WORLD TRADE
ORGANIZATIONG/SCM/N/25/ISL
G/SCM/N/38/ISL
25 November 1998
(98-4736)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Notifications Pursuant to Article XVI:1 of the GATT 1994
and Article 25 of the Agreement on Subsidies and Countervailing Measures
ICELAND
The following communication, dated 19 November 1998, has been received from the
Permanent Mission of Iceland.
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TABLE OF CONTENTS
Page
1. Agricultural Agreements;  Paymen ts for sheep and milk produc tion....................................2
2. Support for R&D and Tec hnological I nnovation...................................................................3
2.1 Technology fund..........................................................................................................3
2.2 Industrial research........................................................................................................4
2.3 Development and marketing in the Fishin g Industry...................................................4
3. Support to Small and Medi um-Sized Companies..................................................................4
3.1 Small Companies in Rural Areas.................................................................................4
3.2 Industry Developmen t and Mark eting .........................................................................4
3.3 Job Creation Initiative..................................................................................................5
4. Marketing Promotion.......................................................................................................... ...6
4.1 Reaching Out ...............................................................................................................6
5. Support for Employmen t and Training..................................................................................6
5.1 Vocation Training fund.  Suppo rt for Vocationa l Training .........................................6
5.2 Employment Opportuni ties for Women.......................................................................7
5.3 Vocation Rehabilitation and Employ ment of Disabled Persons..................................7
5.4 Vocation Training in the Fishing Industry...................................................................8
6. Regional Support ............................................................................................................. ......8
6.1 Assistance to Deve lopment Projects............................................................................8
6.2 Assistance to Local Economic Development ..............................................................9G/SCM/N/25/ISL
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The Agricultural Sector
A Name of programme
1. Agricultural Agreements; Payments for sheep and milk production
(Budget item no: 04-801 & 04-805)
B. Responsible authority
Ministry of Agriculture
C. Amount of subsidy
Agricultural Agreements, Million ISK
TABLE 1
Budget item no. 04-801, Agricultural Agreements, Million ISK
1996
Agricultural Productivity Fund 209.6
Market Regulation 927.6
Price Support (direct payments) 4059.6
TABLE 2
Budget item No. 04-805, Price Support, Million ISK
1996
Subsidies, wool 207.4
D. No change has been made to the objectives of the programme, the form of subsidy, the rules
and conditions of the programmes or the legal basis.
E. Duration
No change. The agreements will terminate at the end of 1998 (dairy farmers) and at the end of
2000 (sheep farmers).G/SCM/N/25/ISL
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F. Trade effects
TABLE 3
Quantity of milk received by dairies and calculated consumption by fat content
of milk-derived products (1000 litres)
Year Milk
received by
dairiesCream Yoghurt
products, etc.Butter Cheeses Skimmed
milk
powder, etc.
1996    101,643   16,134         2,791   25,339     20,846      1,973
TABLE 4
Quantity of sheepmeat (in 1000 kilograms)
Year Production Export Consumption
1996       8,131    2,942             6,941
2. Support for R&D and Technological Innovation
A. Name of programme
2.1. Technology fund
B. Responsible authority
Icelandic Research Council which is under the supervision of the Ministry of Culture and
Education.
C. Amount of subsidy
The amount of subsidy and number of projects in 1996
TF Scheme Million ISK No. of projects
General project support 162 113
Transfer of knowledge 10.8 9
Cooperation 18 70
General projects are RTD projects.  The fund contributes on average 30-40 per cent of the
total cost of the projects.  The rest is paid by the participants from industry and RTD institutions.
Transfer of knowledge projects are granted to companies lacking technical know how but
planning to initiate RTD activities to increase th eir technological competence.  The grant is intended
to pay half the labour cost of one technician.G/SCM/N/25/ISL
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Cooperation projects are both preprojects to investigate and plan future RTD projects and
travel grants for companies and RTD institutions interested in European multinational projects.
D. No change has been made to the to the objective of the fund, the form of the subsidy, duration
of the programme, the rules and conditions of the programme or the legal basis.
E. Duration
No change. There is no time limit but the Act governing the operation of the fund is due for
revision in 1999.
A. Name of programme
2.2. Industrial research
The programme ended in 1995 and was replaced by a programme called Job Creation
Initiative, see under 3.3.
A. Name of programme
2.3. Development and marketing in the Fishing Industry.
The programme ended in 1995.
3. Support to Small and Medium-Sized Companies.
A. Name of programme
3.1. Small Companies in Rural Areas
The programme ended in 1995 and was replaced by a programme called Job Creation
Initiative, see under 3.3.
A. Name of programme
3.2. Industry Development and Marketing
(Budget item no. 11-299-114)
B. Responsible authority
Ministry of Industry and Commerce.
C. Amount of subsidy
1996
Million ISK 19G/SCM/N/25/ISL
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D. No change has been made to the to objectives  of the programme, the form of the subsidy,
rules and conditions of the programme or the legal basis.
E. Duration
No change.
