G/SCM/N/155/ISL/Rev.1 
G/SCM/N/186/ISL/Rev.1  
G/SCM/N/220/ISL/Rev.1 
G/SCM/N/253/ISL/Rev.1  
G/SCM/N/284/ISL/Rev.1  
 
21 June 2019  
(19-4233)  Page: 1/120 
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES  
NEW AND FULL NOTIFIC ATION PURSUANT TO AR TICLE XVI:1 OF THE G ATT 1994  
AND ARTICLE 25 OF TH E AGREEMENT ON SUBSI DIES 
AND COUNTERVAILING M EASURES  
ICELAND  
Revision1 
The following communication, dated 21 May 2019, is being circulated at the request of the Delegation 
of Iceland.  
 
_______________  
  
                                                
1 This revision only applies to the portion of the document under Section 2013 & 2014. All other sections 
remain unchanged.  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 2 - 
 
  TABLE OF CONTENTS  
2005  ................................ ................................ ................................ ...............................  7 
1   THE AGRICULTURAL  SECTOR  ................................ ................................ ......................  7 
2   SUPPORT FOR R&D AND TECHNOLO GICAL INNOVATION  ................................ ...........  9 
2.1   Technical Development Fund  ................................ ................................ ........................  9 
2.2   Research Fund  ................................ ................................ ................................ ...........  9 
2.3   Support for R&D in marine aquaculture  ................................ ................................ ....... 10 
3   JOB CREATION INI TIATIVE (PRIOR TO 19 96 KNOWN AS FIRM SPE CIFIC  
SUBSIDIES AND EXPORT  PROMOTION (CASE 93 -221))  ................................ ................  11 
4   SUPPORT FOR EMPL OYMENT AND TRAINING  ................................ ...........................  11 
4.1   Vocational Training Fund Support for Vocational Training  ................................ ...............  11 
4.2   Employment Opportunities for Women in Rural Areas  ................................ ....................  12 
4.3   Employment of Handicapped Persons  ................................ ................................ ..........  13 
5   REGIONAL SUPPORT  ................................ ................................ ................................  13 
5.1   Assistance to Employment Development Projects  ................................ .........................  13 
5.2   Assistance to Local Economic Development  ................................ ................................ .. 14 
6   TEMPORARY REPAYM ENT OF COSTS OF FILM S PRODUCTION IN ICEL AND ...............  15 
7   RURAL TOURISM  ................................ ................................ ................................ ...... 16 
8   AID TO PROMOTE M ARKETING OF ICELANDI C TOURISM  ................................ ..........  16 
2006  ................................ ................................ ................................ .............................  18 
1   THE AGRICULTURAL  SECTOR  ................................ ................................ ....................  18 
2   SUPPORT FOR R&D AND TECHNOLOGICAL IN NOVATION  ................................ .........  20 
2.1   Technical Development Fund  ................................ ................................ ......................  20 
2.2   Research Fund  ................................ ................................ ................................ .........  20 
2.3   Support for R&D in marine aquaculture  ................................ ................................ ....... 21 
3   JOB CREATION INI TIATIVE (PRIOR TO 19 96 KNOWN AS FIRM SPE CIFIC  
SUBSIDIES AND EXPORT  PROMOTION (CASE 93 -221))  ................................ ................  22 
4   SUPPORT FOR EMPL OYMENT AND TRAINING  ................................ ...........................  22 
4.1   Vocational Training Fund Support for Vocational Training  ................................ ...............  22 
4.2   Employment Opportunities for Women in Rural Areas  ................................ ....................  23 
4.3   Employment of Handicapped Persons  ................................ ................................ ..........  24 
5   REGIONAL SUPPORT  ................................ ................................ ................................  24 
5.1   Assistance to Employment Development Projects  ................................ .........................  24 
5.2   Assistance to Local Economic Development  ................................ ................................ .. 25 
6   TEMPORARY REPAYM ENT OF COSTS OF FILM S PRODUCTION IN ICEL AND ...............  26 
7   RURAL TOURISM  ................................ ................................ ................................ ...... 27 
8   AID TO PROMOTE M ARKETING OF ICELANDI C TOURISM  ................................ ..........  27 
2007  ................................ ................................ ................................ .............................  29 
1   THE AGRICULTURAL  SECTOR  ................................ ................................ ....................  29 
2   SUPPORT FOR R&D AND TE CHNOLOGICAL INNOVATI ON ................................ .........  31 
2.1   Technical Development Fund  ................................ ................................ ......................  31 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 3 - 
 
  2.2   Research Fund  ................................ ................................ ................................ .........  31 
2.3   Support for R&D in marine aquaculture  ................................ ................................ ....... 32 
3   JOB CREATION INI TIATIVE (PRIOR TO 19 96 KNOWN AS FIRM SPE CIFIC  
SUBSIDIES AND EXPORT  PROMOTION (C ASE 93 -221))  ................................ ................  33 
4   SUPPORT FOR EMPL OYMENT AND TRAINING  ................................ ...........................  33 
4.1   Vocational Training Fund Support for Vocational Training  ................................ ...............  33 
4.2   Employment Opportunities for Women in Rural Areas  ................................ ....................  34 
4.3   Employment of Handicapped Persons  ................................ ................................ ..........  35 
5   REGIONAL SUPPORT  ................................ ................................ ................................  35 
5.1   Assistance to Employment Development Projects  ................................ .........................  35 
5.2   Assistance to Local Economic Development  ................................ ................................ .. 36 
6   TEMPORARY REPAYM ENT OF COSTS OF FILM S PRODUCTION IN ICEL AND ...............  37 
7   RURAL TOURISM  ................................ ................................ ................................ ...... 38 
8   AID TO PROMOTE M ARKETING OF ICELANDI C TOURISM  ................................ ..........  38 
2008  ................................ ................................ ................................ .............................  40 
1   THE AGRICULTURAL  SECTOR  ................................ ................................ ....................  40 
2   SUPPORT FOR R&D AND TECHNOLOGICAL IN NOVATION  ................................ .........  42 
2.1   Technical Development Fund  ................................ ................................ ......................  42 
2.2   Research Fund  ................................ ................................ ................................ .........  43 
2.3   Support for R&D in marine aquaculture  ................................ ................................ ....... 43 
3   JOB CREATION INI TIATIVE (PRIOR TO 19 96 KNOWN AS FIRM SPE CIFIC  
SUBSIDIES AND EXPORT PR OMOTION (CASE 93 -221)) ................................ ................  44 
4   SUPPORT FOR EMPL OYMENT AND TRAINING  ................................ ...........................  45 
4.1   Vocational Training Fund Support for Vocational Training  ................................ ...............  45 
4.2   Employment Opportunities for Women in Rural Areas  ................................ ....................  45 
4.3   Employment of Handicapped Persons  ................................ ................................ ..........  46 
5   REGIONAL SUPPORT  ................................ ................................ ................................  46 
5.1   Assist ance to Employment Development Projects  ................................ .........................  46 
5.2   Assistance to Local Economic Development  ................................ ................................ .. 47 
6   TEMPORARY REPAYM ENT OF COSTS OF FILM S PRODUCTION IN ICEL AND ...............  48 
7   RURAL TOURISM  ................................ ................................ ................................ ...... 49 
8   AID TO PROMO TE MARKETING OF ICEL ANDIC TOURISM  ................................ ..........  50 
2009  ................................ ................................ ................................ .............................  51 
1   THE AGRICULTURAL  SECTOR  ................................ ................................ ....................  51 
2   SUPPORT FOR R&D AND TECHNOLOGICAL IN NOVATION  ................................ .........  53 
2.1   Technical Development Fund  ................................ ................................ ......................  53 
2.2   Research Fund  ................................ ................................ ................................ .........  53 
2.3   Support for R&D in marine aquaculture  ................................ ................................ ....... 54 
3   JOB CREATION INI TIATIVE (PRIOR TO 19 96 KNOWN AS FIRM SPE CIFIC  
SUBSIDIES AND EXPORT  PROMOTION (CASE 93 -221))  ................................ ................  55 
4   SUPPORT FOR EMPL OYMENT AND TRAINING  ................................ ...........................  55 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 4 - 
 
  4.1   Vocational Training Fund Support for Vocational Training  ................................ ...............  55 
4.2   Employment Opportunities for Women in Rural Areas  ................................ ....................  56 
4.3   Employment of Handicapped Persons  ................................ ................................ ..........  57 
5   REGIONAL SUPPORT  ................................ ................................ ................................  57 
5.1   Assistance to Employment Development Projects  ................................ .........................  57 
5.2   Assistance to Local Economic Development  ................................ ................................ .. 58 
6   TEMPORARY REPAYM ENT OF COSTS OF FILM S PRODUCTION IN ICEL AND ...............  59 
7   RURAL TOURISM  ................................ ................................ ................................ ...... 60 
8   AID TO PROMOTE M ARKETING OF ICELANDI C TOURISM  ................................ ..........  60 
2010  ................................ ................................ ................................ .............................  62 
1   THE AGRICULTURAL  SECTOR  ................................ ................................ ....................  62 
2   SUPPORT FOR R&D AND TECHNOLOGICAL IN NOVATION  ................................ .........  64 
2.1   Technical Development Fund  ................................ ................................ ......................  64 
2.2   Research Fund  ................................ ................................ ................................ .........  64 
2.3   Support for R&D in marine aquaculture  ................................ ................................ ....... 65 
3   JOB CREATION INI TIATIVE (PRIOR TO 19 96 KNOWN AS FIRM SPE CIFIC  
SUBSIDIES AND EXPORT  PROMOTION (C ASE 93 -221))  ................................ ................  66 
4   SUPPORT FOR EMPL OYMENT AND TRAINING  ................................ ...........................  66 
4.1   Vocational Training Fund Support for Vocational Training  ................................ ...............  66 
4.2   Employment Opportunities for Women in Rural Areas  ................................ ....................  67 
4.3   Vocational Rehabilitation  ................................ ................................ ...........................  68 
4.4   Employment of Handicapped Persons  ................................ ................................ ..........  68 
5   REGIONAL SUPPORT  ................................ ................................ ................................  69 
5.1   Assistance to Employment Development Projects  ................................ .........................  69 
5.2   Assistance to Local Economic Development  ................................ ................................ .. 69 
6   TEMPORARY REPAYM ENT OF COSTS OF FILM S PRODUCTION IN ICEL AND ...............  70 
7   RURAL TOURISM  ................................ ................................ ................................ ...... 72 
8   AID TO PROMOTE M ARKETING OF ICELANDI C TOURISM  ................................ ..........  72 
2011  ................................ ................................ ................................ .............................  73 
1   THE AGRICULTURAL  SECTOR  ................................ ................................ ....................  73 
2   SUPPORT FOR R&D AND TECHNOLOGICAL IN NOVATION  ................................ .........  75 
2.1   Technical Development Fund  ................................ ................................ ......................  75 
2.2   Research Fund  ................................ ................................ ................................ .........  75 
2.3   Support for R&D in marine aquaculture  ................................ ................................ ....... 76 
3   JOB CREATION INI TIATIVE (PRIOR TO 19 96 KNOWN AS FIRM SPE CIFIC  
SUBSIDIES AND EXPORT PR OMOTION (CASE 93 -221)) ................................ ................  77 
4   SUPPORT FOR EMPL OYMENT AND TRAINING  ................................ ...........................  77 
4.1   Vocational Training Fund Support for Vocational Training  ................................ ...............  77 
4.2   Employment Opportunities for Women in Rural Areas  ................................ ....................  78 
4.3   Vocational Rehabilitation  ................................ ................................ ...........................  79 
4.4   Employment of Handicapped Persons  ................................ ................................ ..........  79 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 5 - 
 
  5   REGIONAL SUPPORT  ................................ ................................ ................................  80 
5.1   Assistance to Employment Development Projects  ................................ .........................  80 
5.2   Assistance to Local Economic Development  ................................ ................................ .. 80 
6   TEMPORARY REPAYM ENT OF COSTS OF FILM S PRODUCTION IN ICEL AND ...............  81 
7   RURAL TOURISM  ................................ ................................ ................................ ...... 83 
8   AID TO PROMOTE M ARKETING OF ICELANDI C TOURISM  ................................ ..........  83 
2012  ................................ ................................ ................................ .............................  84 
1   THE AGRICULTURAL  SECTOR  ................................ ................................ ....................  84 
2   SUPPORT FOR R&D AND TECHNOLOGICAL IN NOVATION  ................................ .........  86 
2.1   Technical Development Fund  ................................ ................................ ......................  86 
2.2   Research Fund  ................................ ................................ ................................ .........  86 
2.3   Support for R&D in marine aquaculture  ................................ ................................ ....... 87 
3   SUPPORT TO SMALL  AND MEDIUM -SIZED CO MPANIES ................................ .............  88 
3.1   Job Creation Initiative (prior to 1996 known as Firm specific subsidies and export  
promotion (Case 93 -221))  ................................ ................................ ................................  88 
3.2   Regional Development Fund  ................................ ................................ .......................  88 
4   SUPPORT FOR EMPL OYMENT AND TRAINING  ................................ ...........................  89 
4.1   Vocational Training Fund Support for Vocational Training  ................................ ...............  89 
4.2   Employment Opportunities for Women in Rural Areas  ................................ ....................  90 
4.3   Vocational Rehabilitation  ................................ ................................ ...........................  90 
4.4   Employment of Handicapped Persons  ................................ ................................ ..........  91 
5   REGIONAL SUPPORT  ................................ ................................ ................................  91 
5.1   Assistance to Employment Development Projects  ................................ .........................  91 
5.2   Assistance to Local Economic Development  ................................ ................................ .. 92 
6   TEMPORARY REPAYM ENT OF COSTS OF FILM S PRODUCTION IN ICEL AND ...............  93 
7   RURAL TOURISM  ................................ ................................ ................................ ...... 94 
8   AID TO PROMOTE M ARKETING OF ICELANDI C TOURISM  ................................ ..........  95 
2013  ................................ ................................ ................................ .............................  96 
1   THE AGRICULTURAL  SECTOR  ................................ ................................ ....................  96 
2   SUPPORT FOR R&D AND TECHNOLOGICAL IN NOVATION  ................................ .........  98 
2.1   Technical Development Fund  ................................ ................................ ......................  98 
2.2   Research Fund  ................................ ................................ ................................ .........  98 
2.3   Support for R&D in marine aquaculture  ................................ ................................ ....... 99 
3   SUPPORT TO SMALL  AND MEDIUM -SIZED CO MPANIES ................................ ...........  100  
3.1   Job Creation Initiative (prior to 1996 known as Firm specific subsidies and export  
promotion (Case 93 -221))  ................................ ................................ ..............................  100 
3.2   Regional Development Fund  ................................ ................................ .....................  101 
4   SUPPORT FOR EMPL OYMENT AND TRAINING  ................................ .........................  101  
4.1   Vocational Training Fund Support for Vocational Training  ................................ .............  101 
4.2   Employment Opportunities for Women in Rural Areas  ................................ ..................  102 
4.3   Vocational Rehabilitation  ................................ ................................ .........................  102 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 6 - 
 
  4.4   Employment of Handicapped Persons  ................................ ................................ ........  103 
5   REGIONAL SUPPORT  ................................ ................................ ..............................  104 
5.1   Assistance to Employment Development Projects  ................................ .......................  104 
5.2   Assistance to Local Economic Development  ................................ ................................  104 
6   TEMPORARY REPAYM ENT OF COSTS OF FILM S PRODUCTION IN ICEL AND .............  105  
7   RURAL TOURISM  ................................ ................................ ................................ .... 106  
8   AID TO PROMOTE M ARKETING OF ICELANDI C TOURISM  ................................ ........  107  
9   SCHEME TO SUPPOR T INNOVATION COMPANI ES ................................ ...................  107  
2014  ................................ ................................ ................................ ...........................  109  
1   THE AGRICULTURAL  SECTOR  ................................ ................................ ..................  109  
2   SUPPORT FOR R&D AND TECHNOLOGICAL IN NOVATION  ................................ ....... 111  
2.1   Technical De velopment Fund  ................................ ................................ ....................  111 
2.2   Research Fund  ................................ ................................ ................................ ....... 111 
2.3   Support for R&D in marine aquaculture  ................................ ................................ ..... 112 
3   SUPPORT TO SMALL  AND MEDIUM -SIZED CO MPANIES ................................ ...........  113  
3.1   Job Creation Initiative (prior to 1996 known as Firm specific subsidies and export  
promotion (Case 93 -221))  ................................ ................................ ..............................  113 
3.2   Regional Development Fund  ................................ ................................ .....................  113 
4   SUPPORT FOR EMPL OYMENT AND TRAINING  ................................ .........................  114  
4.1   Vocational Training Fund Support for Vocational Training  ................................ .............  114 
4.2   Employment Opportunities for Women in Rural Areas  ................................ ..................  115 
4.3   Vocational Rehabilitation  ................................ ................................ .........................  115 
4.4   Employment of Handicapped Persons  ................................ ................................ ........  116 
5   REGIONAL SUPPORT  ................................ ................................ ..............................  116  
5.1   Assistance to Employment Development Projects  ................................ .......................  116 
5.2   Assistance to Local Economic Development  ................................ ................................  117 
6   TEMPORARY REPAYM ENT OF COSTS OF FILM S PRODUCTION IN ICEL AND .............  118  
7   RURAL TOURISM  ................................ ................................ ................................ .... 119  
8   AID TO PROMOTE M ARKETING OF ICELANDI C TOURISM  ................................ ........  119  
9   SCHEME TO SUPPOR T INNOVATION COMPANI ES ................................ ...................  120  
 
  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 7 - 
 
  2005  
1  THE AGRICUL TURAL SECTOR  
A. NAME OF PROGRAMME  
 
Agricultural Agreements; Payments to dairy farms, sheep farms and horticulture farms  (Budget 
items No: 04 -801, 04 -805 & 04 -807).  
 
