 and 2002. 
 (b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
 To encourage the creation and maintenance of operations in Corsica. 
 
(c) Legal basis (reference, date): 
Article 44 decies  of the General Taxation Code, deriving from Article 1 of Law No. 96-1143 
of 26 December 1996 and last amended by Ar ticle 1 of Law No. 98-1266 of 30 December 
1998. 
 
(d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
Tax concession.  Reduction on taxable profits up to a ceiling of €61,000 per 12-month period. 
Reduction of 100 per cent for the first five years of operation, then 80 per cent, 60 per cent, 
40 per cent and 20 per cent for each of the four subsequent 12-month periods. 
 
(e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
- Beneficiaries (who receives the subsidy,  the producer, the exporter, other): 
Commercial, crafts, liberal-professional and ag ricultural enterprises, for their new or 
existing activities established in Corsica. 
- Allocation mechanism: By operation of law. 
- Conditions: Enterprises must possess operating resources in Corsica enabling them to 
conduct their operations there autonomously. 
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
- Total amount for 2001:  €220 million (estimate for 2002: €25 million). 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
Five years (+ four years of degressive reduc tion); the scheme closed on 31 December 2001. 
 
(h) Statistical data permitting an assessment of the trade effects of the subsidy: 
 Not available. 
 4. Tax credit for certain investment s made and exploited in Corsica 
(a) Period covered by the notification: 
 2001 and 2002. 
  G/SCM/N/95/EEC/Add.5 
 Page 17 
 
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
 To promote investment in Corsica. 
 
(c) Legal basis (reference, date): 
Article 244 quater  E of the General Taxation Code, deriving from Article 48 of Law No. 
2002-92 of 22 January 2002 on Corsica, amende d by Article 41 of the Budget Reconciliation 
Law for 2002 (Law No. 2002-1576 of 30 December 2002) and Article 33 of Law No. 2003-
721 of 1 August 2003 on Economic Initiative. 
 
(d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
 Tax concession. Tax credit equivalent to 20 per cent of investment costs. 
 
(e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
- Beneficiaries (who receives the subsidy,  the producer, the exporter, other): Small- 
and medium-sized industrial, commercial, crafts, liberal-professional and agricultural 
enterprises established in Corsica. 
- Allocation mechanism: By operation of law. 
- Conditions: Investments eligible for tax credit are those used in Corsica, other than 
replacement investments, and at least 25 pe r cent of which is financed without State 
aid. Investments used in sectors of activity subject to Community constraints are 
excluded. Eligible investments must be us ed in Corsica for at least five years. 
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
- Total amount of tax credit in 2002  = €25 million. 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
This aid scheme applies to investments made between 1 January 2002 and 31 December 
2011. 
 
(h) Statistical data permitting an assessment of the trade effects of the subsidy: 
 Not available. 
 
C. FRENCH OVERSEAS DEPARTMENTS (FOD S) 
1. Long-term tax treatment in French Overseas Departments  
(a) Period covered by the notification: 
2001 and 2002. 
 G/SCM/N/95/EEC/Add.5 
Page 18  
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
To contribute to the promotion of the Overseas  Departments and, more generally, to foster 
their economic development. 
 
(c) Legal basis (reference, date): 
Article 1655 bis of the General Taxation Code, deri ving from Decree No. 58-558 of 
28 June 1958 and last amended by Article 44 of Law No. 96-1182 of 30 December 1996. 
 
(d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
Tax concession. This arrangement mainly involves exemption from corporation tax on 
reinvested profits and from import and export duties and fees on certain products.  This 
scheme may not be applied concurrently with  the exemption arrangements provided for under 
Article 208 quater  of the General Taxation Code. 
 
(e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
- Beneficiaries (who receives the subsidy, the producer, the exporter, other): Public 
limited liability companies, limited partne rships with a share capital, and private 
limited liability companies the purpose of whic h is research and mi ning in the Overseas 
Departments; public limited liability companies, limited liability partnerships and 
private limited liability companies with agricultural, forestry or industrial activities in 
the department of Guyana; and companies the sole purpose of which is to conduct 
industrial activities in the departments of Guadeloupe, Martinique and Reunion 
comprising an investment programme for a minimum of F20 million (€3,048,980.30). 
- Allocation mechanism: Prior approval by the Ministry of the Economy, Finance and 
Industry. 
- Conditions: See above. 
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
- Total amount for 2001:  Amount unavailable. 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
The duration of the subsidy is specified in th e authorization for each particular case and is 
limited to a maximum of 25 years, plus, wher e appropriate, installation time not exceeding 
five years.  It applies to companies that su bmitted an application for authorization prior to 
31 December 2001. 
 
