G/SCM/N/25/EEC
Page308
IRELAND
TABLE OFCONTENTS
Page
SECTION A...................................................309
1. IrishSteel Ltd. ............................................309
2. Aughinish Alumina Relief ......................................311
3. SeaFishing -Repayment ofhydrocarbon oilandLPGexise dutyinthecase
ofseafishing ..............................................312
4. Reliefs forGlasshouse/Mushroom Operators ..........................312
5. Relief forBiofuel PilotProjects ..................................313
SECTION B...................................................315
1. Tomato Marketing Improvement Assistance Programme ...................315
2. Group Marketing Scheme ......................................315
3. Scheme ofPremiums forMaintaining PureBredKerry Herds ofCattle ..........316
4. Grant-in-aid toFederation ofIrishBeekeepers .........................316G/SCM/N/25/EEC
Page309
SECTION A
1. Irish Steel Ltd.(privatized inMay1996 andnowknown asIrishIspatLtd.)
1. Description/identification ofsubsidy
State Aid,approved bytheEU,forIrishSteel Ltd., aspartoftheprivatization process.
2. Period covered bythenotification
ThesaleofIrishSteel Ltd.toIspatMexicana S.A.deC.V. wascompleted on30May1996,
atwhich timetheappropriate State Aidwaspaidtothecompany bytheIrishGovernment.
3. Policy objective and/or purpose ofsubsidy
OnthebaSis ofa1994 Restructuring Plan, theGovernment decided toseekapartner ornew
owner fortheStateowned IrishSteelLtd.Following negotiations withseveral interested parties, the
IrishGovernment signed anAgreement withIspatMexicana inSeptember 1995forthesaleofallthe
Share Capital ofIrishSteel Ltd. Theprivatization process wascompleted on30May1996 withthe
signature ofaSupplemental Agreement. Thepromise ofStateAidwasessential insecuring agreement
withIspatMexicana onthesaleofIrishSteel Ltd.tothem.
4. Background andauthority forthesubsidy (including legislation)
TheState Aidagreed between theIrishGovernment andIspat Mexicana wassubject toEU
approval under Article 95oftheECSC Treaty.
Following consideration bytheEuropean Commission, theStateAidagreed between theIrish
Government andIspat Mexicana aspartoftheprivatization package wasrecommended bythe
Commission toEUCouncil forapproval.
Unanimous Council approval wasreceived on20December 1995, subject tomonitoring
requirementsandrestrictionsonproduction/salesfora5yearperiod(CommissionDecision96/315/ECSC
of7February 1996).
Irishlegislation wasalsorequired toeffect thesaleofthecompany toIspatMexicana andfor
theprovision oftheappropriate StateAidbytheIrishGovernment (Irish SteelLtd.Act,1996), (S.I.
No.153of1996).
5. Form ofthesubsidy
StateAidtotalling IEP£38.298 million wasapproved bytheEUCommission/EU Council in
respect ofIrishSteel Ltd.asfollows:
(a) Cash contribution todealwithaBalance Sheet deficit £2,831,000
(b) Cash contribution tocover adeficit ontheStaffPension Fund £628,000
(c) Cash contribution tocover specific remedial environmental works £2,360,000G/SCM/N/25/EEC
Page310
(d) Cash contribution towards interest charges onexisting debt £4,617,000
(e) Cash contribution forindemnities inrespect ofpossible residual taxation
andother costs/claims arising from thepast £2,445,000
(f) Cash contribution tocompensate ISPAT forrestrictions attached to
State Aidapproval bytheEU £7,200,000
(g) Write-off of1985 Government Loan £17,000,000
(h) Aidelement contained inState guarantees ontwooldloans £1,217,000
__________
£38,298,000
6. Towhom andhowthesubsidy isprovided
TheStateAidapproved bytheCommission/Council involved thepayment ofcashcontributions
(a)to(f)above bytheIrishGovernment andthese contributions were paidtoIrishSteel Ltd./Ispat
Mexicana on30May1996 onthecompletion ofthesaleoftheShare Capital ofIrishSteel Ltd.to
IspatMexicana.