B. RESPONSIBLE AUTHORITY  
 
Ministry of Agriculture.  
 
C. POLICY OBJECTIVE  
 
Agricultural policy is implemented in Iceland in pursuit of objectives which include increasing 
efficiency in the agro -food sector, ensuring self -sufficiency for the country's major agricultural 
production; seeking to utilize domestic inputs to the extent possible; increasing overall efficiency in 
the agricultural food sector; utilizing export opportunities to the extent feasible; securing an 
equitable income for farmers; and integrating environmental issues in agricultural policy.  
 
D. FORMS OF SUBSIDY  
 
Agricultural subsidies in Iceland is mostly provided through direct payments, based on payment 
entitlements, which are directly or indirectly coupled with production factors. Direct payments are 
provided to cattle (mainly dairy) and sheep producers, and, on a  smaller scale, to certain greenhouse 
producers. Allocations for the Agricultural Agreements in 2005 are made under items  04-801, 04 -
805 and 04 -807 of the State budget (Ministry of Agriculture).  
 
E. AMOUNT OF SUBSIDY  
 
Items making up the amount of support as measured by total costs in Government Accounts for  2005 
are listed in table 1.  
Table 1 Amount of support in 2005 (Government Accounts); Million ISK  
 2005  
Agricultural Productivity Fund  185 
Stockholding costs; sheep meat program  346 
Directs payments to sheep farmers  1,659  
Quality control scheme; sheep farmers  528 
Wool utilization; subsidies  378 
Direct payments to dairy farmers  4,163  
Direct payments to horticulture farmers  200 
Electricity subsidies to horticulture farmers (greenhouse)  111 
 
F. RULES AND CONDITIONS  
 
Implementation of the agricultural policy revolves around Agricultural Agreements negotiated 
between the Government and the Farmer's Association. Under Act No. 99/1993 on Agricultural 
Produce, the Minister of Fisheries and Agriculture  is given the authority to negotiate with the 
Farmer's Association on behalf of the Government on the total support target for milk and total 
support target for sheep meat entitlements and direct payments for horticulture. A government -
chaired committee de termines a guaranteed minimum price for milk delivered within production 
quotas at the producer level.  
 
Support is provided for dairy farms, sheep farms and horticulture farms (greenhouse).  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 8 - 
 
  1.  Dairy farmers  
Milk producers receive direct payments from the Government on milk delivered to dairies. The 
annual quantity must be within the allocated supported targets. The amount of monetary support 
is the same for all producers in Iceland.  
2.  Sheep farmers  
Sheep farmers receive direct payments from the Government wh ich are based on support targets 
for sheep meat entitlements, for which they must own 70% live sheep. Additional payments to 
sheep farmers are related to a quality control scheme for lamb meat, based on animal welfare, 
product quality and traceability, and  sustainability criteria.  
3.  Sheep farmers; wool  
Sheep farmers receive support from the Government based on quantity and quality of wool 
produced.  
4.  Horticulture farmers  
Horticulture farmers producing cucumbers, peppers and tomatoes in greenhouses, mainly unde r 
artificial lighting receive direct payments from the government. The distribution of electricity used 
for artificial lighting is also subsidized to some extent by the Government.  
G. DURATION  
 
The time of application of the agricultural agreements betwee n the Government and the Farmer's 
Association was until the end of 2016 when the agreements were renegotiated. The agreements 
were not revisited, in essence, during the years 2006 to 2014.  
 
H. LEGAL BASIS  
 
Act No. 99/1993 on Production, Pricing and Sales of Agricultural Products. The State Budget.  
 
I. TRADE EFFECTS  
 
An assessment of the trade effects of the subsidies is not available. Below, in tables 2, 3 and 4 there 
are, however, presented statistics on production and exports of the relevant agricultural  
commodities.  
Table 2 Quantity of milk received by dairies and calculated exports by fat -content of milk 
derived products (in 1,000 of litres) for 2005  
Year Milk, received by dairies by fat -
content  Exported products by fat -content, 
thereof (%)  
2005 100,768  13% 
Table 3 Sheep meat production and exports 2005 (in 1,000 kg)  
Year Production  Exports, thereof (%)  
2005 8,738  15% 
Table 4 Tomato, cucumber and bell pepper production and exports 2005 (in 1,000 kg)  
Tomatoes  Cucumbers  Bell peppers   Total exports, thereof 
(%) 
1,508  1,147  126 <1% G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 9 - 
 
  2  SUPPORT FOR R&D AND TECHNOLOGICAL INNOVA TION  
2.1  Technical Development Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic Centre for Research ( RANNÍS ) which is under the supervision of the Ministry of Industry 
and Innovation.  
 
B. POLICY OBJECTIVES  
 
The objective of the Technology Development Fund is to facilitate innovation through supporting 
research and technological development.  
 
C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2005: ISK 332 .4 million.  
 
D. RULES AND CONDITIONS  
 
The role of the fund is to support research and development activities, which aim towards innovation 
in Icelandic industry. The Fund will in general operate as a competitive fund through which firms, 
research institutes and universities will have the possibility of financing projects that support 
technological development and innovation. The Fund is intended to give support to spin -off ventures 
and innovative firms to secure that economic benefits accrue to society from the s cientific and 
technical knowledge and the innovation arising from these new ventures.  
 
The Science and Technology Policy Council attaches high importance to close co -ordination between 
the Research Fund and the Technical Development Fund, as well as co -operation with other public 
funds and venture investors. The Technical Development Fund can take the initiative to establish 
programmes and specific actions prepared in consultation with the business community, research 
institutes and universities. Finally, t he Technical Development Fund is permitted to enter into 
partnerships with venture capital investors for seed and early risk financing toward establishing firms 
which base their operations on technological development and research and which involves a nove lty 
to the economy.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE EFFECTS  
 
The support is granted to a variety of small projects and sectors ; therefore , it is difficult to present 
statistical d ata permitting an assessment of trade effects.  
 
G. DURATION  
 
The Technology Development Fund has been operating since 2004. It took over from the Technology 
Fund which expired in 2004.  
 
2.2  Research Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic Centre for Rese arch ( RANNÍS ) which is under the supervision of the Ministry of Culture 
and Education.  
 
B. POLICY OBJECTIVES  
 
The objective of the Research Fund is to facilitate fundamental research at University institutes or 
other Governmental R&D institutes.  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 10 - 
 
  C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2005: ISK 420 .6 million.  
 
D. RULES AND CONDITIONS  
 
Subsidies are granted only on the basis of  project applications. The Funds grants are for fundamental 
research at Universities and the involvement of private companies is very limited or non -existent.  
 
The Research Fund is the most powerful tool of the public sector for reinforcing the research 
community infrastructure through project grants based on applications from scientists, business 
firms and institutions. The Science and Technology Policy Council encourages the Fund to give young 
scientists an opportunity to establish their work and contribu te to the further accumulation of 
scientific and technical knowledge.  
 
The Research Fund offers grants in accordance with the priorities set by the Science and Technology 
Policy Council and the grants strategy defined by the Science Board based on a peer r eview 
evaluation of research project quality, the competence of the individuals involved and the facilities 
available for completing the project.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE E FFECTS  
 
The support is granted to a variety of small projects and sectors, therefore it is difficult to present 
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
 
Research Fund has been operating since 2004. It took over from the Sc ience Fund which expired 
in 2004.  
 
2.3  Support for R&D in marine aquaculture  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture.  
 
B. POLICY OBJECTIVE  
 
To enhance scientific knowledge in marine aquaculture.  
 
C. FORM OF SUPPORT  
 
Grants.  
 
D. AMOUNT OF SUPPORT  
 
2005: ISK 22.423,1 million . 
 
E. RULES AND CONDITIONS  
 
Grants are awarded on the basis of applications evaluated by a special committee.  
 
F. DURATION  
 
There is no time limit, but each programme is decided on for a year at a time.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 11 - 
 
  G. LEGAL BASIS  
 
Act no. 76/1970.  
 
H. TRADE EFFECTS  
 
There is no trade effect due to limited support.  
 
3  JOB CREATION INITIAT IVE (PRIOR TO 1996 K NOWN AS FIRM SPECIFI C SUBSIDIES 
AND EXPORT PROMOTION  (CASE 93 -221))  
A. RESPONSIBLE AUTHORITY  
 
Innovation Center  Iceland which is under the supervision of the Ministry of Employment and 
Innovation.  
 
B. POLICY OBJECTIVE  
 
The objective is, to increase the knowledge and competence of entrepreneurs and small and 
medium -sized enterprises such as in managing, financing, p roduct development, marketing and 
innovation.  
 
C. FORM OF SUPPORT  
 
Cost items incurred for consultants, product development, marketing and innovation are eligible for 
grants. Support shall in general not cover more than 50% of eligible expenses.  
 
D. AMOUNT  OF SUPPORT  
 
2005: ISK 53 .4 million.  
 
E. RULES AND CONDITIONS  
 
Firms and individuals having a registered domicile in Iceland can apply for a grant. In accordance 
with the de minimis  rule, individuals who apply for grants according to these rules must decla re that 
they have not received a grant from the Government amounts to more than 200,000 EURO last 3 
years, the grant applied for included.  
 
F. DURATION  
 
There is no time limit, but each programme is decided on for a year at a time.  
 
G. LEGAL BASIS  
 
The B udget item no. 11 -299-1.48. 
 
H. TRADE EFFECTS  
 
There are no trade effects of the support due to the general framework of the scheme and limited 
support.  
 
4  SUPPORT FOR EMPLOYME NT AND TRAINING  
4.1  Vocational Training Fund Support for Vocational Training  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Education and Culture.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 12 - 
 
  B. POLICY OBJECTIVE  
 
The main purpose of this programme is to maintain and develop vocational skills, in most cases for 
people already employed.  
 
C. FORM OF STATE AID  
 
Grants.  
 
D. AMOUNT OF STATE A ID 
 
Actual total expenditure in 2005: ISK 183 .6 million . 
 
E. RULES AND CONDITIONS  
 
Grants to organizations on application to the Vocational Training Fund mainly to make curriculum or 
other teaching materials for the vocational training courses.  
 
F. DURATIO N 
 
The programme started in 1992. Duration has not been specified.  
 
G. LEGAL BASIS  
 
Budget item no. 02 -451. 
 
4.2  Employment Opportunities for Women in Rural Areas  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture and the Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to create new jobs among women. Areas where high 
unemployment is among women will especially be considered.  
 
C. FORM OF STATE AID  
 
Grants, up to 50% of primary R&D co sts, innovation costs and cost of new products, process and 
systems for industrial production. Institute of Regional Development pays the grants and controls 
their disposition.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2005: ISK 24 .6 million . 
 
It is difficult to give exact information on how many jobs have been created or maintained, as many 
of these new jobs are just part time jobs.  
 
E. RULES AND CONDITIONS  
 
Grants to women on application to the Institute of Regional Development mainly to new pr oduct 
developing and marketing. The grant can only be given to companies, which are at least 50% owned 
by women or have been established by women.  
 
F. DURATION  
 
The programme started in 1990. Duration has not been specified.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 13 - 
 
  G. LEGAL BASIS  
 
Governmental decision from 1990.  
 
4.3  Employment of Handicapped Persons  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Welfare.  
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to ensure that disabled persons enjoy human rights and 
freedoms on the same basis as others a nd that they are guaranteed the support necessary to enjoy 
these rights.  
 
C. FORM OF STATE AID  
 
Gross wage State aid to rehabilitation centres.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2005: ISK 202 .5 million.  
 
E. RULES AND CONDITIONS  
 
Service institutions for disabled people should be deployed in order to meet their specific needs so 
that they can live independently.  
 
F. DURATION  
 
No time limit ; the amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Act No. 59/1992 on the Affairs of Disabled People and the Budget item no. 07 -701.1.30 and 
07-707.1.30.  
 
5  REGIONAL SUPPORT  
5.1  Assistance to Employment Development Projects  
A. RESPONSIBLE AUTHORITY  
 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The objectiv e of the programme is to assist the economic development of the nationally assisted 
areas of Iceland. The assisted projects are small and cover employment development, training and 
innovation.  
 
C. FORM OF STATE AID  
 
Grants, as assistance to Employment Deve lopment Projects, which fall within the objectives of Act 
No. 106/1999, on the Institute of Regional Development.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2005: ISK 122 .3 million.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 14 - 
 
  E. RULES AND CONDITIONS  
 
The programme is available to individuals, private companies, local development companies and 
municipalities. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
 
F. DURATION  
 
The programme has no time limit ; the amount is decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 10 of Act no. 106/1999 on the Institute of Regional Development, the Budget item no. 04 -542. 
 
5.2  Assistance to Local Economic Deve lopment  
A. RESPONSIBLE AUTHORITY  
 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to assist local economic development companies and to finance 
venturesome projects within the field of local emplo yment development and innovation.  
 
C. FORM OF STATE AID  
 
Grants to finance venturesome projects within the field of local employment development and 
innovation.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2005: ISK 7 .75 million.  
 
E. RULES AND CONDITIONS  
 
According to Act No. 106/1999, on the Institute of Regional Development, the assistance is to be in 
accordance with rules laid down by the Ministry of Employment and Innovation. These rules have 
not yet been issued. The subsidies are subject to  the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
 
F. DURATION  
 
The programme has no time limit;  the amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 12 of Act no. 106/1999 on the Institute of Regional Development, the Budget item 
no. 04-542.1.10.  
 
H. ADDITIONAL INFORMATION  
 
The Institute of Regional Development is authorized according to Article 11 of Act No 106/1999 to 
provide l oans and guarantees, in accordance with the role of the Institute as stipulated in the Act. 
These loans and guarantees are provided on market terms, with similar interest rates as on the open 
market.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  6  TEMPORARY REPAYMENT OF COSTS OF FILMS PR ODUCTION IN ICE LAND  
A. RESPONSIBLE AUTHORITY  
 
Icelandic film centre ( Kvikmyndamiðstöð Íslands ) under the auspice of the Ministry of Industry.  
 
B. POLICY OBJECTIVE  
 
The objective of the Act is to enhance domestic culture and promote the history and nature of Iceland 
by temporarily supporting motion pictures and television programmes produced in Iceland.  
 
According to the Act authorisation is granted for the reimbursement from the State Treasury of a 
proportion of the production costs incurred in the production of films an d television programmes in 
Iceland.  
 
When more than 80% of the total production cost of a motion picture or television programme incurs 
in Iceland, the reimbursement shall be calculated from the total production cost incurring within the 
European Economic  Area.  
 
Production costs refers to all costs incurred in Iceland deductible from the revenues of enterprises 
pursuant to the provisions of the Act on Income and Net Wealth Tax. Payments pertaining to 
employees and contractors are only to be included in pro duction costs if they are verifiable taxable 
in Iceland  
 
C. FORM OF STATE AID  
 
A specific company shall be established in Iceland for the production; an Icelandic branch or agency 
of a company registered in another Member State of the European Economic Are a shall be considered 
a specific company  
 
D. AMOUNT OF STATE AID  
 
Total expenditure (reimbursement of production cost) in 2005: ISK 125 million.  
 
