WORLD TRADE
ORGANIZATIONG/SCM/Q2/SVN/10
10 October 2002
(02-5466)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Replies to Questions Posed by the UNITED STATES1 and AUSTRALIA2
Regarding the New and Full Notification of SLOVENIA3
The following communication, dated 4 October 2002, has been received from the Permanent
Mission of Slovenia.
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QUESTIONS FROM THE UNITED STATES
Q1. We note that the “Support for Export programme notified for 1998-1999 was not
notified for 2000.  Has this programme been terminated?  If not, could Slovenia please explain
why it was not notified under the 2000-2001 programmes?
Reply
It was not notified since the programme as such is not a subsidy in the meaning of the
Agreement on Subsidies and Countervailing Measures, but a form of a guarantee in accordance withthe rules of the Slovenian Export Corporation based on OECD guidelines.
Q2. Are grants available under the “Programme of Adjustment of Textile Industry to the
EU Internal Market Conditions” contingent upon a company’s ability or intention to export its
goods or services?
Reply
Grants are not contingent on export performance.
Q3. Could Slovenia please provide the number of companies and industry sectors that
benefited from the “Programme of Measures to Promote Entrepreneurship and
Competitiveness?  May foreign companies invest ing in Slovenia benefit from this programme?
Is financing provided to any company or en terprise that, under commercial and market
considerations, would not be able to obtain financing?  Could Slovenia please explain the policyobjective of “promoting internationalizatio n of Slovenian companies?” Does this mean
assistance is contingent upon a company’s ability or intention to export its goods or services?
                                                     
1 G/SCM/Q2/SVN/8
2 G/SCM/Q2/SVN/9
3 G/SCM/N/60/SVN/Suppl.1-G/SCM/N/71/SVNG/SCM/Q2/SVN/10
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Reply
To enhance the key factors that determine a nation's capacity for growth and competitiveness
today, the Ministry of the Economy designed the Programme for Entrepreneurship Promotion and
Competitiveness as an instrumental component of its pro-active industrial policy.  This programmeaims to support enterprises to undertake innovative strategies, and to develop the organizational
structures and appropriate institutions that can enhance national productivity and competitiveness.
The Programme involves four sub-programmes, including measures to enhance productivity growth,
competitiveness at company level, internationaliza tion of Slovenian enterprises, and investment and
inter-company cooperation.
The programme represents interrelated horizontal measures, directed at the key factors which
influence competitive capacity of enterprises (over 55,000 enterprises across 46 industries).  About
1,091 projects in 2000 and 507 in 2001 from practically all the main industrial sectors were accepted
and will be co-financed in 2002.
Allocation of developmental state incentives in  the framework of the programme is based on
the following starting points:
- incentives are directed at the whole enterprise sector, irrespective of the size of the
enterprises, branch of activity, type of registration, location or ownership;
- developmental state incentives are allocated in accordance with the rules of the EU
state aid allocations which ensure protection of competition;
- incentives are intended in the first place for investment into the human resource
development, key technologies and opening of work places which create high added
value.
The sub-programme for the internationalization of the Slovenian enterprise sector aims to
promote the development of strategic partnerships and cooperation between Slovenian and foreign
enterprises, and the promotion of new investment.  Policy measures are designed to support both
domestic and foreign investment, and to support the international activities, linkage creation and
outward investment projects of Slovenian companies.  Among the sub-programmes, the sub-programme for the internationalization of Slovenian en terprises seems to have been of most interest to
the enterprise sector, in spite of strict rules governing the use of state funding.
The purpose of the measure Promoting foreign direct investments is to increase the
attractiveness of Slovenia to foreign direct investment (FDI) by reducing investor entry costs for
investors that would have a positive effect on new job creation, the transfer of knowledge and
technology and the promotion of balanced regional development.  The Ministry promotes links
between foreign investors and Slovenian enterprises.
The Ministry of the Economy co-finances the costs of:- material investments (the communal and infrastructural equipping of land for new
investments, construction/purchase of premises, purchase of machinery and
equipment (for new machinery and equipment only));
- creating new jobs – the employment of ne w employees linked to investments (costs
of gross pay for a two-year period).G/SCM/Q2/SVN/10
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Q4. Under the programme, “Promoting Basic Research and Development”, could Slovenia
please provide further programme details, including the types of R&D activities that are
funded, what stage of research is funded, and the industry sectors that benefit.
Reply
Under the programme "Promoting Basic Research and Development" the grants are provided
for private sector entities (commercial companies and sole proprietors) and it covers:
- basic research and development projects
- training of young researchers
- target research programmes- research and technological-development projects within international multilateral and
bilateral cooperation.