7. Subsidy perunit
Notapplicable.
8. Duration ofsubsidy
Once offpayment on30May1996ontheoccasion ofthefinalization ofthesaleofthecompany
toIspatMexicana.
9. Statistical datapermitting anassessment ofthetrade effects ofthesubsidy
Theprovision ofState Aidissubject todetailed consideration bytheEuropean Commission.
TheCommission indicated thatitwasessential toensure thattheaidapproved waslimited towhat
wasabsolutely necessary anditwastherefore important thatthere should beadequate counterpart
measures ....sothattheaiddoesnotadversely affect trading conditions within theCommunity toan
extent contrary tothecommon interest.
Asaresult, conditions were attached tothesubsequent approval bytheEUCouncil relating
to,interalia,production/sales restrictions fora5yearperiod. TheCommission indicated thatclose
attention would bepaidto:
- thegranting ofaidunder therestructuring planandthesource, terms andconditions
ofanyfurther financing overandabove thatprovided forintheplan;
- thelimitation ofcapacity;
- production andsalesandtheeffect onthemarket;
- theinvestments carried out;
- financial performance.G/SCM/N/25/EEC
Page311
TheCommission willsubmit six-monthly reports totheCouncil tokeep itinformed of
developments.
Todate,theCommission hasproduced threemonitoring reports onIrishSteel/Irish Ispat, which
indicate thattheStateAidwaspaidinaccordance withtheEUCommission/Council Decision andthat
theother conditions attached tothepayment oftheAidarebeing adhered to.
2. Aughinish Alumina Relief
Titleofsubsidy
Aughinish Alumina relief
Policy objective ofthesubsidy
Tomaintain competitiveness.
Background andauthority forthesubsidy
Therelief wasintroduced under S.I.no.126of1983. Council Decision 92/510/EEC authorized
Ireland tocontinue togrant excise dutyrelief inrespect ofoilusedintheproduction ofalumina in
theShannon region (Aughinish). Thisrelief wasgranted inaccordance withprovisions ofArticle 8.4
ofDirective 92/81/EEC which setsoutthestructure ofexcise dutyforoilproducts intheSingle Market.
Under theterms ofthisDirective itwillbesubject toreview bytheEuropean Commission before the
endof1996.
Form ofthesubsidy
Excise dutyrelief.
How thesubsidy isprovided (destination)
Thesubsidy isprovided toAughinish Alumina Ltd.intheformofrelief frompayment ofduty
onHeavy FuelOilusedtoproduce aluminium.
Total amount ofsubsidy
Thetotalamount wasapproximately IEP£2m.
Duration ofthesubsidy
Therelief inoperation since 1983isnottimelimited butwillbesubject toreview asindicated
above.
Assessment ofthetrade effects ofsubsidy
None available.G/SCM/N/25/EEC
Page312
3. SeaFishing
Titleofsubsidy
Seafishing -Repayment ofhydrocarbon oilandLPGexcise dutyinthecaseofseafishing.
Policy objective ofthesubsidy
Toassist theseafishing industry.
Background andauthority forthesubsidy
Imposition ofDuties (No.255)(Hydrocarbon oils)Order, 1981.
Form ofthesubsidy
Repayment ofexcise duty.
How thesubsidy isprovided (destination)
Thesubsidy isprovided toseafishermen.
Subsidy perunit
Total value ofthesubsidy wasIEP£1.79 million.
Duration ofthesubsidy
Therelief isinoperation since 1981 andisnottimelimited.
Assessment ofthetrade effects ofsubsidy
None available.
4. Glasshouse/Mushroom Operators
Titleofsubsidy
Reliefs forglasshouse/mushroom operators.
Policy objective ofthesubsidy
Toassist thecommercial glasshouse operators andmushroom growers.
Background andauthority forthesubsidy
Therelief wasoriginally introduced intheImposition ofDuties (No.232)(Hydrocarbon Oils)
Order, 1977 which came intoeffect on1September 1977 provided fortherepayment ofexcise dutyG/SCM/N/25/EEC
Page313
atthethenrateof2p.pergallon. Inthe1980 Finance Act,when thedutywasincreased to7p.per
gallon, itwasdecided thatarateof2p.should apply toglasshouse operators.
