RESTRICTED
WORLD TRADE G/SCM/Q2/SVK/6
10April 1997
ORGANIZATION(97-1510)
Original: English Committee onSubsidies andCountervailing Measures
SUBSIDIES
Replies toQuestions posed byARGENTINA1,theEUROPEAN COMMUNITY2,
KOREA3,POLAND4andNEW ZEALAND Regarding the
NewandFullNotification oftheSLOVAK REPUBLIC5
Thefollowing communication, dated 19March 1997, hasbeenreceived fromthePermanent
Mission oftheSlovak Republic.
_______________
Since thewritten answers tothequestions posed bytheUnited States arecurrently stillunder
preparation, additional notification inthisrespect willbesentassoonasreceived from theSlovak
authorities.
NewZealand andtheEuropean Community
Q.1. Export activity promotion andhowthese subsidies willbephased out?
Answer
Thequestion relates toasmall expenditure, which isexempted fromreduction commitment.
Theamount ofSK1.6million presents anAMS category of"widely available export promotion and
advisory services". Thissmall subsidy isoriented tofacilitate theaccess ofproducers oninternational
foodfairs. Throughout, subsidies cover thecosts forrenting thefairssquares, technical realization
oftheexhibition upto50%oftherealcosts. Thesubsidies aregranted totheproducers exhibiting
theirproducts abroad.
Taking intoaccount thenature ofthese subsidies, theSlovak Republic intends tocontinue to
provide suchsupport intheshort-term ormedium-term periods.
1G/SCM/Q2/SVK/4,2G/SCM/Q2/SVK/2,3G/SCM/Q2/SVK/1,4G/SCM/Q2/SVK/3.
5G/SCM/N/3/SVK+Suppl.1.G/SCM/Q2/SVK/6
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Republic ofKorea
Q.1. Could youprovide amoredetailed explanation ofthecurrent purposes, conditions andcriteria
fordomestic support.
Answer
Thesubsidies canbegranted toallbodies acting intheagriculture orfoodindustry, butthere
isnolegalbasis forgranting thesubsidy foreachapplicant. Themainpurpose oftheSlovak subsidy
programme isamaintaining ofagrarian production intheregions withworse productive (climatic,
mountain, ...)conditions. Allthese purposes arementioned inournotification. Thesubsidies are
generally limited bytheamount ofState budget disbursement inafiscal year.
Concrete conditions forgranting theparticular subsidy aredetermined inaccordance withthe
Ministry ofFinance foreachsubsidy title(generally partial upto40%coverage ofthecosts), each
subsidy titleislimited byagiven amount foracalendar year. There isnopossibility togrant subsidies
onother activities, which havenotbeenapproved. Forabetter, more exact decision ongranting the
subsidy, themajority ofsubsidies areprovided bytheRegional Offices oftheMinistry ofAgriculture,
onlysome subsidy titlesareprovided directly bytheMinistry ofAgriculture -forexample plant and
geneticsources,promotionofhistoricalactions,capitalinvestments,exportactivitypromotion,livestock
restoring tohealth, irrigation.
Taking intoaccount given titles ofsubsidies, eachapplicant acting inagriculture, withthe
exception ofbodies withnon-settled disbursement from theStatebudget, canaskforasubsidy. An
application hastocontain mainly thetitleofthesubsidy andconcrete aimwithcalculated economic
results, including totalbudget ofthisactivity anddeclared economic effect ofsuchasubsidy.
European Community
(a) Market Regulation
Q.1. Could theSlovak Republic clarify thecriteria foreligibility?
Answer
Theactivity ofSFMR isbased ontheprinciples given bytherespective legislation (Acton
SFMR -Collection ofLawNo.270/1991) andisaimed atStateintervention purchases, salesofsupplies
andproviding export refunds. Concrete operations areperformed bytheindividual legalorphysical
bodies chosen onthebasis oftenders through public procurement process, which ispublished inthe
daily press.
Q.2. According totheinformation available totheCommunity, theStateFundonMarket Regulation
onlycovers exports ofagriculture products. Could theSlovak Republic comment onthisissue?
Answer
Theactivities ofthefundarecarried outinaccordance withavalidlegislation aiming atsupport
andregulation ofdomestic agrarian market, only. Ifthesituation onthedomestic market inparticular
commodities requires aStateintervention purchase, through theindividual independent operators chosen
onapublic procurement basis, theFund canalsoparticipate inapproved import operations.G/SCM/Q2/SVK/6
Page3
Q.3. Could theSlovak Republic provide thetimetable ofhowthese subsidies willbephased out?