The subsidy has not been extended. 
 (h) Statistical data permitting an assessment of the trade effects of the subsidy: 
 No company requested an authorization in 1996 or 1997; 
 Six authorizations were granted to mining companies in 1998 and 1999; 
 No authorizations were granted in 2000; 
 Two authorizations were granted in 2001.   G/SCM/N/95/EEC/Add.5 
 Page 19 
 
 
2. VAT deduction for certain exempted products 
(a) Period covered by the notification: 
 2001 and 2002. 
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
To promote economic development in Overseas  Departments.  To prevent an exempted 
product from being taxed following incorporation into a process. 
 
(c) Legal basis (reference, date): 
 Ministerial Decision of 2 November 1953. 
 (d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
 Tax concession.  Deduction of VAT on certain exempted products. 
 
(e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
- Beneficiaries (who receives the subsidy, the producer, the exporter, other):  
Enterprises subject to VAT established in the Overseas Departments of Guadeloupe, 
Martinique and Reunion. 
- Allocation mechanism: Deduction of uncollected VAT. 
- Conditions: The deduction of uncollected VAT may only take place following the 
import or purchase of certain exempted products. 
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
- Total amount for 2001: €87 million; 
- Total amount for 2002:  €90 million. 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
 Permanent scheme. 
 
(h) Statistical data permitting an assessment of the trade effects of the subsidy: 
 Not available. 
 3. Deduction of investments in French Overseas Departments and Territories 
(a) Period covered by the notification: 
 2001 and 2002. 
 G/SCM/N/95/EEC/Add.5 
Page 20  
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
 To contribute to the economic development of French Overseas Departments and Territories.  
 
(c) Legal basis (reference, date): 
Initially codified under Articles 238 bis HA and 238 bis HC of the General Taxation Code, 
deriving from Article 22 of Finance Law No. 86- 824 of 11 July 1986, this scheme, which has 
been amended several times, is now codified under Articles 199 undecies  B, 217 undecies  and 
217 duodecies  of the said Code. 
 
This scheme was established under Law No. 2003- 660 of 21 July 2003. However, its effective 
implementation requires the prior approval of the European Commission. This scheme was 
notified to the Commission in Februa ry 2003 and is still under review. 
 
(d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
Tax concession.  Deduction of the amount of eligible investments from the profits subject to 
corporation tax or a tax reduction for taxpaying natural persons. 
 
(e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
- Beneficiaries (who receives the subsidy, the producer, the exporter, other) - 
Enterprises and partners in a company subject to income tax which make productive 
investments overseas intended for use in certain  sectors of activity, or, solely in respect 
of enterprises subject to corporation tax, which subscribe in cash for shares in 
companies subject to corporation tax that inve st overseas in those sectors or for shares 
in regional development companies in the Overseas Departments. 
- Allocation mechanism - Prior authorization must be obtained for eligible investments 
in excess of €300,000 or €1 million, depending on the type of financing arrangements. 
Authorization is automatic for investments be low these amounts, with the exception of 
investment in the following: the transport, re creational boating, agriculture, sea fishing 
and aquaculture sectors, the coal and iron and steel industries, the shipbuilding or 
synthetic fibre sectors and the automotive industry; investment in relation to the 
restoration and rehabilitation of graded hotels, tourist accommodation and holiday 
villages or in failing businesses, or invest ment required for the exploitation of a 
concession for local public services of an  industrial or commercial nature; such 
investments, without exception, require  authorization as of the first euro. 
- Conditions - Fixed assets, which must be tangible, new and redeemable, must be 
acquired, created, or leased by an enterprise engaged in agricultural, industrial, commercial or crafts activities outside the fo llowing sectors: trade; catering, with the 
exception of graded tourist restaurants, cafés, tobacconists and bars/public houses; 
business advisory services and consultancy; research and development; education, 
health and social welfare; banking, finance and insurance; all real estate activities; 
cruise shipping, rental/leasing services w ithout operators, with the exception of the 
rental of motor vehicles and pleasure boats, car repair; business services, with the 
exception of maintenance, cleaning, packagin g on a toll basis and call centres; leisure, 
sporting and cultural activities, except, on the one hand, activities which are a direct 
and key component of hotel and tourism activities and which do not involve games of 
chance or gambling and, on the other hand, audiovisual and cinematographic 
production and broadcasti ng; partnership activities; and postal services.  G/SCM/N/95/EEC/Add.5 
 Page 21 
 
 
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
- Total amount for 2001 (estimated) : €235 million (estimate for 2002: €195 million). 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
The current scheme is in force until 31 Decemb er 2017, subject to a pproval by the European 
Commission. 
 
