WORLD TRADE
ORGANIZATIONG/SCM/N/60/POL
18 December 2000
(00-5503)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Updating Notification Pursuant to Article XVI:1 of
the GATT 1994 and Article 25 of the SCM Agreement
POLAND
The following communication, dated 12 December 2000, has been received from the
Permanent Mission of Poland.
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The following notification covers the specific subsidies applied in Poland in 1999 in the
industrial and agricultural sectors.
All data concerning the amounts of subsidies contained herein are given in the New Polish
Zlotys (PLN)1
TABLE OF CONTENTS
A. S UBSIDIES APPLIED IN 1999 IN THE INDUSTRIAL SECTOR.............................................3
1. Loans from EFSAL Funds ....................................................................................................... 3
2. Investment Tax Reductions.................................................................................................... ..3
3. Direct Grants for Extra Charges to Products and Services..................................................4
4. Assistance for Restructuring of the Banking Sector..............................................................4
5. Reduction of Liabilities Resulting from Social Insurance Premiums ..................................46. Guarantees and Warrants of the Treasury ............................................................................4
7. Credit Warrants from Funds of “Bank Gospodarstwa Krajowego”...................................5
8. Support of Regional Programmes ...........................................................................................6
9. Restructuring Programme for Steel and Iron Industry........................................................6
10. Restructuring Programme  for Mining Sector........................................................................6
II. HARD COAL MINING ...........................................................................................................7
III. MINING OF SULPHUR, SALT, ZINC AND LEAD ORES, AND OTHER NON-
ENERGETIC MI NERALS ......................................................................................................7
                                                     
1 In 1999, the average exchange rate between Polish Zloty and US dollar was: 1 PLN =  US$0.268.G/SCM/N/60/POL
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11. Tax Incentives .............................................................................................................. .............8
12. Support for Special Economic Zones ......................................................................................8
B. S UBSIDIES SUPPORTING EX PORTS .......................................................................................9
1. Insurance System Supporting Export Contracts, Giaranteed by the Treasury..................9
2. Investment Related Tax Rebate Connected  with Results of Export Activities ...................9
C. S PECIFIC SUBSIDIES  APPLIED IN THE AGRIC ULTURAL SE CTOR ....................................9
1. Grants for Supporting Production of Calcium Fertilizers....................................................9
2. Financial Support for Sugar Export .....................................................................................10
3. Subsidizing of Interests on Banking Loans for Agricultural Purposes..............................10
4. Working Capital Loans ........................................................................................................ ..10
5. Investment Loans............................................................................................................. .......10
6. Intervention Purchase of Food and Agricultural Products by the Agricultural
Products by the Agricultural Market Agency (AMA).........................................................11
7. Grants for Biological Pr ogress in Agriculture .....................................................................12G/SCM/N/60/POL
Page 3
A. SUBSIDIES APPLIED IN 1999 IN THE INDUSTRIAL SECTOR
1. Loans from EFSAL Funds
Amount of assistance granted
In 1999 the total assistance provided amounted to PLN 36.4 million, including: grants –
PLN 17.2 million, and loans – PLN 19.2 million.
As per the end of 1999 approximately 92 per cent of the EFSAL funds were consumed and it
is expected to be used fully until the end of 2000.
Beneficiaries
in thousands PLN
No
.Branch of economy Total
assistance
grantedin 1998Grants LoansGlobal
assistance
structure
1. Food industry 3 152.9 1 152.9 2 000.0 8.7%
2. Chemical industry 1 524.1 1 524.1 - 4.2%
3. Light industry 7 299.2 6 369.2 930.0 20.0%
4. Metallurgy 16 900.9 3 900.9 13 000.0 46.4%
5. Electromechanical industry 4 467.2 3 217.2 250.0 12.3%
6. Extractive industry 85.6 85.6 - 0.2%
7. Health Care 975.3 975.3 - 2.7%
8. Culture        2 000.0 - 2 000.0 5.5%
Total 36 405.1 17 225.1 19 180.0 100%
2. Investment Tax Reductions
Amount of assistance granted
(i) Tax relief resulting from previous year income’s deductions of the investment expenditures
on the basis of the provisions of the Council’s of Ministers Regulation of 24 January 1995
concerning deductions of the investments expenditures from the income and reduction of the
income tax rates in the municipalities especially endangered with high structural
unemployment amounted in 1999 to PLN 5.2 million.
 
