WORLD TRADE
ORGANIZATIONG/SCM/N/48/EEC/Add.14
4 November 1999
(99-4766)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Updating Notifications Pursuant to Article XVI:1 of the GATT 1994
and Article 25 of the Agreement on Subsidies and
Countervailing Measures
EUROPEAN COMMUNITIES
Addendum
The following addendum to the notification of  the European Community relates to subsidy
programmes of Sweden .G/SCM/N/48/EEC/Add.14
Page 2
SWEDEN
TABLE OF CONTENTS
Page
I. INTRO DUCTION ................................................................................................................. ...4
1.1 M ETHOD AND SCOPE OF THE NOTIFICATION ..........................................................................4
II. SUPPORT FOR RESEARCH  AND DEVELO PMENT .......................................................4
2.1  S UPPORT FOR TECHNOLOGICAL R&D THROUGH NUTEK ...................................................4
2.2  P ROJECT FINANCING THROUGH THE FUND FOR INDUSTRY ...................................................5
2.3  E NERGY RESEARCH PROGRAMME ...........................................................................................6
2.4  T HE ENERGY TECHNOLOGY FUND ..........................................................................................7
2.5 GRANT FOR NEW ENERGY TECHNOLOGY ................................................................................  8
2.6 T RANSPORT - AND COMMUNICATION RESEARCH THROUGH THE TRANSPORT AND
COMMUNICATIONS RESEARCH BOARD ...................................................................................9
2.7 S UPPORT TO DEMONSTRATION OF ELECTRICAL AND HYBRID VEHICLES
THROUGH THE TRANSPORT AND COMMUNICATIONS RESEARCH BOARD ...........................10
2.8 P ROJECT FINANCING THROUGH THE FUND FOR SWEDISH -NORWEGIAN
INDUSTRIAL COOPERATION ....................................................................................................11
III. AID TO SMALL AND MEDI UM SIZED CO MPANIES...................................................12
3.1 T HE REGIONAL DEVELOPMENT COMPANIES , ALMI ...........................................................12
3.2 SUPPORT TO SMALL COMPANIES ............................................................................................... 13
3.3  I NDUSTRIAL DEVELOPMENT CENTRES ..................................................................................14
IV. SUPPORT FOR EMPLOY MENT AND T RAINING.........................................................15
4.1  S UPPORT FOR VOCATIONAL TRAINING .................................................................................15
4.2  E MPLOYMENT AID (FORMER RECRUITMENT AID)...............................................................16
4.3  T RAINING AID (FORMER TRAINEE TEMPORARY REPLACEMENT SCHEME ).......................17
V. EXPORT PROMOTION .......................................................................................................18
5.1  G ENERAL EXPORT PROMOTION .............................................................................................18
VI. REGIONAL AID TO  ENTERPR ISES.................................................................................19
6.1 R EGIONAL DEVELOPMENT GRANT (FORMER LOCALISATION GRANTS AND
DEVELOPMENT GRANTS )........................................................................................................19
6.2  R EGIONAL DEVELOPMENT LOANS (FORMER LOCALISATION LOANS .................................20
6.3  L OANS TO REGIONAL INVESTMENT COMPANIES ..................................................................21
6.4  E MPLOYMENT GRANT .............................................................................................................22
6.5  R EDUCED SOCIAL SECURITY CONTRIBUTIONS .....................................................................23
6.6  R EGIONAL TRANSPORT GRANT ..............................................................................................24G/SCM/N/48/EEC/Add.14
Page 3
6.7  T HE FUND FOR NORTHERN SWEDEN ......................................................................................25
6.8 P ROGRAMME FOR INDUSTRIAL DEVELOPMENT IN REGIONS OF REGIONAL
POLICY PRIORITY ....................................................................................................................26
6.9 E UROPEAN UNION STRUCTURAL FUNDS - DEVELOPMENT WITHIN THE
GEOGRAPHICAL OBJECTIVE AREAS 2, 5B AND 6....................................................................27
VII. ENVIRONM ENT AI D ...........................................................................................................2 8
7.1  I NVESTMENT GRANT FOR ECOLOGICALLY SUSTAINABLE DEVELOPMENT ........................28
7.2 G RANT FOR LOCAL INVESTMENT PROGRAMMES FOR ECOLOGICALLY
SUSTAINABLE DEVELOPMENT ................................................................................................29
7.3  I NVESTMENT GRANT FOR CERTAIN INVESTMENTS WITHIN THE ENERGY SECTOR ...........30
VIII. OTHER FORMS OF SUBSIDIES ........................................................................................30
8.1 E NERGY TAX CONCESSION .....................................................................................................30
APPENDIX....................................................................................................................... ....................32
THE NET COST METHOD .....................................................................................................................32
SUBSIDIES TO SWED ISH FISHERY 1998.....................................................................................33
1. Investment aid to fi shing enterp rises ....................................................................................33
2. Investment aid to aqua culture ent erprises ...........................................................................35
3. Investment aid to fish ing port fa ciliti es.................................................................................36
4. Investment aid for processing and marketing......................................................................37
5. Investment aid for protec tion of coas tal wate rs ...................................................................37
6. Aid for promotion/marketing ................................................................................................38
7. Aid for temporary cessatio n of fishing activities..................................................................39
8. Aid to studies and pilot projects ............................................................................................ 40
9. Payment of compensation to  producers´ organisations.......................................................41
10. Governmental subsidy for fish-sto cking ...............................................................................42
11. Aid to measures undertaken within the Community Initiative Pesca................................42G/SCM/N/48/EEC/Add.14
Page 4
I. INTRODUCTION
1.1 METHOD AND SCOPE OF THE NOTIFICATION
In Sweden, the budget of the central government is the only source of aid to industry.  Local
governments are in principle prohibited by law to grant aid to enterprises.  However, administration ofaid programmes funded by the central government may take place at the local level.
The notification covers aid to the business sector, in broad sense, i.e. trade and industry.  It is
not possible to separate aid figures to the mi ning and manufacturing industry (SITC 2 and 3).
The description of the various aid schemes follows the outline suggested by WTO.  However,
it is not possible to present statistical data permitting an assessment of trade effects.
The quantitative information is based on the net cost to government  method.  This method is
used for the annual follow-up of state aid in Swede n.  The approach has also been used by OECD in
its "Public Support to Industry" project.  The method is described in appendix.
As from 1997, the Swedish administration has changed its budgetary cycle from fiscal to
calendar years.  The programmes that were in effect 1 January 1998 are reported in the notification.
II. SUPPORT FOR RESEARCH AND DEVELOPMENT
2.1  S UPPORT FOR TECHNOLOGICAL R&D THROUGH NUTEK
(a) Form of subsidy
Grants or loans with conditional repayment.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  736
- Skr 127 millions to firms and individual inventors
- Skr 259 million to universities
- Skr 350 millions to technological research institutes and cooperative research
institutes.
Net cost for seed financing, Skr millions:  Calendar year 1998:  233
Support is granted to a variety of projects and cannot be broken down per unit
(c) Policy objective
The primary objective is aid for R&D and the secondary objective is aid to SMEs.
(d) Duration
The programme commenced as from 1 July 1993.  Duration until 1 January 2002 .G/SCM/N/48/EEC/Add.14
Page 5
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f)  Legal basis
The legal provisions are laid down in the following Governmental ordinances: SFS 1993:1 32
(Förordning om ändring av förordningen 1978:571 om statligt stöd till teknisk forskning, industriellt
utvecklingsarbete och uppfinnar-verksamhet) and SFS 1993:286 (Förordning om ändringar i
förordningen 1991:660 med instruktion för Närings- och Teknikutvecklingsverket).  As from
1 January 1996, Governmental ordinance 1995: 1254 (Förordning om statligt stöd till teknisk
forskning, industriellt utvecklingsarbete och uppfinnarverksamhet).
(g) Rules and conditions
The National Board for Industrial and Technical Development (NUTEK), is a government
agency which among other tasks administers gove rnment support to technical R&D.  Support is
granted to universities, technological research institutes for basic research, cooperative research
institutes (i.e. institutes financed jointly by government and industry) and to individual firms and
inventors.  A precondition for receiving support in the form of grants is that the result of the supported
project is made public.
All firms, regardless of industry, are eligible. However, the support is focused on small firms
and individual innovators.  The support to firms and individual inventors is in the form of loans with
conditional repayment.  A loan can cover up to 50 per cent of project costs.  Repayment, including
market interest rate, is required if a project becomes commercially successful.  The duration and otherterms of the loan are dependent on the objective of the loan and various economic factors.  Costs for
personnel, material and supplies related to R&D, instruments and equipment, consulting bought-in
research, etc. are eligible for aid.  Other possible aid should be taken into account before the decision
of support is made.  In practice, projects supported by other state aid schemes do not normally receive
support from NUTEK. To the extent that this occurs, the aid ceilings apply to the combined aid.