Answer
TheSlovak Republic isveryliberal intheagricultural sector withgenerally verylowdomestic
support aswellasexport subsidies. Inmore exact terms, export subsidies in1996 theURofGATT
obligations areonalevelapproximately USD14/per capita, butrealusewaspredicted about USD 2/per
capita. Assuchourexport markets arenegatively influenced byourcompetitors fromsome European
andoverseas countries, having thelevelofbothdomestic support andexport subsidies several times
higher. Therefore, theSlovak Republic reserves itsrighttoutilize export subsidies uptolimits given
bytheUruguay Round.
(b) State Support Fund
Questions 1and2
Could theSlovak Republic explain whytheseprogrammes werenotnotified totheWTO? Could
theSlovak Republic supply anotification under Article 25,using thestandard format?
Answers 1and2
TheSlovak Republic hadnointention toconceal anysubsidy programme, butthisprogramme
isvery special inaway, thattheFund isnotgranting anytypical subsidy. TheFund offers
concessionary loans andguarantees bankloans, ortheircombination, butallthese financial activities
aresubject torefund. Inacaseofnotrefunding theloan,theFund takesownership overthesupported
object andbyfollowing sales getsbackinvested capital. If,however, WTO Members would keep
theopinion, thatthisprogramme issubject tonotification, theSlovak Republic isready tosupply such
notification.
Q.3. Could theSlovak Republic clarify what thecriteria foreligibility areandhowprojects are
selected forgovernment subsidies?
Answer
Theactivity ofState Support Fund isbased ontheapproved aimswhich areasfollows:
- support ofdevelopment oriented programmes inagricultural andfoodindustry;
- loans onpurchase ofagricultural soil;
- support oftransformation, restructurization andprivatization inagriculture;
- support ofregional developing programmes.
There isnoconcrete determination ofcriteria foreligibility andfeasibility ofeachproject within
theabove-mentioned framework astheyareconsidered individually. TheCommittee oftheFund is
adopting decisions forsupport uptothebudgeted limits. Thecriteria forpresenting applications and
theirconsideration arecontained intheregulation ofMinistry ofAgriculture No.1481/1995-321 dated
20March 1995, published intheCollection ofMinistry ofAgriculture 7/1995, June1995.G/SCM/Q2/SVK/6
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Q.4. Withrespect tothesupport forexport activity programme, could theSlovak Republic provide
thetimetable ofhowthese subsidies willbephased out?
Answer
Specificity oftheSFFoperation hasbeenmentioned inprevious answers andthevolume of
support depends mostly onavailability ofresources given byStatebudget limits. Therefore nophase-out
programme hasbeen adopted. However, funds available forthisyeararebeing projected upto
SK0.135 billion -USD 4.2million (which means 10%ofbudgeted funds fortheyear1995).
Poland
Q.1. What criteria aretaken intoaccount while granting asubsidy tolegal andphysical persons,
whatdecides theamount ofaidgranted toacertain subject andwhatisthemaximum levelofsuch
aidadmissible forasingle subject?
Answer
Thesubsidies canbegranted toallbodies acting inagriculture orfoodindustry, butthere is
nospecific legalbasis forgranting thesubsidy foreachapplicant. Themain purpose oftheSlovak
subsidy programme ismaintaining ofagrarian production intheregions withworse productive (climatic,
mountain,...)conditions.ThesubsidiesaregenerallylimitedbytheamountofStatebudgetdisbursement
inafiscal year.
Concrete conditions forgranting theparticular subsidy titlearedetermined inaccordance with
theMinistry ofFinance foreachsubsidy title(generally partial upto40%coverage ofthecosts), each
subsidy titleislimited byagiven amount foracalendar year. There isnopossibility togrant subsidies
onother activities, which havenotbeenapproved. Forabetter, more exact decision ongranting the
subsidy, themajority ofsubsidies areprovided bytheRegional Offices oftheMinistry ofAgriculture,
onlysome subsidy titlesareprovided directly bytheMinistry ofAgriculture -plantandgenetic sources,
promotion ofhistorical actions, capital investments, export activity promotion, livestock restoring to
health, irrigation.
