WORLD TRADE G/SCM/N/3/ROM
31October 1996
ORGANIZATION(96-4588)
Original: English Committee onSubsidies andCountervailing Measures
SUBSIDIES
NOTIFICATIONS PURSUANT TOARTICLE XVI.1 OFTHE GATT 1994
AND ARTICLE 25OFTHE AGREEMENT ONSUBSIDIES AND
COUNTERVAILING MEASURES
ROMANIA
Thefollowing communication, dated 14October 1996, hasbeenreceived fromthePermanent
Mission ofRomania.
_______________
Thisnotification covers subsidies fortheyear1995.
Since itisdifficult toidentify which ofthesubsidies granted under certain programmes fall
under Article 2,andconsequently under paragraph 2ofArticle 25oftheAgreement, Romania notifies
allsuchprogrammes withrespect toaidandassistance provided toeconomic operators, withaview
toensure amaximum transparency.
Alsofortransparency reasons, thisnotification contains allprogrammes fortheimplementation
ofwhich thereisalegislative authority. Consequently, theinclusion ofaprogramme inthisnotification
doesnotnecessarily mean thatitwasoperative in1995.
Thenotification ofanyofthemeasures doesnotprejudge whether ornotsuchameasure is
specific, whether ornotithasanytrade effect andwhether ornotitfallsunder theAgreement on
Subsidies andCountervailing Measures.
Romania reserves itsrighttosupplement thisnotification whenever newmeasures might be
identified ortaken.G/SCM/N/3/ROM
Page2
Table ofContents PageNo.
PART I:INDUSTRY
1. Titleofthesubsidy programmes .................................3
2. Period covered bythenotification .................................3
3. Policy objective and/or purpose ofthesubsidy .........................3
4. Background andauthority forthesubsidy ............................3
5. Form ofthesubsidy ..........................................3
6. Towhom andhowthesubsidy isprovided ............................3
7. Annual amount budgeted forthesubsidy .............................3
8. Duration ofthesubsidy ........................................3
9. Assessment ofthetrade effects ofthesubsidy ..........................4
PART II:AGRICULTURE
1. Titleofthesubsidy programme ...................................4
2. Period covered bythenotification ..................................4
3. Policy objective and/or purpose ofthesubsidy .........................4
4. Background andauthority forthesubsidy .............................4
5. Form ofsubsidy .............................................4
6. Towhom andhowthesubsidy isprovided ............................4
7. Annual amount budgeted forthesubsidy .............................5
8. Duration ofthesubsidy ........................................6
9. Assessment ofthetrade effects ofthesubsidy ..........................6
PART III:RESEARCH AND DEVELOPMENT
1. Titleofthesubsidy programme ...................................6
2. Period covered bythenotification ..................................6
3. Policy objective and/or purpose ofthesubsidy ..........................6
4. Background andauthority forthesubsidy .............................7
5. Form ofsubsidy ............................................7
6. Towhom andhowthesubsidy isprovided ...........................7
7. Annual amount budgeted forthesubsidy ............................7
8. Duration ofthesubsidy .......................................7
9. Assessment ofthetrade effects ofthesubsidy .........................7
PART IV:EXPORT PROMOTION
1. Titleofthesubsidy programme ..................................8
2. Period covered bythenotification .................................8
3. Policy objective and/or purpose ofthesubsidy .........................8
4. Background andauthority forthesubsidy ............................8
5. Form ofthesubsidy .........................................8
6. Towhom andhowthesubsidy isprovided ...........................8
7. Annual amount budgeted forthesubsidy ............................8
8. Duration ofthesubsidy .......................................9
9. Assessment ofthetrade effects ofthesubsidy .........................9G/SCM/N/3/ROM
Page3
PART I:INDUSTRY
1. Titleofthesubsidy programme
Programme ongranting subsidies from theState budget fortheindustries ofcoal, ironand
non-iron ores, radioactive andrareores.
2. Period covered bythenotification
Year 1995.
3. Policy objective and/or purpose ofthesubsidy
TheStatesupports theactivity inthemining sector, ofastrategic importance forthenational
economy currently under thestructural adjustment process.
4. Background andauthority forthesubsidy (including identification ofthelegislation under which
itisgranted)
Subsidies aregranted onthebasis ofGovernment Decision No.18,17January 1995 onthe
products forwhich aregranted subsidies fromtheStateBudget (published inMonitorul Oficial -the
Official Gazette -No.13,24January 1995) andtheLawoftheStateBudget No.22,1995(published
inMonitorul Oficial -theOfficial Gazette -No.53,22January 1995).
Fortheeffective allocation ofthesubsidies, theGovernment issued decisions applicable for
eachproducer (Government Decisions Nos.337and939of1995). Thebudget allocates thesubsidies
totheMinistry ofIndustries, which istheresponsible authority ensuring thattherespective amounts
reach theentitled beneficiary.