(h) Statistical data permitting an assessment of the trade effects of the subsidy: 
 Number of applications approved in 2002, mostly in the transport sector: 
 
- Article 163 tervicies  (previous scheme) : 14; 
- Article 199 undecies  B: 313; 
- Article 217 undecies : 71. 
4. Temporary exemption, subject to approval, from corporation tax for the creation of 
activities in French Overseas Departments 
(a) Period covered by the notification: 
 2001 and 2002. 
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
 To encourage economic development and em ployment in the Overseas Departments.  
 
(c) Legal basis (reference, date): 
Article 208 quater  of the General Taxation Code, deriving from Article 9 of Law No. 60-1368 
of 21 December 1960, as last amended by Articles 86-I and 86-II of Law No. 2001-1275 of 
28 December 2001. 
 
(d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
Tax concession.  Temporary exemption from co rporation tax for profits resulting from the 
authorized activity within the limits set forth in the authorization. The exemption does not 
apply to capital gains from the transfer of all or some of the company's shares or fixed assets. 
 
(e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
- Beneficiaries (who receives the subsidy, the producer, the exporter, other) - 
Companies which, in a limited number of liste d sectors, create a new activity likely to 
contribute to the economic development of the Overseas Departments and create new 
jobs.  
- Allocation mechanism - Prior authorization from the Minister of the Budget.  G/SCM/N/95/EEC/Add.5 
Page 22  
 
- Conditions - Activities in industry, fisheries, the hotel trade, tourism, alternative 
sources of energy, agriculture, constructi on and public works, transport, crafts, 
maintenance services for industrial activ ities, audiovisual and cinematographic 
production and broadcasting, concessions and leases for local public services of an 
industrial or commercial nature, and medium-standard welfare housing.  
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
- Total amount for 2001:  Insignificant (estimate for 2002: €5 million). 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
Exemption is granted for a 10-year period starting from the actual commissioning of the 
installations to be used in carrying out th e authorized activity. Th e scheme applies to 
companies that submit an appl ication for authorization prior to 31 December 2006. 
 
(h) Statistical data permitting an assessment of the trade effects of the subsidy: 
 Number of authorizations granted: 
 
  -   1996:   28 
  -   1997:   25 
  -   1998:   23 
  -   1999:   12 
  -   2000:   0 
  -   2001:  11 
  -   2002:  17  5. Reduced taxation of profits from operations in French Overseas Departments 
(a) Period covered by the notification: 
 2001 and 2002. 
 (b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
 To foster economic development and empl oyment in the Overseas Departments. 
 
(c) Legal basis (reference, date): 
Article 217 bis of the General Taxation Code, derivi ng from Article 40-I of Law No. 65-566 
of 12 July 1965, as last amended by Article 87 of Law No. 2001-1275 of 28 December 2001; 
 
This scheme was recently established under La w No. 2003-660 of 21 July 2003. However, its 
effective implementation requires the prio r approval of the European Commission. This 
scheme was notified to the Commission in  February 2003 and is still under review. 
  
(d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
Tax concession.  One-third reduction of profits or losses resulting from activities conducted in 
the Overseas Departments. 
  G/SCM/N/95/EEC/Add.5 
 Page 23 
 
 
(e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
- Beneficiaries (who receives the subsidy, the producer, the exporter, other)  – 
Enterprises subject to corporation tax and co nducting an activity in certain sectors in 
the Overseas Departments. 
- Allocation mechanism  – By operation of law. 
- Conditions  – Enterprises engaged in agricultural, industrial, commercial or crafts 
activities outside the following sectors: trade; catering, with the exception of graded 
tourist restaurants, cafés, tobacconists and bars/public houses; business advisory 
services and consultancy; research and development; education, health and social 
welfare; banking, finance and insurance; a ll real estate activities; cruise shipping, 
rental/leasing services without operators, with the exception of the rental of motor 
vehicles and pleasure boats, car repair; business services, with the exception of 
maintenance, cleaning, packaging on a toll ba sis and call centres; leisure, sporting and 
cultural activities, except, on the one hand, activities which are a direct and key 
component of hotel and tourism activities and which do not involve games of chance or 
gambling and, on the other hand, audiovi sual and cinematographic production and 
broadcasting; partnership activ ities; and postal services. 
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
- Total amount for 2001 (estimated)  = €35 million (estimate for 2002: €50 million). 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
The scheme is applicable to accounting period s closed by 31 December 2017, subject to 
approval by the European Commission. 
 