As from 1 January 1996 rules and conditions have been altered in accordance with the state
aid rules within the European Community. In practice the new rules have been applied as from
1 January 1995.
2.2  P
ROJECT FINANCING THROUGH THE FUND FOR INDUSTRY
The Fund for Industry is a public foundation.  Its main objective is to promote industrial
development and marketing.  The Fund should earn enough money to retain its capital on a long term
basis.  This calls for market interest rate s to compensate for a few inevitable losses.
(a) Form of subsidy
Project financing in the form of loans with c onditional repayment, guarantees and grants with
royalty repayments.  No calculated element of subsidy to individual enterprises, but high risk is
accepted.G/SCM/N/48/EEC/Add.14
Page 6
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  106
Support is granted to a variety of projects and cannot be broken down per unit
(c) Policy objective
The primary objective of the project financing is aid to SMEs and R&D.
(d) Duration
The scheme commenced in 1979 and was altered in 1993 and 1996.  Duration has not been
specified.
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f) Legal basis
The legal provisions are laid down in the Governmental ordinance SFS 1996:880 (Förordning
om finansiering genom Industrifonden).
(g) Rules and conditions
Project financing:  The Fund concentrates on support to small and medium-sized companies.
There are no restrictions regarding industry or location.  To be eligible for support, a project must
involve a substantial risk, but have a compensating potential to become commercially successful.  The
maximum amount of an award cannot exceed 50 per cent of the costs of a project.  Expenditures
connected with a development project (seldom land or buildings) are eligible for financing.  All
successful SMEs pay back with market interest rate or royalty.  Financing from the Fund may becombined with regional support, in accordance with  the state aid rules in the European Community.
2.3  E
NERGY RESEARCH PROGRAMME
(a) Form of subsidy
Grants or loans with conditional repayment.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  106
- Skr 9 millions to firms and individual inventors
- Skr 92 million to universities
- Skr 5 millions to technological research institutes and co-operative research institutes.
Support is granted to a variety of projects and cannot be broken down per unitG/SCM/N/48/EEC/Add.14
Page 7
(c) Policy objective
The primary objective of the programme is to establish fundamental competence and
expertise, to facilitate the transformation of the Swedish energy system in order to reduce the
environmental and climatic effects of energy systems.  The emphasis of the programme is long-term,i.e. on technology that can be expected to be implemented beyond the year 2000.  The programme has
its main focus on basic research, while applied research only plays a minor role.
(d) Duration
Programme commenced originally in 1975 and has been prolonged several times.  The
programme has been altered as from June 1998 in order to reflect the objectives of the politicalagreement on Swedish Energy Policy reached in 1997 .  Duration until further notice, i.e. has not been
specified.
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f) Legal basis
The legal provisions are laid down in the Governmental ordinance SFS 1987:819 (Förordning
om statligt stöd till energiforskning).  As from June 1998 legal provisions are laid down in
Governmental ordinance SFS 1998:222 (Förordning om statligt stöd till energiforskning).
(g) Rules and conditions
Support is granted to universities, institutes of technology, co-operative research institutes
(i.e. institutes financed jointly by the government and industry) and to firms.  The general rule is that
all results from the Energy Research Programme are official and shall be made available.  Aid to
firms accounts for a minor portion of the expenditure. Costs for personnel, materials and supplies
related to R&D, instruments and equipment, consulting, bought in research etc. are eligible for aid.
Maximal aid intensity is 50 per cent of eligible costs.  Other possible aid shall always be taken intoaccount before decision of support is made.
2.4  T
HE ENERGY TECHNOLOGY FUND
(a) Form of subsidy
Grants, soft loans and guarantees.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  121
- Skr79 millions to firms and individual inventors
- Skr 5 millions to universities
- Skr 37 millions to technological research institutes and cooperative research institutes
Support is granted to a variety of projects and cannot be broken down per unit.G/SCM/N/48/EEC/Add.14
Page 8
(c) Policy objective
The primary objective is aid for R&D with a focus on new technology for energy production
and for environmental protection.
(d) Duration
The programme commenced as from 1 July 1988.  The programme has been altered as from
June 1998 in order to reflect the objectives of the political agreement on Swedish Energy Policy
reached in 1997.  Duration until further notice, i.e. has not been specified.
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f) Legal basis
The legal provisions are laid down in the Governmental ordinance SFS 1988:805 (Förordning
om statligt stöd ur energiteknikfonden, mm.).  As  from June 1998 legal provisions are laid down in
Governmental ordinance SFS 1998:653 (Förordning om statligt stöd till energiteknik).
(g) Rules and conditions
Support is granted to the development, testing and demonstration of new techniques in the
form of test plants, pilot projects, full scale plants, etc.  Support is also granted to applied research
jointly co-financed by industry.  The beneficiary is normally the user of the new technique, mainlysmall-scale private energy producers and public utili ties in the energy sector.  The maximum possible
aid is 50 per cent of the project costs where SME:s can receive an additional 10 per cent.
2.5  
GRANT FOR NEW ENERGY TECHNOLOGY
(a) form of subsidy
Grants.
(b) Amount of subsidy
Net cost in SKR millions:  Calendar year 1998:   30
Support is granted to a variety of projects and cannot be broken down per unit.
(c) Policy objective
The primary objective is aid to R&D with a focus on developing technology for the use of
sustainable sources of energy.
(d) Duration
Duration until further notice, i.e. has not been specified.G/SCM/N/48/EEC/Add.14
Page 9
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f) Legal basis
The legal provisions are laid down in the Governmental ordinance SFS 1998:654 (Förordning
om energiteknikbidrag).
(g) Rules and conditions
Support is granted to industrial research in order to develop new technology based on
sustainable sources of energy and for efficient use of energy in industrial processes.  The maximum
possible aid to projects concerning industrial research is 50 per cent of the project costs.  The
maximum support to projects aiming at a market introduction of products or services is 25 per cent of
the project costs where SMEs can receive an additional 10 per cent. In accordance with EC State aidrules there are restrictions to which extent the grant may be combined with other aid schemes.
2.6 T
RANSPORT - AND COMMUNICATION RESEARCH THROUGH THE TRANSPORT AND
COMMUNICATIONS RESEARCH BOARD
(a) Form of subsidy
Grants.
(b) Amount of subsidy
Net cost in SKR millions:  Calendar year 1998:  160
- Skr 17 million to private firms
- Skr 108 million to universities
- Skr 35 million to technological research institutes, co-operative research institutes
Support is granted to a variety of projects and cannot be broken down per unit.
(c) Policy objective
The primary objective is aid for R&D. Secondary objective is environmental aid and support
for energy-saving.
(d) Duration
Programme commenced as from 1st of July 1993. Duration formally decided every year.
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.G/SCM/N/48/EEC/Add.14
Page 10
(f) Legal basis
The legal provisions are laid down in the Go vernment Bill ”Research for Knowledge and
Progress” 1992/1993:170 and 1996/97:1.
(g) Rules and conditions
The nature of assisted projects is basic transport and communication research and applied
research, development and demonstrations at a pre-competitive level.  Grants are predominantly given
to universities and research institutions.  Regional authorities, municipalities and companies can be
granted aid if they are engaged in pre-competitive development or demonstration projects.  Such
projects are devoted especially to the development of public transport.  Costs for personnel, materialand supplies related to R&D are eligible for aid. Maximum possible aid intensity is 100 per cent of the
eligible costs. Aid is granted on a scientific basis on applications or initiatives from The Board. Grants
are regulated by an R&D contract. At least Skr 30 million a year has to be used as grants to research-,
development- or demonstration projects concerning public transports.  There is no formal restriction
to what extent the aid may be combined with other aid schemes.
2.7 S
UPPORT TO DEMONSTRATION OF ELECTRICAL AND HYBRID VEHICLES THROUGH THE
TRANSPORT AND COMMUNICATIONS RESEARCH BOARD
(a) Form of subsidy
Grants.
(b) Amount of subsidy
Net cost in Skr millions:  Fiscal year 1995/1996:  6,5
- Skr 2.8 million to private firms
- Skr 3.7 million to universities, technological research institutes, cooperative research
institutes.
Support is granted to a variety of projects and cannot be broken down per unit.