(ii) The tax relief resulting from the provisions of the Law of 15 February 1992 concerning the
Corporate Income Tax amounted in 1999 to PLN 1330.7 million, including PLN 341.2
million connected with export activity (see point B2)
Beneficiaries
(i) Relief mentioned in point (i) above was used by 85 entities; average subsidy per tax-payer
amounted to PLN 61.8 thousand.G/SCM/N/60/POL
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(ii) Relief mentioned in point (ii) above was used by 3251 entities (including 257 exporters);
average subsidy per tax-payer amounted to PLN 409.3 thousand (PLN 1 327.6 thousand per
exporter).
3. Direct Grants for Extra Charges to Products and Services
Amount of assistance granted
In 1999 the grants amounted to PLN 715.0 million.
Beneficiaries
Pursuant to the state budget for 1999, similar to the previous years, the grants were designated
for:
in millions of PLN
Meals sold in milk bars
Passenger domestic railway transport
Passenger inter-city bus transportPublication of specialized school and university books           18.3
          537.7
          148.2            10.8
4. Assistance for Restructuring of the Banking Sector
In 1999 no state aid was granted for restructuring the banking sector either within the
framework of previously notified programmes or the new ones.
5. Reduction of Liabilities Resulting from Social Insurance Premiums
In 1999 no state aid was granted for restructuring of the debts of state own enterprises and companies
with the Treasury capital share resulting from contributions for the social insurance.
6. Guarantees and Warrants of the Treasury
Amount of assistance granted
In 1999, 5 enterprises obtained guarantees to re pay the international loans in total value of
PLN 1 579.7 million.  No guarantees were granted in 1999 as to the repayment of the domestic loans.
The expenditures incurred by the Treasury in 1999 resulting from the extended guarantees for
defaulted domestic loans amounted to PLN 296.7 million, including repayment of the principalstotaling PLN 274.9 million and interests PLN 21.8 million.
The expenditures resulted from the defaulted international loans guaranteed and repaid by the
Treasury in 1999 amounted to PLN 0.6 million, including PLN 0.5 million for repayment of the
principal and PLN 0.1 million for interests.G/SCM/N/60/POL
Page 5
Beneficiaries
The guarantees and warrants extended by the Treasury in 1999 covered the banking loans for
financing the following undertakings (within the total amount of the guarantees and warranties
extended by the Treasury):
• Investment in infrastructure of transport sector 37.5 per cent
• Investment in modernization of the energy sector 40.9 per cent
• Investments in infrastructure realized by local governments and 8.0 per cent
Municipal entities  (for banking sector)
• Investments in infrastructure realized by local government 8.4 per cent
• Investments in infrastructure realized by small and medium enterprises 5.2 per cent
     (for governmental agency)
7. Credit Warrants from Funds of “Bank Gospodarstwa Krajowego”
Amount of assistance granted
In 1999 Bank Gospodarstwa Krajowego (BGK) extended 223 loan guarantees totaling
PLN 62.3 million.
Beneficiaries
Currently any domestic business may apply to BGK for loan guarantee, irrespective of
volume of its income and employment level.  Any in vestment loan or loan for purchase of production
materials or raw materials may be covered by the guarantee.  The guarantees are provided up to 60 per
cent of the used portion of the extended loan and up to 60 per cent of the corresponding interests, or
up to 70 per cent of the principal excluding the interests.
The maximum guaranteed amount must not exceed Euro 1.5 million.  The guarantee is
extended after the debtor has provided the guaranto r with collateral in the form of a blank bill of
exchange or in other form if so required by the by the BGK.  Businesses pay a fee for extending the
guaranty, however BGK may charge not more than 2 per cent of the guarantee value.  Guarantees may
be obtained directly from BGK or through one of 44 banks which have concluded cooperationagreements with BGK (altogether 2080 local branches).
BGK may extend guarantees for banks loan portfolio of which the loans would be provided
for local small and medium enterprises employing up to 250 persons and whose annual income does
not exceed Euro 20 million, and balance sheet total does not exceed Euro 10 million.  The amount of asingle guarantee within the portfolio must not exceed Euro 50 thousand, and must not exceed 50 per
cent of the loan.
Additionally there are still in force preferential terms for guarantees concerning loans for
financing repairs and reconstruction of buildings and production assets and purchase of productionand raw materials in connection with liquidation of the effects of 1997 floods.  Maximum amount of
these guarantees is up to 80 per cent of the used portion of the extended loan and up to 80 per cent of
the corresponding interests.  However, the deadline for submitting applications concerning these
guarantees expired on 31 December 1998.G/SCM/N/60/POL
Page 6
8. Support of Regional Programmes
Amount of assistance granted
(i) In 1999 PLN 62.7 million was expended for financing of regional programmes.
(ii) In 1999 grants for financing of investments in infrastructure implemented within the system
of public works as own responsibilities of the municipalities endangered with high level of
structural unemployment amounted to PLN 50.3 million.
Beneficiaries
(i) In 1999 of PLN 62.7 million expended for financing of investments determined in regional
restructuring programmes 86.4 per cent was expended for financing own investments of
municipalities (third level administrative units), 9.2 per cent for financing own investments of
the second level administrative units (powiat), 5.2 per cent for financing investments of
economic entities, 0.2 per cent for financing own investments of the voivodships (first level
administrative units).
(ii) PLN 50.3 million of grants from the state budget for financing of investments in infrastructure
implemented within the system of public works as own responsibilities of the municipalities
especially endangered with high level of structural unemployment  was provided exclusively
for financing of own investments of municipalities in 10 voivodships.
9. Restructuring Programme for Steel and Iron Industry
 Amount of assistance granted
 
