WORLD TRADE
ORGANIZATIONG/SCM/N/95/BGR
24 July 2003
(03-3956)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
New and Full Notification Pursuant to Article XVI:1
of the GATT 1994 and Article 25 of the SCM Agreement
BULGARIA
The following communication, dated 18 July 2003, has been received from the Permanent
Mission of the Republic of Bulgaria.
_______________
With reference to Article 25.1 of the Agreement on Subsidies and Countervailing Measures
and Article XVI:1 of GATT 1994, the Government of the Republic of Bulgaria hereby submits its
updating notification on subsidies for the financial year 2002 to the Committee on Subsidies andCountervailing Measures.  All data concerning the amounts of subsidies are given in Bulgarian new
levs (BGN).
TABLE OF CONTENTS
Page
I. TRANS PORT.................................................................................................................... ........3
1. Railway Transport............................................................................................................ ........3
2. Urban and Inter-Urban Passenger Transport .......................................................................4
3. Maritime Transport........................................................................................................... .......5
II. ENERGY ...................................................................................................................... .............6
1. Central Heating and Coal ..................................................................................................... ...6
III. MINING..................................................................................................................... ................7
1. Ore-mining ................................................................................................................... .............7
IV. COMMUNICAT IONS: ............................................................................................................8
1. Posts and Communication Services.........................................................................................8
V. ENVIRO NMENT.................................................................................................................. ....9
1. Soil and Wat er Pollution ..................................................................................................... .....9
VI. EMPLOYMENT AND SOCI AL PROTEC TION ...............................................................10
1. Encouragement of Employment ............................................................................................10
2. Assistance to Low Populated Areas.......................................................................................11G/SCM/N/95/BGR
Page 2
VII. AGRI CULTU RE................................................................................................................ .....12
1. Agricultu ral Products .............................................................................................................12
2. Development of Tobacco Production ....................................................................................14
* * *G/SCM/N/95/BGR
Page 3
I. TRANSPORT
1. Railway Transport
1. Title of the subsidy programme
Assistance to the National Railway Infrastructure Company and Bulgarian State Railways
Single Joint Stock Company.
2. Period covered by the notification
2002.
3. Policy objective and/or purpose of the subsidy
Support to National Railway Infrastructure Company  for maintenance of railway
infrastructure and assistance to Bulgarian State Railway Single Joint Stock  Company for
compensation of passenger travels by railway transport.
4. Background and authority for the subsidy (incl. identification of the legislation under which it
is granted)
− Law on the State Budget for 2002 (State  Gazette No 111 of 28.12.2001; amended by
SG No 28 of 19.3.2002).
− Council of Ministers Decree No 1 of 04.01.2002 on the State Budget Implementation.
− Council of Ministers Decree No 671 of 17.10.2002 for granting of temporary financial aid to
the Bulgarian State Railways Single Joint Stock Company for executing of general interest
services.
− Law on the Railway Transport (SG No 97 of 28.12.2000, entered into force on 1.1.2002,
amended by SG No 47 of 10.5.2002), specifying the terms and system of building,
maintenance, development and utilization of railway infrastructure.
− Law on the Loan Contract with the International Financial Institution, ratified by the National
Assembly on 31.01.1996 (SG No 12/96).
− Council of Ministers Decree No 482 of 1 9.12.1997 (SG No 125/97) concerning the state
obligations on loans and guarantees’ agreements.
Authorities responsible for the subsidy: Ministry of Finance, Ministry of Transport and
Communications.
5. Form of the subsidy
Grant; loan; loan guarantee.G/SCM/N/95/BGR
Page 4
6. To whom and how the subsidy is provided
Grant was provided to the National Railway Infrastructure Company and Bulgarian State
Railways Single Joint Stock Company∗ for the readjustment within the Program for rehabilitation of
activities related to the maintenance, repairing, exploitation and development of the railwayinfrastructure; for separation of the repairing-rehabilitation activities from the railway system, and for
compensation of passenger travels by railway transport.
Interest free loan was provided to the Bulgarian State Railway Single Joint Stock Company
for executing of general interest services.
State guarantee  up to 100 per cent was provided to the National Railway Infrastructure
Company on the loan extended  by the International Financial Institution for its  restructuring and
stabilization.