(c) Policy objective
The primary objective is aid for R&D. Secondary objective is environmental aid and support
for energy-saving.  The aim of the programme is to investigate the potentials of such vehicles have inorder to accomplish energy-saving and environmental benefits. Investigated are also the real costs for
society and users, the degree to which the vehicles can fit into the existing transport system as well as
their impact on traffic safety.  The aid is not devoted to development of the vehicles as such.
(d) Duration
Programme commenced as from 1 July 1993. Duration formally decided every year.
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.G/SCM/N/48/EEC/Add.14
Page 11
(f) Legal basis
The legal provisions are laid down in the Government Bills; 1992/1993:179 and
1993/1994:100.
(g) Rules and conditions
The aid is directed towards research, development and demonstration of electrical vehicles
and hybrid vehicles from a socio-economic and infrastructural point of view.  The research is pre-
competitive and the result is publicly available.  Aid is granted on a scientific basis on applications or
initiatives from the Board. Grants are regulated by an R&D contract.  The programme is to be carried
out in close co-operation with industry and other interested parties and the costs for the programme asa whole are supposed to be shared with these parties.  Costs for personnel, material and supplies
related to R&D are eligible for aid. Maximum possible aid intensity is 100 per cent of the eligible
costs.  There are no formal restrictions to what extent the aid may be combined with other aid
schemes.
2.8 P
ROJECT FINANCING THROUGH THE FUND FOR SWEDISH -NORWEGIAN INDUSTRIAL
COOPERATION
The Fund for Swedish-Norwegian Industrial Co- operation is a foundation operating relatively
independently from the Swedish and Norwegian Governments. The Fund should earn enough money tocover the inflation on a long term basis.  This call s for market interest rates to compensate for a few
inevitable losses.
(a) Form of subsidy
Grants, loans with conditional repayment and grants with royalty repayments.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:   6 (to Swedish firms).
Support is granted to a variety of projects and cannot be broken down per unit.
(c) Policy objective
The primary objective is aid to SMEs and for R&D.  The objective of the Fund is to support
development co-operation between Swedish and Norwegian companies.
(d) Duration
The programme commenced as from 1 January 1982.  Duration until the year 2001, with
possible prolongation.
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.G/SCM/N/48/EEC/Add.14
Page 12
(f) Legal basis
The legal provisions are laid down in the Governmental ordinance SFS 1990:45 (Förordningen
om stöd genom Fonden för svenskt-norskt industriellt samarbete), amended 1998:49.
(g) Rules and conditions
Costs connected with a development project (sel dom land or buildings) are eligible.  Maximal
aid intensity is 50 per cent of eligible costs. A precondition is that the project is a high risk project and
has prospects to be commercially successful on a relatively short term basis.  All successful SMEs pay
back with market interest rates or royalty. Beneficiaries are Swedish and Norwegian companies in all
industry except the extraction of oil and gas.  There are no formal restrictions to which extentfinancing through the Fund may be combined with other aid schemes other than the state aid rules of
the European Community.
III. AID TO SMALL AND MEDIUM SIZED COMPANIES
3.1 T
HE REGIONAL DEVELOPMENT COMPANIES , ALMI
ALMI, Regional Development Companies, consist of a parent company and 22 regional
subsidiaries.  The objective of ALMI is to strengthen the competitiveness and profitability of small
and medium sized enterprises and to promote the formation of new firms.
(a) Form of subsidy
Loan guarantees, guarantees for bank guarantees, loans, new business loans and development
capital in the form of grants with royalties repayment and soft loans.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  210
Support is granted to a variety of projects and can not be broken down per unit.
(c) Policy objective
The primary objective of the scheme is aid to SMEs.  The Regional Development Companies
should strengthen the competitiveness and profitability of small and medium sized enterprises
(defined as firms with less than 250 employ ees, in accordance with the European Commission
definition) and to promote the formation of new firms.
(d) Duration
The programme for loans and guarantees commenced in 1978, development capital in 1982
and new business loans in 1993. Duration until further notice, i.e. has not been specified.
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.G/SCM/N/48/EEC/Add.14
Page 13
(f) Legal basis
The legal provisions are laid down in the following Governmental ordinance: SFS 1994:1100
(Förordning om statlig finansiering genom regionala utvecklingsbolag) altered SFS 1995:1196.
(g) Rules and conditions
General rules for all forms of financing:  The scheme is strictly complementary to private
institutions.  The scheme is intended for small firms, i.e. firms with less than 250 employees. (In
practice, often under 50 employees.)  The Regional Development Companies have discretion in
respect of the terms of the loans, i.e. the rate of  interest, duration and repayment holidays.  However,
the financing should be on commercial terms and aiming at a reasonable yield and risk-spread.
The lending should be on commercial terms but on a high risk level.  Only firms that are
profitable or have reasonable prospects to become profitable are eligible.  The Companies also
provide counselling.  The scheme may be combined with regional support and support from NUTEK,
in accordance with the state aid rules in the European Community.
Loans: High risk and slightly above market rates. Bad collateral accepted.Development capital: High risk and bad or no collateral accepted.
Guarantees: High risk and bad collateral accepted. Guarantee fee required.
New business loans: The loan to start-ups is either a personal loan made out to the
entrepreneur (injected into the company as restrict ed equity) or a risk-carrying (unsecured) debenture
loan to the company. Maximum is 30 per cent of the amount of financing, but the limit isSkr 1 million.  The loan runs for 10-15 years and is instalment-free during the first years.  The loan is
interest-free for two years, with reduced interest for three years; from the sixth year market interest is
paid. An opening charge of 2 per cent on granted loans is payable and is deducted when the loan is
paid. Security is normally not necessary.
Supplementary loan:  If a company which has been granted a loan for a new company
requires further financing, a supplementary loan may be granted but only if there are good reasons forit, and if an application is received by the fund within three years of the loan for a new company being
granted.  Authorized applicants are private persons or companies.  The applicant has to contribute
with at least 10 per cent of the capital.  All sorts of businesses are eligible.
3.2 
SUPPORT TO SMALL COMPANIES
(a) Form of subsidy
Grants.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  71
Support is granted to a variety of projects and can not be broken down per unitG/SCM/N/48/EEC/Add.14
Page 14
(c) Policy objective
The primary objective is promotion of employment-generating investments within small
companies and balance within regions.
(d) Duration
Programme commenced in 1994.  Duration until further notice, i.e. has not been specified.
(e) Statistical data
Support is granted to a variety of projects and sectors, therefore it is not possible to present
statistical data permitting an assessment of trade effects.
(f) Legal basis
The legal provisions are laid down in Gove rnmental ordinance: SFS 1994:773 (Förordning
om tillfälligt småföretagsstöd), altered latest through SFS 1999:16 (Förordning om ändring i
förordningen (1994:773) om småföretagarstöd).
(g) Rules and conditions
Support is handled by the County Administrative Boards (Länsstyrelse).  It is available to
small companies throughout Sweden, with the excepti on of companies within the steel- or synthetic
fibre industries.  Small companies are defined according to the European Commission definition as
consisting of 50 employees or less and  having an annual turnover of less than Skr 60 million.
Support is granted for investments estimated to create long-term employment opportunities.
The prerequisites are that it does not contribute to the relocation of an activity from one county to
another, nor to the reconstructing of an activity.  An activity that recently has undergone such
reconstruction is also excluded from receiving support.  Approved capital needed for the investment
can not exceed Skr 20 million.  Support can be given with at most 15 per cent of total costs as long as
it does not exceed the amount of funds needed for the investment to take place.
3.3  I NDUSTRIAL DEVELOPMENT CENTRES
(a) Form of subsidy
Grants.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  16
Support is granted to a variety of projects and cannot be broken down per unit
(c) Policy objective
The primary objective is industrial development of SME:s.  Secondary objective is aid for
R&D.G/SCM/N/48/EEC/Add.14
Page 15
(d) Duration
The programme commenced as from February 1998.  Duration until 31 December 1999 .
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f)  Legal basis
The legal provisions are laid down in Governmental decision 1997-01-30.
(g) Rules and conditions
The support is distributed in the form of grants to regional Industrial Development Centres.
The overall objective of the centres is to promote technological development in SME:s through anetwork approach.  Feasibility studies are carried out within the Industrial Development Centres,
aiming at subsequent transfer to as well as fu rther development within SME:s as potential product
concepts.  Even though the main rule is to cover actual costs incurred within the Industrial
Development Centres, transfer could include an element of subsidy which is maximized to 50 per cent
in relation to the initial feasibility work costs.  The accounted subsidy above refers to total costswithin Industrial Development Centres for feasibility studies.