 In 1999 almost 7.3 thousand workers were covered by social protection payments from the
state budget within the framework of employment re structuring in the steel and iron sector.  Total
amount of grants of PLN 38.9 million consisted of:
 
- PLN 21.8 million granted to almost 6.2 thousand workers in connection with accelerated
retirement,
- PLN 17.1 million granted to almost 1.1 thousand workers as remuneration for dismissed
employees.
 
 Beneficiaries
 
 In 1999 no subsidies other than social payments were granted to the steel and iron sector.
Social support was granted only to the individual workers as described above.
 
10. Restructuring Programme for Mining Sector
 Legal basis – amendment
 
- The 1999 State Budget (Journal of Laws No 17, item 154),
- Law of 26 November 1998 on adjustment of hard co al mining to the market economy and special
rights of municipalities with a mining industry (Journal of Laws No 162, item 1112)
 G/SCM/N/60/POL
Page 7
- Regulation of the Minister of Economy of 30 April 1999 concerning detailed  rules and
procedures of awarding and use of grants aime d at employment restructuring ... (Journal of Laws
No 52, item 538 and No 111, item 1298)
 
- Regulation of the Minister of Economy of 30 April 1999 concerning detailed  rules and
procedures of awarding and use of grants ai med at financing physical liquidation of the coal
mines and alleviation of mining damages ... (Journal of Laws No 47, item 465)
II. HARD COAL MINING
 Amount of assistance granted
 
 (a) Direct assistance in 1999 – PLN 1 312.7 million including :
 
- Grants for liquidation of the coal mines
- Grants for employment restructuring
- Mining damages alleviation PLN 338 million
 PLN 953.7 million
 PLN   30 million
 
 (b) Grants from the state budget for financing central government investments in 1999:
  
- total amount for hard coal mining PLN 30.06 million
 
 Beneficiaries
 
 The following entities of the hard coal mining sector obtained the assistance:
  
Type of grant  Number  of
 Entities Average grant per grantee
 (in millions PLN)
 Liquidation of mines
 
 Grants for employment
 Restructuring
 
 Mining damages alleviation 26
 
 84
  
 
31 13
 
 11.4
  
 
0.97
 
III. MINING OF SULPHUR, SALT, ZINC AND LEAD ORES, AND OTHER NON-
ENERGETIC MINERALS
Amount of assistance granted
 
 Direct assistance in 1999 – PLN 150 million including :
 
 - liquidation of mines PLN 141.1million 
 - necessary expenditures after liquidation of mines  PLN   5.4 million
 - social payments PLN   3.5 million
 
Beneficiaries
 
 In the sector of mining of salt, sulfur, zinc and lead ores, and other non-energetic minerals in
1999 the grants were awarded to 8 entities. Average grant per entity was PLN 18.8 millionG/SCM/N/60/POL
Page 8
 
11. Tax Incentives
 Amount of assistance granted
 
 Value of the abolished current taxes obligation – PLN 165 millions including :
 from legal persons  - PLN 138.3 million
 from natural persons - PLN 26.9 million.
 
 Value of the abolished overdue taxes - total amount PLN 142.4 million including :
 lifted taxes - PLN 34.6 million
 corporate income tax - PLN 112.5 million
 personal income tax - PLN 29.9 million
  
Total amount of deferred tax payments and tax payments in installments - PLN 812.4 million
including :
 lifted taxes - PLN 23.2million,
 corporate income tax - PLN 78.9 million,
 personal income tax - PLN 35.6 million,
 indirect taxes – PLN 674.7 million.
 