7. Subsidy per unit, or in case where it is not possible, the total amount or the annual budgeted
for that subsidy
Grant – BGN 70.00 mln.
Loan – BGN 12.00 mln.
Loan guarantee on installments in 2002 amounted BGN 1.14 mln.
8. Duration of a subsidy and/or any other time limits attached to it   
Grant – duration within 2002
Interest free loan – duration till 31.12.2003
Loan guarantee – 2002
9. Statistical data permitting an assessment of the trade effects of the subsidy
It can be assumed that the subsidy programme has minimal trade effects.
2. Urban and Inter-Urban Passenger Transport
1. Title of the subsidy programme
Assistance to Urban and Inter-Urban  passenger transport.
2. Period covered by the notification
2002.
3. Policy objective and/or purpose of the subsidy
Support to Sofia-City passenger transport and in ter-urban transport in the country for partial
covering of losses arising from passengers’ transportation activities.
                                                     
∗ Bulgarian State Railway Company was split in 2002 into two state-owned companies - an infrastructure operator National Railway Infrastructure Company
and a company that handles passenger and cargo traffic - Bulgarian State Railway Single Joint Stock Company.G/SCM/N/95/BGR
Page 5
4. Background and authority for the subsidy (incl. identification of the legislation under which it
is granted)
− Law on the State Budget for 2002 (State  Gazette No 111 of 28.12.2001; amended by
SG No 28 of 19.03.2002).
− Council of Ministers Decree No 1 of 04.01.2002 on the State Budget Implementation.
− Ordinance of the Ministry of Finance on the managing of subsidies for inter-towns passenger
transport and inter passenger transport in the rare populated mountain and border
municipalities (updated every year).
− Council of Ministers Decree No 305 of 20.12.2002 for granting additional support to Sofia-
City passenger transport.
Authorities responsible for the subsidy: Ministry of Transport and Communications, Ministry
of Finance, Ministry of Regional Development and Public Works, Municipalities.
5. Form of the subsidy
Grant.
6. To whom and how the subsidy is provided
To all passenger transport companies through the Sofia-City municipality and municipalities
after meeting the criteria stipulated in the Ministry  of Finance’s Ordinance in order to obtain grants
for the services they provide.
7. Subsidy per unit, or in case where it is not possible, the total amount or the annual budgeted
for that subsidy
Total amount budgeted BGN 27.44 mln.
8. Duration of a subsidy and/or any other time limits attached to it   
2002.
9. Statistical data permitting an assessment of the trade effects of the subsidy
It is considered that the trade effects are minimal because of the purpose of the subsidy.
3. Maritime Transport
1. Title of the subsidy programme
Assistance to the maritime transport.
2. Period covered by the notification
2002.G/SCM/N/95/BGR
Page 6
3. Policy objective and/or purpose of the subsidy
Construction enlargement of the sea port Burgas.
4. Background and authority for the subsidy (incl. identification of the legislation under which it
is granted)
− Law on the Loan Contract with the IFI, ratified by the National Assembly on 22.07.1998
(SG No 88/98).
− Council of Ministers Decree No 482 of 19.12.1997 (SG No 125/97) concerning  the state
obligation on the loans and guarantees’ agreements.
Authority responsible for the subsidy: Ministry of Transport and Communications.
5. Form of the subsidy
Loan guarantee.
6. To whom and how the subsidy is provided
State guarantee up to 100 per cent was provided on the loan extended by the International
Financial Institution and consigned to the Sea Port Burgas Company.
7. Subsidy per unit, or in case where it is not possible, the total amount or the annual budgeted
for that subsidy
Loan guarantee on the installments in 2002 amounted to BGN 24.54 mln.
8. Duration of a subsidy and/or any other time limits attached to it   
2002.
9. Statistical data permitting an assessment of the trade effects of the subsidy
It can be assumed that the trade effects are minimal.
II. ENERGY
1. Central Heating and Coal
1. Title of the subsidy
Assistance to Central Heating and Coal Companies.
2. Period covered by the notification    
2002.
3. Policy objective and/or purpose of the subsidy
Assistance to energy enterprises producing coal and central heating energy in conformity with
the National Strategy for Long-term Development of the Energy Sector until 2010. The strategyG/SCM/N/95/BGR
Page 7
provides for the restructuring and privatization of the energy sector and energy efficiency until 2010,
and for the gradual cutting-off of the subsidies to this sector.