IV. SUPPORT FOR EMPLOYMENT AND TRAINING
Labour market support is aimed at stimulating companies and authorities to hire individuals
who face particular difficulties finding work, for instance youth, disabled, refugees and immigrants
and elderly.  The support is generally given directly to the employer.  This kind of aid is intended to
give an incentive for the employers to hire an individual they would not else have hired and to
compensate for costs for training and equipment.
The schemes noted below, i.e. support for Vocational Training, Employment Aid, Training
Aid, are intended for companies and could be regarded to constitute a subsidy in the meaning of theWTO-Agreement on Subsidies.  As from 1999, however, programmes for Employment Aid and
Training Aid have been amended in such a way that they are applied in a fully non-specific manner,
thereby not constituting a subsidy in the meaning of the Agreement on Subsidies and Countervailing
Measures. Hence they will not be reported to the WTO from 2000 on.
4.1  S
UPPORT FOR VOCATIONAL TRAINING
(a) Form of subsidy
Regular grants for on-the-job-training.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  138
Support is granted to a variety of projects and cannot be broken down per unit.G/SCM/N/48/EEC/Add.14
Page 16
(c) Policy objective
The primary objective of the scheme is to avoid disruption in the production mainly in small
and medium-sized companies due to lack of skilled workers, to avoid lay-off and to support workers
in danger of losing their jobs.
(d) Duration
The programme commenced in 1984.  Duration has not specified.
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f) Legal basis
The legal provisions are laid down in the Governmental ordinance SFS 1994:938 (Förordning
om bidrag till utbildning i företag).
(g) Rules and conditions
All firms, regardless of industry, are eligible.  The aid is in the form of a grant.  The state aid
to individual companies covers the actual cost of the training course up to a maximum of Skr 60 per
hour for a maximum of 920 hours.
4.2  E MPLOYMENT AID (FORMER RECRUITMENT AID)
(a) Form of subsidy
Grants.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  45
Support is granted to a variety of projects and cannot be broken down per unit.
(c) Policy objective
The primary objective of the scheme is to increase employment, mainly of long-term
unemployed and persons with difficulties to get a job.
(d) Duration
The programme commenced in 1984.  Duration until 31 December 1998
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.G/SCM/N/48/EEC/Add.14
Page 17
(f) Legal basis
The legal provisions are laid down in the Governmental ordinance SFS 1997:1275
(Förordning om anställningsstöd).
(g) Rules and conditions
As from 1998 the programme was amended, including a new title.  The main features of the
programme however still remained, i.e. eligibility for all firms regardless of industry (except for
sectors being regarded as sensitive according to EU-rules), aid covering maximum Skr 350 per day or
maximum 50 per cent of the wage.  Furthermore, the individual must have been unemployed for a
period of at least one year and duration of the aid mu st not exceed 6 months.  As a new feature of the
amended programme, employment aid is used in conjunction with Training Aid (see 4.3 below)
thereby replacing the possibility under the latter programme for employers to make deduction for
social fees when employing a person temporarily as a replacer for staff undergoing external training.
4.3  T RAINING AID (FORMER TRAINEE TEMPORARY REPLACEMENT SCHEME )
(a) Form of subsidy
Grants.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  14
Support is granted to a variety of projects and cannot be broken down per unit.
(c) Policy objective
The primary objective is aid to training and on-the-job-training for individuals being long
term unemployed.
(d) Duration
The scheme commenced as from 1 July 1991.  Duration until 31 December 1998.
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f) Legal basis
The legal provisions are laid down in Gove rnmental ordinance: SFS 1997:1276 (Förordning
om utbildningsstöd).
(g) Rules and conditions
Eligible for training aid are employers, regardless of sector, having costs for certain staff
training improving skills in relation to the use of new technology or facilitating internal replacements
in a firm.  Maximum aid intensity is Skr 40 per hour of training and employee, subject to a limit ofG/SCM/N/48/EEC/Add.14
Page 18
Skr 20 000 per employee. The beneficiaries are mainly county councils and municipalities.  About
20 per cent of the programme budget goes to private firms.  Figures reported are estimation of the
private sector share of the programme budget.  Th e projects supported under this scheme are excluded
from receiving aid from other sources.
V. EXPORT PROMOTION
5.1  G ENERAL EXPORT PROMOTION
(a) Form of subsidy
The Swedish Government maintains an export promotion regime, which is operated by the
semi-private Swedish Trade Council.  The Council assists the Swedish industry by offering various
international trade consulting and marketing services  that are mainly provided on a fee basis.  A
company operating in Sweden has an option to – fo r a fee – to become a member of the Council and it
can thereby obtain a discount on services and publications.
The state funding provided to the Council comprises the basic export-services such as
answering trade-inquiries, providing info rmation on the Council’s activities, etc.
(b) Amount of subsidy
Net cost in Skr millions: Calendar year 1998:  0
(c) Policy objective
The primary objective is to promote Swedish e xports and the internationalisation of Swedish
industry in order to achieve a long-ter m  development of the Swedish economy.
(d) Duration
The Swedish Trade Council was formed in 1972.  The government funding is allocated on a
yearly basis. Duration has not been specified.
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f) Legal basis
An agreement between the government and th e General Swedish Export Association forms
the legal basis for the Swedish Trade Council.  The latest revision of the agreement was made in
1998.
(g) Rules and conditions
The services of the Swedish Trade Council are available for all Swedish firms regardless of
industry and their export volumes.  The internalization of SMEs is given priority.  The Swedish Trade
Council’s total turnover in 1998 was Skr 450 million, and Skr 144 million was used to the generalexport activity directed towards all Swedish companies.G/SCM/N/48/EEC/Add.14
Page 19
VI. REGIONAL AID TO ENTERPRISES
Regional aid to enterprises in Sweden is granted within the framework of six main schemes:
Regional Development Grants, Regional Development Loans, Loans to Regional Investment
Companies, Employment Grants, Reduced Social S ecurity Contributions and Regional Transport Aid.
The main goal of Swedish regional policy is to promote sustainable growth, freedom of choice and a
good environment, so that equal living conditions ar e created for the citizens in whatever part of the
country they live.  An active regional policy has for many years been of major importance due to the
special living-conditions in large parts of Sweden.
6.1 R EGIONAL DEVELOPMENT GRANT (FORMER LOCALISATION GRANTS AND
DEVELOPMENT GRANTS )
(a) Form of subsidy
Grants and conditional loans for tangible or intangible investments.  The grants can be
reclaimed if the objectives, especially the purpose of creating new jobs, are not fulfilled.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  482
Support is granted to a variety of sectors and recipients and cannot be broken down per unit.
(c) Policy objective
The programme supports investments in tangible and intangible investments.  The primary
objective is regional aid in designated areas.  The secondary objective is aid to SMEs, employment
and R&D in designated areas.  The main objective is to promote development of industry and tocreate new employment in the designated areas.
(d) Duration
The programme commenced as from 1 July 1990.  Duration formally decided for every new
fiscal year.
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f) Legal basis
The legal provisions are laid down in the Governmental Ordinance (Förordningen om
regionalpolitiskt företagsstöd): SFS 1990:642, and (from the 1st of January 1997) in SFS 1996:1570
(Förordning om ändring i förordningen (1990:642) om regionalpolitiskt företagsstöd) andSFS 1998:995 (Förordning om regionalpolitiskt stöd i EG:s strukturomvandlingsområden).
(g) Rules and conditions
Eligible are natural or juridical persons operating in Sweden and public authorities working
with viability in certain competitive sectors on market conditions.  In certain cases aid can also be
granted to non-profit associations.  The firm must be  profitable. In order to promote equality betweenG/SCM/N/48/EEC/Add.14
Page 20
men and women there is also a rule that at least 40 per cent of the new jobs created in each project
shall be reserved for each sex.  The total grant element may not exceed the maximal aid intensity
allowed in each designated area.
Regional Development grants can be awarded in connection with investments in buildings,
machinery, etc.  It can also be awarded for intangible investment, such as investments in patent,
licenses, marketing activities, development of new products and education.  The form of the aid is a
grant, which can be reclaimed if the objectives, especially the purpose of creating new jobs, are not
fulfilled.
The grant is awarded discretionary according to the calculated need for each individual
project, the size of the investments, the number of new jobs, etc.  Maximal intensity is 35 per cent ofeligible investment costs in aid area 1 and 20 per cent in aid area 2 and structural aid areas.  In some
cases the maximal intensity is lower and in exceptional cases it can be higher, maximum 50 per cent
(government decision).  As from 1 of January 1997 the maximum grant is 40 per cent of eligible
investment for small and medium sized companies, and 35 per cent for other companies i.e. up to
250 employees, in regional aid area 1. In aid area 2 the maximum grant is 20 per cent.