E. RULES AND CONDITIONS  
 
In assessing whether a proportion of the production costs of a motion picture or a te levision 
programme shall be reimbursed, the following conditions shall be fulfilled:  
 
a. the production shall be suited for promoting Icelandic culture and the history and nature 
of Iceland;  
b. the production shall be suited for enhancing the experience, knowledge and artistic 
ambition of those involved in the production;  
c. a specific company shall be established in Iceland for the production; an Icelandic branch 
or agency of a company registered in another EEA member state shall be considered a 
specific com pany;  
d. information on the principal parties involved in the film or television programme shall be 
submitted;  
e. information on domestic parties and their share in the production of the film or television 
programme shall be submitted;  
f. an itemized estimate of t he production costs and sources of funding shall be submitted, 
together with confirmation by the funding parties and a declaration by the producer to the 
effect that the production conforms with the aims of the Act No. 43/1999;  
g. information on the content o f the proposed film or television programme shall be 
submitted, including a manuscript, synopsis and information about filming locations;  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 16 - 
 
  h. a production plan shall be available (i.e. filming, post -production and marketing plan), 
providing for completion of t he production within three years of receipt of the application 
for reimbursement;  
i. a statement shall be submitted to the effect that the material to be produced is intended 
for general distribution to cinemas or television stations, the content of the film or 
television programme shall not violate the Film Censorship and Prohibition of Violent Films 
Act, No. 47/1995, or Article 210 of the Criminal Code, No. 19/1940.  
F. DURATION  
 
The programme is limited to end of year 2021.  
 
G. LEGAL BASIS  
 
Act on Temporary Reimbursements in Respect of Film Making in Iceland, No. 43/1999, with 
amendments. The Budget item no. 11 -251.  
 
7  RURAL TOURISM  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication.  
 
B. POLICY OBJECTIVE  
 
The objective of the pr ogramme is to promote rural tourism and assist local museums, and places 
of historical importance, in attracting tourists.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2005: ISK 245 .2 million.  
 
E. DURATIO N 
 
The programme has no time limit;  the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 10 -651 
 
8  AID TO PROMOTE MARKE TING OF ICELANDIC TO URISM  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication and Icelandic Tourism Board ( Ferðamálastofa ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to promote marketing of Icelandic tourism. Further reference is 
made to a correspondence with the Authority concerning Case No. 47859.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 17 - 
 
  D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2005: ISK 150 million.  
 
E. DURATION  
 
The programme is intended to be temporary ; the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 10 -190.1.44.  
  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 18 - 
 
  2006  
1  THE AGRICULTURAL SECTOR  
A. NAME OF PROGRAMME  
 
Agricultural Agreements; Payments to dairy farms, sheep farms and horticulture farms (Budget 
items No: 04 -801, 04 -805 & 04 -807).  
 
B. RESPONSIBLE AUTHORITY  
 
Ministry of Agriculture  
 
C. POLICY OBJECTIVE  
 
Agricultural  policy is implemented in Iceland in pursuit of objectives which include increasing 
efficiency in the agro -food sector, ensuring self -sufficiency for the country's major agricultural 
production; seeking to utilize domestic inputs to the extent possible; in creasing overall efficiency in 
the agricultural food sector; utilizing export opportunities to the extent feasible; securing an 
equitable income for farmers; and integrating environmental issues in agricultural policy.  
 
D. FORMS OF SUBSIDY  
 
Agricultural su bsidies in Iceland is mostly provided through direct payments, based on payment 
entitlements, which are directly or indirectly coupled with production factors. Direct payments are 
provided to cattle (mainly dairy) and sheep producers, and, on a smaller sca le, to certain greenhouse 
producers. Allocations for the Agricultural Agreements in 2006 are made under items  04-801, 04 -
805 and 04 -807 of the State budget (Ministry of Agriculture).  
 
E. AMOUNT OF SUBSIDY  
 
Items making up the amount of support as measured by total costs in Government Accounts for  2006 
are listed in table 1.  
Table 1 Amount of support in 2006 (Government Accounts); Million ISK  
 2006  
Agricultural Productivity Fund  160 
Stockholding costs; sheep meat program  359 
Directs payments to sheep farmers  1,820  
Quality control scheme; sheep farmers  537 
Wool utilization; subsidies  283 
Direct payments to dairy farmers  4,240  
Direct payments to horticulture farmers  195 
Electricity subsidies to horticulture farmers 
(greenhouse)  110 
 
F. RULES AND CONDITIONS  
 
Implementation of the agricultural policy revolves around Agricultural Agreements negotiated 
between the Government and the Farmer's Association. Under Act No. 99/1993 on Agricultural 
Produce, the Minister of Fisheries and Agriculture is given the authority to negotiate with the 
Farmer's Association on behalf of the Government on the total support target for milk and total 
support target for sheep meat entitlements and direct payments for horticulture. A government -
chaired committee determines a  guaranteed minimum price for milk delivered within production 
quotas at the producer level.  
 
Support is provided for dairy farms, sheep farms and horticulture farms (greenhouse).  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 19 - 
 
  1.  Dairy farmers  
Milk producers receive direct payments from the Government on  milk delivered to dairies. The 
annual quantity must be within the allocated supported targets. The amount of monetary 
support is the same for all producers in Iceland.  
2.  Sheep farmers  
Sheep farmers receive direct payments from the Government which are based  on support 
targets for sheep meat entitlements, for which they must own 70% live sheep. Additional 
payments to sheep farmers are related to a quality control scheme for lamb meat, based on 
animal welfare, product quality and traceability, and sustainabili ty criteria.  
3.  Sheep farmers; wool  
Sheep farmers receive support from the Government based on quantity and quality of wool 
produced.  
4.  Horticulture farmers  
Horticulture farmers producing cucumbers, peppers and tomatoes in greenhouses, mainly 
under artificial l ighting receive direct payments from the government. The distribution of 
electricity used for artificial lighting is also subsidized to some extent by the Government.  
 
G. DURATION  
 
The time of application of the agricultural agreements between the Governm ent and the Farmer's 
Association was until the end of 2016 when the agreements were renegotiated. The agreements 
were not revisited, in essence, during the years 2006 to 2014.  
 
H. LEGAL BASIS  
 
Act No. 99/1993 on Agricultural Produce, Pricing and Sales of A gricultural Products. The State 
Budget.  
 
I. TRADE EFFECTS  
 
An assessment of the trade effects of the subsidies is not available. Below, in tables 2, 3 and 4 there 
are, however, presented statistics on production and exports of the relevant agricultural 
commodities.  
Table 2 Quantity of milk received by dairies and calculated exports by fat -content of milk 
derived products (in 1,000 of litres) for 2006  
Year Milk, received by dairies by fat -
content  Exported products by fat -content, 
thereof (%)  
2006 103,871  2% 
Table 3 Sheep meat production and exports 2006 (in 1,000 kg)  
Year Production  Exports, thereof (%)  
2006 8,647   14% 
Table 4 Tomato, cucumber and bell pepper production and exports 2006 (in 1,000 kg)  
Tomatoes  Cucumbers  Bell peppers   Total exports, thereof  
(%) 
1,724  1,124  130 <1% 
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 20 - 
 
  2  SUPPORT FOR R&D AND TECHNOLOGICAL INNOVA TION  
2.1  Technical Development Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic Centre for Research ( RANNÍS ) which is under the supervision of the Ministry of Industry 
and Innovation.  
 
B. POLICY OBJECTIVES  
 
The objective of the Technology Development Fund is to facilitate innovation through supporting 
research and technological development.  
 
C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2006: ISK 482 million.  
 
D. RULES AND CONDITIONS  
 
The role of the fund is to support research and development activities, which aim towards innovation 
in Icelandic industry. The Fund will in general operate as a competitive fund through which firms, 
research institutes and universities will have the pos sibility of financing projects that support 
technological development and innovation. The Fund is intended to give support to spin -off ventures 
and innovative firms to secure that economic benefits accrue to society from the scientific and 
technical knowle dge and the innovation arising from these new ventures.  
 
The Science and Technology Policy Council attaches high importance to close co -ordination between 
the Research Fund and the Technical Development Fund, as well as co -operation with other public 
funds  and venture investors. The Technical Development Fund can take the initiative to establish 
programmes and specific actions prepared in consultation with the business community, research 
institutes and universities. Finally, the Technical Development Fund is permitted to enter into 
partnerships with venture capital investors for seed and early risk financing toward establishing firms 
which base their operations on technological development and research and which involves a novelty 
to the economy.  
 
E. LEGAL  BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE EFFECTS  
 
The support is granted to a variety of small projects and sectors, therefore it is difficult to present 
statistical data permitting an assessment of  trade effects.  
 
G. DURATION  
 
The Technology Development Fund has been operating since 2004. It took over from the Technology 
Fund which expired in 2004.  
 
2.2  Research Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic Centre for Research ( RANNÍS ) which is under th e supervision of the Ministry of Culture 
and Education.  
 
B. POLICY OBJECTIVES  
 
The objective of the Research Fund is to facilitate fundamental research at University institutes or 
other Governmental R&D institutes.  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 21 - 
 
  C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2006: ISK 592 million.  
 
D. RULES AND CONDITIONS  
 
Subsidies are granted only on the basis of project applications. The Funds grants are for fundamental 
research at Universities and the involvement of private companies is very limited or non -existent.  
 
The Research Fund is the most powerful tool of the public sector for reinforcing the research 
community infrastructure through project grants based on applications from scientists, business 
firms and institutions. The Science and Technolo gy Policy Council encourages the Fund to give young 
scientists an opportunity to establish their work and contribute to the further accumulation of 
scientific and technical knowledge.  
 
The Research Fund offers grants in accordance with the priorities set b y the Science and Technology 
Policy Council and the grants strategy defined by the Science Board based on a peer review 
evaluation of research project quality, the competence of the individuals involved and the facilities 
available for completing the proje ct.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE EFFECTS  
 
The support is granted to a variety of small projects and sectors, therefore it is difficult to present 
statistical data permitting an  assessment of trade effects.  
 
G. DURATION  
 
Research Fund has been operating since 2004. It took over from the Science Fund which expired 
in 2004.  
 
2.3  Support for R&D in marine aquaculture  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture.  
 
B. POLICY OBJECTIVE  
 
To enhance scientific knowledge in marine aquaculture.  
 
C. FORM OF SUPPORT  
 
Grants.  
 
D. AMOUNT OF SUPPORT  
 
2006: ISK 31.800 million . 
 
E. RULES AND CONDITIONS  
 
Grants are awarded on the basis of  applications evaluated by a special committee.  
 
F. DURATION  
 
There is no time limit, but each programme is decided on for a year at a time.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 22 - 
 
  G. LEGAL BASIS  
 
Act no. 76/1970.  
 
H. TRADE EFFECTS  
 
There is no trade effect due to limited support.  
 
3  JOB CREATION INITIATIVE (PRIOR TO 1996 KNOWN  AS FIRM SPECIFIC SU BSIDIES 
AND EXPORT PROMOTION  (CASE 93 -221)) 
A. RESPONSIBLE AUTHORITY  
 
Innovation Center Iceland which is under the supervision of the Ministry of Employment and 
Innovation.  
 
B. POLICY OBJECTIVE  
 
The objective is, to increase the knowledge and competence of entrepreneurs and small and 
medium -sized enterprises such as in managing, financing, product development, marketing and 
innovation.  
 
C. FORM OF SUPPORT  
 
Cost items incurred for consultants, prod uct development, marketing and innovation are eligible for 
grants. Support shall in general not cover more than 50% of eligible expenses.  
 
D. AMOUNT OF SUPPORT  
 
2006: ISK 50 million.  
 
E. RULES AND CONDITIONS  
 
Firms and individuals having a registered domic ile in Iceland can apply for a grant. In accordance 
with the de minimis  rule, individuals who apply for grants according to these rules must declare that 
they have not received a grant from the Government amounts to more than 200,000 EURO last 3 
years, the  grant applied for included.  
 
F. DURATION  
 
There is no time limit, but each programme is decided on for a year at a time.  
 
G. LEGAL BASIS  
 
The Budget item no. 11 -299-1.48. 
 
H. TRADE EFFECTS  
 
There are no trade effects of the support due to the general framework of the scheme and limited 
support.  
 
4  SUPPORT FOR EMPLOYME NT AND TRAINING  
4.1  Vocational Training Fund Support  for Vocational Training  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Education and Culture.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 23 - 
 
  B. POLICY OBJECTIVE  
 
The main purpose of this programme  is to maintain and develop vocational skills, in most cases for 
people already employed.  
 
C. FORM OF STATE AID  
 
Grants.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2006: ISK 644 .6 million . 
 
E. RULES AND CONDITIONS  
 
Grants to organizations on appl ication to the Vocational Training Fund mainly to make curriculum or 
other teaching materials for the vocational training courses.  
 
F. DURATION  
 
The programme started in 1992. Duration has not been specified.  
 
G. LEGAL BASIS  
 
Act No. 19/1992 ( Lög um starfsmenntun í atvinnulífi ) and the Budget item no. 02 -451. 
 
4.2  Employment Opportunities for Women in Rural Areas  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture and the Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to create new jobs among women. Areas where high 
unemployment is among women will especially be considered.  
 
C. FORM OF STATE AID  
 
Grants, up to 50% of primary R&D costs, innovation costs and cost of new products, p rocess and 
systems for industrial production. Institute of Regional Development pays the grants and controls 
their disposition.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2006: ISK 0 million . 
 
It is difficult to give exact information on how many  jobs have been created or maintained, as many 
of these new jobs are just part time jobs.  
 
E. RULES AND CONDITIONS  
 
Grants to women on application to the Institute of Regional Development mainly to new product 
developing and marketing. The grant can only be given to companies, which are at least 50% owned 
by women or have been established by women.  
 
F. DURATION  
 
The programme started in 1990. Duration has not been specified.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 24 - 
 
  G. LEGAL BASIS  
 
Governmental decision from 1990.  
 
4.3  Employment of Handicapped Perso ns  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Welfare.  
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to ensure that disabled persons enjoy human rights and 
freedoms on the same basis as others and that they are guaranteed the support necessary to  enjoy 
these rights.  
 
C. FORM OF STATE AID  
 
Gross wage State aid to rehabilitation centres.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2006: ISK 55 .4 million.  
 
E. RULES AND CONDITIONS  
 
Service institutions for disabled people should be deployed in order to meet their specific needs so 
that they can live independently.  
 
F. DURATION  
 
No time limit; the amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Act No. 59/1992 on the Affairs of Disabled People and the Budget item no. 07 -701.1. 30 and 
07-707.1.30.  
 
5  REGIONAL SUPPORT  
5.1  Assistance to Employment Development Projects  
A. RESPONSIBLE AUTHORITY  
 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to assist the economic development of the nationally assisted 
areas of Iceland. The assisted projects are small and cover employment development, training and 
innovation.  
 
C. FORM OF STATE AID  
 
Grants, as assistance to Employment Development Projects, which fall within the objectives of Act 
No. 106/1999, on the Institute of Regional Development.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2006: ISK 134 .8 million.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 25 - 
 
  E. RULES AND CONDITIONS  
 
The programme is available to individuals, private companies, local development companies and 
municipalities. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
 
F. DURATION  
 
The programme has no time limit; the  amount  is decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 10 of Act no. 106/1999 on the Institute of Regional Development, the Budget item 
no. 04-542. 
 
5.2  Assistance to Local Economic Development  
A. RESPONSIBLE AUTHORITY  
 
Institute of Regional Develop ment ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to assist local economic development companies and to finance 
venturesome projects within the field of local employment development and innovation.  
 
C. FORM OF STATE AID  
 
Grants to finance venturesome projects within the field of local employment development and 
innovation.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2006: ISK 34 .5 million.  
 
E. RULES AND CONDITIONS  
 
According to Act No. 106/1999, on the Institute of Regional Development, the assistance is to be in 
accordance with rules laid down by the Ministry of Employment and Innovation. These rules have 
not yet been issued. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority St ate Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
 
F. DURATION  
 
The programme has no time limit ; the amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 12 of Act no. 106/1999 on the Institute of Regional Development, the Budget item 
no. 04-542.1.10.  
 