4. Background and authority for the subsidy (incl. identification of the legislation under which it
is granted)
− Law on the State Budget for 2002 (State  Gazette No 111 of 28.12.2001; amended by
SG No 28 of 19.03.2002).
− Council of Ministers Decree No 1 of 04.01.2002 on the State Budget Implementation.
− Council of Ministers Decree No 195/26.09.2000 for technical liquidation and overcoming of
harmful consequences after cutting or limitation of current activity in coal-mining sector.
Authorities responsible for the subsidy: Ministry of Energy and Energy Resources, Ministry
of Finance.
5. Form of the subsidy
Grant.
6. To whom and how the subsidy is provided
The subsidy is granted to companies producin g coal and to central heating companies for
compensation of the retail prices regulated by the Council of Ministers and technical liquidation andconservation of poor deposit coal units.
7. Subsidy per unit, or in case where it is not possible, the total amount or the annual budgeted
for that subsidy
Total amount budgeted BGN 55.15 mln.
8. Duration of a subsidy and/or any other time limits attached to it
2002.
9. Statistical data permitting an assessment of the trade effects of the subsidy
It is considered that the trade effects are minimal because of the purpose of the subsidy.
III. MINING
1. Ore-mining
1. Title of the subsidy
Assistance to Ore-mining Units.
2. Period covered by the notification
2002.G/SCM/N/95/BGR
Page 8
3. Policy objective and/or purpose of the subsidy
Assistance for the reorganization of ore-mining sector, liquidation of capacities of poor
deposit ore output units, and closing down and e liminating the harmful effect of production and
processing of uranium output and waste.
4. Background and authority for the subsidy (incl. identification of the legislation under which it
is granted)
− Law on the State Budget for 2002 (State  Gazette No 111 of 28.12.2001; amended by
SG No 28 of 19.03.2002).
− Council of Ministers Decree No 1 of 04.01.2002 on the State Budget Implementation.
− Council of Ministers Decrees No 140/1992 and No 74/1998 for the elimination of the harmful
effect of production and processing of ore and uranium output and waste.
Authorities responsible for the subsidy:  Ministry of Economy, Ministry of Energy and Energy
Resources.
5. Form of the subsidy
Grant.
6. To whom and how the subsidy is provided
To ore and uranium mining units in liquidation.
7. Subsidy per unit, or in case where it is not possible, the total amount or the annual budgeted
for that subsidy
Total amount budgeted BGN  12.80 mln.
8. Duration of a subsidy and/or any other time limits attached to it
2002.
9. Statistical data permitting an assessment of the trade effects of the subsidy
Information on the trade effect of the subsidy is not available.
IV. COMMUNICATIONS:
1. Posts and Communication Services
1. Title of the subsidy
Assistance to the Bulgarian Post Company and Bulgarian News Agency.
2. Period covered by the notification
2002.G/SCM/N/95/BGR
Page 9
3. Policy objective and/or purpose of the subsidy
Assistance to the Bulgarian Post Company and Bulgarian News Agency arising from the
provision of services of general interest.
4. Background and authority for the subsidy (incl. identification of the legislation under which it
is granted)
− Law on the State Budget for 2002 (State  Gazette No 111 of 28.12.2001; amended by
SG No 28 of 19.03.2002).
− Council of Ministers Decree No 1 of 04.01.2002 on the State Budget Implementation.
− Law on postal services (SG 64/04.08.2000, amended in 2001 and 2002).
− Statute of Bulgarian Ne ws Agency, SG 56/1994.
Authorities responsible for the subsidy: Ministry of Transport and Communications; National
Assembly.
5. Form of the subsidy
Grant.
6. To whom and how the subsidy is provided
Bulgarian Post Company and Bulgarian News Agency to provide services of general interest.
7. Subsidy per unit, or in case where it is not possible, the total amount or the annual budgeted
for that subsidy
Total amount budgeted BGN 3.46 mln.
8. Duration of a subsidy and/or any other time limits attached to it
2002.
9. Statistical data permitting an assessment of the trade effects of the subsidy
It is considered that the trade effects are minimal because of the purpose of the subsidy.
V. ENVIRONMENT
1. Soil and Water Pollution
1. Title of the subsidy
Assistance for reduction of soil and water pollution.
