RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q2/EEC/20
23 March 2000
(00-1203)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Questions Posed by BRAZIL
Regarding the Updating Notification of the EUROPEAN COMMUNITIES1
The following communication, dated 21 March 2000, has been received from the Permanent
Mission of Brazil.
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GERMANY2
1. Bavarian Regional Programmes in Support of Commerce and Industry (Item 2 of the
notification)
(a) In response to Korea3, Germany affirmed that "the eligible companies are industrial
companies, arts and crafts and the service sector".  Will all companies from these
sectors that request the subsidy be automa tically eligible to receive the investment
grant or the interest rate subsidy to subsidize loans under this programme?
(b) Is this subsidy available for the entire territory of Bavaria?  What are the assisted
areas under the Joint Federal Government?  Laender Scheme for the Improvement of
Regional Economic Structures?
(c) Could the EC/Germany provide Members with a copy of the "Community
Framework on State Aid to SME" ?  (EC OJ 213/04 of 23.07.96)
2. Consolidation programme of the Land Mecklenburg-Western Pomerania on the
granting of public financial aid to small and medium-sized commercial and industrial
enterprises – special fund to support companies (Item 4 of the Notification)
(a) The notification of this programme states that loans are made at market conditions .
What are the criteria and parameters used as a reference for the definition of these
"market conditions "?  Could the EC/Germany present the specific conditions under
which the loans are made?
(b) What are the eligibility criteria for the co mpanies that desire to receive loans under
this programme?  The notification mentions that it is "usually restricted" to SMEs.
                                                     
1 G/SCM/N/48/EEC/Add.6, G/SCM/N/48/Add.13, G/SCM/N/48/EEC/Add.9.
2 G/SCM/N/48/EEC/Add.6
3 G/SCM/Q2/EEC/10G/SCM/Q2/EEC/20
Page 2
What kinds of companies and operating in which fields have in fact benefitted from
this programme during the period covered by this notification?  Could the
EC/Germany describe the characteristics and objectives of these projects?
3. Joint Scheme on "Improving the Regional Economic Structure"
(a) What were the assisted areas in the period covered by the notification?
(b) What are the investment projects promoted under this programme?
4. Investment allowance for companies in th e manufacturing and craft sectors in Eastern
Germany where the majority holding is in Eastern German hands (Section 5, para. 2 of the 1996Investment Allowance Act) and investment allowance for small and medium-sized companies
(up to 250 employees) in the manufacturing and craft sectors in Eastern Germany (Section 5,
para. 3 of the 1996 Investment Allowance Act) – Items 6 and 7 of the notification
(a) On items 6.5 and 7.5, Duration of subsidy and other time-limits attached to it ,
Germany states:  "Investment completed before 31 December 1998".  Does this mean
that these programmes have been terminated?
5. Regional Economic Support Programme (Item 8 of the Notification)
(Land North-Rhine-Westphalia)
(a) Are the grants under this programme provided only to small and medium sized
businesses?
(b) What are the eligibility criteria for the co mpanies that are seeking grants under this
subsidy?
(c) What kinds of projects are eligible for subsidization under this programme?  What
kinds of projects have actually benefitted from the programme?
6. State Aid for Research and Development in the Sector of Biotechnology (Item 11 of the
notification)
(a) What are the characteristics of the R&D projects supported under this programme?
(b) What are the types of companies eligible under the programme criteria?
(c) What is meant by "preventive research"? (Item 11.4)
(d) How does this programme comply with the specificity criteria of Article 2 of the
Agreement on Subsidies and Countervailing Measures?
SPAIN
4
1. Development of Non-Energy Mining
(a) The notification of this programme affirms that this subsidy "is confined to zones
defined by the EU Commission as Objective 1".  What are these zones in Spain?
What are their characteristics in economic terms?
                                                     
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2. Support Initiative for Technology, Quality and Industrial Safety (ATYCA)
(a) What is the total amount of resources granted by this subsidy?
3. Aid under technological programmes connected with the SEAT Modernization Plan
(1994-1997)
(a) What is the percentage of the total amount of the research financing that is supported
by this subsidy?
(b) For a better evaluation of the effects of this programme on trade, could Spain inform
the annual sales of SEAT for the year of 1998?
(c) Has this subsidy been terminated?
4. R&D plan for the aeronautical sector
(a) What were the aircraft companies that have signed a cooperation agreement under
this programme?
(b) How is the amount of the repayable advances for a given company defined or
calculated?
(c) On what basis are the advances repaid?  Are they related to the sales of the company?(d) Has this subsidy been terminated?
5. Regional Economic Incentives Scheme
(a) Which are the most disadvantaged areas that can receive aid from this subsidy?
ITALY
5
1. Incentives to Manufacturing and Extractive Enterprises in Disadvantaged Regions
(Item 2)
(a) What are the disadvantaged areas covered by this programme?
(b) What are the types of companies eligible for the benefits of the programme?
(c) What are the conditions and terms of the tax concession scheme?
2. Soft Loans to companies that are entering  new markets by the opening of commercial
operations in non-EC countries
(a) Is this subsidy contingent upon export performance?  How does it comply with
footnote 4 of the SCM Agreement, which establishes that "This standard is met when
the facts demonstrate that the granting of a subsidy … … is in fact tied to actual or
anticipated exportation or export earnings . …".  (Emphasis added)?
                                                     
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(b) Which are the types of companies eligible for the benefits of the programme?
(c) What are the conditions and terms of the tax concession scheme?
3. Support to Innovation and Development of SME (Item 3 of the notification)
(a) What are the eligibility criteria for this programme?
(b) What types of projects for the innovation and development of SMEs have in fact been
supported by this programme during the period covered by the notification?
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