 Beneficiaries
 
 Natural and legal persons; any taxpayer may apply for tax relief.
 
12. Support for Special Economic Zones
 Amount of assistance granted
 
 In 1999 the tax exemptions were granted in 10 of the Zones.  The total assistance amounted to
PLN 88.2 million including :
 
- PLN 3.9 million in Special Economic Zone of Walbrzych,
- PLN 341 thousand million in Special Economic Zone of Slupsk
- PLN 8.3  million in Special Economic Zone of Tarnobrzeg
- PLN 190 thousand in Special Economic Zone of Warmia
- PLN 1 million in Special Economic Zone of Lodz,
- PLN 12.9 million in Special Economic Zone of Suwalki,
- PLN 31.6 million in Special Economic Zone of Mielec,
- PLN 25.5 million in Special Economic Zone of Katowice,
- PLN 3.8 million in Special Economic Zone of Starachowice,
- PLN 312 thousand in Special Economic Zone of Legnica.
 
 Beneficiaries
  
In 1999 the assistance was granted to 71 entities.  The number of entities which became
eligible for the scheme (i.e. registered their economic activity in the zones) till the end of 1999
amounted to 246 for all zones altogether.
 G/SCM/N/60/POL
Page 9
B. SUBSIDIES SUPPORTING EXPORTS
1. Insurance System Supporting Export Contracts, Giaranteed by the Treasury
 Amount of  assistance granted
 
 In 1999 the Export Credits Insurance Corporation did not use any forms of the state
assistance, i.e. neither loans from the state budget resources nor banking loans guarantees to secure
the credits contracted by the Corporation. Own reso urces of the Corporation were sufficient for the
insurance.
 
 40.2 per cent (i.e. PLN 1 368 million) of the PLN 3 400 million’s limit determined in the
1999 budget for insurance of export contracts was consumed.
 
 Beneficiaries
 
 The Export Credits Insurance Corporation is the direct beneficiary of the assistance while
businesses using this form of assistance are indirect beneficiaries.
 
2. Investment Related Tax Rebate Connected with Results of Export Activities
 Amount of  assistance granted
 
 Investment tax relieves for exporters (i.e. entities with incomes from export sales constituting
more than 50 per cent of global incomes or with incomes from export sales exceeding Euro 8 million)amounted in 1999 to PLN 341.2 million.
 
 Beneficiaries
 
 Investment tax relieves were granted in 1999 to  257 exporters. Average amount of the subsidy
was PLN  1.3 million.
 
C. SPECIFIC SUBSIDIES  APPLIED IN THE AGRICULTURAL SECTOR
1. Grants for Supporting Production of Calcium Fertilizers
 Legal basis – amendment   
 
- Law of 26 November 1998 on public finances (Journal of Laws No 155 item 1014 and of 1999
No 38 item 360, No 49 item 437, No 70 item 778, No 110 item 1255).
- The 1999 Budget Law (Journal of Laws  No 17 item 154)
- Regulation of the Minister of Agriculture of 19 March 1999 on the amount of subject grants for
entities in agriculture sector and detailed rules and procedures of awarding and accounting of
these grants (Journal of Laws No 33 item 318 and No 100 item 1176).
 
 Amount  of  assistance granted
 
 In 1999 the grants from the state budget amounted to PLN 64.2 million
 
 Beneficiaries
 
 Subsidy was granted to all calcium fertilizers' producers.
 G/SCM/N/60/POL
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2. Financial Support for Sugar Export
 Amount  of  assistance granted
 
 n 1999 the Agency for Agriculture Restructuring and Modernization supported the export of
sugar with the amount of PLN 59.2 million for the exported volume of 108 902 tons.
 
 Beneficiaries
 
 68 sugar producers received subsidies for the exported sugar in 1999.
 
3. Subsidizing of Interests on Banking Loans for Agricultural Purposes
 Amount of assistance granted
 
 Amount of PLN 362.6 million
 
 Beneficiaries
 
 Agricultural farms
 
4. Working Capital Loans
 Amount of  assistance granted
 
 In 1999 the Agency for Agriculture Restructuring and Modernization assigned funds  for :
- loans for purchase of  production assets for agricultural production – PLN 194.1 million,
- loans for purchase of  agricultural products and storage or purchase of periodical surplus of
agricultural products – PLN 186. 1 million.
 