The awarding of a grant has many reasons.  For example:  The cost of building is higher in
the designated areas because of climatic reasons, transport costs, etc.  It is more difficult to finance
these investments on the regular credit market because of their low alternative value.
The main rule is that the grant is taxable as an  income to the recipient.  The general level for
corporate income taxes is about 28 per cent flat ra te. In Sweden, the value of buildings may depreciate
at rates varying from 2 to 5 per cent per annum, depending on the type of the building.  Machinery is
normally depreciated during a 5 year period.  The grant can be awarded either by the Government,
NUTEK (National Board for Industrial and Technical Development) or the County AdministrativeBoards.
6.2  R
EGIONAL DEVELOPMENT LOANS (FORMER LOCALISATION LOANS
(a) Form of subsidy
Loans that can be reclaimed immediately if the objectives, especially the purpose of creating
new jobs, are not fulfilled.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  50
Support is granted to a variety of sectors and recipients and cannot be broken down per unit.
(c) Policy objective
The primary objective is regional aid in designated areas.  The secondary objective is aid to
SMEs and aid to employment in designated areas.  The main objective of the scheme is to promote
development of industry and to create new employme nt in the designated areas.  In these areas the
credit market is less developed compared with other parts of Sweden.  This is mainly due to the low
alternative value of the fixed assets. Regional Development Loans can be awarded in connection withinvestments in buildings, machinery, etc.G/SCM/N/48/EEC/Add.14
Page 21
(d) Duration
The programme commenced in 1992.  Duration until 31 December 1998.
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f) Legal basis
The legal provisions are laid down in the Governmental Ordinance (Förordningen om
regionalpolitiskt företagsstöd): SFS 1990:642, and (from the 1 January 1997) in SFS 1996:1570
(Förordning om ändring i förordningen (1990:642) om regionalpolitiskt företagsstöd) and SFS
1998:995 (Förordning om regionalpolitiskt stöd inom EG:s strukturomvandlingsområden).
(g) Rules and conditions
Natural or juridical persons operating in Sweden  and public authorities working with viability
in competitive sectors on market conditions are eligible.  Loans can also be granted to non-profit
associations.  The loan is granted discretionary and limited to an amount actually needed.  The firm
must be profitable.  At least 40 per cent of the new jobs created in each project must be reserved foreach sex.  Loans at market conditions, no subsidy, risk-sharing.  The interest rate of the loan is the
Swedish discount rate plus 4.25 percentage units.  The state financing, grant and loans, may not
exceed 70 per cent in aid area 1 and 50 per cent in aid area 2 and structural aid areas.
6.3  L
OANS TO REGIONAL INVESTMENT COMPANIES
(a) Form of subsidy
Loans.  During the first years the interest rate  may be lower than market rates, provided that
the state e.g. receives a share of the value added in the company after about ten years.
(b) Amount of subsidy
Total amount of granted loans in Skr millions: Calendar year 1998:  0
(c) Policy objective
The primary objective is regional aid to designated areas.  The secondary objective is aid to
SMEs in designated areas.  The main objective is to create new employment by stimulating private
capital to engage in certain businesses in the aid areas.  The objective is also to take advantage of
management knowledge in order to promote the expansion of small businesses.
(d) Duration
The programme commenced as from 1 July 1982. Duration formally decided for every new
fiscal year.G/SCM/N/48/EEC/Add.14
Page 22
(e) Statistical data
The support is granted to a variety of sectors and recipients, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f) Legal basis
The legal provisions are laid down in the Governmental Ordinance (Förordningen om
regionalpolitiskt företagsstöd): SFS 1990:642, and (from 1 January 1997) in SFS 1996:1570
(Förordning om ändring i förordningen (1990:642) om regionalpolitiskt företagsstöd) and SFS
1998:995 (Förordning om regionalpolitiskt stöd i EG:s strukturomvandlingsområden).
(g) Rules and conditions
Eligible are privately Swedish or foreign ow ned regional investment companies, working
with viability in competitive sectors on market conditions.  The size of the loan is related to the capital
raised by the share holders.  The government makes decisions on loans to regional investmentcompanies.  During the fiscal year 1997 no such decisions have been made.
6.4  E
MPLOYMENT GRANT
(a) Form of subsidy
Grants.
(b) Amount of subsidy
Net cost in Skr millions: Calendar year 1998:  230
Support is granted to a variety of sectors and recipients and cannot be broken down per unit.
(c) Policy objective
The objective is regional aid to designated areas and employment in designated areas.  The
scheme is aimed at creation of new employment by reducing the extra costs during the first years
when taking on additional labour.
(d) Duration
The programme commenced as from 1 July 1990.  Duration formally decided for every new
fiscal year.
(e) Statistical data
The support is granted to a variety of sectors and recipients, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f) Legal basis
The legal provisions are laid down in the Governmental ordinance SFS 1998:996 (Förordning
om sysselsättningsbidrag).G/SCM/N/48/EEC/Add.14
Page 23
(g) Rules and conditions
Eligible for aid are public authorities, natural or juridical persons operating in Sweden and
working in competitive sectors on market conditions.  In some cases aid can also be granted to non-
profit making associations.  There is a requirement that at least 40 per cent of the new jobs createdshall be reserved for each sex.  Grants are awarded according to the amount of new jobs created
measured in additional man-years (i.e. total net increase of working hours performed by employees in
companies applying and eligible for aid).  If the number of additional years of work is exceeding ten,
the applications are examined from the company’s economic point of view.  Support is only granted
for employment that is considered fixed and the employer shall supply competence raising education
in the form of theory or practice of at least 125 hours during a period of 2 years.
The aid intensity in regional aid area 1: A total sum of Skr 200 000 per additional year of
work allocated according to a uniform scheme during a five year period.
The aid intensity in regional aid area 2: A total sum of Skr 120 000 per additional year of
work allocated according to a uniform scheme during a five year period.
Year Aid area 1 Aid area 2
1 60 000 40 000
2 50 000 30 000
3 40 000 25 000
4 30 000 15 000
5 20 000 10 000
Total 200 000 120 000
6.5  R EDUCED SOCIAL SECURITY CONTRIBUTIONS
(a) Form of subsidy
Tax concessions in the form of reduced social security contributions.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  421
Support is granted to a variety of sectors and recipients and cannot be broken down per unit.
(c) Policy objective
The primary objective is regional aid to designated areas.  The secondary objective is aid to
SMEs and employment in designated areas.  The main objective is to create new employment and to
maintain employment in certain sectors in the most disadvantaged areas by reducing the cost oflabour.  An overall aim is to compensate for additional costs due to permanent geographical
disadvantages in the form of long distances, low population density and remote location.
(d) Duration
In aid area 1 and 2 the duration is until and including the year 2000.G/SCM/N/48/EEC/Add.14
Page 24
(e) Statistical data
The support is granted to a variety of sectors and recipients, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f) Legal basis
The legal provisions are laid down in the Act (Lag om nedsättning av social-avgifter och
allmän löneavgift) SFS 1990:912 and SFS 1994:549 (Förordning om nedsättning av socialavgifter).
(g) Rules and conditions
In aid area 1 and parts of aid area 2 the reduction is 8 percentage units.The social security contributions are reduced for employers engaged in the following sectors
in aid area 1: mining and quarrying (except iron, ore and mining); manufacturing (except pulp, paper,
iron, steel and ferro-alloys); wholesaling of manufacturing goods; and hotels, restaurants and serviceactivities.  In aid area 2 the reduction is only available in the most sparsely populated areas.  In these
parts e.g. agricultural and forestry activities and certain private business services are eligible.  These
activities are very important for women’s employment.  In the vast majority of cases the aid is
awarded automatically.  Reduced social security contributions may be combined with employment
grants.
6.6  R
EGIONAL TRANSPORT GRANT
(a) Form of subsidy
Grants.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  352
Support is granted to a variety of sectors and recipients and cannot be broken down per unit.
(c) Policy objective
The primary objective is regional aid to designated areas.  The objective of the grant is to
partly compensate for high transport costs due to long distances to the main markets.  It is importantto create new employment and to maintain employment in those areas in Sweden where the cost of
transport is considerably higher than in the rest of the country.  Hereby these companies are put on
more equal footing when competing with comp anies situated closer to the large markets.
(d) Duration
The scheme commenced in 1971.  Duration formally decided for every new fiscal year.
