WORLD TRADE  
ORGANIZATION  G/SCM/Q2/EEC/43 
15 April 2004 
 (04-1682) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
SUBSIDIES  
 
Questions from the UNITED STATES Regarding the New and Full  
Notification of the EUROPEAN COMMUNITIES  
 
 
 The following communication, dated 8 April 2004, is being circulated at the request of the Delegation of the United States  
_______________ 
 
 
EUROPEAN COMMUNITIES (G/SCM/N/95/EEC
) 
 
I. INDUSTRY SECTORS 
  
A. COMMUNITY FRAMEWORK PROGRAMMES IN THE FIELD OF RESEARCH 
   
1. The United States understands that under the "fifth framework" the amount of funding 
provided to aeronautical and space activities is  €700  million.  Is this figure correct?  What portion of 
this amount was devoted exclusively to aeronautical activities? 
 2. Are non-EU entities eligible for assistance under this programme?  Are non-EU companies provided access to the results of the activities funde d by the framework programme?  If so, please 
provide examples.    II. FISHERIES  Financial Instrument of Fisheries Guidance (FIFG)  
1. Based on our reading of regulation 1263/99 th e following types of activities are financed: 
(a) adjustment of fishing effort (grants for scrapping and creation of joint enterprises), fleet renewal 
and modernization of fishing vessels;  (b) investme nt in aquaculture, development of coastal areas, 
fishing port facilities, processing and marketing fish eries products (improving quality and hygiene, 
preserving the environment, developing statistical inst ruments, etc.); and, (c) other measures such as 
promoting and seeking new markets and activities by trade organizations (managing fishing quotas, 
temporary cessation of activity, etc.).  Is this correct? 
 2. Is all the assistance provided in the form of grants?  If not, please specify the type of aid provided based on the three categories listed above.  3. How does the Community ensure that th e assistance provided does not increase fishing 
capacity, particularly with respect to assistance for scrapping, fleet renewal, modernization of fishing 
vessels and helping "young people . . .  buy their first boat."?     
 G/SCM/Q2/EEC/43 
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III. ENVIRONMENTAL TAX REBATES 
 
1. To what extent do Member states provide exemptions from energy/environmental  taxes for 
"dual use"products ( e.g., coking coal) or energy intensive processes ( e.g., metallurgical processes)? 
 
 
  G/SCM/Q2/EEC/43 
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AUSTRIA (G/SCM//N/95/EEC/Add.1 ) 
 
 
Assistance Pursuant to Chapter 27A of the Labour Market Promotion Act (LMPA) 1969 as Amended in 1994 
 1. What are the eligibility criteria to receive the benefits under this programme? 
 2. How is it determined what type of aid (cash grants, soft loans or guarantees) will be provided 
to the recipient?    
 
ERP-Technology Programme
 
 
1. What stage of research does this programme fund?  
2. What type of industries benefit from this programme? 
  
ERP-Regional Programme
 
 
1. What are the "National Assisted Areas" within Austria? 
 
2. What types of industries benefit from this programme?  3. Which industries received "pertin ent subsidies" above € 5 million? 
 
 
Assistance by ECO Plus Lower Austrian Regi onal Development Agency, LTD to Regional 
Investment Projects in Lower Austria 
 
1. What are the eligibility criteria for receiving subsidies under this programme and to whom is 
this subsidy provided, i.e., which industry sectors? 
 
2. Please explain what the "two-step procedure"  is, which results in a specific recommendation 
by the Regional Government of Lower Austria.   Regional Investment Promotion Programme
 
 
1. What are the eligibility criteria for receiving subsidies under this programme and to whom is 
this subsidy provided, i.e., which industry sectors?  
2. How is it determined what type of aid (cash gran ts, soft loans or interest rate subsidies) will 
be provided to the recipient?  Is the appli cation process the same for each type of aid? 
  
Lower Austrian Participation Model
 
 1. What are the eligibility criteria for receiving subsidies under this programme and to whom is 
this subsidy provided, i.e., which industry sectors?  G/SCM/Q2/EEC/43 
Page 4  
 
2. Under what circumstances is reimbursement re quired?  Is the reimbursement criteria the same 
for each project?   
Programme to Promote the Establishment of Enterprises
 
 1. What are the eligibility criteria for receiving subsidies under this programme and to whom is 
this subsidy provided, i.e., which industry sectors?  2. How many projects took place inside and outside the "assisted areas"? 
 