Form ofthesubsidy
Reduced rateforpurchase ofhydrocarbon oil.
How thesubsidy isprovided (destination)
Commercial glasshouse operators andmushroom growers.
Total amount ofsubsidy
Total value wasIEP£0.31m.
Duration ofthesubsidy
Therelief isinoperation invarious forms since 1977 andisnottimelimited.
Assessment ofthetrade effects ofsubsidy
None available.
5. Biofuel Pilot Projects
Titleofsubsidy
Relief forBiofuel PilotProjects
Policy objective ofthesubsidy
Section 116ofFinance Act1995, provides fortheMinister ofFinance inconsultation with
theMinister forTransport, Energy andCommunications tomake provision forrelief fromexcise duty
inrespect ofbiofuel projects which are:
- designed tomanufacture orproduce biofuel; or
- totestthetechnical viability ofbiofuel foruseasamotor fuel.
Background andauthority forthesubsidy
Therelief wasintroduced insection 116oftheFinance Act,1995.
Form ofthesubsidy
Remission ofExcise Duty onbiofuels usedinpilotprojects.G/SCM/N/25/EEC
Page314
How thesubsidy isprovided (destination)
Anyorganization which satisfies theMinister forFinance andtheMinister forTransport, Energy
andCommunications thattheir project fillstheabove criteria. Cork County Council istheonly
organization inreceipt oftherelief.
Total value ofsubsidy
Total value isIEP£0.020m.
Duration ofthesubsidy
Relief inrespect ofpilotprojects willbeavailable until1998.
Assessment ofthetrade effects ofsubsidy
None available.G/SCM/N/25/EEC
Page315
SECTION B
1. Tomato Marketing Improvement Assistance Programme
1. 1996
2. Toimprove thequality ofIrishtomatoes
3. Scheme operated byAnBordGlas(theGovernment agency withresponsibility fordeveloping
thehorticulture industry). Nospecific legislation.
4. Grant
5. Provided totomato producers atarateof50%ofthecostofqualifying expenditure onquality
andhygiene control systems
6. 50%ofeligible costs. Total budget allocation for1997 isIEP£50,000
7. Noduration limitset.
8. N/A.
2. Group Marketing Scheme
1. 1996.
2. Toenable small andmedium-sized businesses which donothavesufficient resources available
tothem topromote theirproduce onthewider market.
3. Scheme runbyAnBord Bia(Irish Food Board). Nospecific legislation.
4. Grant.
5. Provided toexporting companies. Subsidy tocover costsofthecompany -notrelated tonumber
ofunits.
6. 50%ofeligible costs uptoamaximum payment ofIEP£60,000.
7. On-going scheme -noduration limit. Each company canreceive aidforamaximum oftwo
years. Commenced 1995.
8. N/A.G/SCM/N/25/EEC
Page316
3. Scheme ofPremiums forMaintaining Pure Bred Kerry Herds ofCattle
1. 1996.
2. Tomaintain purebredherds ofcattle inIreland forthepurposes ofenvironmental andheritage
conservation.
3. National scheme runbyDepartment ofAgriculture, FoodandForestry. Nospecific legislation.
4. Grant
5. Provided tobreeders ofPureBredKerry Cattle. Fixed amount perunit.
6. IEP£60.00 percalfborn.
7. On-going scheme -noduration limit. Commenced 1983.
8. N/A
4. Grant-in-aid toFederation ofIrish Beekeepers
1. 1996
2. ToassisttheFederationofIrishBeekeeperswhointurnprovideadvicefortheirmembersthrough
thepublication ofajournal, organisation ofsummer courses, etc.
3. Grant made bytheDepartment ofAgriculture, Food andForestry. Nospecific legislation.
4. Grant.
5. Provided toFederation ofIrishBeekeepers. Fixed amount -notrelated tonumber ofunits.
6. Total amount ofsubsidy: IEP£3,000.
7. On-going scheme -noduration limit. Commenced 1986.
8. N/A.