(e) Statistical data
The support is granted to a variety of sectors and recipients, therefore it is not possible to
present statistical data permitting an assessment of trade effects.G/SCM/N/48/EEC/Add.14
Page 25
(f) Legal basis
The legal provisions are laid down in the Governmental ordinance: SFS 1980:803
(Förordningen om regionalpolitiskt transportstöd). SFS 1996:1569 Förordning om ändring i
förordningen (1980:803) om regional politiskt transportstöd.
(g) Rules and conditions
Eligible are Swedish natural or juridical pe rsons, foreign company branches in Sweden or
foreign natural persons living in Sweden.
The assisted projects: Actually paid domestic transport costs from the regional aid area for
goods that have been produced or manufactured (processed) in this area (except for certain products
like pulp, paper, metals, certain steel products and iron ore).  Transport costs for raw materials that
shall be processed in the regional transport aid area are also eligible.  However, in principle, materials
from outside the aid area that are also produced in the aid area are not eligible.  The goods transported
must be highly processed in order to be eligible.  The grant is awarded automatically after applicationif all the conditions are fulfilled.  As from 1 July 1995 regional transport aid was terminated in
12 municipalities outside the regional aid areas approved by ESA, i.e. outside areas with population
density above 12.5 inhabitants per square kilometres.
The regional aid area for transport is divided into five zones.  The percentages of the transport
costs that are covered appear in the following table:
Distance
in kilometresTransport
aid zone
1Transport
aid zone
2Transport
aid zone
3Transport
aid zone
4Transport
aid zone
5
251 - 400 5% 5% 5% 5% 5%
401 - 700 5% 15% 25% 30% 30%
701 - 5% 15% 25% 30% 45%
6.7  T HE FUND FOR NORTHERN SWEDEN
The Fund has been operating with two different types of activities:
- loans, including guarantees and conditional loans given primarily to small and medium
sized companies within the industrial and service sector.
- guarantees and project support given to institutions or projects and research of
infrastructure character (for example, research activities at universities and colleges,
foundations of research bodies outside the university sphere).  As from 1994 the Fund
has primarily concentrated on the loan operation.
(a) Form of subsidy
Mainly loans at market conditions. No subsidies, risk-sharing.  Conditional loans, guarantees,
grants and project support.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  1,3G/SCM/N/48/EEC/Add.14
Page 26
Support is granted to a variety of projects and recipients and cannot be broken down per unit.
(c) Policy objective
The primary objective is regional aid to designated areas.  The secondary objective is aid to
SMEs and R&D.  The aim of the fund is to promote development mainly of SMEs, at present, in the
5 northernmost counties.
(d) Duration
The scheme commenced in 1961.  Duration has not been specified.
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f) Legal basis
Government Decision 1961, the latest revision in 1995.
(g) Rules and conditions
Expenditure eligible for financing is product development, marketing, fixed assets and
working capital.  If loans from the Fund Northern Sweden are combined with Regional Development
aid, the state financing may only amount to 70 per cent  of investment costs in aid area 1 and 50 per
cent in aid area 2 and structural aid areas.  The government can decide that these levels may beexceeded if there is a special priority.
6.8 P
ROGRAMME FOR INDUSTRIAL DEVELOPMENT IN REGIONS OF REGIONAL POLICY
PRIORITY
(a) Form of subsidy
Grants.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:   11
- Skr 1.4 million to private firms
- Skr 1 million to universities
- Skr 2 million to other governmental bodies
Support is granted to a variety of projects and cannot be broken down per unit.
(c) Policy objective
The primary objective of the programme is regional aid in designated areas.  The aim is to
improve companies own ability to develop through knowledge-raising activities.  Secondary objective
is aid for R&D activities.G/SCM/N/48/EEC/Add.14
Page 27
(d) Duration
Programme started as from 1 August 1994.  Duration until 31 December 1999.
(e) Statistical data
Support is granted to a variety of projects and sectors, therefore it is not possible to present
statistical data permitting an assessment of trade effects.
(f) Legal basis
The legal provisions are laid down in Government decision no. 7 from 10 February 1994.
(g) Rules and conditions
Support is allocated by NUTEK to 22 consortiums (programmes).  These programmes have
been selected from submitted proposals, according to criteria such as relevance to industry andconnection to external sources of knowledge (size and quality of network).
The consortiums include around 200 companies and a number of research institutes or
universities.  These are working together to raise th e level of knowledge in companies.  No financial
resources are directed to an individual company, but  to the consortiums as collective bodies.  Support
to each consortium can amount to 37.5 per cent of total programme costs at most.
Costs eligible for aid include personnel, materials and supplies related to R&D.  Instruments
and equipment costs are only to a limited extent supported.
6.9 E
UROPEAN UNION STRUCTURAL FUNDS - DEVELOPMENT WITHIN THE GEOGRAPHICAL
OBJECTIVE AREAS 2, 5B AND 6.
(a) Form of subsidy
Grants.
(b) Amount of subsidy
EU funds accorded during calendar year 1998, net cost in Skr millions:  11.5
Objective area 2:  0.2 
Objective area 5b:  0.3 
Objective area 6:  11 
(c) Policy objective
Aid to structural development within the different geographical objective areas.  The
programmes are dominated by measures for small and medium-sized enterprises.  Priorities: Industrial
development, local development and tourism, and skills development.
(d) Duration
The programme is running from 1995 to 1999.G/SCM/N/48/EEC/Add.14
Page 28
(e) Statistical data
Funds are distributed horizontally mainly to  small and medium-sized companies, and trade
effects are considered minimal.
(f) Legal basis
Council regulation (EEC) no. 2082/93.
(g) Rules and conditions
Funds from the European Union are to be complemented by national funds at the rate
30/70 per cent. Programme no. 3.2, Temporary Support to Small Companies, is used for Swedish
national co-financing.  Cofinancing is included in the total reported under that programme.
VII. ENVIRONMENT AID
7.1  I NVESTMENT GRANT FOR ECOLOGICALLY SUSTAINABLE DEVELOPMENT
(a) Form of subsidy
Grants.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  27
Support is granted to a variety of projects and cannot be broken down per unit.
(c) Policy objective
Primary objective is to obtain higher levels of environmental protection compared to what is
demanded by international standards.
(d) Duration
The programme started in July 1997 and was terminated in April 1999.
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f) Legal basis
The legal provisions are laid down in the Governmental ordinance: SFS 1996:1378
(Förordning om statligt investeringsbidrag för en ekologiskt hållbar samhällsutveckling).G/SCM/N/48/EEC/Add.14
Page 29
(g) Rules and conditions
Support is granted to environmentally friendly investments within the areas of construction
and technological infrastructure. The grant is to be given to investments that are implemented beyondthe present international standard that develops the technology and that has obvious effects on
employment.  Support is not to cover more than 30 per cent of the additional costs that arise due to
upgrading of investments into a more environmenta lly friendly direction.  Investments can not receive
other forms of state aid.
7.2 G
RANT FOR LOCAL INVESTMENT PROGRAMMES FOR ECOLOGICALLY SUSTAINABLE
DEVELOPMENT
(a) Form of subsidy
Grants.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  600
Support is granted to a variety of projects and cannot be broken down per unit.
(c) Policy objective
Primary objective is to obtain higher levels of environmental protection compared to what is
demanded by international standards.
(d) Duration
The programme commenced as from February 1998 and will run for a three year period.
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f) Legal basis
The legal provisions are laid down in the Governmental ordinance SFS 1998:23 (Förordning
om statliga bidrag till lokala investeringsprogram som ökar den ekologiska hållbarheten i samhället).
(g) Rules and conditions
Support is granted to local investment programmes administered by municipalities, which
contributes to ecologically sustainable development through a.o. increased efficiency in the use of
energy and other natural resources, use of renewable raw materials and recycling measures.  The grant
is to be given to investments that are implemented beyond the present international standard, that
develops the technology and that has obvious effects on employment.  Support to firms is not to cover
more than 30 per cent of the additional costs that arise due to upgrading of investments into a moreenvironmentally friendly direction.  Investments should be restricted to land, buildings and
equipment.  When aid is given together with other forms of state aid the maximum aid level apply to
the combined aid.G/SCM/N/48/EEC/Add.14
Page 30
7.3  I NVESTMENT GRANT FOR CERTAIN INVESTMENTS WITHIN THE ENERGY SECTOR
(a) Form of subsidy
Grants.
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  70
Support is granted to a variety of projects and cannot be broken down per unit.