 Beneficiaries
 
- Domestic economic entities involved in the agricultural production may apply for loans for
purchase of production assets for agricultural production.
- Domestic economic entities involved in food processing or food storage may apply for loans for
purchase and storage of agricultural products.
- Domestic economic entities producing or storing periodical surplus of powdered milk, butter, hard
cheeses, pork half-carcasses, and bee-honey may apply for loans for purchase and storage of these
products.
5. Investment Loans
Characteristics of the programme - supplement.
In 1999 Agency for Agriculture Restructuring and Modernization used to subsidize interests
on following investments credits granted in years 1994 -1998 :
- basic investment loans for implementation of agricultural undertakings, food processing, special
agricultural production sectors and agricultural services,
- loans for purchase of  agricultural land,
- loans for establishing farms by persons not older than 40 years,G/SCM/N/60/POL
Page 11
- loans for business sectors and regions  within the scope of programmes approved by the Minister
of Agriculture and Food Economy,
- loans for implementation of undertakings in agriculture  and special agricultural production
sectors aimed at utilization of  the existing production base of the farms and special agricultural
production sectors through starting up or increasing the production,
- loans for implementation of undertakings in agriculture  and special agricultural production
sectors aimed at utilization of  the existing production base of the farms and special agricultural
production sectors through restarting the production  in these farms and special agricultural
production sectors after the break that lasted at least one year,
- application and increase the Agency subsidies for interest on investment loans for agriculture,
food processing  and agricultural services, extended  before coming into force of the Council’s of
Minister ordinance of January 30, 1996 concerning the specific directions of the actions of theAgency for Agriculture Restructuring and Modernization and rules for implementation of these
actions,
- loans for undertakings generating new jobs for rural population in non-agricultural  sectors in
rural and rural/urban municipalities,
- loans for resuming the activity in the areas affected by  droughts, hails, excessive downfall of
rains or snow, floods, hurricanes, fire,  or  scourge of rodents,
- loans extended for creation of furnishing of a farm within the scope of the programme for
settlement on state owned farmlands approved by the Ministry of Agriculture and Food Economy
and Ministry of Finance
 
 Amount of  assistance granted
 
 In 1999 the Agency allocated PLN 704.6 million for subsidizing the interests on investments
loans.
 
 Beneficiaries
 
 The entities that may apply for loans subsidized interests to the Agency are:
 
- natural or corporate persons conducting activities in  agriculture and special agricultural
production,
- natural or corporate persons conducting or starting up business activities in the rural or rural/urban
municipalities.
 
6. Intervention Purchase of Food and Agricultural Products by the Agricultural Products
by the Agricultural Market Agency (AMA)
 Amount  of  assistance granted
 
(a) grain market
In 1999 AMA directly purchased 328.2 thousand tons of grain for PLN 105.0 million.
 Simultaneously AMA granted surcharges for stor age of the 3.2 million tones of grain (wheat
– 2.7 million tones, rye – 0.5 million tones) in the total amount of PLN 231.7 million.
 
 (b) butter market
 
 In 1999 AMA purchased 4 thousand tones of butter for PLN 33.1 million
 G/SCM/N/60/POL
Page 12
(c) meat market
In 1999 AMA purchased 119.9 thousand tones of pork half-carcasses for PLN 569.9 million.
 (d) bee-honey market
 
In 1999 the total of  1.6 thousands tons of bee honey was purchased  by AMA for PLN 9.9
million.
7. Grants for Biological Progress in Agriculture
 Legal basis – amendment   
 
- Law of 26 November 1998 on public finances (Journal of Laws No 155 item 1014 and of 1999
No 38 item 360, No 49 item 437, No 70 item 778, No 110 item 1255).
- The 1999 Budget Law (Journal of Laws  No 17 item 154)
- Regulation of the Minister of Agriculture of 19 March 1999 on the amount of subject grants for
entities in agriculture sector and detailed rules and procedures of awarding and accounting of
these grants (Journal of Laws No 33 item 318 and No 100 item 1176).
 
Amount  of  assistance granted
In 1999 the grants totaled PLN 221.6 million, including:
animal breeding: PLN 125.3 million and plant production: PLN 96.3 million.
Beneficiaries
The grants are awarded to farmers and animal breeders as well as to entities involved in
implementation of the goals related to biological progress in agriculture:
(1) grants for animal breeding:
- animal breeders PLN 65.2 million
- entities PLN 60.1 million
(2) grants for plant production:
- animal breeders PLN 37.2 million
      - entities PLN 59.1 million
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