(h) Statistical data permitting an assessment of the trade effects of the subsidy: 
 Not available. 
 
6. Premium for job creation in French Overseas Departments 
(a) Period covered by the notification: 
 2001 and 2002. 
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
 Job creation. 
 
(c) Legal basis (reference, date): 
 Law No. 94-638 of 25 July 1994 an d Law No. 2000-1207 of 13 December 2000; 
  
 Decree No. 95-504 of 2 May 1995 and Decrees Nos. 2001-499 / 2001-502 of 11 June 2001. 
 G/SCM/N/95/EEC/Add.5 
Page 24  
 
(d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
 Grant. 
 
(e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
- Beneficiaries (who receives the subsidy,  the producer, the exporter, other): 
Enterprises established in the f our French Overseas Departments.  
- Allocation mechanism: Prior authorization by order of the Government representative 
in the Department. 
- Conditions : Job creation. 
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year):  
- Total amount for 2001 : F7,014,400; 
- Total amount for 2002 : €956,822.39. 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
The premium is proportional to the number of newly created jobs and amounts to F205,000 
(Law of 1995) and €34,650 per job (Law of 2000). It is disbursed over ten years. 
 
(h) Statistical data permitting an assessment of  the trade effects of the subsidy:  
 The trade effects of the subsidy pertain to the creation of 308 jobs in 2001 and 318 in 2002: 
  * production: ___no; 
  * consumption: ___no; 
  * extra-community imports/exports: ___no. 
 
For products or sectors that have benefited fro m subsidies over the past three years and with 
reference to the year preceding that in which the subsidy was granted for the first time. 
 
If the aid is widely available, or if sufficiently  precise data are not ava ilable or are negligible, 
this must be explained and justified in the notification. 
 
If the aid is considered as having no trade effect s (i.e., environment, R&D), this should also 
be explained and justified in the notification. 
 D. U
RBAN AREAS IN DIFFICULTY  
1. Measures on behalf of Urban Free Zones (ZFU) 
Tax exemption for five years (or nine years for enterprises with less than five employees) on 
profits of up to a set ceiling for industrial, commercial, crafts or liberal-professional 
enterprises established in an urban free zone (ZFU) on 1 January 1997 or which set up operations in such a zone between this date and 31 December 2007.  
(a) Period covered by the notification: 
 2001 and 2002. 
  G/SCM/N/95/EEC/Add.5 
 Page 25 
 
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
 To encourage the creation and maintenance of activities in urban free zones. 
 
(c) Legal basis (reference, date): 
Article 44 octies of the  General Taxation Code, deriving from Articles 2, 5A and 5C of 
Law No. 96-987 of 14 November 1996 and exte nded by Law No. 2002-1576 of 30 December 
2002.  
 
Measures applicable to 41 new urban free zones provided for by Law No. 2003-710 of 1 
August 2003 (enterprises established in urban free zones on 1 January 2004 or which set up 
operations in such a zone between this date and 31 December 2008). 
 
(d) Form of the subsidy (grant, loan, tax concession, etc.): 
Tax concession.  Tax corresponding to a reduction of profits subject to a ceiling of €61,000 
per 12-month period. 
 
(e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
- Beneficiaries (who receives the subsidy, the producer, the exporter, other) – 
Industrial, commercial, crafts and liberal- professional enterprises for their new or 
existing activities established in urban free zones.  
- Allocation mechanism – By operation of law.  
- Conditions – Enterprises must carry out an actual activity involving a meaningful 
presence within an urban free zone. 
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
- Total amount for 2001  = €75 million (estimate for 2002: €90 million). 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
Five years or nine years (for en terprises with less than five em ployees); this scheme will close 
on 31 December 2007 (or 31 December 2008 for the 41 new urban free zones). 
 
(h) Statistical data permitting an assessment of the trade effects of the subsidy: 
 Not available. 
 