5. Form ofsubsidy
Grant.
6. Towhom andhowthesubsidy isprovided (through what mechanism; whether afixed or
fluctuating amount perunit)
(a) Thesubsidies aregranted totheproducers.
(b) Thesubsidies aregranted through monthly allocations according totheeffective results
obtained.
(c) There isafixed amount pereachproduct unit(ton).
7. Annual amount budgeted forthesubsidy
ThetotalannualamountbudgetedforthesubsidywasofLei820.9billion1,representing1.33per
centoftheGDP (ofwhich about Lei476billion forcoalmining).
8. Duration ofthesubsidy
Thesubsidy covers theperiod 1January 1995 -31December 1995.
1Exchange rateat28December 1995: US$1 -Lei2573.G/SCM/N/3/ROM
Page4
9. Assessment ofthetrade effects ofthesubsidy
Although thetrade effects ofthesubsidy aredifficult toassess duetothehorizontal character
oftheextractive industry, itcanbeconsidered thatthetrade effect ofthese subsidies isirrelevant.
PART II:AGRICULTURE
1. Titleofthesubsidy programme
Programme onthesupport granted bytheState totheagricultural producers.
2. Period covered bythenotification
Year 1995.
3. Policy objective and/or purpose ofthesubsidy
TheStatesupports theagricultural producers withaviewtoimproving animal breeds andplant
varieties,irrigatingtheagriculturalland,improvingthesoilfertilityandtheleveloftechnicalendowment
inagriculture.
4. Background andauthority forthesubsidy (including identification ofthelegislation under which
itisgranted)
Thesubsidies aregranted onthebasis ofLawNo.83,1993, onthesupport granted bythe
State totheagricultural producers (published inMonitorul Oficial -theOfficial Gazette -No.286,
7December 1993), asamended through LawNo.56,1994(published inMonitorul Oficial -theOfficial
Gazette -No.184,1994).
Fortheeffective allocation ofthesubsidies, theGovernment issues decisions applicable toeach
product. Thesubsidies allocated from theState budget aretransferred totheMinistry ofFood and
Agriculture, theauthority responsible forensuring thattherespective amounts reach theagricultural
producers.
5. Form ofsubsidy
Grant.
6. Towhom andhowthesubsidy isprovided (through what mechanism; whether afixed or
fluctuating amount perunit)
(a) Thesubsidy isgranted totheagricultural producers.
(b) - Forsubsidies granted fortheimprovement ofplantvarieties, theamounts are
disbursed when theselected seeds arepurchased;
- Inthecaseofimproving theanimal breeds andincreasing thelivestock, apart
ofthesubsidy isgranted when thebreed animals arepurchased andtheother
partisgranted when theanimals and/or animal products (meat, milk) aresold
totheeconomic operators;G/SCM/N/3/ROM
Page5
- Inthefieldofsoilfertility improvement, thesubsidy isgranted when the
agricultural works areinitiated, according totheplant variety;
- Forthecontrol ofplant pests andofanimal diseases, thesubsidy isgranted
annually;
- Fortheenvironment protection, thesubsidy isgranted annually, according
totheimplemented projects;
- Fortheimprovement oftheleveloftechnical endowment ofthefarmers and
thegood functioning ofthefarms, theState subsidizes annually theinterest
tothecredits received bythefarmers.
(c) - Fixed amount.
- Inthecaseofsubsidies oftheinterests tothecredits received bythefarmers,
theamount varies according tothedestination ofthecredit:
- subsidization by60percentformaterial supplies andtheobtaining
ofagricultural production;
- subsidization by70percentforequipment purchase;
- subsidization by75percentforinvestments.
7. Annual amount budgeted forthesubsidy
Forporkandpoultry: Lei460.9 billion
Formilk: Lei183.8 billion
Forcalves andother breed animals: Lei43.7billion
Forsuperior wheat: Lei115.2 billion
Forselected seeds: Lei44.0billion
Forsoilimprovement: Lei334.3 billion
Forthecontrol ofplant pests: Lei39.3billion
Forthecontrol ofanimal diseases: Lei86.0billion
Fortheamendment ofacidandalkaline soils: Lei2.3billion
Forenvironment protection: Lei4.2billion
Forinterest subsidization: Lei170.3 billionG/SCM/N/3/ROM
Page6
Examples ofsubsidies inagriculture:
1. Purchase ofbreed animals:
- Calves forreproduction Lei900/kg live
- Swine Lei900/kg live
2. Increase inlivestock andsalesthereof:
- Cows Lei800/kg live+Lei65,000/year
formaintaining itinexploitation
- Swine Lei1,150/kg when sold
- Poultry Lei950/kg when sold
3. Bonuses formilkwhen sold
- Cowmilk Lei225/litre
8. Duration ofthesubsidy
Thesubsidy covers theperiod 1January 1995 to31December 1995.