Taking intoaccount given titlesofsubsidies, eachapplicant acting inagriculture withexception
ofbodies withnon-settled disbursement fromtheStatebudget canaskforasubsidy. Anapplication
hastocontain mainly thetitleofsubsidy andconcrete aimwithcalculated economic results, including
totalbudget ofthisactivity anddeclared economic effect ofsuchsubsidy.
Further details ofthemaximum levelarementioned intheregulation ofMinistry ofAgriculture
(No.849/1995-100), 20April 1995published inCollection oftheMinistry ofAgriculture No.3/1995.
Argentina
1. Programme formarket regulation ofagricultural products
Q.1.1 What isthesubsidy onvalue perunitofproduct?
Answer
Theproducts export incidence hasnotbeencalculated, onaverage itisinthelevelupto20%
oftheproduct value.G/SCM/Q2/SVK/6
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Q.1.2 Could youplease clarify what andhowintervention purchases aremade, aswellasthose
intended forexport?
Answer
Interventions ofSFMR aredetermined onsituations when asurplus ofproduction overcomes
thedomestic market consumption andtheprices havedecreased under therealproduction costs. Level
ofexport subsidies isbased ondifferences between world market prices anddomestic production costs.
Naturally, subsidies areprovided onlyincaseswhen theworld market prices arelower thanthedomestic
production costs. Volume ofexport subsidy perunitiscreated bythedifference between these two
categories, however, reduced by10%asarule.
Theexport operators arechosen onthebasis oftheresults oftenders inpublic procurement,
officially published. TheFund isnotdetermining thedestination ofsubsidy, butthesubsidy isnot
permitted tobegranted onexport totheCzech Republic (asthere isacustom union between both
countries), thesubsidies aregenerally oriented onexport totheterritories oftheformer USSR, where
market access isnegatively influenced byexport subsidies provided bythird, competing countries.
Q.1.3. Istheprogramme renewed annually?
Answer
Yes,theprogramme ofmarket regulation isonanannual basis. Stabilization oftheagricultural
domestic market iseffected within theUruguay Round commitments. Operation oftheState Fund
forMarket Regulation hasbeennotified totheWorking Party onState Trading Enterprises, where
further details canbefound.
Q.1.4 Howaretenders made andawarded?
Answer
Each activity oftheFund isrealized onthebasis ofcontracts between individual operators
andtheFund. Obligatory basisforsuchcontacts ispublic procurement. Information ontender through
public procurement process should bepublished inthepress.
2. Domestic support
Q.2.1 What aretheeligible companies andproducts andhowaretheychosen?
Answer
Thesubsidies canbegranted toallbodies acting inagriculture orfoodindustry, butthere is
nolegalbasis forgranting thesubsidy foreachapplicant. Themain purpose oftheSlovak subsidy
programme ismaintaining agrarian production intheregions withtheworse productive (climatic,
mountain, ...)conditions.
Concrete conditions forgranting theparticular subsidy aredetermined inaccordance withthe
Ministry ofFinance foreachsubsidy title(generally partial upto40%coverage ofthecosts), each
subsidy titleislimited byagiven amount foracalendar year. There isnopossibility togrant subsidies
onother activities, which havenotbeenapproved. Forabetter, more exact decision ongranting the
subsidy, themajority ofsubsidies areprovided bytheRegional Offices oftheMinistry ofAgriculture,
onlysome subsidy titlesareprovided directly bytheMinistry ofAgriculture -forexample plant and
genetic sources, promotion ofhistorical actions, capital investments export activity promotion, livestock
restoring tohealth, irrigation.G/SCM/Q2/SVK/6
Page6
Anyjuridical orphysical person acting inagriculture, withtheexception ofbodies withnon-
settled disbursement from theState budget, mayapply forasubsidy. Anapplication hastocontain
mainly thetitleofthesubsidy andtheconcrete aimwithcalculated economic results, including total
budget ofthisactivity anddeclared economic effect ofsuchsubsidy.
Q.2.2 Could youplease provide datainorder tobeabletoknow thetrade effects andrelationship
withexports?
Answer
Nomore detailed calculation ofeffects ofsubsidy ontrade orexport hasbeenmade.
Q.2.3 Isthere anend-date?
Answer
Currently, thetarget dateisnotpredicted. Forthetimebeing, theSlovak Republic reserves
itsright toutilize thesubsidy programme inaccordance with thecommitments contained in
Schedule XCII.