F. Trade effects
There are no trade effects of the support due to the general framework of the scheme and
limited support.
A. Name of Programme
3.3. Job Creation Initiative
(Budget item 11-299-148)
This programme replaces the Industrial Research programme, the Small Companies in Rural
Areas Programme and the Reaching Out programme.
B. Responsible authority
IceTec, under the auspices of the Ministry of Industry and Commerce
C. Policy objective
The objective is, to increase the knowledge and competence of entrepreneurs and small and
medium-sized enterprises such as in managing, financing, product development, marketing and
innovation.
D. Form of support
Cost items incurred for consultants, product development, marketing and innovation are
eligible for grants.  Support shall in general not co ver more than 30 per cent of eligible expenses and
must not exceed 50 per cent.
E. Amount of support
1996
Million ISK      18
F. Rules and conditions
Firms and individuals having a registered domicile in Iceland can apply for a grant.
Individuals who apply for grants according to these rules must declare that they have not received agrant from the Government amounting to more than ISK 8.4 million (100,000 ECU) last 3 years, the
grant applied for included. In this context, special grants for investment are not included.G/SCM/N/25/ISL
G/SCM/N/38/ISL
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G. Duration
There is no time limit, but each programme is decided on for a year at a time.
H. Legal basis
State Budget.
I. Trade effects
There are no trade effects of the support due to the general framework of the scheme and
limited support.
4. Marketing Promotion
A. Name of programme
4.1. Reaching Out
The programme ended in 1996 and was replaced by the Job Creation Initiative programme
discussed under 3.3.
B. Responsible Authority
Ministry of Foreign Affairs/Export Council of Iceland.
C. Amount of support
Actual expenditure in 1996 was 25 Million ISK.
5. Support for Employment and Training
A. Name of programme
5.1. Vocation Training fund. Support for Vocational Training
B. Responsible Authority
Ministry of Social Affairs.
C. Amount of subsidy
Actual total expenditure in 1996:  ISK 47,5 million.  Through the programme 29 recipients
have received 63 different vocation-training courses.   Most of these recipients are non-profit or public
organizations.
D. No changes have been made to the objective of the programme, the form of subsidies, the
rules and conditions or the leg-al basis of the programme.G/SCM/N/25/ISL
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E. Duration
No change.  The duration of the programme has not been specified.  The Budget for the
programme is decided in the Budget each year.
A. Name of programme
5.2. Employment Opportunities for Women.
(Budget item no: 07-981.)
B. Responsible authority
Ministry of Social Affairs.
C.  Amount of subsidy
Actual total expenditure in 1996: 6,5 Million ISK
D.  Policy objective
The main purpose of the programme is to create new jobs among women.  The programme is
no longer limited to women in rural areas, but areas where high unemployment is among women is
specially taken into consideration when aid is granted.
F. Rules and conditions
The only change is that the programme is no longer limited to women in rural areas.
D. The legal base
No change.
E. Duration
No change.  The duration of the programme has not been specified.  The Budget for the
programme is decided in the Budget each year.
A. Name of programme
5.3. Vocation Rehabilitation and Employment of Disabled Persons.
(Budget items no: 07.701-07.703, 07.706-07.708 & 07.711)
B. Responsible authority
Ministry of Social Affairs.
C. Amount of subsidy
Actual total expenditure in 1996: 95,3 million ISK.G/SCM/N/25/ISL
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D. No change has been made with respect to th e objectives of the programme, the form of the
subsidy, rules and conditions or the leg-al basis of the programme.
E. Duration
No change.  Indefinite
A. Name of programme
5.4 Vocation Training in the Fishing Industry
(Budget item 05-190)
B. Responsible authority
Ministry of Fisheries
C. Amount of subsidy
Actual total expenditure in 1996: 11 million ISK.
D. No change has been made with respect to the objectives of the programme, the form of the
subsidy, rules and conditions or the leg-al basis of the programme.
E. Duration
No change. No time limit, the amounts are decided on in the Budget each year.
6. Regional Support
A. Name of programme
6.1. Assistance to Development Projects
(Budget item 01-221)
B. Responsible authority
Institute of Regional Development
C. Amount of subsidy
Actual total expenditure in 1996: 75,3 Million ISK.
D. Rules and conditions
From of the subsidy, rules and conditions or the leg-al basis of the programme.G/SCM/N/25/ISL
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E. Duration
No change.  The programme has no time limit, the amount is decided on in the Budget each
year.
A.  Name of programme
6.2. Assistance to Local Economic Development (Budget, item no. 01-221)
B. Responsible authority
Institute of Regional Development
C. Amount of subsidy
Actual total expenditure in 1996: 42 Million ISK.
D. Rules and conditions
From 1996 it also covers special counselling services to tourism in addition to counselling
and general economic development.
E. No change has been made with respect to the objectives of the programme, the form of the
subsidy or the legal basis of the programme.
F. Duration
No change.  The programme has no time limit, the amounts are decided on in the Budget each
year.
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