H. ADDITIONAL INFORMATION  
 
The Institute of Regional Development is authorized according to Article 11 of Act No 106/1999 to 
provide loans and guarantees, in accordance with the role of the Institu te as stipulated in the Act. 
These loans and guarantees are provided on market terms, with similar interest rates as on the open 
market.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  6  TEMPORARY REPAYMENT OF COSTS OF FILMS PR ODUCTION IN ICELAND  
A. RESPONSIBLE AUTHORITY  
 
Icelandic film centre ( Kvikmynda miðstöð Íslands ) under the auspice of the Ministry of Industry.  
 
B. POLICY OBJECTIVE  
 
The objective of the Act is to enhance domestic culture and promote the history and nature of Iceland 
by temporarily supporting motion pictures and television programmes produced in Iceland.  
 
According to the Act authorisation is granted for the reimbursement from the State Treasury of a 
proportion of the production costs incurred in the production of films and television programmes in 
Iceland.  
 
When more than 80% of the  total production cost of a motion picture or television programme incurs 
in Iceland, the reimbursement shall be calculated from the total production cost incurring within the 
European Economic Area.  
 
Production costs refers to all costs incurred in Icelan d deductible from the revenues of enterprises 
pursuant to the provisions of the Act on Income and Net Wealth Tax. Payments pertaining to 
employees and contractors are only to be included in production costs if they are verifiable taxable 
in Iceland  
 
C. FORM OF STATE AID  
 
A specific company shall be established in Iceland for the production; an Icelandic branch or agency 
of a company registered in another Member State of the European Economic Area shall be considered 
a specific company  
 
D. AMOUNT OF STATE AID 
 
Total expenditure (reimbursement of production cost) in 2006: ISK 75 million.  
 
E. RULES AND CONDITIONS  
 
In assessing whether a proportion of the production costs of a motion picture or a television 
programme shall be reimbursed, the following conditio ns shall be fulfilled:  
 
a. the production shall be suited for promoting Icelandic culture and the history and nature 
of Iceland;  
b. the production shall be suited for enhancing the experience, knowledge and artistic 
ambition of those involved in the production;  
c. a specific company shall be established in Iceland for the production; an Icelandic branch 
or agency of a company registered in another EEA member state shall be considered a 
specific company;  
d. information on the principal parties involved in the film or te levision programme shall be 
submitted;  
e. information on domestic parties and their share in the production of the film or television 
programme shall be submitted;  
f. an itemized estimate of the production costs and sources of funding shall be submitted, 
togeth er with confirmation by the funding parties and a declaration by the producer to the 
effect that the production conforms with the aims of the Act No. 43/1999;  
g. information on the content of the proposed film or television programme shall be 
submitted, inclu ding a manuscript, synopsis and information about filming locations;  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 27 - 
 
  h. a production plan shall be available (i.e. filming, post -production and marketing plan), 
providing for completion of the production within three years of receipt of the application 
for re imbursement;  
i. a statement shall be submitted to the effect that the material to be produced is intended 
for general distribution to cinemas or television stations, the content of the film or 
television programme shall not violate the Film Censorship and Pro hibition of Violent Films 
Act, No. 47/1995, or Article 210 of the Criminal Code, No. 19/1940.  
F. DURATION  
 
The programme is limited to end of year 2021.  
 
G. LEGAL BASIS  
 
Act on Temporary Reimbursements in Respect of Film Making in Iceland, No. 43/1999, with 
amendments. The Budget item no. 11 -251.  
 
7  RURAL TOURISM  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication.  
 
B. POLICY OBJECTIVE  
 
The objective of the pr ogramme is to promote rural tourism and assist local museums, and places 
of historical importance, in attracting tourists.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2006: ISK 264 .7million.  
 
E. DURATION  
 
The programme has no time limit ; the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 10 -651 
 
8  AID TO PROMOTE MARKE TING OF ICELANDIC TO URISM  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication and Icelandic Tourism Board ( Ferðamálastofa ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to promote marketing of Icelandic tourism. Further reference is 
made to a correspondence with the Authority concerning Case No. 47859.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 28 - 
 
  D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2006: ISK 150 million.  
 
E. DURATION  
 
The programme is intended to be temporary, the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 10 -190. 1.44.  
  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 29 - 
 
  2007  
1  THE AGRICULTURAL SECTOR  
A. NAME OF PROGRAMME  
 
Agricultural Agreements; Payments to dairy farms, sheep farms and horticulture farms (Budget 
items No: 04 -801, 04 -805 & 04 -807).  
 
B. RESPONSIBLE AUTHORITY  
 
Ministry of Agriculture  
 
C. POLICY OBJECTIVE  
 
Agricultural  policy is implemented in Iceland in pursuit of objectives which include increasing 
efficiency in the agro -food sector, ensuring self -sufficiency for the country's major agricultural 
production; seeking to utilize domestic inputs to the extent possible; in creasing overall efficiency in 
the agricultural food sector; utilizing export opportunities to the extent feasible; securing an 
equitable income for farmers; and integrating environmental issues in agricultural policy.  
 
D. FORMS OF SUBSIDY  
 
Agricultural su bsidies in Iceland is mostly provided through direct payments, based on payment 
entitlements, which are directly or indirectly coupled with production factors. Direct payments are 
provided to cattle (mainly dairy) and sheep producers, and, on a smaller sca le, to certain greenhouse 
producers. Allocations for the Agricultural Agreements in 2007 are made under items  04-801, 04 -
805 and 04 -807 of the State budget (Ministry of Agriculture).  
 
E. AMOUNT OF SUBSIDY  
 
Items making up the amount of support as measured by total costs in Government Accounts for 
2007 are listed in table 1.  
Table 1 Amount of support in 2007 (Government Accounts); Million ISK  
 2007  
Agricultural Productivity Fund  157 
Stockholding costs; sheep meat program  273 
Directs payments to sheep farmers  1,826  
Quality control scheme; sheep farmers  689 
Wool utilization; subsidies  293 
Direct payments to dairy farmers  4,137  
Direct payments to horticulture farmers  204 
Electricity subsidies to horticulture farmers 
(greenhouse)  150 
 
F. RULES AND CONDITIONS  
 
Implementation of the agricultural policy revolves around Agricultural Agreements negotiated 
between the Government and the Farmer's Association. Under Act No. 99/1993 on Agricultural 
Produce, the Minister of Fisheries and Agriculture is given the authority to negotiate with the 
Farmer's Association on behalf of the Government on the total support target for milk and total 
support target for sheep meat entitlements and direct payments for horticulture. A government -
chaired committee determines a  guaranteed minimum price for milk delivered within production 
quotas at the producer level.  
 
Support is provided for dairy farms, sheep farms and horticulture farms (greenhouse).  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 30 - 
 
  1.  Dairy farmers  
Milk producers receive direct payments from the Government on  milk delivered to dairies. The 
annual quantity must be within the allocated supported targets. The amount of monetary 
support is the same for all producers in Iceland.  
2.  Sheep farmers  
Sheep farmers receive direct payments from the Government which are based  on support 
targets for sheep meat entitlements, for which they must own 70% live sheep. Additional 
payments to sheep farmers are related to a quality control scheme for lamb meat, based on 
animal welfare, product quality and traceability, and sustainabili ty criteria.  
3.  Sheep farmers; wool  
Sheep farmers receive support from the Government based on quantity and quality of wool 
produced.  
4.  Horticulture farmers  
Horticulture farmers producing cucumbers, peppers and tomatoes in greenhouses, mainly 
under artificial lighting receive direct payments from the government. The distribution of 
electricity used for artificial lighting is also subsidized to some extent by the Government.  
G. DURATION  
 
The time of application of the agricultural agreements between the Governm ent and the Farmer's 
Association was until the end of 2016 when the agreements were renegotiated. The agreements 
were not revisited, in essence, during the years 2006 to 2014.  
 
H. LEGAL BASIS  
 
Act No. 99/1993 on Agricultural Produce, Pricing and Sales of A gricultural Products. The State 
Budget.  
 
I. TRADE EFFECTS  
 
An assessment of the trade effects of the subsidies is not available. Below, in tables 2, 3 and 4 there 
are, however, presented statistics on production and exports of the relevant agricultural 
commodities.  
Table 2 Quantity of milk received by dairies and calculated exports by fat -content of milk 
derived products (in 1,000 of litres) for 2007  
Year Milk, received by dairies by fat -
content  Exported products by fat -content, 
thereof (%)  
2007 108,695  13% 
Table 3 Sheep meat production and exports 2007 (in 1,000 kg)  
Year Production  Exports, thereof (%)  
2007 8,644  12% 
Table 4 Tomato, cucumber and bell pepper production and exports 2007 (in 1,000 kg)  
Tomatoes  Cucumbers  Bell peppers   Total exports, thereof (%)  
1,603  1,343  147 <1% 
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 31 - 
 
  2  SUPPORT FOR R&D AND TECHNOLOGICAL INNOVA TION  
2.1  Technical Development Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic Centre for Research ( RANNÍS ) which is under the supervision of the Ministry of Industry 
and Innovation.  
 
B. POLICY OBJECTIVES  
 
The objective of the Technology Development Fund is to facilitate innovation through supporting 
research and technological development.  
 
C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2007: ISK 482 million.  
 
D. RULES AND CONDITIONS  
 
The role of the fund is to support research and development activities, which aim towards innovation 
in Icelandic industry. The Fund will in general operate as a competitive fund through which firms, 
research institutes and universities will ha ve the possibility of financing projects that support 
technological development and innovation. The Fund is intended to give support to spin -off ventures 
and innovative firms to secure that economic benefits accrue to society from the scientific and 
techni cal knowledge and the innovation arising from these new ventures.  
 
The Science and Technology Policy Council attaches high importance to close co -ordination between 
the Research Fund and the Technical Development Fund, as well as co -operation with other pu blic 
funds and venture investors. The Technical Development Fund can take the initiative to establish 
programmes and specific actions prepared in consultation with the business community, research 
institutes and universities. Finally, the Technical Develop ment Fund is permitted to enter into 
partnerships with venture capital investors for seed and early risk financing toward establishing firms 
which base their operations on technological development and research and which involves a novelty 
to the economy.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE EFFECTS  
 
The support is granted to a variety of small projects and sectors, therefore it is difficult to present 
statistical data permitting an ass essment of trade effects.  
 
G. DURATION  
 
The Technology Development Fund has been operating since 2004. It took over from the Technology 
Fund which expired in 2004.  
 
2.2  Research Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic Centre for Research ( RANNÍS ) which i s under the supervision of the Ministry of Culture 
and Education.  
 
B. POLICY OBJECTIVES  
 
The objective of the Research Fund is to facilitate fundamental research at University institutes or 
other Governmental R&D institutes.  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 32 - 
 
  C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2007: ISK 592 million.  
 
D. RULES AND CONDITIONS  
 
Subsidies are granted only on the basis of  project applications. The Funds grants are for fundamental 
research at Universities and the involvement of private companies is very limited or non -existent.  
 
The Research Fund is the most powerful tool of the public sector for reinforcing the research 
community infrastructure through project grants based on applications from scientists, business 
firms and institutions. The Science and Technology Policy Council encourages the Fund to give young 
scientists an opportunity to establish their work and contribu te to the further accumulation of 
scientific and technical knowledge.  
 
The Research Fund offers grants in accordance with the priorities set by the Science and Technology 
Policy Council and the grants strategy defined by the Science Board based on a peer r eview 
evaluation of research project quality, the competence of the individuals involved and the facilities 
available for completing the project.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE E FFECTS  
 
The support is granted to a variety of small projects and sectors, therefore it is difficult to present 
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
 
Research Fund has been operating since 2004. It took over from the Sc ience Fund which expired 
in 2004.  
 
2.3  Support for R&D in marine aquaculture  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture.  
 
B. POLICY OBJECTIVE  
 
To enhance scientific knowledge in marine aquaculture.  
 
C. FORM OF SUPPORT  
 
Grants.  
 
D. AMOUNT OF SUPPORT  
 
2007: ISK 31.800 million . 
 
E. RULES AND CONDITIONS  
 
Grants are awarded on the basis of applications evaluated by a special committee.  
 
F. DURATION  
 
There is no time limit, but each programme is decided on for a year at a time.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 33 - 
 
  G. LEGAL BASIS  
 
Act no. 76/1970.  
 
H. TRADE EFFECTS  
 
There is no trade effect due to limited support.  
 
3  JOB CREATION INITIAT IVE (PRIOR TO 1996 K NOWN AS FIRM SPECIFI C SUBSIDIES 
AND EXPORT PROMOTION  (CASE 93 -221))  
A. RESPONSIBLE AUTHORITY  
 
Innovation Center  Iceland which is under the supervision of the Ministry of Employment and 
Innovation.  
 
B. POLICY OBJECTIVE  
 
The objective is, to increase the knowledge and competence of entrepreneurs and small and 
medium -sized enterprises such as in managing, financing, p roduct development, marketing and 
innovation.  
 
C. FORM OF SUPPORT  
 
Cost items incurred for consultants, product development, marketing and innovation are eligible for 
grants. Support shall in general not cover more than 50% of eligible expenses.  
 
D. AMOUNT  OF SUPPORT  
 
2007: ISK 50 million.  
 
E. RULES AND CONDITIONS  
 
Firms and individuals having a registered domicile in Iceland can apply for a grant. In accordance 
with the de minimis  rule, individuals who apply for grants according to these rules must declare  that 
they have not received a grant from the Government amounts to more than 200,000 EURO last 3 
years, the grant applied for included.  
 
F. DURATION  
 
There is no time limit, but each programme is decided on for a year at a time.  
 
G. LEGAL BASIS  
 
The Bud get item no. 11 -299-1.48. 
 
H. TRADE EFFECTS  
 
There are no trade effects of the support due to the general framework of the scheme and limited 
support.  
 
4  SUPPORT FOR EMPLOYME NT AND TRAINING  
4.1  Vocational Training Fund Support  for Vocational Training  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Education and Culture.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 34 - 
 
  B. POLICY OBJECTIVE  
 
The main purpose of this programme is to maintain and develop vocational skills, in most cases for 
people already employed.  
 
C. FORM OF STATE AID  
 
Grants.  
 
D. AMOUNT OF STATE A ID 
 
Actual total expenditure in 2007: ISK 644 .6 million . 
 
E. RULES AND CONDITIONS  
 
Grants to organizations on application to the Vocational Training Fund mainly to make curriculum or 
other teaching materials for the vocational training courses.  
 
F. DURATIO N 
 
The programme started in 1992. Duration has not been specified.  
 
G. LEGAL BASIS  
 
Act No. 19/1992 ( Lög um starfsmenntun í atvinnulífi ) and the Budget item no. 02 -451. 
 
4.2  Employment Opportunities for Women in Rural Areas  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture and the Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to create new jobs among women. Areas where high 
unemployment is among women will especially be considered.  
 
C. FORM OF STATE AID  
 
Grants, up to 50% of primary R&D costs, innovation costs and cost of new products, process and 
systems for industrial production. Institute of Regional Development pays the grants and controls 
their disposition.  
 
D. AMOUNT OF STATE AID 
 
Actual total expenditure in 2007: ISK 0 million . 
 
It is difficult to give exact information on how many jobs have been created or maintained, as many 
of these new jobs are just part time jobs.  
 
E. RULES AND CONDITIONS  
 
Grants to women on application to the Institute of Regional Development mainly to new product 
developing and marketing. The grant can only be given to companies, which are at least 50% owned 
by women or have been established by women.  
 
F. DURATION  
 
The programme started in 1990. Duratio n has not been specified.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 35 - 
 
  G. LEGAL BASIS  
 
Governmental decision from 1990.  
 
4.3  Employment of Handicapped Persons  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Welfare.  
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to ensure that disabled persons enjoy  human rights and 
freedoms on the same basis as others and that they are guaranteed the support necessary to enjoy 
these rights.  
 
C. FORM OF STATE AID  
 
Gross wage State aid to rehabilitation centres.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 200 7: ISK 55 .4 million.  
 
E. RULES AND CONDITIONS  
 
Service institutions for disabled people should be deployed in order to meet their specific needs so 
that they can live independently.  
 
F. DURATION  
 
No time limit; the amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Act No. 59/1992 on the Affairs of Disabled People and the Budget item no. 07 -701.1.30 and 
07-707.1.30.  
 
5  REGIONAL SUPPORT  
5.1  Assistance to Employment Development Projects  
A. RESPONSIBLE AUTHORITY  
 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to assist the economic development of the nationally assisted 
areas of Iceland. The assisted projects are small and cover employment devel opment, training and 
innovation.  
 