(c) Policy objective
Primary objective is to encourage use of sustainable sources of energy within electricity
production.
(d) Duration
The programme started in February 1998 and is running for a five year period.
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f) Legal basis
The legal provisions are laid down in the Governmental ordinance SFS 1998:22 (Förordning
om statligt bidrag till vissa investeringar inom energiområdet).
(g) Rules and conditions
Support is granted to investments in combined power and heating plants for biofuel, wind
power stations and small-scale hydroelectric power stations.  Maximum support to investments in
biofuel combined power and heating plats is 25 per cent of the total investment costs.  Maximum aid
to investments in wind power stations is 15 per cent of the costs that can receive support.  This 15 per
cent can rise to maximum 30 per cent when cumulative aid is present.  Eligible costs are expenses for
building, construction and equipment with the restri ction to the extra investment costs necessary for
carrying through the project.
VIII.  OTHER FORMS OF SUBSIDIES
8.1 E NERGY TAX CONCESSION
(a) Form of subsidy
Tax reduction.G/SCM/N/48/EEC/Add.14
Page 31
(b) Amount of subsidy
Net cost in Skr millions:  Calendar year 1998:  200
Support is granted to a variety of projects and cannot be broken down per unit.
(c) Policy objective
The tax measure aims at reducing emissions of CO2.  The objective of the concession
provisions is to safeguard that enterprises with energy intensive production are not burdened with an
unreasonably high tax level.
(d) Duration
The present system started 1 July 1997.  Expiration date 31 December 1999.
(e) Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
(f) Legal basis
The legal provisions are laid down in the Act of Excise Duties on Energy (SFS 1994:1776),
chapter 7.4, 9.2, 9.5 and 9.9. The provisions came into force on 1 July 1997 (SFS 1997:479).  The
provisions regarding the 1.2 per cent-rule are found in paragraph 2 of the provisional regulations
regarding SFS 1997:479.
(g) Rules and conditions
For enterprises within the industry sector there is a general rule stipulating a 50 per cent
reduction of the CO2-tax for the use of fossil fuels.  As concerns enterprises with energy intensive
production, they also benefit from a special tax reduction;  If the CO2 tax payable according to the
50 per cent-rule exceeds 0.8 per cent of the companies value of sales, then the enterprise only has topay 12 per cent tax on the exceeding sales value.  In addition, there are complementary rules
applicable for certain types of fuels (mainly coal and natural gas) when used for manufacturing
products out of other mineral materials than metals.  According to these rules CO2 tax exceeding
1.2 per cent of sales value is deductible from the total CO2 tax amount to be paid.  (The 0.8 per cent
rule was introduced as from 1 July 1997. The 1.2 per cent rule was, with somewhat different content,already in force prior to that date).G/SCM/N/48/EEC/Add.14
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APPENDIX
THE NET COST METHOD
The objective of the net cost to government (N CG) method is to obtain a consistent measure
of government aid, where support from various inst ruments, i.e. grants, loans, guarantees, equity
injections and tax concessions, are added.  The NCG-method is used by OECD in its project "Public
support to industry”.
Net costs are calculated as follows:Grants:  Actual amounts paid out minus repayments and royalties if any.
Guarantees:  Claims paid minus fees received and recoveries.
Loans:  Estimated capital cost based on the difference between the government borrowing rate and
actual interest payments received.Equity capital:  Estimated capital cost based on the government borrowing rate and dividends
received.Tax concessions:  Estimates of revenue forgone.
Capital against Royalty:  Estimated capital cost based on the difference between the government
borrowing rate and actual royalty payments received.
It should be noted that the net cost does not correspond to the actual transfer of funds from the
government to the firms in any given year, i.e. th e expenditure as reported in the government budget.
Instead the purpose is to indicate the net cost to  government of support to industry.  Since imputed
capital costs on previous loans and equity injections are included, the net cost figures to a certain
extent reflect past policies.  The NCG-method is not a direct guide to determine the extent of
distortion of competition nor to approximate the ultimate benefit to industry.  However, the NCG is a
useful guide to the evolution and the stru cture of government support over time.G/SCM/N/48/EEC/Add.14
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SUBSIDIES TO SWEDISH FISHERY 1998
(1997)
Introduction
This notification covers direct subsidies to the fisheries sector.  The amounts reported relate in
general to commitments made by the competent authorities during the fiscal years 1997 and 1998.
The description of the various schemes follows the outline suggested by WTO.  However,
effects on trade are difficult to assess and the notification contains, but for a few aid schemes, no
information on effects on trade.
As regards investment aid to enterprises ”econo mically viable enterprises” is referred to as
one policy objective.  Before selecting a project the competent authorities shall also see that an
economic analysis of the company as well as a profitability assessment of the project as such is made.
1. Investment aid to fishing enterprises
1(a) Aid for fleet renewal and modernisation of fishing vessels
(a) Form of subsidy
Grant
(b) Amount of subsidy (Total commitments)
1997: Skr 20,865,000 (Community funds)
Skr 4,646,000 (National funds)
1998: Skr 19,660,000 (Community funds)
  Skr 5,912,000 (National funds)
(c) Policy objectives
To strengthen the structure and to develop economically viable enterprises in the sector.
(d) Duration
State aid to fisheries is from the date of accession subject to the rules and conditions that are
stipulated in Council Regulation (EC) No 2468/98.
(e) Statistical data
Estimated number of recipients of aid during 1997 and 1998: approx. 175
Information concerning effects on trade is not available.
(f) Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:1716, 1 January 1995)G/SCM/N/48/EEC/Add.14
Page 34
(g) Rules and conditions
Recipients: Fishing enterprises.
Categories of expenditures eligible for aid:
RSW tanks, safety equipment, selective gear, etc.
1(b) Aid for adjustment of fishing effort
(a) Form of subsidy
Grant
(b) Amount of subsidy (Total commitments)
1997: Skr 6,969,000 (Community Funds)
Skr 6,969,000 (National Funds)
1998: Skr 983,000 (Community Funds)
Skr 983,000 (National Funds)
(c) Policy objectives
To achieve a sustainable balance between resources and their exploitation.
(d) Duration
State aid to fisheries is from the date of accession subject to the rules and conditions that are
stipulated in Council Regulation (EC) No 2468/98
(e) Statistical data
Estimated number of recipients of aid during 1997 and 1998: 43
Information concerning effects on trade is not available.
(f) Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:1716, 1 January 1995)
(g) Rules and conditions
Recipients:  Fishing enterprises
Categories of expenditures eligible for aid:
- scrapping
- permanent transfer to third country
Maximum possible aid intensity: Participation rates are stipulated in Council Regulation (EC)
No 2468/98 and in the SPDG/SCM/N/48/EEC/Add.14
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2. Investment aid to aquaculture enterprises
(a) Form of subsidy
Grant
(b) Amount of subsidy (Total commitments)
1997: Skr 11,850,000 (Community funds)
Skr 3,160,000 Skr (National funds)
1998: Skr 10,034,000 (Community Funds)
Skr 3,028,000 (National Funds)
(c) Policy objectives
To develop economically viable enterprises in the sector and assist structural improvements.
(d) Duration
State aid to fisheries is from the date of accession subject to the rules and conditions that are
stipulated in Council Regulation (EC) No 2468/98.
(e) Statistical data
Estimated number of recipients of aid during 1997 and 1998: 90
Information concerning effects on trade is not available.
(f) Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:1716, 1 January 1995)
(g) Rules and conditions
Recipients: Aquaculture enterprises and organisations concerned with development projects
within the aquaculture sector.
Maximum possible aid intensity: Participation rates are stipulated in Council Regulation (EC)
No 2468/98 and in the SPD
Categories of expenditures eligible for aid:
- construction, modernisation and acquisition of buildings
- investments to improve the product quality and to reduce pollution
- acquisition of new plant and machinery
.
The enterprise must be submitted to official animal health control.G/SCM/N/48/EEC/Add.14
Page 36
3. Investment aid to fishing port facilities
(a) Form of subsidy
Grant
(b) Amount of subsidy (Total commitments)
1997: Skr 3,849,000 (Community funds)
Skr 2,475,000 (National funds)
1998: Skr 6,114,000 (Community funds)
Skr 12,023,950 (National funds)
(c) Policy objectives
To improve and adapt structure in the fisheries sector.
(d) Duration
State aid to investments in fishing port facilities is from the date of accession subject to the
rules and conditions that are stipulated  in Council Regulation (EC) No 2468/98.
(e) Statistical data
Estimated number of recipients of aid during 1997 and 1998: 33
Information concerning effects on trade is not available.