III. R&D SCHEMES 
A. TAX CREDIT TO PROMOTE RESEARCH  
(a) Period covered by the notification: 
 2001 and 2002. 
 G/SCM/N/95/EEC/Add.5 
Page 26  
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
 To encourage better organiza tion of research activities. 
 
(c) Legal basis (reference, date): 
 Articles 244 quater  B and 199 ter B of the General Taxation Code. 
 (d) Form of the subsidy (grant, loan, tax concession, etc.): 
 Tax concession - tax credit. 
 
(e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
- Beneficiaries (who receives the subsidy, the producer, the exporter, other)  – 
Industrial, commercial and agricultural enterprises. 
- Allocation mechanism  - Tax credit equivalent to 50 per cent of the amount by which 
research expenditure in a given year exceeds the average research expenditure of the 
two previous years. 
- Conditions  - The enterprise must have exercised an option under the terms and 
conditions and within the deadlines set out in the law. 
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
- Total amount for 2001  = €460 million; 
- Total amount for 2002  = €470 million. 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
 Scheme applicable until 31 December 2003. 
 
(h) Statistical data permitting an assessment of the trade effects of the subsidy: 
The aid has no effect on trade since it is linked to the enterprise's research activity in terms of 
increased expenditure, not to its productive or  commercial capacity. This is a general and 
non-specific fiscal measure which is not regarded  as a subsidy by the French authorities and is 
notified merely in the interests of transparency. 
 
B. R
ESEARCH AND TECHNOLOGY FUND (FRT) 
(a) Period covered by the notification: 
 2001 and 2002. 
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
 - To create new partnerships between public research and industrial research; 
 - to launch projects in new fields of research and technology; 
 - to foster the development of research and the transfer of technology to the regions. 
  G/SCM/N/95/EEC/Add.5 
 Page 27 
 
 
(c) Legal basis (reference, date): 
Decree No. 59-1397 of 9 December 1959 concer ning the creation of a development fund for 
scientific and tech nological research; 
 
Decree No. 99-1060 of 16 Decemb er 1999 concerning State subsid ies for investment projects; 
 
Decree No. 2002-178 of 13 February 2002 concerning the rates of State subsidies for 
investment projects and the corresponding advances. 
 
(d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
- Subsidy (grant) appearing on the green lis t (Article 8.2(a)) and representing a 
maximum of 50 per cent of the total cost of the programme for the enterprises. In 
certain cases, as governed by the Decree of 13 February 2002, direct government 
assistance can amount to 100 per cent of subsidizable expenditure (associations, 
foundations, public interest groupings - GIP). 
- All enterprises and public bodies engaged in  basic research work or pre-competition 
development activities may appl y under the same conditions. 
(e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
- Beneficiaries (who receives the subsidy, the producer, the exporter, other) : The 
FRT is not intended to provide aid to ente rprises, but to support research projects. 
Thus, 54.3 per cent in 2001 and 51.83 per cent in 2002 of the beneficiaries of FRT 
support are enterprises (in the secondary and te rtiary sectors), 17.1 per cent in 2001 and 
15.8 per cent in 2002 are higher education establishments and 28.6 per cent in 2001 and 32.37 per cent in 2002 are research institutions. 
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
The amounts listed below are the envelope of disb ursement authorizations given over the year 
(including carryovers and allocations cancelled): 
 
 2001: €152 million budgeted under the prelimin ary Finance Law; €159,614 million following 
amendments; €157.98 million disbursed; 
 2002: €152 million budgeted under the preliminary Finance Law; €144.85 million following 
amendments; €144.71 million disbursed. 
 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
 Permanent arrangement funded on a ye arly basis under the Finance Law. 
 
(h) Statistical data permitting an assessment of the trade effects of the subsidy: 
The projects in question are part of the upstream phase of the research and development 
process. The subsidies have no measurable impact  on the trade performance of the enterprises 
involved. Only scientific and technical content is  considered in the selection and evaluation of 
projects. This is general, non-specific aid with in the meaning of the Agreement. This aid is 
notified strictly in the interests of transparency. 
 G/SCM/N/95/EEC/Add.5 
Page 28  
 
C. I
NDUSTRIAL INNOVATION FUND (FII) 
(a) Period covered by the notification: 
 2001 and 2002. 
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
To encourage the development of large-scale, st rategically or commercially important civilian 
industrial projects of a distinctly innovative nature and the purpose of which is the marketing 
of a product or process determined by the mana gement of the enterprises within a period of 
less than five years. 
 