C. FORM OF STATE AID  
 
Grants, as assistance to Employment Development Projects, which fall within the objectives of Act 
No. 106/1999, on the Institute of Regional Development.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2007: ISK 139 .4 million.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 36 - 
 
  E. RULES AND CONDITIONS  
 
The programme is available to individuals, private companies, local development companies and 
municipalities. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
 
F. DURATION  
 
The programme has no time limit;  the amount is decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 10 of Act no. 106/1999 on the I nstitute of Regional Development, the Budget item 
no. 04-542. 
 
5.2  Assistance to Local Economic Development  
A. RESPONSIBLE AUTHORITY  
 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to assist local ec onomic development companies and to finance 
venturesome projects within the field of local employment development and innovation.  
 
C. FORM OF STATE AID  
 
Grants to finance venturesome projects within the field of local employment development and 
innovation.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2007: ISK 23 .3 million.  
 
E. RULES AND CONDITIONS  
 
According to Act No. 106/1999, on the Institute of Regional Development, the assistance is to be in 
accordance with rules laid down by the Ministry of Employment and Innovation. These rules have 
not yet been issued. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
 
F. DURA TION 
 
The programme has no time limit ; the amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 12 of Act no. 106/1999 on the Institute of Regional Development, the Budget item 
no. 04-542.1.10.  
 
H. ADDITIONAL INFORMATION  
 
The Institute of Regional Development is authorized according to Article 11 of Act No 106/1999 to 
provide loans and guarantees, in accordance with the role of the Institute as stipulated in the Act. 
These loans and guarantees are provided on market terms, with similar i nterest rates as on the open 
market.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 37 - 
 
  6  TEMPORARY REPAYMENT OF COSTS OF FILMS PR ODUCTION IN ICELAND  
A. RESPONSIBLE AUTHORITY  
 
Icelandic film centre ( Kvikmyndamiðstöð Íslands ) under the auspice of the Ministry of Industry.  
 
B. POLICY OBJECTIVE  
 
The objective of the Act is to enhance domestic culture and promote the history and nature of Iceland 
by temporarily supporting motion pictures and television programmes produced in Iceland.  
 
According to the Act authorisation is granted for the reimbursement from the State Treasury of a 
proportion of the production costs incurred in the production of films and television programmes in 
Iceland.  
 
When more than 80% of the total production cost of a motion picture or television programme incurs 
in Iceland, the reimbursement shall be calculated from the total production cost incurring within the 
European Economic Area.  
 
Production costs refers to all costs incurred in Iceland deductible from the revenues of enterprises 
pursuant to the provisions of the Act on Income and Net Wealth Tax. Payments pertaining to 
employees and contractors are only to be included in production costs if they are verifiable taxable 
in Iceland  
 
C. FORM OF STATE AID  
 
A spec ific company shall be established in Iceland for the production; an Icelandic branch or agency 
of a company registered in another Member State of the European Economic Area shall be considered 
a specific company  
 
D. AMOUNT OF STATE AID  
 
Total expenditure ( reimbursement of production cost) in 2007: ISK 75 million.  
 
E. RULES AND CONDITIONS  
 
In assessing whether a proportion of the production costs of a motion picture or a television 
programme shall be reimbursed, the following conditions shall be fulfilled:  
 
a. the production shall be suited for promoting Icelandic culture and the history and nature 
of Iceland;  
b. the production shall be suited for enhancing the experience, knowledge and artistic 
ambition of those involved in the production;  
c. a specific company shall  be established in Iceland for the production; an Icelandic branch 
or agency of a company registered in another EEA member state shall be considered a 
specific company;  
d. information on the principal parties involved in the film or television programme shall  be 
submitted;  
e. information on domestic parties and their share in the production of the film or television 
programme shall be submitted;  
f. an itemized estimate of the production costs and sources of funding shall be submitted, 
together with confirmation by the funding parties and a declaration by the producer to the 
effect that the production conforms with the aims of the Act No. 43/1999;  
g. information on the content of the proposed film or television programme shall be 
submitted, including a manuscript, synop sis and information about filming locations;  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 38 - 
 
  h. a production plan shall be available (i.e. filming, post -production and marketing plan), 
providing for completion of the production within three years of receipt of the application 
for reimbursement;  
i. a statement  shall be submitted to the effect that the material to be produced is intended 
for general distribution to cinemas or television stations, the content of the film or 
television programme shall not violate the Film Censorship and Prohibition of Violent Film s 
Act, No. 47/1995, or Article 210 of the Criminal Code, No. 19/1940.  
F. DURATION  
 
The programme is limited to end of year 2021.  
 
G. LEGAL BASIS  
 
Act on Temporary Reimbursements in Respect of Film Making in Iceland, No. 43/1999, with 
amendments. The Budget item no. 11 -251.  
 
7  RURAL TOURISM  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication.  
 
B. POLICY OBJECTIVE  
 
The objective of the pr ogramme is to promote rural tourism and assist local museums, and places 
of historical importance, in attracting tourists.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2007: ISK 346 million.  
 
E. DURATION  
 
The programme has no time limit;  the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 10 -651. 
 
8  AID TO PROMOTE MARKE TING OF ICELANDIC TO URISM  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication and Icelandic Tourism Board ( Ferðamálastofa ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to promote marketing of Icelandic tourism. Further reference is 
made to a correspondence with the Authority concerning Case No. 47859.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 39 - 
 
  D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2007: ISK 30 million.  
 
E. DURATION  
 
The programme is intended to be temporary, the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 10 -190.1.44.  
  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 40 - 
 
  2008  
1  THE AGRICULTURAL SECTOR  
A. NAME OF PROGRAMME  
 
Agricultural Agreements; Payments to dairy farms, sheep farms and horticulture farms (Budget 
items No: 04 -801, 04 -805 & 04 -807).  
 
B. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture  
 
C. POLICY OBJECTIVE  
 
Agricultural policy is implemented in Iceland in pursuit of objectives which include increasing 
efficiency in the agro -food sector, ensuring self -sufficiency for the country's major agricultural 
production; seeking to utilize domestic inputs to the exten t possible; increasing overall efficiency in 
the agricultural food sector; utilizing export opportunities to the extent feasible; securing an 
equitable income for farmers; and integrating environmental issues in agricultural policy.  
 
D. FORMS OF SUBSIDY  
 
Agricultural subsidies in Iceland is mostly provided through direct payments, based on payment 
entitlements, which are directly or indirectly coupled with production factors. Direct payments are 
provided to cattle (mainly dairy) and sheep producers, and, on  a smaller scale, to certain greenhouse 
producers. Allocations for the Agricultural Agreements in 2008 are made under items  04-801, 04 -
805 and 04 -807 of the State budget (Ministry of Fisheries and Agriculture).  
 
E. AMOUNT OF SUBSIDY  
 
Items making up the am ount of support as measured by total costs in Government Accounts for  2008 
are listed in table 1.  
Table 1 Amount of support in 2008 (Government Accounts); Million ISK  
 2008  
Agricultural Productivity Fund  160 
Stockholding costs; sheep meat program  389 
Directs payments to sheep farmers  2,042  
Quality control scheme; sheep farmers  1,039  
Wool utilization; subsidies  348 
Direct payments to dairy farmers  4,366  
Direct payments to horticulture farmers  246 
Electricity subsidies to horticulture farmers 
(greenhouse)  179 
 
F. RULES AND CONDITIONS  
 
Implementation of the agricultural policy revolves around Agricultural Agreements negotiated 
between the Government and the Farmer's Association. Under Act No. 99/1993 on Agricultural 
Produce, the Minister of Fis heries and Agriculture is given the authority to negotiate with the 
Farmer's Association on behalf of the Government on the total support target for milk and total 
support target for sheep meat entitlements and direct payments for horticulture. A governmen t-
chaired committee determines a guaranteed minimum price for milk delivered within production 
quotas at the producer level.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 41 - 
 
  Support is provided for dairy farms, sheep farms and horticulture farms (greenhouse).  
1.  Dairy farmers  
Milk producers receive direct payments from the Government on milk delivered to dairies. The 
annual quantity must be within the allocated supported targets. The amount of monetary 
support is the same for all producers in Iceland.  
2.  Sheep farmers  
Sheep farmers receive direct payments from  the Government which are based on support 
targets for sheep meat entitlements, for which they must own 70% live sheep. Additional 
payments to sheep farmers are related to a quality control scheme for lamb meat, based on 
animal welfare, product quality and  traceability, and sustainability criteria.  
3.  Sheep farmers; wool  
Sheep farmers receive support from the Government based on quantity and quality of wool 
produced.  
4.  Horticulture farmers  
Horticulture farmers producing cucumbers, peppers and tomatoes in greenh ouses, mainly 
under artificial lighting receive direct payments from the government. The distribution of 
electricity used for artificial lighting is also subsidized to some extent by the Government.  
G. DURATION  
 
The time of application of the agricultural  agreements between the Government and the Farmer's 
Association was until the end of 2016 when the agreements were renegotiated. The agreements 
were not revisited, in essence, during the years 2006 to 2014.  
 
H. LEGAL BASIS  
 
Act No. 99/1993 on Agricultural Produce, Pricing and Sales of Agricultural Products. The State 
Budget.  
 
I. TRADE EFFECTS  
 
An assessment of the trade effects of the subsidies is not available. Below, in tables 2, 3 and 4 there 
are, however, presented statistics on production and exports o f the relevant agricultural 
commodities.  
Table 2 Quantity of milk received by dairies and calculated exports by fat -content of milk 
derived products (in 1,000 of litres) for 2008  
Year Milk, received by dairies by fat -
content  Exported products by fat -conten t, 
thereof (%)  
2008 112,297  17% 
Table 3 Sheep meat production and exports 2008 (in 1,000 kg)  
Year Production  Exports, thereof (%)  
2008 8,930  17% G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 42 - 
 
  Table 4 Tomato, cucumber and bell pepper production and exports 2008 (in 1,000 kg)  
Tomatoes  Cucumbers  Bell peppers   Total exports, thereof 
(%) 
1,481  1,516  170 <1% 
 
2  SUPPORT FOR R&D AND TECHNOLOGICAL INNOVA TION  
2.1  Technical Development Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic Centre for Research ( RANNÍS ) which is under the supervision of the Ministry of Industry 
and Innovation.  
 
B. POLICY OBJECTIVES  
 
The objective of the Technology Development Fund is to facilitate innovation through supporting 
research and technological development.  
 
C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2008: ISK 6 51.1 million.  
 
D. RULES AND CONDITIONS  
 
The role of the fund is to support research and development activities, which aim towards innovation 
in Icelandic industry. The Fund will in general operate as a competitive fund through which firms, 
research institutes and universities will have the possibility of financing projects that support 
technological development and innovation. The Fund is intended to give support to spin -off ventures 
and innovative firms to secure that economic benefits accrue to soc iety from the scientific and 
technical knowledge and the innovation arising from these new ventures.  
 
The Science and Technology Policy Council attaches high importance to close co -ordination between 
the Research Fund and the Technical Development Fund, as  well as co -operation with other public 
funds and venture investors. The Technical Development Fund can take the initiative to establish 
programmes and specific actions prepared in consultation with the business community, research 
institutes and universit ies. Finally, the Technical Development Fund is permitted to enter into 
partnerships with venture capital investors for seed and early risk financing toward establishing firms 
which base their operations on technological development and research and which involves a novelty 
to the economy.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE EFFECTS  
 
The support is granted to a variety of small projects and sectors, therefore it is difficult to present  
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
 
The Technology Development Fund has been operating since 2004. It took over from the Technology 
Fund which expired in 2004.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 43 - 
 
  2.2  Research Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic C entre for Research ( RANNÍS ) which is under the supervision of the Ministry of Culture 
and Education.  
 
B. POLICY OBJECTIVES  
 
The objective of the Research Fund is to facilitate fundamental research at University institutes or 
other Governmental R&D institut es. 
C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2008: ISK 303 .4 million.  
 
D. RULES AND CONDITIONS  
 
Subsidies are granted only on the basis of  project applications. The Funds grants are for fundamental 
research at Universities and the involvement of private companies is very limited or non -existent.  
 
The Research Fund is the most powerful tool of the public sector for reinforcing the research 
community infrastructure through project grants based on applications from scientists, business 
firms and institutions. The Science and Technology Policy Council encourages the Fund to give young 
scientists an opportunity to establish their work and contribu te to the further accumulation of 
scientific and technical knowledge.  
 
The Research Fund offers grants in accordance with the priorities set by the Science and Technology 
Policy Council and the grants strategy defined by the Science Board based on a peer r eview 
evaluation of research project quality, the competence of the individuals involved and the facilities 
available for completing the project.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE E FFECTS  
 
The support is granted to a variety of small projects and sectors, therefore it is difficult to present 
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
 
Research Fund has been operating since 2004. It took over from the Sc ience Fund which expired in 
2004.  
 
2.3  Support for R&D in marine aquaculture  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture.  
 
B. POLICY OBJECTIVE  
 
To enhance scientific knowledge in marine aquaculture.  
 
C. FORM OF SUPPORT  
 
Grants.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 44 - 
 
  D. AMOUNT OF SUPPORT  
 
2008: ISK 20.093 ,1 million . 
 
E. RULES AND CONDITIONS  
 
Grants are awarded on the basis of applications evaluated by a special committee.  
 
F. DURATION  
 
There is no time limit, but each programme is decided on for a year at a time.  
 
G. LEGAL BASI S 
 
Act no. 72/2008 on the Directorate of Fisheries.  
 
H. TRADE EFFECTS  
 
There is no trade effect due to limited support.  
 
3  JOB CREATION INITIAT IVE (PRIOR TO 1996 K NOWN AS FIRM SPECIFI C SUBSIDIES 
AND EXPORT PROMOTION  (CASE 93 -221))  
A. RESPONSIBLE AUTHORITY  
 
Innovation Center Iceland which is under the supervision of the Ministry of Employment and 
Innovation.  
 
B. POLICY OBJECTIVE  
 
The objective is, to increase the knowledge and competence of entrepreneurs and small and 
medium -sized enterprises such as in manag ing, financing, product development, marketing and 
innovation.  
 
C. FORM OF SUPPORT  
 
Cost items incurred for consultants, product development, marketing and innovation are eligible for 
grants. Support shall in general not cover more than 50% of eligible exp enses.  
 
D. AMOUNT OF SUPPORT  
 
2008: ISK 75 million.  
 
E. RULES AND CONDITIONS  
 
Firms and individuals having a registered domicile in Iceland can apply for a grant. In accordance 
with the de minimis  rule, individuals who apply for grants according to these r ules must declare that 
they have not received a grant from the Government amounts to more than 200,000 EURO last 3 
years, the grant applied for included.  
 
F. DURATION  
 
There is no time limit, but each programme is decided on for a year at a time.  
 
G. LEGAL BASIS  
 
The Budget item no. 11 -299-1.48. 
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 45 - 
 
  H. TRADE EFFECTS  
 
There are no trade effects of the support due to the general framework of the scheme and limited 
support.  
 
4  SUPPORT FOR EMPLOYME NT AND TRAINING  
4.1  Vocational Training Fund Support  for Vocational Training  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Education and Culture.  
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to maintain and develop vocational skills, in most cases for 
people already employed.  
 
C. FORM OF STATE AID  
 
Grants.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2008: ISK 1.005,9 million . 
 
E. RULES AND CONDITIONS  
 
Grants to organizations on application to the Vocational Training Fund mainly to make curriculum or 
other teaching materials for the vocational  training courses.  
 
F. DURATION  
 
The programme started in 1992. Duration has not been specified.  
 
G. LEGAL BASIS  
 
Adult Education Act No. 19/1992 and the Budget item no. 02 -451. 
 
4.2  Employment Opportunities for Women in Rural Areas  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture and the Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to create new jobs among women. Areas where high 
unemployment is among women will especially be con sidered.  
 
C. FORM OF STATE AID  
 
Grants, up to 50% of primary R&D costs, innovation costs and cost of new products, process and 
systems for industrial production. Institute of Regional Development pays the grants and controls 
their disposition.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2008: ISK 0 million . 
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 46 - 
 
  It is difficult to give exact information on how many jobs have been created or maintained, as many 
of these new jobs are just part time jobs.  
 
E. RULES AND CONDITIONS  
 
Grants to women on application to the Institute of Regional Development mainly to new product 
developing and marketing. The grant can only be given to companies, which are at least 50% owned 
by women or have been established by women.  
 