 
Promotion of Market Exploration
 
 
1. What are the eligibility criteria for receiving subsidies under this programme and to whom is 
this subsidy provided, i.e., which industry sectors?  
 2. Could Austria please explain what is meant by  "enhanced measures of internationalisation"? 
 3. Are the benefits under this programme expor t contingent?  If so, please explain how this 
programme is in compliance with Article 3 of  the Agreement on Subsidies and Countervailing 
Measures (Subsidies Agreement). 
  
Impulse Package Tyrol 1999-2006
 
 1. What types of large industries receive aid under this programme?  What is the eligibility 
criteria for large industries?  2. What types of research activities are funded under this programme?  G/SCM/Q2/EEC/43 
 Page 5 
 
 
BELGIUM (G/SCM/N/95/EEC/Add.2 ) 
 
I. BRUSSELS - CAPITAL REGION 
 1. Prototype Advances  
(a) Would you please list the industries represented by the 13 enterprises who were recipients of 
aid under this programme during the reporting period? 
 
(b) This programme states that loans are repayable upon marketing.  Would you please provide 
information as to, on average, what percentage of aid under this programme is repaid to the 
government?  
 
II.  BELGIUM - WALLOON REGION  
1. Decree of 5 July 1990 on Aid and Action by the Walloon Region to Promote Research 
and Technology and the Implementing Orders Thereof 
 
(a) Would you please provide information as to wh at proportion of aid under this programme is 
provided to the civil aviation sector? 
 
(b) Under what conditions is aid under this progr amme repaid to the government.  Also, please 
explain, on average, what proportion of aid under this programme has been repaid.   
 (c) Would you please explain the type of evaluation that is made of a project to determine 
whether the "quality of the project" is sufficient to receive aid under this programme.  
Specifically, what factors are evaluated under this analysis? 
 
III.  BELGIUM - FLEMISH REGION 
 
1. Law of 30 December 1970 on Economic Growth 
 (a) Would you please list the main  industries th at have benefited from assistance under this 
programme?  In particular, please explain whether the steel industry has directly or indirectly benefited from this programme. 
 
2. Aid to the Fisheries and Aquiculture Sector 
 
(a) Would you please explain whether this progr amme takes into consideration over-capacity 
when providing assistance to the fisheries industry? 
 
IV. BELGIUM - FEDERAL STATE 
 
1. Aid for Research and Development 
 
(a) Would you please list the main industries that have benefited from assi stance provided under 
this programme? 
 
(b) Please also provide information regarding th e stages of R&D covered by assistance under this 
programme and what costs are covered by this assistance.  
 G/SCM/Q2/EEC/43 
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V. AID TO CIVIL AVIATION 
 
 In response to US questions regarding this programme in previous years, Belgium has not 
disputed that launch aid has been provided to the aerospace industry and has simply asserted that such 
aid does not constitute a subs idy because it is repayable. 
 
(a) Is it Belgium’s position that the repayable ai d provided cannot be considered a subsidy under 
the Subsidies Agreement regardless of the te rms and conditions under which such aid is 
provided?  If so, please explain. 
 
(b) Please describe in detail the amounts of launch aid provided in 2002, the dates the aid was 
provided, the terms and conditio ns under which the aid was provided and the aircraft models 
to which the aid was related. 
 (c) Please provide the sales projections which th e Government of Belgium relied upon prior to 
the provision of any launch aid for each of the relevant aircraft mode ls which benefited in 
2002.  G/SCM/Q2/EEC/43 
 Page 7 
 
 
DENMARK (G/SCM/N/95/EEC/Add.3 ) 
 
I. FISHERIES 
  1. Permanent Withdrawal 
 • Would you please explain what is done with prod uctive capacity (i.e., ships) when owners 
take advantage of the aid provided under this program?  Specifically, are ships scrapped or 
are they resold? 
 2. Aid for Young Fishermen  
• Would you please explain whether this progra mme takes into consideration overcapacity 
when providing assistance?  
 
II.  THE DANISH MINISTRY OF ECONOMIC AND BUSINESS AFFAIRS, DANISH 
MARITIME AUTHORITY 
 1. Subsidies in the Form of Reduction/Cancellation of Stamp Duty  
• Would you please explain what conditions must be  met for a ship to receive tax exemptions 
under this programme? 
 