The legal basis for the programmes of basic and development research is Rules on Conditions
and Criteria and on Financing of the Basic and Applicative Research and Development Projectsunder which the following projects are defined:
- basic research projects:  experimental and theoretical analyses to gain the new
knowledge on basic facts without the predicted application of the research results.
The Ministry subsidies 100 per cent of the project costs;
- applicative research projects:  experimental and theoretical analyses to gain the new
knowledge on basic facts with the applicative research results.  The Ministry co-
finances up to 75 per cent of the project costs, the applicant must provide that the
25 per cent of the project costs are covered by other interested parties;
- industry sector research projects:  these projects are aimed at gaining new applicative
knowledge to develop new products, processes and services and to introduce new
improvements in the new products, processes and services.  The Ministry provides up
to 50 per cent of the project costs and the proportion of the subsidy can be raised to
75 per cent of the costs.
The Ministry grants the subsidies for young researchers in the commercial companies to
establish the network of the research-development units outside the educational and research
institutions.
The international research and technological-development projects and target programmes are
implemented under the National Research Programme and strategic documents of other relevant
ministries.  Within those programmes subsidies are granted to commercial companies and sole
proprietors under the criteria in the tenders.
Grants provided for commercial companies and sole proprietors are mostly approved for
research projects under the Rules on Conditions and Criteria and on Financing of the Basic and
Applicative Research and Development Projects.   They represent 79 per cent of all approved subsidies
and cover technical, natural-mathematic, medicinal, biotechnological, sociological and human
sciences.  The research plays a major role in technical sciences in the field of machine, steel and
chemical industry and electrotechnology and information technology, the applicative research domainin the research projects.G/SCM/Q2/SVN/10
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Q5. Can Slovenia please explain the specified conditions that must be fulfilled for the
distribution of grants?  Are direct payments under “Measures for Market Stabilization” in any
way linked to the export of agricultural products?
Reply
Specific conditions for the distribution of grants are related to the actual circumstances for the
implementation of such measures as "market withdrawal" etc.  In the market orders there are detailed
provisions as to the conditions to be fulfilled for the introduction of such measures as public and
private storage, buying in, withdrawal from the market, etc.
Conditions for the distribution of grants for direct payments are the relevant data for the
number of cattle (animal headage premium) and utilized agricultural area in case of area direct
payments.  The data supplied by the farmers are double-checked with the data from farm, animal and
other registers.
Measures for market stabilization include such measures as co-financing of participation in
trade fairs participation, marketing studies and preparation of promotional materials.
QUESTIONS FROM AUSTRALIA
I. STEEL INDUSTRY
Q1. Can you please advise whether the progra mme is contingent in any way on the use of
domestic content, or export performance?
Reply
Grants are not contingent on export performance.
Q2. The description of the programme is that its supports steel industry companies.  How
many companies are currently eligible and how many companies received benefits in 2000 and
2001?
Reply
Under the Protocol II of the Association Agreement the aid was received by two steel
companies:  "Acroni Jesenice" and "Metal Ravne" within Slovenian Steel Works Corporation.
Q3. Is there any ceiling on the amount of fund ing than an enterprise can receive on an
annual basis?
Reply
There is no ceiling.G/SCM/Q2/SVN/10
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III. LEATHER PROCESSING AND FOOTWEAR INDUSTRY
Q1. What is the maximum level of funding available per enterprise?
Reply
There is no maximum level of funding available per enterprise but per project.  The level of
co-funding by the state is up to 40 per cent of the value of all justified costs of a complete integrated
project.
Q2. The programme notes that it is to st rengthen sectoral competitiveness through
enhancement of value added manufacturing and services.  Is the programme contingent on theuse of domestic goods?
Reply
No, it is not.
IV. TEXTILE INDUSTRY
Q1. Similarly, the stated policy objectives of this programme include strengthening sectoral
competitiveness through enhancement of value added manufacturing and services.
Q2. Is there any ceiling on the amount of fund ing than an enterprise can receive on an
annual basis?
Reply
No, there is no ceiling.  However, project-based cost coverage is limited to 40 per cent or by
available funds.
V. DEVELOPMENT OF ENTERPRISES
Q1. What industry sectors have benefitted from the programme?
Reply
Industry sectors that benefited were:
• different manufacturing sectors,
• construction,
• wholesale, retail, trade,
• hotels and restaurants,
• transport, storage and communication services,
• education and training in companies.
Q2. Are there targeted industry sectors under this programme?
Reply
No, there are not.
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