(f) Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:1716, 1 January 1995)
(g) Rules and conditions
Recipients:
- local authorities & other public bodies
- fishermen and fish processing enterprises connected to harbours
- fishing harbour associations
Maximum possible aid intensity: Participation rates are stipulated in Council Regulation (EC)
No 2468/98 and in the SPD
Categories of expenditures eligible for aid:
- investments to improve the conditions under which fishery products are landed, handled
and stored
- investments to support fishing vessel activities
- investments to improve the safety during the landing or loading of products.G/SCM/N/48/EEC/Add.14
Page 37
4. Investment aid for processing and marketing
(a) Form of subsidy
Grant
(b) Amount of subsidy (Total commitments)
1997: Skr 27,535,000 (Community funds)
Skr 9,096,000 (National funds)
1998: Skr 22,719,000 (Community funds)
Skr 7,552,000 (National funds)
(c) Policy objectives:
To develop economically viable enterprises in the sector and assist structural improvements.
(d) Duration
State aid to investments in processing and marketing is from the date of accession subject to
the rules and conditions that are stipulated in Council Regulation (EC) No 2468/98.
(e) Statistical data
Estimated number of recipients of aid during 1997 and 1998: approx. 95
Information concerning effects on trade is not available.
(f) Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:1716, 1 January 1995)
(g) Rules and conditions 
Recipients:  The Processing IndustryMaximum possible aid intensity: Participation rates are stipulated in Council Regulation (EC)
No 2468/98 and in the SPD
Categories of expenditures eligible for aid:
- The construction and acquisition of buildings and installation
- The acquisition of new equipment needed for the processing and marketing
- The application of new technology
- Investments to improve product quality and to reduce pollution
5. Investment aid for protection of coastal waters
(a) Form of subsidy
Grant.G/SCM/N/48/EEC/Add.14
Page 38
(b) Amount of subsidy (Total commitments)
1997: Skr 4,708,000 (Community funds)
Skr 4,708,000 (National funds)
1998: Skr 4,043,000 (Community funds)
Skr 3,659,000 (National funds)
(c) Policy objectives
To achieve a sustainable balance between resources and their exploitation.
(d) Duration
Aid for development of coastal waters is from the date of accession subject to the rules and
conditions that are stipulated in Council Regulation (EC) No 2468/98.
(e) Statistical data
Estimated number of recipients of aid during 1997 and 1998: 6
Information concerning effects on trade is not available.
(f) Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:1716, 1 January 1995)
(g) Rules and conditions
Recipients: Public institutions or bodies designated for that purpose by the competent
authorities.
Maximum possible aid intensity: Participation rates are stipulated in Council Regulation (EC)
No 2468/98 and in the SPD
Categories of expenditures eligible for aid:
- Investments to improve water circulation and other habitat conservation measures.
- Re-stocking of species of importance for coastal fishing
6. Aid for promotion/marketing
(a) Form of subsidy
Grant
(b) Amount of subsidy (Total commitments)
1997: Skr 2,020,000 (Community funds)
Skr 1,819,000 (National funds)
1998: Skr 3,769,000 (Community funds)
Skr 2,705,000 (National funds)G/SCM/N/48/EEC/Add.14
Page 39
(c) Policy objectives
To improve market supply and the value added to fisheries and aquaculture products.
(d) Duration
Aid for promotion is from the date of accession subject to the rules and conditions that are
stipulated in Council Regulation (EC) No 2468/98.
(e) Statistical data
Estimated number of recipients of aid between 1997 and 1998:  16
Information concerning effects on trade is not available.
(f) Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:1716, 1 January 1995)
(g) Rules and conditions 
Recipients:
Public bodies, fisheries interest associations, private contractors
Maximum possible aid intensity: Participation rates are stipulated in Council Regulation (EC)
No 2468/98 and in the SPD
Categories of expenditures eligible for aid:
- Consumers surveys and market studies, promotion campaigns, organisation of and
participation in trade fairs, consumption advice, services and advice to wholesalers and
retailers.
7. Aid for temporary cessation of fishing activities
(a) Form of subsidy
Grant.
(b) Amount of subsidy (Total commitments)
1997: Skr 721,000 (Community funds)
Skr 387,000 (National funds)
1998: Skr 813,000 (Community funds)
Skr 488,000 (National funds)
(c) Policy objectives
To achieve sustainable balance between resources and their exploitation.G/SCM/N/48/EEC/Add.14
Page 40
(d) Duration
State aid to temporary cessation of fishing activity is from the date of accession subject to the
rules and conditions that are stipulated  in Council Regulation (EC) No 2468/98.
(e) Statistical data
Estimated number of recipients of aid during 1997 and 1998:  approx. 40
(f) Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:1716, 1 January 1995)
(g) Rules and conditions
Recipients: Fishing enterprises.
Categories of expenditures eligible for aid:
- Compensation of the loss of income associated with a temporary cessation measure
introduced as a result of unforeseen and non-recurring circumstances attributable to
biological causes.
8. Aid to studies and pilot projects
(a) Form of subsidy
Grant.
(b) Amount of subsidy (Total commitments)
1997: Skr 2,764,000 (Community funds)
Skr 1,906,000 (National funds)
1998: Skr 1,583,000 (Community funds)
Skr 973,000 (National funds)
(c)  Policy objectives
To improve and adapt structures in the fisheries and aquaculture sector.
(d) Duration
State aid to studies and pilot projects is from the date of accession subject to the rules and
conditions that are stipulated in Council Regulation (EC) No 2468/98.
(e) Statistical data
Estimated number of recipients of aid during 1997 and 1998: 13
Information concerning effects on trade is not available.G/SCM/N/48/EEC/Add.14
Page 41
(f) Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:1716, 1 January 1995)
(g) Rules and conditions
Recipients:  Universities, Public and private institutions, enterprisesMaximum possible aid intensity: Participation rates are stipulated in Council Regulation (EC)
No 2468/98 and in the SPD
Categories of expenditures eligible for aid:The result of the study or pilot project should be of value for the Industry.Any result must be published and made accessible to the public.
9. Payment of compensation to producers´ organisations
(a) Form of subsidy
(b) Amount of subsidy (Total commitments)
1997: Skr 3 600 000
1998: Skr 3 500 000
(c) Policy objective
To grant financial compensation to producers´ organizations for losses when fish has been
withdrawn from the market.
(d) Duration
From 1 January 1995.
(e) Statistical data
Estimated number of recipients of aid between 1997 and 1998: 4 (Producers´ organisations)
Sweden considers that this measure has had very insignificant, if any, effects on trade.
(f) Legal basis
Council Regulation (EEC) No 3759/92 of 17 December 1992 on the common organisation of
the market in fishery and aquaculture products.
(g) Rules and conditions
Article 8-12 in Council Regulation No 3759/92G/SCM/N/48/EEC/Add.14
Page 42
10. Governmental subsid y for fish-stocking
(a) Form of subsidy
Grant
(b) Amount of subsidy (Total payments):
1997: Skr 1,645,000
1998: Skr 3,900,000
(c) Policy objectives
To  enhance stocks of eel and salmonids for the commercial fisheries in coastal and inland
waters.
(d) Duration:
Commitments has been made for activities as from 1 January 1998–31 December 2000.
(e) Statistical data:
The grants are restricted to enhance stocks and it is not possible to estimate any effects on
trade.
(f) Legal basis
Government decision 1998-02-12
(g) Rules and conditions 
The Board of Fisheries decides upon the program and the County Administrative Boards are
responsible for following up the stocking programme.
11. Aid to measures undertaken within the Community Initiative Pesca
(a) Form of subsidy
Grant
(b) Amount of subsidy
1997/1998: Skr 13,800,000 (Community funds)
Skr 10,500,000 (National funds)
(c) Policy objectives
The objectives for the Community Initiative Pesca are stipulated in the Commission´s notice
to the Member States (94/C 180/01)G/SCM/N/48/EEC/Add.14
Page 43
(d) Duration
The integrated Operational Programme covers the period 1995-1999
(e) Statistical data
Estimated number of recipients of aid during 1997 and 1998: 30
Information concerning effects on trade is not available.
(f) Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:1716, 1 January 1995)
(g) Rules and conditions
Recipients: Pesca is designed principally for areas dependent on fisheries in regions eligible
under objective 1,2 and 5(b).
Maximum possible aid intensity: Participation rates are stipulated in the Operational
Programme.
Categories of expenditures eligible for aid:
- diversification of activities in eligible areas
- business services
- maintenance or creation of jobs
- specific project of a general and/or transnational nature in the fisheries sectors
__________