2. Contract-Subsidy Scheme 
 
• Would you please explain what conditions must be met for a shipyard to receive subsidies 
under this programme? G/SCM/Q2/EEC/43 
Page 8  
 
FINLAND (G/SCM/N/95/EEC/Add.4
) 
 
 
State Aid for the Internationalization for SME's  
 1. Would Finland please explain what is meant by "internationalization skills"? 
 2. Are the benefits under this programme expor t contingent?  If so, please explain how this 
programme is in compliance with Article 3 of  the Agreement on Subsidies and Countervailing 
Measures (Subsidies Agreement). 
 
 
Investment Aid
 
 
1. Which areas qualify as "regional deve lopment areas" under this programme? 
 
2. What are the eligibility criteria for receiving subsidies under this programme and to whom is 
this subsidy provided, i.e. , which industry sectors? 
 
Investment Aid Programme Related to Pro cessing and Marketing Agricultural Products  
 
1. Would Finland please explain what is meant by "promotion of the enterprise’s 
internationalization"?  2. Are the benefits under this programme expor t contingent? If so, please explain how this 
programme is in compliance with Artic le 3 of the Subsidies Agreement.  G/SCM/Q2/EEC/43 
 Page 9 
 
 
GERMANY (G/SCM/N/95/EEC/Add.6)  
 
 
I.  REDUCTION OF RATES ON INHERITABLE LAND-USE RIGHTS 
(BERLIN) 
 
1. The description of this programme states that  a reduction of the rates payable on land-use 
rights is provided to projects "worthy of special promotion".  Would you please explain what types of 
projects are "worthy of special promotion" and what "regional promotion purposes" entails?  
II. NATIONAL PROGRAMME FOR CIVIL AERONAUTICAL RESEARCH 
 
1. Please explain what the specific eligibility criteria are to receive funding under this programme.  Are non-EU or non-German  entities eligible for funding? 
 2 Are the research results in all instances proprieta ry, or are they made available to the public? 
 4. How are aerospace manufacturers involved in this research?  How do they benefit from it? 
 
III. LAUNCH AID 
 
 In response to US questions regarding this programme in previous years, Germany has not 
disputed that launch aid has been provided to the aerospace industry and has simply asserted that such 
aid does not constitute a subs idy because it is repayable. 
 
1. Is it Germany’s position that the repayable ai d provided cannot be cons idered a subsidy under 
the Subsidies Agreement regardless of the terms and conditions under which such aid is provided?  If 
so, please explain.  
2. Please describe in detail the amounts of launch aid provided in 2002, the dates the aid was 
provided, the terms and conditions under which the aid was provided a nd the aircraft models to which 
the aid was related.  3. Please provide the sales projections which th e Government of Germany relied upon prior to 
the provision of any launch aid for each of the rele vant aircraft models wh ich benefited from launch 
aid in 2002.  
IV. FUNDING FOR A380 PRODUC TION AND INFRASTRUCTURE 
 
 According to press reports, the City of Ham burg is spending about €665 million to close up a 
section of marsh lands (the Muehelnberger Loch) for use by Airbus to build components and a 
delivery centre for the Airbus A380.   The Unite d States understands that as of March 2002, €300 
million of the €665 million had been distributed.    1. Would you please confirm whether the above information is correct?  If not, please provide 
the correct figures. 
 2. Please explain why this assistance to th e aerospace industry does not qualify as notifiable 
under Article 25 of the Subsidies Agreement.  If it does qualify as notifiable, please provide the 
information required under Article 25.     G/SCM/Q2/EEC/43 
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IV. AID TO THE PULP AND PAPER INDUSTRY 
 
1. The United States has previously requested information concerning regional government of 
Brandenburg aid to the pulp and paper industry.  Specifically, it has been our understanding that 
Brandenburg agreed to provide assistance to Hambur ger AG for the construction of a linerboard mill.  
In G/SCM/Q2/EEC/40, you stated that Brande nburg did not provide any subsidies during the 
notification period.   Would you please explain whet her any of this aid was provided during 2001 or 
2002?  If so, please provide the required informa tion pursuant to Article 25 of the Subsidies 
Agreement.   
2. We also previously requested informati on concerning aid by the regional government of 
Saxony-Anhalt to support Zellstoff Ste ndal GmbH to build a pulp mill.  With respect to this aid, you 
stated that the Federal State of Saxony - Anhalt di d not allocate any aid to Zellstoff Stendal GmbH 
during the notification period.  Could you please expl ain whether any of this aid was provided during 
2001 or 2002?  If so, please provide the required in formation pursuant to Article 25 of the Subsidies 
Agreement.  G/SCM/Q2/EEC/43 
 Page 11 
 