F. DURATION  
 
The programme started in 1 990. Duration has not been specified.  
 
G. LEGAL BASIS  
 
Governmental decision from 1990.  
 
4.3  Employment of Handicapped Persons  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Welfare.  
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to ensure that disabled p ersons enjoy human rights and 
freedoms on the same basis as others and that they are guaranteed the support necessary to enjoy 
these rights.  
 
C. FORM OF STATE AID  
 
Gross wage State aid to rehabilitation centres.  
 
D. AMOUNT OF STATE AID  
 
Actual total expend iture in 2008: ISK 59 .1 million.  
 
E. RULES AND CONDITIONS  
 
Service institutions for disabled people should be deployed in order to meet their specific needs so 
that they can live independently.  
 
F. DURATION  
 
No time limit; the amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Act No. 59/1992 on the Affairs of Disabled People and the Budget item no. 07 -701.1.30 and 
07-707.1.30.  
 
5  REGIONAL SUPPORT  
5.1  Assistance to Employment Development Projects  
A. RESPONSIBLE AUT HORITY  
 
Institute of Regional Development ( Byggðastofnun ). 
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 47 - 
 
  B. POLICY OBJECTIVE  
 
The objective of the programme is to assist the economic development of the nationally assisted 
areas of Iceland. The assisted projects are small and cover employment developm ent, training and 
innovation.  
 
C. FORM OF STATE AID  
 
Grants, as assistance to Employment Development Projects, which fall within the objectives of Act 
No. 106/1999, on the Institute of Regional Development.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure  in 2008: ISK 173 .2 million.  
 
E. RULES AND CONDITIONS  
 
The programme is available to individuals, private companies, local development companies and 
municipalities. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority St ate Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
 
F. DURATION  
 
The programme has no time limit; the  amount is decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 10 of Act no. 106/1999 on the Institute of  Regional Development, the Budget item 
no. 04-542. 
 
5.2  Assistance to Local Economic Development  
A. RESPONSIBLE AUTHORITY  
 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to assist local economic deve lopment companies and to finance 
venturesome projects within the field of local employment development and innovation.  
 
C. FORM OF STATE AID  
 
Grants to finance venturesome projects within the field of local employment development and 
innovation.  
 
D. AMOUNT  OF STATE AID  
 
Actual total expenditure in 2008: ISK 106 .5 million.  
 
E. RULES AND CONDITIONS  
 
According to Act No. 106/1999, on the Institute of Regional Development, the assistance is to be in 
accordance with rules laid down by the Ministry of Employment and Innovation. These rules have 
not yet been issued. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 48 - 
 
  F. DURATION  
 
The p rogramme has no time limit ; the amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 12 of Act no. 106/1999 on the Institute of Regional Development, the Budget item 
no. 04-542.1.10.  
 
H. ADDITIONAL INFORMATION  
 
The Institute of Regional  Development is authorized according to Article 11 of Act No 106/1999 to 
provide loans and guarantees, in accordance with the role of the Institute as stipulated in the Act. 
These loans and guarantees are provided on market terms, with similar interest rat es as on the open 
market.  
 
6  TEMPORARY REPAYMENT OF COSTS OF FILMS PR ODUCTION IN ICELAND  
A. RESPONSIBLE AUTHORITY  
 
Icelandic film centre ( Kvikmyndamiðstöð Íslands ) under the auspice of the Ministry of Industry.  
 
B. POLICY OBJECTIVE  
 
The objective of the Act is to enhance domestic culture and promote the history and nature of Iceland 
by temporarily supporting motion pictures and television programmes produced in Iceland.  
 
According to the Act authorisation is granted for the reimbursement from the State Treasury of a 
proportion of the production costs incurred in the production of films and television programmes in 
Iceland.  
 
When more than 80% of the total production cost of a motion picture or television programme incurs 
in Iceland, the reimbursement shall be calculated from the total production cost incurring within the 
European Economic Area.  
 
Production costs refers to all costs incurred in Iceland deductible from the r evenues of enterprises 
pursuant to the provisions of the Act on Income and Net Wealth Tax. Payments pertaining to 
employees and contractors are only to be included in production costs if they are verifiable taxable 
in Iceland  
 
C. FORM OF STATE AID  
 
A speci fic company shall be established in Iceland for the production; an Icelandic branch or agency 
of a company registered in another Member State of the European Economic Area shall be considered 
a specific company  
 
D. AMOUNT OF STATE AID  
 
Total expenditure (r eimbursement of production cost) in 2008: ISK 75 million.  
 
E. RULES AND CONDITIONS  
 
In assessing whether a proportion of the production costs of a motion picture or a television 
programme shall be reimbursed, the following conditions shall be fulfilled:  
 
a. the production shall be suited for promoting Icelandic culture and the history and nature 
of Iceland;  
b. the production shall be suited for enhancing the experience, knowledge and artistic 
ambition of those involved in the production;  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 49 - 
 
  c. a specific company shall be established in Iceland for the production; an Icelandic branch 
or agency of a company registered in another EEA member state shall be considered a 
specific company;  
d. information on the principal parties involved in the film or television programme shall be 
submitted;  
e. information on domestic parties and their share in the production of the film or television 
programme shall be submitted;  
f. an itemized estimate of the production costs and sources of funding shall be submitted, 
together with confirmation by t he funding parties and a declaration by the producer to the 
effect that the production conforms with the aims of the Act No.  43/1999;  
g. information on the content of the proposed film or television programme shall be 
submitted, including a manuscript, synops is and information about filming locations;  
h. a production plan shall be available (i.e. filming, post -production and marketing plan), 
providing for completion of the production within three years of receipt of the application 
for reimbursement;  
i. a statement shall be submitted to the effect that the material to be produced is intended 
for general distribution to cinemas or television stations, the content of the film or 
television programme shall not violate the Film Censorship and Prohibition of Violent Films  
Act, No. 47/1995, or Article 210 of the Criminal Code, No. 19/1940.  
F. DURATION  
 
The programme is limited to end of year 2021.  
 
G. LEGAL BASIS  
 
Act on Temporary Reimbursements in Respect of Film Making in Iceland, No. 43/1999, with 
amendments. The Budget item no. 11 -251.  
 
7  RURAL TOURISM  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication.  
 
B. POLICY OBJECTIVE  
 
The objective of the pr ogramme is to promote rural tourism and assist local museums, and places 
of historical importance, in attracting tourists.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2008: ISK 390 .8 million.  
 
E. DURATIO N 
 
The programme has no time limit ; the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 11 -501. G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 50 - 
 
   
8  AID TO PROMOTE MARKE TING OF ICELANDIC TO URISM  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication and Icelandic  Tourism Board ( Ferðamálastofa ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to promote marketing of Icelandic tourism. Further reference is 
made to a correspondence with the Authority concerning Case No. 47859.  
 
C. FORM OF STATE AID  
 
Grants to  projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2008: ISK 30 million.  
 
E. DURATION  
 
The programme is intended to be temporary, the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 11 -599.1.44.  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 51 - 
 
  2009  
1  THE AGRICULTURAL SECTOR  
A. NAME OF PROGRAMME  
 
Agricultural Agreements; Payments to dairy farms, sheep farms and horticulture farms  (Budget 
items No: 04 -801, 04 -805 & 04 -807).  
 
B. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture  
 
C. POLICY OBJECTIVE  
 
Agricultural policy is implemented in Iceland in pursuit of objectives which include increasing 
efficiency in the agro -food sector, ensuring self -sufficiency for the country's major agricultural 
production; seeking to utilize domestic inputs to the exten t possible; increasing overall efficiency in 
the agricultural food sector; utilizing export opportunities to the extent feasible; securing an 
equitable income for farmers; and integrating environmental issues in agricultural policy.  
 
D. FORMS OF SUBSIDY  
 
Agricultural subsidies in Iceland is mostly provided through direct payments, based on payment 
entitlements, which are directly or indirectly coupled with production factors. Direct payments are 
provided to cattle (mainly dairy) and sheep producers, and, on  a smaller scale, to certain greenhouse 
producers. Allocations for the Agricultural Agreements in 2009 are made under items  04-801, 04 -
805 and 04 -807 of the State budget (Ministry of Fisheries and Agriculture).  
 
E. AMOUNT OF SUBSIDY  
 
Items making up the am ount of support as measured by total costs in Government Accounts for  2009 
are listed in table 1.  
Table 1 Amount of support in 2009 (Government Accounts); Million ISK  
 2009  
Agricultural Productivity Fund  159 
Stockholding costs; sheep meat program  340 
Directs payments to sheep farmers  2,141  
Quality control scheme; sheep farmers  1,088  
Wool utilization; subsidies  364 
Direct payments to dairy farmers  4,589  
Direct payments to horticulture farmers  247 
Electricity subsidies to horticulture farmers 
(greenhouse)  153 
 
F. RULES AND CONDITIONS  
 
Implementation of the agricultural policy revolves around Agricultural Agreements negotiated 
between the Government and the Farmer's Association. Under Act No. 99/1993 on Agricultural 
Produce, the Minister of Fis heries and Agriculture is given the authority to negotiate with the 
Farmer's Association on behalf of the Government on the total support target for milk and total 
support target for sheep meat entitlements and direct payments for horticulture. A governmen t-
chaired committee determines a guaranteed minimum price for milk delivered within production 
quotas at the producer level.  
 
Support is provided for dairy farms, sheep farms and horticulture farms (greenhouse).  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 52 - 
 
  1.  Dairy farmers  
Milk producers receive direct  payments from the Government on milk delivered to dairies. The 
annual quantity must be within the allocated supported targets. The amount of monetary 
support is the same for all producers in Iceland.  
2.  Sheep farmers  
Sheep farmers receive direct payments fro m the Government which are based on support 
targets for sheep meat entitlements, for which they must own 70% live sheep. Additional 
payments to sheep farmers are related to a quality control scheme for lamb meat, based on 
animal welfare, product quality an d traceability, and sustainability criteria.  
3.  Sheep farmers; wool  
Sheep farmers receive support from the Government based on quantity and quality of wool 
produced.  
4.  Horticulture farmers  
Horticulture farmers producing cucumbers, peppers and tomatoes in green houses, mainly 
under artificial lighting receive direct payments from the government. The distribution of 
electricity used for artificial lighting is also subsidized to some extent by the Government.  
G. DURATION  
 
The time of application of the agricultura l agreements between the Government and the Farmer's 
Association was until the end of 2016 when the agreements were renegotiated. The agreements 
were not revisited, in essence, during the years 2006 to 2014.  
 
H. LEGAL BASIS  
 
Act No. 99/1993 on Agricultural  Produce, Pricing and Sales of Agricultural Products. The State 
Budget.  
 
I. TRADE EFFECTS  
 
An assessment of the trade effects of the subsidies is not available. Below, in tables 2, 3 and 4 there 
are, however, presented statistics on production and exports of the relevant agricultural 
commodities.  
Table 2 Quantity of milk received by dairies and calculated exports by fat -content of milk 
derived products (in 1,000 of litres) for 2009  
Year Milk, received by dairies by fat - 
content  Exported products by fat -content, 
thereof (%)  
2009  115,579  13% 
Table 3 Sheep meat production and exports 2009 (in 1,000 kg)  
Year Production  Exports, thereof (%)  
2009 8,841  27% 
Table 4 Tomato, cucumber and bell pepper production and exports 2009 (in 1,000 kg)  
Tomatoes  Cucumbers  Bell peppers   Total exports, thereof 
(%) 
1,481  1,452  177 <1% G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 53 - 
 
  2  SUPPORT FOR R&D AND TECHNOLOGICAL INNOVA TION  
2.1  Technical Development Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic Centre for Research ( RANNÍS ) which is under the supervision of the Ministry of Industry 
and Innovation.  
 
B. POLICY OBJECTIVES  
 
The objective of the Technology Development Fund is to facilitate innovation through supporting 
research and technological development.  
 
C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2009: ISK 8 26 million.  
 
D. RULES AND CONDITIONS  
 
The role of the fund is to support research and development activities, which aim towards innovation 
in Icelandic industry. The Fund will in general operate as a competitive fund through which firms, 
research institutes and universities will have the possibility of financing projects that support 
technological development and innovation. The Fund is intended to give support to spin -off ventures 
and innovative firms to secure that economic benefits accrue to soc iety from the scientific and 
technical knowledge and the innovation arising from these new ventures.  
 
The Science and Technology Policy Council attaches high importance to close co -ordination between 
the Research Fund and the Technical Development Fund, as  well as co -operation with other public 
funds and venture investors. The Technical Development Fund can take the initiative to establish 
programmes and specific actions prepared in consultation with the business community, research 
institutes and universit ies. Finally, the Technical Development Fund is permitted to enter into 
partnerships with venture capital investors for seed and early risk financing toward establishing firms 
which base their operations on technological development and research and which involves a novelty 
to the economy.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE EFFECTS  
 
The support is granted to a variety of small projects and sectors, therefore it is difficult to present  
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
 
The Technology Development Fund has been operating since 2004. It took over from the Technology 
Fund which expired in 2004.  
 
2.2  Research Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic C entre for Research ( RANNÍS ) which is under the supervision of the Ministry of Culture 
and Education.  
 
B. POLICY OBJECTIVES  
 
The objective of the Research Fund is to facilitate fundamental research at University institutes or 
other Governmental R&D institutes.  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 54 - 
 
  C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2009: ISK 771 million.  
 
D. RULES AND CONDITIONS  
 
Subsidies are granted only on the basis of  project applications. The Funds grants are for fundamental 
research at Universities and the involvement of private companies is very limited or non -existent.  
 
The Research Fund is the most powerful tool of the public sector for reinforcing the research 
community infrastructure through project grants based on applications from scientists, business 
firms and institutions. The Science and Technology Policy Council encourages the Fund to give young 
scientists an opportunity to establish their work and contribu te to the further accumulation of 
scientific and technical knowledge.  
 
The Research Fund offers grants in accordance with the priorities set by the Science and Technology 
Policy Council and the grants strategy defined by the Science Board based on a peer r eview 
evaluation of research project quality, the competence of the individuals involved and the facilities 
available for completing the project.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE E FFECTS  
 
The support is granted to a variety of small projects and sectors, therefore it is difficult to present 
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
 
Research Fund has been operating since 2004. It took over from the Sc ience Fund which expired 
in 2004.  
 
2.3  Support for R&D in marine aquaculture  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture.  
 
B. POLICY OBJECTIVE  
 
To enhance scientific knowledge in marine aquaculture.  
 
C. FORM OF SUPPORT  
 
Grants.  
 
D. AMOUNT OF SUPPORT  
 
2009: ISK 26.675 million . 
 
E. RULES AND CONDITIONS  
 
Grants are awarded on the basis of applications evaluated by a special committee.  
 
F. DURATION  
 
There is no time limit, but each programme is decided on for a year at a time.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 55 - 
 
  G. LEGAL BASIS  
 
Act no. 72/2008 on the Directorate of Fisheries.  
 
H. TRADE EFFECTS  
 
There is no trade effect due to limited support.  
 
3  JOB CREATION INITIAT IVE (PRIOR TO 1996 K NOWN AS FIRM SPECIFI C SUBSIDIES 
AND EXPORT PROMOTION  (CASE 93 -221))  
A. RESPONSIBLE AUTHORITY  
 
Innovation Center Iceland which is under the supervision of the Ministry of Employment and 
Innovation.  
 
B. POLICY OBJECTIVE  
 
The objective is, to increase the knowledge and competence of entrepreneurs and small and 
medium -sized enterprises such as in manag ing, financing, product development, marketing and 
innovation.  
 
C. FORM OF SUPPORT  
 
Cost items incurred for consultants, product development, marketing and innovation are eligible for 
grants. Support shall in general not cover more than 50% of eligible exp enses.  
 
D. AMOUNT OF SUPPORT  
 
2009: ISK 80 million.  
 
E. RULES AND CONDITIONS  
 
Firms and individuals having a registered domicile in Iceland can apply for a grant. In accordance 
with the de minimis  rule, individuals who apply for grants according to these r ules must declare that 
they have not received a grant from the Government amounts to more than 200,000 EURO last 3 
years, the grant applied for included.  
 
F. DURATION  
 
There is no time limit, but each programme is decided on for a year at a time.  
 
G. LEGAL BASIS  
 
The Budget item no. 11 -299-1.48. 
 
H. TRADE EFFECTS  
 
There are no trade effects of the support due to the general framework of the scheme and limited 
support.  
 