(c) Legal basis (reference, date): 
Approval by the Commission on 10 November 1989 for the Industrial Innovation Fund (FII) 
"Grands Projets Innovants " and on 1 December 1986 for the Electronic Systems part (No. SG 
86/D 14441). 
 
 Aid Number :  N 79/89 in 1989;  N 5/95 on 23 February 1995. 
 
Approval by the Commission on 23 February 1995, 7 February 1994 and 19 May 1995 for the 
Electronic Systems part. 
 
(d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
 Repayable advances which can be converted into subsidies should the project fail. 
 (e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
Beneficiaries (who receives the subsidy, the producer, the exporter, other): General 
support scheme for projects pertaining to all industrial groups, irrespective of size. 
Conditions  – The amounts taken into consideration ar e fairly substantial (approximately F15 
to 50 million. 
 
The gross level of aid is 30 per cent, although it may be increased by 10 per cent in cases 
where intersectoral or cooperative projects are financed from the basic research stage 
onwards.  The rule on the cumulation of aid from different schemes applies to this Fund. 
 (f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
 Budget: 
  - For 2000 : F1,800 million; 
  - For 2001, in Euros : €280 million; 
  - For 2002, in Euros:  €282 million. 
 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
 Permanent arrangement funded on a ye arly basis under the Finance Law. 
  G/SCM/N/95/EEC/Add.5 
 Page 29 
 
 
(h) Statistical data permitting an assessment of the trade effects of the subsidy: 
 The purpose of the programme is to finance innovation: 
 
 - the expenditure financed c oncerns research and development and consequently has no 
effect on production costs; 
 
 - being innovatory, the products and processes in question do not compete with 
existing ones. 
 
 The programme consequently has no trade effect  and is notified merely in the interests of 
transparency. 
 
D. NATIONAL AGENCY FOR THE PROMOTION OF RESEARCH (ANVAR) 
(a) Period covered by the notification: 
 2001 and 2002. 
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
 To make full use of the results of  scientific and technical research; 
 
 to promote innovation and technological progress; 
 
 to facilitate the transfer to industry of the results of la boratory research. 
 
(c) Legal basis (reference, date): 
Decree No. 97-152 of 19 February 1997 on  the organization and operation of ANVAR and 
Decree No. 97-682 of 31 May 1997 concerning aid to innovation; 
 
Notification by the French authorities of 3 February 1988, amended on 15 June 1989 and 
again on 28 January 1994; 
 
Adoption by the European Commission on 17 July 1989 (SG(89) 9616), amended on 
10 April 1990 and again on 14 March 1994. 
 
(d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
Interest-free loan:  repayable over a three- to five-year period in the event of the technical and 
commercial success of the R&D project. 
 
 The loan becomes a non-reimbursable subsidy should the project fail. 
 
Direct subsidies for studies conducted prior to  the launching of research and development and 
innovation projects and for feas ibility and advisory studies. 
 
(e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions):  
Beneficiaries (who receives the subsidy, the producer, the exporter, other):  Enterprises 
with fewer than 2,000 employees. 
 G/SCM/N/95/EEC/Add.5 
Page 30  
 
 Allocation mechanism 
 
Conditions : Aid to innovation projects, aid to new te chnological enterprises either being set 
up or in existence for less than three years, following a technical and financial study of the 
programme, and aid for the recruitment of researchers. 
 
 Submission of an annual report to the Commission. 
 
 Notification of cases of appli cation to projects valued at over €25 million. 
 (f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
Repayable advances with a ceiling of 40 per cent  of the intangible investment (maximum of 
24.6 per cent in gross subsidy equivalent in the event of project success); 
  Direct subsidies up to a ceiling of F200,000, with a maximum rate of 50 per cent:  
-  for 2000 : F1,424 million; 
-  for 2001 (in Euros) : €224 million; 
-  for 2002 (in Euros) : €245.2 million. 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
 Permanent arrangement funded on a ye arly basis under the Finance Law. 
 
(h) Statistical data permitting an assessment of the trade effects of the subsidy: 
 The purpose of the programme is to finance innovation: 
 
- the expenditure financed concerns research and development and consequently has no 
effect on production costs; 
- being innovatory, the products and processes in question do not compete with existing 
ones. 
 Consequently, the programme has no effect on trade. 
  