9. Assessment ofthetrade effects ofthesubsidy
Notrade effects.
PART III:RESEARCH AND DEVELOPMENT
1. Titleofthesubsidy programme
Research anddevelopment national programme.
Organization andfinancing ofresearch anddevelopment activities. Subsidization byupto
50percentofthevalue ofanyresearch anddevelopment project, within thelimits ofavailable budgetary
resources.
2. Period covered bythenotification
Year 1995.
3. Policy objective and/or purpose ofthesubsidy
TheStatestimulates scientific research andtechnological development, considered asnational
priorities.G/SCM/N/3/ROM
Page7
4. Background andauthority forthesubsidy (including identification ofthelegislation under which
itisgranted)
Thesubsidies aregranted onthebasis ofGovernment Ordinance No.25,1995, onthe
organization andfunctioning oftheresearch anddevelopment activity (published inMonitorul Oficial
-theOfficial Gazette -No.194,1995).
Thesubsidy fromtheStatebudget istransferred totheMinistry ofResearch andTechnology
andtotheRomanian Academy, which aretheauthorities responsible forensuring thattheresponsible
amounts reach thebeneficiaries.
5. Form ofsubsidy
Grant.
6. Towhom andhowthesubsidy isprovided (through what mechanism; whether fixed or
fluctuating amount perunit)
Thesubsidy isgranted toallentities (irrespective ofownership) carrying outresearch and
development activities, suchas:
- National research anddevelopment institutes;
- Research anddevelopment entities subordinated tothecentral public administration;
- Development entities orstructures from theacademic system;
- Scientific research entities oftheRomanian Academy;
- Commercial companies involved inresearch anddevelopment;
- Other legalpersons carrying outsuchactivities.
Theallocation ofsubsidies isperformed through theannual budgets oftherespective research
anddevelopment units.
Theamount represents upto50percentofthevalue ofaresearch anddevelopment project.
Thepercentage actually disbursed isestablished taking intoconsideration possible contributions
coming from other sources thantheState Budget.
7. Annual amount budgeted forthesubsidy
Thetotalannual amount wasLei416.8 billion.
8. Duration ofthesubsidy
Thesubsidy covers theperiod 1January 1995 to31December 1995.
9. Assessment ofthetrade effects ofthesubsidy
Notrade effects.G/SCM/N/3/ROM
Page8
PART IV:EXPORT PROMOTION
1. Titleofthesubsidy programme
Programme onthestimulation ofexport production andofexport. Inorder tocompensate
thedifference between theinterests toexternal credits andthose todomestic credits, theState grants
subsidies covering 50percentoftheleveloftheinterest tothedomestic credits usedinobtaining export
products.
Thenotification issubmitted fortransparency reasons inthepresentation ofmeasures used
bytheGovernment tosupport export development. Inouropinion, these measures arenotofsubsidy
nature. Moreover, these measures comply withOECD countries 'practices andthewaytheyare
implemented complies withtheinternational practices.
2. Period covered bythenotification
Year 1995.
3. Policy objective and/or purpose ofthesubsidy
With aview toensure incentives fortheexport producers andtaking intoaccount thehigh
level oftheinterests todomestic credits (especially when compared totheinterests intheexternal
market), theState decided tocover 50percentoftheinterest tothedomestic credits forexport
production. Thepurpose istoavoid Romanian exports being slowed down ordiminished duetothe
scarcity ofdomestic resources and,implicitly, tothehighlevelofinterests todomestic credits.
4. Background andauthority forthesubsidy (including identification ofthelegislation under which
itisgranted)
Thesubsidy isallocated according totheLawontheStateBudget andisadministered byan
inter-ministerial committee. EXIMBANK (Romanian Export-Import Bank) isthecompetent authority
analysing therequests forsubsidization anddisbursing theamounts established through theStatebudget
(Law No.22,1995, published inMonitorul Oficial -theOfficial Gazette -No.53,1995).
5. Form ofthesubsidy
Grant.
6. Towhom andhowthesubsidy isprovided (through what mechanism; whether afixed or
fluctuating amount perunit)
Thesubsidy isgranted toanyproducer producing forexport onthebasis ofdomestic credits
innational currency, within thelimits established intheLawontheState Budget. Therequests for
subsidies partially covering interests tocredit forexport production areapproved bytheinter-ministerial
committee andthequalification criterion isthatofexport profitability.
Theamounts corresponding tothe50percentoftheinterest tothedomestic credit arereleased
andtransferred tothebeneficiary aftertheexport isactually performed.
7. Annual amount budgeted forthesubsidy
Thetotalannual amount budgeted wasofLei100billion.G/SCM/N/3/ROM
Page9
8. Duration ofthesubsidy
Thesubsidy covers theperiod 1January 1995 to31December 1995.
9. Assessment ofthetrade effects ofthesubsidy
Notrade effects.