 
GREECE (G/SCM/N/95/EEC/Add.7 ) 
  
1. It is our understanding that Greece maintain s the following six Priority Pivots programmes, 
which have not been notified this reporting period.   These programmes were previously outlined in 
document G/SCM/N/Q2/EEC/40.   Please clarify whether these programmes still exist: 
 
 −  Pivot 1 Fishing vessels demolitions    
 −  Pivot 2 Building new vessels 
 −  Pivot 3 Protection and Conservation of Fishing Resources 
 −  Pivot 4 Small-scale inshore fisheries 
 −  Pivot 5 Technical Assistance 
 −  Pivot 6 Financial Activities 
 
2. If these programmes continue to exist, please explain why they do not qualify as notifiable 
under Article 25 of the Agreemen t on Subsidies and Countervailing Measures.  If these programmes 
are notifiable or if other programmes have taken their place, please provide the information required 
under Article 25. G/SCM/Q2/EEC/43 
Page 12  
 
ITALY (G/SCM/N/95/EEC/Add.9
) 
  General Fishery Questions
 
 1. It is our understanding that Italy mainta ins the following fishery-financing programmes, 
which have not been notified this reporting period.   These programmes were previously outlined in 
document G/SCM/N/Q2/EEC/40.   Please clarify whether these programmes still exist:   
 −  DOCUP 2000/2006 
 −  PON Pesca 
 −  POR for the Regions 
 
2. If these programmes do exist, please explai n why they no longer qualify as notifiable under 
Article 25 of the Agreement on Subsidies and Countervailing Duties (Subsidies Agreement).  
Otherwise, please provide the required information.  Measures for Investment in the Naval Sector  (New)
 
 
1. Are commercial fishing vessels eligible for the interest subsidy under this programme? 
 2. Does this programme directly or indirectly promote the construction of new fishing vessels? 
 Soft Loans to Companies to Favour a Long -Lasting Penetration in Non-EU Countries
 
Soft Loans for Italian Enterprises to Cov er Expenses Concerning the Participation in 
International Tenders Held in Non-EU Countries  
 
1. For the above programmes, will you confirm that the interest rate is still calculated at 40 per 
cent of the reference rate?  If not, ho w is the interest rate determined? 
 2. Do the terms of the loan differ for SME’s and other eligible Italian companies? If so, please 
explain how they differ.  3. What non-SME’s companies are eligible fo r assistance under this programme? Are the loans 
contingent upon exportation?  If so, please explai n how this programme is in compliance with 
Article 3 of the Subsidies Agreement.  
Extraordinary Intervention in the South Italy (MIUR)
 
Extraordinary Intervention in the South Italy (MAP 4)  
 
1.   Can you please explain how the above programmes differ from one another?  
Urgent Measures for the Economy-Automatic Incentives
 
 1. Could you please explain what is mean t by "fiscal bonus in tax payment"? 
 2.   What types of activities are eligible to receive tax concessions under this programme? 
 3.   Do all companies investing in mach inery automatically receive tax concessions?  G/SCM/Q2/EEC/43 
 Page 13 
 
 
NETHERLANDS (G/SCM/N//95/EEC/Add.11 ) 
  
 
Environmental Pollution in Order to Establish Cleaner Production  
 
1. Has this programme been terminated?  Has another similar programme replaced it? If so, please provide the required information under Article 25 of the Subsidies Agreement. 
 
Eureka Project ITEA
 
 
1. On average, how many projects are funded under this programme each year? 
 
Regulatory Energy Tax  
 
1. Is a company able to receive a tax credit a nd the zero-rate tax exemption for the same project? 
 Subsidy Scheme for Environmental Technology
 
The Regulation on Environmental Investment Deduction 2001 and 2002  
 
1. For the above programmes, what are the e ligibility criteria to receive the incentives? G/SCM/Q2/EEC/43 
Page 14  
 
PORTUGAL (G/SCM/N/95/EEC/Add.12
) 
 