4  SUPPORT FOR EMPLOYME NT AND TRAINING  
4.1  Vocational Training Fund Support  for Vocational Training  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Education and Culture.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 56 - 
 
  B. POLICY OBJECTIVE  
 
The main purpose of this programme is to maintain and develop vocational skills, in most cases for 
people already employed.  
 
C. FORM OF STATE AID  
 
Grants.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2009: ISK 644 .6 million . 
 
E. RULES AND CONDITIONS  
 
Grants to organizations on application to the Vocational Training Fund mainly to make curriculum or 
other teaching materials for the vocational t raining courses.  
 
F. DURATION  
 
The programme started in 1992. Duration has not been specified.  
 
G. LEGAL BASIS  
 
Budget item no. 02 -451. 
 
4.2  Employment Opportunities for Women in Rural Areas  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture and the Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to create new jobs among women. Areas where high 
unemployment is among women will especially be considered.  
 
C. FORM OF STATE AID  
 
Grants, u p to 50% of primary R&D costs, innovation costs and cost of new products, process and 
systems for industrial production. Institute of Regional Development pays the grants and controls 
their disposition.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2009: ISK 0 million . 
 
It is difficult to give exact information on how many jobs have been created or maintained, as many 
of these new jobs are just part time jobs.  
 
E. RULES AND CONDITIONS  
 
Grants to women on application to the Institute of Regional Devel opment mainly to new product 
developing and marketing. The grant can only be given to companies, which are at least 50% owned 
by women or have been established by women.  
 
F. DURATION  
 
The programme started in 1990. Duration has not been specified.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 57 - 
 
  G. LEGAL BASIS  
 
Governmental decision from 1990.  
 
4.3  Employment of Handicapped Persons  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Welfare.  
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to ensure that disabled persons enjoy human rights and 
freedoms on the same basis as others and that they are guaranteed the support necessary to enjoy 
these rights.  
 
C. FORM OF STATE AID  
 
Gross wage State aid to rehabilitation centres.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2009: ISK 64 .8 million.  
 
E. RULES  AND CONDITIONS  
 
Service institutions for disabled people should be deployed in order to meet their specific needs so 
that they can live independently.  
 
F. DURATION  
 
No time limit; the  amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Act No. 59/1992 on the Affairs of Disabled People and the Budget item no. 07 -701.1.30 
and 07-707.1.30.  
 
5  REGIONAL SUPPORT  
5.1  Assistance to Employment Development Projects  
A. RESPONSIBLE AUTHORITY  
 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJE CTIVE  
 
The objective of the programme is to assist the economic development of the nationally assisted 
areas of Iceland. The assisted projects are small and cover employment development, training and 
innovation.  
 
C. FORM OF STATE AID  
 
Grants, as assistance  to Employment Development Projects, which fall within the objectives of Act 
No. 106/1999, on the Institute of Regional Development.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2009: ISK 164 .7 million.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 58 - 
 
  E. RULES AND CONDITIONS  
 
The programme is av ailable to individuals, private companies, local development companies and 
municipalities. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Survei llance 
Authority.  
 
F. DURATION  
 
The programme has no time limit; the  amount is decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 10 of Act no. 106/1999 on the Institute of Regional Development, the Budget item 
no. 04-542. 
 
5.2  Assistance to Local Economic Development  
A. RESPONSIBLE AUTHORITY  
 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to assist local economic development companies and to finance 
venturesome projects within the field o f local employment development and innovation.  
 
C. FORM OF STATE AID  
 
Grants to finance venturesome projects within the field of local employment development and 
innovation.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2009: ISK 49 .4 million.  
 
E. RULES AND CONDITIONS  
 
According to Act No. 106/1999, on the Institute of Regional Development, the assistance is to be in 
accordance with rules laid down by the Ministry of Employment and Innovation. These rules have 
not yet been issued. The subsidies are s ubject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
 
F. DURATION  
 
The programme has no time limit; the  amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 12 of Act no. 106/1999 on the Institute of Regional Development, the Budget item 
no. 04-542.1.10.  
 
H. ADDITIONAL INFORMATION  
 
The Institute of Regional Development is authorized acco rding to Article 11 of Act No 106/1999 to 
provide loans and guarantees, in accordance with the role of the Institute as stipulated in the Act. 
These loans and guarantees are provided on market terms, with similar interest rates as on the open 
market.  
 
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 59 - 
 
  6  TEMPORARY REPAYMENT OF COSTS OF FILMS PRODU CTION IN ICELAND  
A. RESPONSIBLE AUTHORITY  
 
Icelandic film centre ( Kvikmyndamiðstöð Íslands ) under the auspice of the Ministry of Industry.  
 
B. POLICY OBJECTIVE  
 
The objective of the Act is to enhance domestic culture  and promote the history and nature of Iceland 
by temporarily supporting motion pictures and television programmes produced in Iceland.  
 
According to the Act authorisation is granted for the reimbursement from the State Treasury of a 
proportion of the pro duction costs incurred in the production of films and television programmes in 
Iceland.  
 
When more than 80% of the total production cost of a motion picture or television programme incurs 
in Iceland, the reimbursement shall be calculated from the total pr oduction cost incurring within the 
European Economic Area.  
 
Production costs refers to all costs incurred in Iceland deductible from the revenues of enterprises 
pursuant to the provisions of the Act on Income and Net Wealth Tax. Payments pertaining to 
employees and contractors are only to be included in production costs if they are verifiable taxable 
in Iceland  
 
C. FORM OF STATE AID  
 
A specific company shall be established in Iceland for the production; an Icelandic branch or agency 
of a company registered in another Member State of the European Economic Area shall be considered 
a specific company  
 
D. AMOUNT OF STATE AID  
 
Total expenditure (reimbursement of production cost) in 2009: ISK 125 million.  
 
E. RULES AND CONDITIONS  
 
In assessing whether a proportion  of the production costs of a motion picture or a television 
programme shall be reimbursed, the following conditions shall be fulfilled:  
 
a. the production shall be suited for promoting Icelandic culture and the history and nature 
of Iceland;  
b. the production s hall be suited for enhancing the experience, knowledge and artistic 
ambition of those involved in the production;  
c. a specific company shall be established in Iceland for the production; an Icelandic branch 
or agency of a company registered in another EEA me mber state shall be considered a 
specific company;  
d. information on the principal parties involved in the film or television programme shall be 
submitted;  
e. information on domestic parties and their share in the production of the film or television 
programme shall be submitted;  
f. an itemized estimate of the production costs and sources of funding shall be submitted, 
together with confirmation by the funding parties and a declaration by the producer to the 
effect that the production conforms with the aims of the Act No. 43/1999;  
g. information on the content of the proposed film or television programme shall be 
submitted, including a manuscript, synopsis and information about filming locations;  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 60 - 
 
  h. a production plan shall be available (i.e. filming, post -production and m arketing plan), 
providing for completion of the production within three years of receipt of the application 
for reimbursement;  
i. a statement shall be submitted to the effect that the material to be produced is intended 
for general distribution to cinemas or television stations, the content of the film or 
television programme shall not violate the Film Censorship and Prohibition of Violent Films 
Act, No. 47/1995, or Article 210 of the Criminal Code, No. 19/1940.  
F. DURATION  
 
The programme is limited to end of year 2021.  
 
G. LEGAL BASIS  
 
Act on Temporary Reimbursements in Respect of Film Making in Iceland, No. 43/1999, with 
amendments. The Budget item no. 11 -251.  
 
7  RURAL TOURISM  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication.  
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to promote rural tourism and assist local museums, and places 
of historical importance, in attracting tourists.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 20 09: ISK 475 .5 million.  
 
E. DURATION  
 
The programme has no time limit ; the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 11 -501. 
 
G. ADDITIONAL INFORMATION  
 
The EFTA Surveillance Authority is currently, following a complaint, examining State aid provided to 
promote Icelandic tourism (reference is made to Case No. 47859).  
 
8  AID TO PROMOTE MARKE TING OF ICELANDIC TO URISM  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication and Icelandic Tourism Board ( Ferðamálastofa ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to promote marketing of Icelandic tourism. Further reference is 
made to a correspondence with the Authority concerning Case No. 47859.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 61 - 
 
  C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2009: ISK 105 million.  
 
E. DURATION  
 
The programme is intended to be temporary, the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 11 -599.1.44.  
  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 62 - 
 
  2010  
1  THE AGRICULTURAL SECTOR  
A. NAME OF PROGRAMME  
 
Agricultural Agreements; Payments to dairy farms, sheep farms and horticulture farms  (Budget 
items No: 04 -801, 04 -805 & 04 -807).  
 
B. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture  
 
C. POLICY OBJECTIVE  
 
Agricultura l policy is implemented in Iceland in pursuit of objectives which include increasing 
efficiency in the agro -food sector, ensuring self -sufficiency for the country's major agricultural 
production; seeking to utilize domestic inputs to the extent possible; i ncreasing overall efficiency in 
the agricultural food sector; utilizing export opportunities to the extent feasible; securing an 
equitable income for farmers; and integrating environmental issues in agricultural policy.  
 
D. FORMS OF SUBSIDY  
 
Agricultural s ubsidies in Iceland is mostly provided through direct payments, based on payment 
entitlements, which are directly or indirectly coupled with production factors. Direct payments are 
provided to cattle (mainly dairy) and sheep producers, and, on a smaller sc ale, to certain greenhouse 
producers. Allocations for the Agricultural Agreements in 2010 are made under items  04-801, 04 -
805 and 04 -807 of the State budget (Ministry of Fisheries and Agriculture).  
 
E. AMOUNT OF SUBSIDY  
 
Items making up the amount of suppo rt as measured by total costs in Government Accounts for  2010 
are listed in table 1.  
Table 1 Amount of support in 2010 (Government Accounts); Million ISK  
 2010  
Agricultural Productivity Fund  148 
Stockholding costs; sheep meat program  347 
Directs payments to sheep farmers  2,231  
Quality control scheme; sheep farmers  1,110  
Wool utilization; subsidies  371 
Direct payments to dairy farmers  4,734  
Direct payments to horticulture farmers  228 
Electricity subsidies to horticulture farmers 
(greenhouse)  2001 
 
F. RULES AND CONDITIONS  
 
Implementation of the agricultural policy revolves around Agricultural Agreements negotiated 
between the Government and the Farmer's Association. Under Act No. 99/1993 on Agricultural 
Produce, the Minister of Fisheries and A griculture is given the authority to negotiate with the 
Farmer's Association on behalf of the Government on the total support target for milk and total 
support target for sheep meat entitlements and direct payments for horticulture. A government -
chaired co mmittee determines a guaranteed minimum price for milk delivered within production 
quotas at the producer level.  
 
Support is provided for dairy farms, sheep farms and horticulture farms (greenhouse).  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 63 - 
 
  1.  Dairy farmers  
Milk producers receive direct payments from the Government on milk delivered to dairies. The 
annual quantity must be within the allocated supported targets. The amount of monetary 
support is the same for all producers in Iceland.  
2.  Sheep farmers  
Sheep farmers receive direct payments from the Gove rnment which are based on support 
targets for sheep meat entitlements, for which they must own 70% live sheep. Additional 
payments to sheep farmers are related to a quality control scheme for lamb meat, based on 
animal welfare, product quality and traceabi lity, and sustainability criteria.  
3.  Sheep farmers; wool  
Sheep farmers receive support from the Government based on quantity and quality of wool 
produced.  
4.  Horticulture farmers  
Horticulture farmers producing cucumbers, peppers and tomatoes in greenhouses, ma inly 
under artificial lighting receive direct payments from the government. The distribution of 
electricity used for artificial lighting is also subsidized to some extent by the Government.  
G. DURATION  
 
The time of application of the agricultural agreemen ts between the Government and the Farmer's 
Association was until the end of 2016 when the agreements were renegotiated. The agreements 
were not revisited, in essence, during the years 2006 to 2014.  
 
H. LEGAL BASIS  
 
Act No. 99/1993 on Agricultural Produce, Pricing and Sales of Agricultural Products. The State 
Budget.  
 
I. TRADE EFFECTS  
 
An assessment of the trade effects of the subsidies is not available. Below, in tables 2, 3 and 4 there 
are, however, presented statistics on production and exports of the rel evant agricultural 
commodities.  
Table 2 Quantity of milk received by dairies and calculated exports by fat -content of milk 
derived products (in 1,000 of litres) for 2010  
Year Milk, received by dairies by 
fat-content  Exported products by fat -
content, thereof (%)  
2010 110,657  11% 
Table 3 Sheep meat production and exports 2010 (in 1,000 kg)  
Year Production  Exports, thereof (%)  
2010 9,166  39% 
Table 4 Tomato, cucumber and bell pepper production and exports 2010 (in 1,000 kg)  
Tomatoes  Cucumbers  Bell peppers  Total exports, thereof 
(%) 
1,652  1,458  187 <1% 
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 64 - 
 
  2  SUPPORT FOR R&D AND TECHNOLOGICAL INNOVA TION  
2.1  Technical Development Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic Centre for Research ( RANNÍS ) which is under the supervision of the Ministry of Industry 
and Innovation.  
 
B. POLICY OBJECTIVES  
 
The objective of the Technology Development Fund is to facilitate innovation through supporting 
research and technological development.  
 
C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2010: ISK 7 56 million.  
 
D. RULES AND CONDITIONS  
 
The role of the fund is to support research and development activities, which aim towards innovation 
in Icelandic industry. The Fund will in general operate as a competitive fund through which firms, 
research institutes and universities will have the possibility of financing projects that support 
technological development and innovation. The Fund is intended to give support to spin -off ventures 
and innovative firms to secure that economic benefits accrue to soc iety from the scientific and 
technical knowledge and the innovation arising from these new ventures.  
 
The Science and Technology Policy Council attaches high importance to close co -ordination between 
the Research Fund and the Technical Development Fund, as  well as co -operation with other public 
funds and venture investors. The Technical Development Fund can take the initiative to establish 
programmes and specific actions prepared in consultation with the business community, research 
institutes and universit ies. Finally, the Technical Development Fund is permitted to enter into 
partnerships with venture capital investors for seed and early risk financing toward establishing firms 
which base their operations on technological development and research and which involves a novelty 
to the economy.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE EFFECTS  
 
The support is granted to a variety of small projects and sectors,  therefore it is difficult to present 
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
 
The Technology Development Fund has been operating since 2004. It took over from the Technology 
Fund which expired in 2004.  
 
2.2  Research Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic Centre for Research ( RANNÍS ) which is under the supervision of the Ministry of Culture 
and Education.  
 
B. POLICY OBJECTIVES  
 
The objective of the Research Fund is to facilitate fundamental research at University institut es or 
other Governmental R&D institutes.  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 65 - 
 
  C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2010: ISK 791 .50 million.  
 
D. RULES AND CONDITIONS  
 
Subsidies are granted only on the basis of  project applications. The Funds grants are for fundamental 
research at Universities and the involvement of private companies is very limited or non -existent.  
 
The Research Fund is the most powerful tool of the public sector for reinforcing the research 
community infrastructure through project grants based on applications from scientists, business 
firms and institutions. The Science and Technology Policy Council encourages the Fund to give young 
scientists an opportunity to establish their work and contribu te to the further accumulation of 
scientific and technical knowledge.  
 
The Research Fund offers grants in accordance with the priorities set by the Science and Technology 
Policy Council and the grants strategy defined by the Science Board based on a peer r eview 
evaluation of research project quality, the competence of the individuals involved and the facilities 
available for completing the project.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE E FFECTS  
 
The support is granted to a variety of small projects and sectors, therefore it is difficult to present 
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
 
Research Fund has been operating since 2004. It took over from the Sc ience Fund which expired 
in 2004.  
 
2.3  Support for R&D in marine aquaculture  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture.  
 
B. POLICY OBJECTIVE  
 
To enhance scientific knowledge in marine aquaculture.  
 
C. FORM OF SUPPORT  
 
Grants.  
 
D. AMOUNT OF SUPPORT  
 
2010: ISK 23.325 million . 
 
E. RULES AND CONDITIONS  
 
Grants are awarded on the basis of applications evaluated by a special committee.  
 
F. DURATION  
 
There is no time limit, but each programme is decided on for a year at a time.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 66 - 
 
  G. LEGAL BASIS  
 
Act no. 72/2008 on the Directorate of Fisheries.  
 
H. TRADE EFFECTS  
 
There is no trade effect due to limited support.  
 