E. A
TOUT -PUMA  
(a) Period covered by the notification: 
 2001 and 2002. 
 
(b) General policy objective and/or purpose  of the subsidy (or aid scheme): 
To support research and development projects aimed at enabling enterprises to acquire 
dissemination technologies. 
 
(c) Legal basis (reference, date): 
 Annual Finance Law;  
  G/SCM/N/95/EEC/Add.5 
 Page 31 
 
 
 Date of adoption by the Commission: N463/90 and N 10/97, confirmed on 7 June 1999. 
 
(d) Form of the subsidy (i.e., grant, loan, tax concession, etc.): 
Subsidy (for projects involving the feasibility  stage): maximum of 50 per cent in gross 
subsidy equivalent (subsidy ceiling of €40,000). 
 
Advances repayable in the event of success: between 16.5 per cent in gross subsidy equivalent 
(advance fully repaid) and 40 per cent in gro ss subsidy equivalent (in the event of the total 
failure of the research project a nd non-repayment of the advance). 
 (e) Beneficiaries of the aid and allocation mech anism (calculation method and conditions): 
- Beneficiaries (who receives the subsidy, the producer, the exporter, other) : 
Industrial enterprises. 
- Conditions : Financially sound enterprises with fewer than 2,000 employees that are 
not subsidiaries of a group with 2,000 or more employees. 
(f) Subsidy per unit or, where this is not possible, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the aver age subsidy per unit in the previous year): 
- for 2000:  F182 million (subsidies and repayable advances);  
- for 2001, in Euros: €36.17 million;  
- for 2002 , in Euros : €34.41 million. 
(g) Duration of the subsidy and/or any other time-limits attached to it: 
 Permanent arrangement funded on a ye arly basis under the Finance Law. 
 
(h) Statistical data permitting an assessment of the trade effects of the subsidy: 
The purpose of the programme is to disseminate technologies and to finance training expenses 
and research and development costs without affecting the cost of production. 
  The programme has no effect on trade. 
 
F. A
ID TO RESEARCH INSTITUTIONS IN THE CIVIL AVIATION SECTOR  
(a) Period covered by the notification: 
 2001 and 2002. 
 
(b) Policy objective: 
The main purpose of the scheme is to he lp a number of non-profit-making research 
institutions to obtain the necessary equipment for their work. 
 (c) Legal basis: 
 Annual Finance Law; 
 
 Arrangement approved by the European Commission (No. 53/96). 
 G/SCM/N/95/EEC/Add.5 
Page 32  
 
(d) Form of the subsidy: 
 Non-repayable subsidy. 
 
(e) Beneficiaries of the aid and allocation mechanism: 
 Mainly ONERA and ETW (European Transonic Wind Tunnel). 
 (f) Total amount: 
- In 2001 , €3.2 million with VAT( ≅ €2.7 million excluding VAT); 
- In 2002 , €3 million with VAT( ≅ €2.5 million excluding VAT). 
(g) Duration of the subsidy: 
 Permanent scheme funded on an annual basis under the Finance Law. 
 
(h) Statistical data: 
 The entities concerned are non-profit-making. 
 
G. C
IVIL AVIATION RESEARCH  
(a) Period covered by the notification: 
 2001 and 2002. 
 (b) Policy objective: 
The overall objective of the research is to develop knowledge in order to improve the 
technological base of the industry. 
 
 The research involves improving the understanding of phenomena with a view to selective 
further investigation in areas likely to yield gains in performance a nd calculation accuracy 
with a view to shorter design cycles, as well as full-size testing. 
 
(c) Legal basis: 
 Annual Finance Law; 
  Arrangement approved by the European Commission (No. 53/96). 
 
(d) Form of the subsidy: 
Non-repayable subsidy intended to finance part of the cost of several previously selected 
research operations. 
 
(e) Beneficiaries of the aid and allocation mechanism: 
 About 30 enterprises were involved in 1999. 
  G/SCM/N/95/EEC/Add.5 
 Page 33 
 
 
(f) Total amount: 
- 2001 , €87 million with VAT ( ≅ €73 million excluding VAT); 
- 2002 , €145 million with VAT ( ≅ €121 million excluding VAT). 
(g) Duration of the subsidy: 
 Permanent arrangement funded on a ye arly basis under the Finance Law. 
 
(h) Statistical data: 
 The entities concerned are non-profit-making. 
 
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