Operational Programme for the Economy  
 
1. What are the eligibility criteria fo r receiving subsidies under this programme? 
 
2. Are companies that receive a ssistance under this programme re quired to export?  If so, please 
explain how this programme is in compliance wi th Article 3 of the Agreement on Subsidies and 
Countervailing Measures (Subsidies Agreement).  
3. How is it determined which type of aid (grant s, soft loans, reimbursable subsidies or venture 
capital interventions) will be provided to the recipient?   
RETEX Operational Programme
 
Regional Incentive System (SIR)  
PEDIP II  
PAIEP 2  
 
1. In your notification, you stated that  the above programmes were completed on 
31 December 2001.  Have other similar programmes replaced these?  If so, please provide the required information under Article 25 of the S ubsidies Agreement for the new programmes. 
 
General Fisheries Questions
 
 
1. It is our understanding that Portugal ma intains the following incentives measures for the 
fisheries sector, which have not been notified this reporting period.  These programmes were 
previously outlined in document G/SCM/N/Q2/EEC /40.   Please clarify whether these programmes 
still exist:   • PROPESCA  • ICPESCA    2. If so, please explain why they do not qualify as notifiable under Article 25 of the Subsidies 
Agreement.  Otherwise, please provide th e required informati on under Article 25.  G/SCM/Q2/EEC/43 
 Page 15 
 
 
SPAIN (G/SCM/N/95/EEC/Add.13 ) 
 
 
Renovation and Modernization of the Fishing Fleet  
 
1. Would Spain please clarify whether this progr amme is intended to renovate and modernize 
existing fishing fleets or to build new vessels? 
 2. Would Spain please explain further the form of the subsidy, in particular what is meant by 
"non-repayable subsidies"?  Are these grants to reduce the effective interest rate or low-interest loans 
or some other form of assistance? 
 
Special Economic Aid to Owners of Fishing Vessels Operating in the Moroccan Fishing 
Grounds, on Account of the Stoppage of Fishing  
 
1. Would Spain please explain further the form of the subsidy, in particular what is meant by 
"non-repayable subsidies"? 
 2. Does this programme still exist or has it been  replaced by another similar programme?  If so, 
please provide details.  
Pilot Projects for Experimental Fishing
 
 
1. What types of projects qualify as "experimental fishing?  
Technical Research Development Programme (PROFIT)
 
 
1. Which technological areas are defined as "of interest" by this programme? 
 2. It is noted that the PROFIT programme’s duration is until 2003. H as this programme been 
replaced?  If so, please explain the new programme.  
Shipbuilding Subsidies Programme
 
 1. It is our understanding that Spain also maintains a "Temporary Defensive Measures" 
programme for the shipbuilding industry.  Woul d you please explain why this programme does not 
qualify as notifiable under Article 25 of the Subsidies Agreement?  If the programme is notifiable, 
please provide the information required under Articl e 25.  In addition, please explain whether the 
same shipyards that would receive benefits under the Shipbuilding Subsidies programme, also benefit 
from the Temporary Defensive Measures programme.  
Funding for A380 production and infrastructure
 
 
 According to press reports the Andalusian regional government granted €17.5 million to 
Airbus for the purpose of modifying an Airbus facility  in Cadiz, Spain so that the facility could take 
part in the production of the Airbus A380.  An ad ditional €13.13 million was also reportedly granted 
in regional aid by the central government of Spain.    1. Would you please confirm whether the above information is correct?  If not, please provide 
the correct figures. 
 G/SCM/Q2/EEC/43 
Page 16  
 
2. Please explain why this assistance to th e aerospace industry does not qualify as notifiable 
under Article 25 of the Subsidies Agreement.  If it does qualify as notifiable, please provide the 
information required under Article 25.     G/SCM/Q2/EEC/43 
 Page 17 
 
 
SWEDEN (G/SCM//N/95/EEC/Add.14 ) 
 
 
 
I. SUBSIDIES TO SWEDISH FISHERY   
 A. Investment Aid to Fishing Enterprises 
  1. Aid for Fleet Renewal and Modernization of Fishing Vessels  B. Investment Aid to Fishing Port Facilities  C. Investment Aid to Inland Fishing  D.  Collective Investment Aid in Sm all-scale Coastal and Freshwater Fishing 
 E.  Investment Aid for Socio-Economic Measures 
 
• Would you please explain how overcapacity in the i ndustry is taken into consideration in the 
evaluation of aid requests for the above-listed programmes? 
 
__________