2. Period covered by the notification
2002.G/SCM/N/95/BGR
Page 10
3. Policy objective and/or purpose of the subsidy
Reduction of the polluting effect of the wastes on the soil and water through establishment of
equipment for reprocessing and recycling, through building of water purification stations in order to
restore the normal quality of the environment.
4. Background and authority for the subsidy (incl. identification of the legislation under which it
is granted)
− Environmental Protection Act (SG No 86/18.10.1991) amended SG No 100/1992;
31, 63/1995; 13, 85, 86/1997; 62/1998, 12/1999.
− Protocols of the 2002 sessions of the Management Council of the National Fund for
Environmental Protection for reduction of the harmful impact of waste.
Authorities responsible for the subsidy: Ministry of Environment and Water, National Fund
for Environmental Protection.
5. Form of the subsidy
Grants and soft loans (average grace period of  24 months and average repayments of 3 years).
6. To whom and how the subsidy is provided
Through the National Fund for Environmental Protection on a tender base to all firms and
companies, introducing equipment for reduction of soil and water pollution.
7. Subsidy per unit, or in case where it is not possible, the total amount or the annual budgeted
for that subsidy
Grants awarded – BGN 15.73 mln.
Soft loans extended BGN 0.69 mln.
8. Duration of a subsidy and/or any other time limits attached to it
The terms are specified for each soft loan case.
9. Statistical data permitting an assessment of the trade effects of the subsidy
It is considered that the trade effects are minimal because of the purpose of the subsidy.
VI. EMPLOYMENT AND SOCIAL PROTECTION
1. Encouragement of Employment
1. Title of the subsidy
Encouragement of employment.
2. Period covered by the notification   
2002.G/SCM/N/95/BGR
Page 11
3. Policy objective and/or purpose of the subsidy
Subsidies are provided through the Employment Agency for financing employment
promotion programs related to the priorities set out in the National Economic Development Plan, the
National Regional Development Plan and the National Employment Action Plan.
4. Background and authority for the subsidy (incl. identification of the legislation under which it
is granted)
− Law on the State Budget for 2002 (State  Gazette No 111 of 28.12.2001; amended by
SG No 28 of 19.03.2002).
− Council of Ministers Decree No 1 of 04.01.2002 on the State Budget Implementation.
− Employment Promotion Act - art. 31, art. 36, art. 37, art. 40, art. 43, art. 51, art. 53, art. 55
(SG 112/29.12.2001, amended in 2002, SG 54/2002.
Authorities responsible for the subsidy: Ministry of Labour and Social Policy (MLSP),
Employment Agency at the MLSP; Ministry of Finance.
5. Form of the subsidy
Grant.
6. To whom and how the subsidy is provided
Subsidies are provided for promotion of youth and regional employment programs and
measures; for implementation of projects providing equal opportunities to groups at risk on the labour
market through social and economic integration; for programmes and measures for transition from
passive to active employment.
7. Subsidy per unit, or in case where it is not possible, the total amount or the annual budgeted
for that subsidy
Total amount budgeted BGN 45.27 mln.
8. Duration of a subsidy and/or any other time limits attached to it    
2002.
9. Statistical data permitting an assessment of the trade effects of the subsidy
It is considered that the trade effects are minimal because of the purpose of the subsidy.
2. Assistance to Low Populated Areas
1. Title of the subsidy
Assistance to low populated areas for foodstuff supply.G/SCM/N/95/BGR
Page 12
2. Period covered by the notification   
2002.
3. Policy objective and/or purpose of the subsidy
Assistance for covering the transport costs arising from the provision of services of general
interest for direct deliveries of bread and basic food to mountain, border areas and small villages with
population below 500 residents.
4. Background and authority for the subsidy (incl. identification of the legislation under which it
is granted)
− Law on the State Budget for 2002 (State  Gazette No 111 of 28.12.2001; amended by
SG No 28 of 19.03.2002).
− Council of Ministers Decree No 1 of 04.01.2002 on the State Budget Implementation.
Authorities responsible for the subsidy: Ministry of Finance, Central Cooperative Union.
5. Form of the subsidy
Grant.
6. To whom and how the subsidy is provided
Through the Central Cooperative Union to all transport companies for the delivery of bread
and basic food to mountain, border areas and small villages.
7. Subsidy per unit, or in case where it is not possible, the total amount or the annual budgeted
for that subsidy
Total amount budgeted BGN 2.20 mln.
8. Duration of a subsidy and/or any other time limits attached to it   
2002.
9. Statistical data permitting an assessment of the trade effects of the subsidy
Information on the trade effect of the subsidy is not available.
VII. AGRICULTURE
1. Agricultu ral Products
1. Title of the subsidy
Assistance to the agricultural producers through the Agriculture State Fund.
2. Period covered by the notification
2002.G/SCM/N/95/BGR
Page 13
3. Policy objective and/or purpose of the subsidy
Creating conditions for implementation of the state policy orientated to the effective
management of resources and development of market-orientated structures, increasing ofcompetitiveness and sustainable development of agricultural sector.
4. Background and authority for the subsidy (incl. identification of the legislation under which it
is granted)
− Law on the State Budget for 2002 (State  Gazette No 111 of 28.12.2001; amended by
SG No 28 of 19.03.2002).
− Council of Ministers Decree No 1 of 04.01.2002 on the State Budget Implementation.
− Law on Support of Agricultural Produc ers (last amendment SG No 96/2002).
Authorities responsible for the subsidy: Ministry of Agriculture and Forestry, Agriculture
State Fund.
5. Form of the subsidy
Grant; loan.
6. To whom and how the subsidy is provided
The support is provided through the Agriculture State Fund at the Ministry of Agriculture  and
Forestry to all entities registered in the Agricultural Producers Register, producing agricultural
products for market sale.
The subsidies are granted for production of grain, oilseed and oleaginous cultures, maize,
potatoes and vegetables, rape, sugar beet, milk production, flax, cattle breading and fertilizers.
The loans are granted for investment in agricu lture within the programs for plant-growing,
cattle breading, buying of farming machinery and for partial subsidizing of interest rates on the creditsextended by the trade banks to the agricultural producers.
7. Subsidy per unit, or in case where it is not possible, the total amount or the annual budgeted
for that subsidy
Grants – BGN 71.61 mln.
Loans – BGN 4.24 mln.
8. Duration of a subsidy and/or any other time limits attached to it
2002.
9. Statistical data permitting an assessment of the trade effects of a subsidy
Information on the trade effect of the subsidy is not available.G/SCM/N/95/BGR
Page 14
2. Development of Tobacco Production
1. Title of the subsidy
Development of tobacco production through Tobacco Fund.
2. Period covered by the notification
2002.
3. Policy objective and/or purpose of the subsidy
Assistance  to tobacco producers for the implementation of the state policy on development of
tobacco production.
4. Background and authority for the subsidy (incl. identification of the legislation under which it
is granted)
− Law on the State Budget for 2002 (State  Gazette No 111 of 28.12.2001; amended by
SG No 28 of 19.03.2002).
− Council of Ministers Decree No 1 of 04.01.2002 on the State Budget Implementation.
− Law on Tobacco and Tobacco Products of 30.11.93 (SG No 101/93), last amendment of
21.12.2001 (SG No 110/2001).
− Decisions No 59, 239, 240 and 814 of 2002 of C ouncil of Ministers on the support of tobacco
production, tobacco premium crop 2001, 2002, and delivery of tobacco seeds crop 2002.
Authorities responsible for the subsidy: Ministry of Agriculture and Forestry; Tobacco  State
Fund.
5. Form of the subsidy
Grant.
6. To whom and how the subsidy is provided
The assistance is provided through the Tobacco State Fund at the Ministry of Agriculture  and
Forestry to all tobacco producers registered under the Law on Tobacco and Tobacco Products in the
National Register of the tobacco producers (they receive seeds free of charge). For regulation of the
tobacco production, a premium from Tobacco State Fund is envisaged for quality and breeding ofspecific brands with a market demand.
The assistance is intended under different objectives to production support and delivery of
tobacco seeds to the producers, granting a premium to the tobacco producers for produced and
delivered tobacco crop 2001 and 2002.
7. Subsidy per unit, or in case where it is not possible, the total amount or the annual budgeted
for that subsidy
Total amount budgeted BGN 85.79 mln.G/SCM/N/95/BGR
Page 15
8. Duration of a subsidy and/or any other time limits attached to it
2002.
9. Statistical data permitting an assessment of the trade effects of the subsidy
Information on the trade effect of the subsidy is not available.
__________