3  JOB CREATION INITIAT IVE (PRIOR TO 1996 K NOWN AS FIRM SPECIFI C SUBSIDIES 
AND EXPORT PROMOTION  (CASE 93 -221))  
A. RESPONSIBLE AUTHORITY  
 
Innovation Center Iceland which is under the supervision of the Ministry of Employment and 
Innovation.  
 
B. POLICY OBJECTIVE  
 
The objective is, to increase the knowledge and competence of entrepreneurs and small and 
medium -sized enterprises such as in managing, financing, product development, marketing and 
innovation.  
 
C. FORM OF SUPPORT  
 
Cost items incurred for consultants, product development, marketing and innovation are eligible for 
grants. Support shall in general not cover more than 50% of eligibl e expenses.  
 
D. AMOUNT OF SUPPORT  
 
2010: ISK 80  million.  
 
E. RULES AND CONDITIONS  
 
Firms and individuals having a registered domicile in Iceland can apply for a grant. In accordance 
with the de minimis  rule, individuals who apply for grants according to th ese rules must declare that 
they have not received a grant from the Government amounts to more than 200,000 EURO last 3 
years, the grant applied for included.  
 
F. DURATION  
 
There is no time limit, but each programme is decided on for a year at a time.  
 
G. LEGAL BASIS  
 
The Budget item no. 11 -299-1.48. 
 
H. TRADE EFFECTS  
 
There are no trade effects of the support due to the general framework of the scheme and limited 
support.  
 
4  SUPPORT FOR EMPLOYME NT AND TRAINING  
4.1  Vocational Training Fund Support  for Vocational Training  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Education and Culture.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 67 - 
 
  B. POLICY OBJECTIVE  
 
The main purpose of this programme is to maintain and develop vocational skills, in most cases for 
people already employed.  
 
C. FORM OF STATE AID  
 
Grants.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2010: ISK 1.348,7 million . 
 
E. RULES AND CONDITIONS  
 
Grants to organizations on application to the Vocational Training Fund mainly to make curriculum or 
other teaching materials for the vocational  training courses.  
 
F. DURATION  
 
The programme started in 1992. Duration has not been specified.  
 
G. LEGAL BASIS  
 
Adult Education Act No. 27/2010 and the Budget item no. 02 -451. 
 
4.2  Employment Opportunities for Women in Rural Areas  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture and the Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to create new jobs among women. Areas where high 
unemployment is among women will especially be con sidered.  
 
C. FORM OF STATE AID  
 
Grants, up to 50% of primary R&D costs, innovation costs and cost of new products, process and 
systems for industrial production. Institute of Regional Development pays the grants and controls 
their disposition.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2010: ISK 0 million . 
 
It is difficult to give exact information on how many jobs have been created or maintained, as many 
of these new jobs are just part time jobs.  
 
E. RULES AND CONDITIONS  
 
Grants to women on application to the Institute of Regional Development mainly to new product 
developing and marketing. The grant can only be given to companies, which are at least 50% owned 
by women or have been established by women.  
 
F. DURATION  
 
The programme started in 1990. Duration has not been specified.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 68 - 
 
  G. LEGAL BASIS  
 
Governmental decision from 1990.  
 
4.3  Vocational Rehabilitation  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Welfare.  
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to develop, integrate and monito r services in the field of 
vocational rehabilitation; aiming systematically for employment of individuals following illness or 
injury.  
 
C. FORM OF STATE AID  
 
Gross wage State aid to rehabilitation centres.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2010: ISK 309 .1 million . 
 
E. RULES AND CONDITIONS  
 
The rehabilitation centres must have operating license from the Ministry of Welfare to apply to the 
Ministry for subsidies.  
 
F. DURATION  
 
The new programme started in 1992. Duration has not been specified.  
 
G. LEGAL BASIS  
 
Budget item no. 07 -988. 
 
4.4  Employment of Handicapped Persons  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Welfare.  
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to ensure that disabled persons enjoy human rights and 
freedoms on the same basis as others and that they are guaranteed the support necessary to enjoy 
these rights.  
 
C. FORM OF STATE AID  
 
Gross wage State aid to rehabilitation centres.  
 
D. AMOUNT OF STATE AI D 
 
Actual total expenditure in 2010: ISK 65 .9 million.  
 
E. RULES AND CONDITIONS  
 
Service institutions for disabled people should be deployed in order to meet their specific needs so 
that they can live independently.  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  F. DURATION  
 
No time limit; the  amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Act No. 59/1992 on the Affairs of Disabled People and the Budget item no. 07 -701.1.30 and 
07-707.1.30.  
 
5  REGIONAL SUPPORT  
5.1  Assistance to Employment Development Projects  
A. RESPONSIBLE AUTHORI TY 
 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to assist the economic development of the nationally assisted 
areas of Iceland. The assisted projects are small and cover employment development,  training and 
innovation.  
 
C. FORM OF STATE AID  
 
Grants, as assistance to Employment Development Projects, which fall within the objectives of Act 
No. 106/1999, on the Institute of Regional Development.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2010: ISK 155 .4 million.  
 
E. RULES AND CONDITIONS  
 
The programme is available to individuals, private companies, local development companies and 
municipalities. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
 
F. DURATION  
 
The programme has no time limit; the  amount is decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 10 of Act no. 106/1999 on the Institute of Reg ional Development, the Budget item 
no. 04-542. 
 
5.2  Assistance to Local Economic Development  
A. RESPONSIBLE AUTHORITY  
 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to assist local economic developm ent companies and to finance 
venturesome projects within the field of local employment development and innovation.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  C. FORM OF STATE AID  
 
Grants to finance venturesome projects within the field of local employment development and 
innovation.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2010: ISK 51 .2 million.  
 
E. RULES AND CONDITIONS  
 
According to Act No. 106/1999, on the Institute of Regional Development, the assistance is to be in 
accordance with rules laid down by the Ministry of Employment and Innovation. These rules have 
not yet been issued. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
 
F. DURATION  
 
The progr amme has no time limit; the  amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 12 of Act no. 106/1999 on the Institute of Regional Development, the Budget item no. 
04-542.1.10.  
 
H. ADDITIONAL INFORMATION  
 
The Institute of Regional Dev elopment is authorized according to Article 11 of Act No 106/1999 to 
provide loans and guarantees, in accordance with the role of the Institute as stipulated in the Act. 
These loans and guarantees are provided on market terms, with similar interest rates a s on the open 
market.  
 
6  TEMPORARY REPAYMENT OF COSTS OF FILMS PR ODUCTION IN ICELAND  
A. RESPONSIBLE AUTHORITY  
 
Icelandic film centre ( Kvikmyndamiðstöð Íslands ) under the auspice of the Ministry of Industry.  
 
B. POLICY OBJECTIVE  
 
The objective of the Act is t o enhance domestic culture and promote the history and nature of Iceland 
by temporarily supporting motion pictures and television programmes produced in Iceland.  
 
According to the Act authorisation is granted for the reimbursement from the State Treasury of a 
proportion of the production costs incurred in the production of films and television programmes in 
Iceland.  
 
When more than 80% of the total production cost of a motion picture or television programme incurs 
in Iceland, the reimbursement shall be ca lculated from the total production cost incurring within the 
European Economic Area.  
 
Production costs refers to all costs incurred in Iceland deductible from the revenues of enterprises 
pursuant to the provisions of the Act on Income and Net Wealth Tax. Payments pertaining to 
employees and contractors are only to be included in production costs if they are verifiable taxable 
in Iceland.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  C. FORM OF STATE AID  
 
A specific company shall be established in Iceland for the production; an Icelandic branch or agency 
of a company registered in another Member State of the European Economic Area shall be considered 
a specific company  
 
D. AMOUNT OF STATE AID  
 
Total expenditure (reimbursement of production cost) in 2010: ISK 157 million.  
 
E. RULES AND CONDITIONS  
 
In assessing whether a proportion of the production costs of a motion picture or a television 
programme shall be reimbursed, the following conditions shall be fulfilled:  
 
a. the production shall be suited for promoting Icelandic culture and the history and natu re 
of Iceland;  
b. the production shall be suited for enhancing the experience, knowledge and artistic 
ambition of those involved in the production;  
c. a specific company shall be established in Iceland for the production; an Icelandic branch 
or agency of a compa ny registered in another EEA member state shall be considered a 
specific company;  
d. information on the principal parties involved in the film or television programme shall be 
submitted;  
e. information on domestic parties and their share in the production of th e film or television 
programme shall be submitted;  
f. an itemized estimate of the production costs and sources of funding shall be submitted, 
together with confirmation by the funding parties and a declaration by the producer to the 
effect that the production  conforms with the aims of the Act No. 43/1999;  
g. information on the content of the proposed film or television programme shall be 
submitted, including a manuscript, synopsis and information about filming locations;  
h. a production plan shall be available (i.e.  filming, post -production and marketing plan), 
providing for completion of the production within three years of receipt of the application 
for reimbursement;  
i. a statement shall be submitted to the effect that the material to be produced is intended 
for gene ral distribution to cinemas or television stations, the content of the film or 
television programme shall not violate the Film Censorship and Prohibition of Violent Films 
Act, No. 47/1995, or Article 210 of the Criminal Code, No. 19/1940.  
F. DURATION  
 
The programme is limited to end of year 2021.  
 
G. LEGAL BASIS  
 
Act on Temporary Reimbursements in Respect of Film Making in Iceland, No. 43/1999, with 
amendments. The Budget item no. 11 -251.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  7  RURAL TOURISM  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication.  
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to promote rural tourism and assist local museums, and places 
of historical importance, in attracting tourists.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2010: ISK 494 .9 million.  
 
E. DURATION  
 
The programme has no time limit; the  amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 11 -501. 
 
G. ADDITIONAL INFORMATION  
 
The EFTA Surveillance Authority is currently, following a complaint, examining State aid provided to 
promote Icelandic tourism (reference is made to Case No. 47859).  
 
8  AID TO PROMOTE MARKE TING OF ICELANDIC TO URISM  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication and Icelandi c Tourism Board ( Ferðamálastofa ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to promote marketing of Icelandic tourism. Further reference is 
made to a correspondence with the Authority concerning Case No. 47859.  
 
C. FORM OF STATE AID  
 
Grants t o projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2010: ISK 85 million.  
 
E. DURATION  
 
The programme is intended to be temporary, the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 11 -599.1.44.  
  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  2011  
1  THE AGRICULTURAL SECTOR  
A. NAME OF PROGRAMME  
 
Agricultural Agreements; Payments to dairy farms, sheep farms and horticulture farms  (Budget 
items No: 04 -801, 04 -805 & 04 -807).  
 
B. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture . 
 
C. POLICY OBJECTIV E 
 
Agricultural policy is implemented in Iceland in pursuit of objectives which include increasing 
efficiency in the agro -food sector, ensuring self -sufficiency for the country's major agricultural 
production; seeking to utilize domestic inputs to the exte nt possible; increasing overall efficiency in 
the agricultural food sector; utilizing export opportunities to the extent feasible; securing an 
equitable income for farmers; and integrating environmental issues in agricultural policy.  
 
D. FORMS OF SUBSIDY  
 
Agricultural subsidies in Iceland is mostly provided through direct payments, based on payment 
entitlements, which are directly or indirectly coupled with production factors. Direct payments are 
provided to cattle (mainly dairy) and sheep producers, and, o n a smaller scale, to certain greenhouse 
producers. Allocations for the Agricultural Agreements in 2011 are made under items  04-801, 04 -
805 and 04 -807 of the State budget (Ministry of Fisheries and Agriculture).  
 
E. AMOUNT OF SUBSIDY  
 
Items making up the a mount of support as measured by total costs in Government Accounts for  2011 
are listed in table 1.  
Table 1 Amount of support in 2011 (Government Accounts); Million ISK  
 2011  
Agricultural Productivity Fund  15 
Stockholding costs; sheep meat program  0 
Directs payments to sheep farmers  2,397  
Quality control scheme; sheep farmers  1,529  
Wool utilization; subsidies  390 
Direct payments to dairy farmers  4,915  
Direct payments to horticulture farmers  239 
Electricity subsidies to horticulture farmers 
(greenhouse)  213 
 
F. RULES AND CONDITIONS  
 
Implementation of the agricultural policy revolves around Agricultural Agreements negotiated 
between the Government and the Farmer's Association. Under Act No. 99/1993 on Agricultural 
Produce, the Minister of Fisheries and Agriculture is given the authority to negotiate with the 
Farmer's Association on behalf of the Government on the total support target for milk and total 
support target for sheep meat entitlements and direct payments for horticulture. A govern ment-
chaired committee determines a guaranteed minimum price for milk delivered within production 
quotas at the producer level.  
 
Support is provided for dairy farms, sheep farms and horticulture farms (greenhouse).  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 74 - 
 
  1.  Dairy farmers  
Milk producers receive direct payments from the Government on milk delivered to dairies. The 
annual quantity must be within the allocated supported targets. The amount of monetary 
support is the same for all producers in Iceland.  
2.  Sheep farmers  
Sheep farmers receive direct paymen ts from the Government which are based on support 
targets for sheep meat entitlements, for which they must own 70% live sheep. Additional 
payments to sheep farmers are related to a quality control scheme for lamb meat, based on 
animal welfare, product qual ity and traceability, and sustainability criteria.  
3.  Sheep farmers; wool  
Sheep farmers receive support from the Government based on quantity and quality of wool 
produced.  
4.  Horticulture farmers  
Horticulture farmers producing cucumbers, peppers and tomatoes in  greenhouses, mainly 
under artificial lighting receive direct payments from the government. The distribution of 
electricity used for artificial lighting is also subsidized to some extent by the Government.  
G. DURATION  
 
The time of application of the agric ultural agreements between the Government and the Farmer's 
Association was until the end of 2016 when the agreements were renegotiated. The agreements 
were not revisited, in essence, during the years 2006 to 2014.  
 
H. LEGAL BASIS  
 
Act No. 99/1993 on Produc tion, Pricing and Sales of Agricultural Products. The State Budget.  
 
I. TRADE EFFECTS  
 
An assessment of the trade effects of the subsidies is not available. Below, in tables 2, 3 and 4 there 
are, however, presented statistics on production and exports of t he relevant agricultural 
commodities.  
Table 2 Quantity of milk received by dairies and calculated exports by fat -content of milk 
derived products (in 1,000 of litres) for 2011  
Year Milk, received by dairies by fat -
content  Exported products by fat -content, 
thereof (%)  
2011 111,489  11% 
Table 3 Sheep meat production and exports 2011 (in 1,000 kg)  
Year Production  Exports, thereof (%)  
2011 10,375  27% 
Table 4 Tomato, cucumber and bell pepper production and exports 2011 (in 1,000 kg)  
Tomatoes  Cucumbers  Bell peppers   Total exports, thereof 
(%) 
1,605  1,582  229 <1% 
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  2  SUPPORT FOR R&D AND TECHNOLOGICAL INNOVA TION  
2.1  Technical Development Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic Centre for Research ( RANNÍS ) which is under the supervision of the Ministry of Industry 
and Innovation.  
 
B. POLICY OBJECTIVES  
 
The objective of the Technology Development Fund is to facilitate innovation through supporting 
research and technological development.  
 
C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2011: ISK 7 19 million.  
 
D. RULES AND CONDITIONS  
 
The role of the fund is to support research and development activities, which aim towards innovation 
in Icelandic industry. The Fund will in general operate as a competitive fund through which firms, 
research institutes and universities will have the possibility of financing projects that support 
technological development and innovation. The Fund is intended to give support to spin -off ventures 
and innovative firms to secure that economic benefits accrue to soc iety from the scientific and 
technical knowledge and the innovation arising from these new ventures.  
 
The Science and Technology Policy Council attaches high importance to close co -ordination between 
the Research Fund and the Technical Development Fund, as  well as co -operation with other public 
funds and venture investors. The Technical Development Fund can take the initiative to establish 
programmes and specific actions prepared in consultation with the business community, research 
institutes and universit ies. Finally, the Technical Development Fund is permitted to enter into 
partnerships with venture capital investors for seed and early risk financing toward establishing firms 
which base their operations on technological development and research and which involves a novelty 
to the economy.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE EFFECTS  
 
The support is granted to a variety of small projects and sectors, therefore it is difficult to present  
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
 
The Technology Development Fund has been operating since 2004. It took over from the Technology 
Fund which expired in 2004.  
 
2.2  Research Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic C entre for Research ( RANNÍS ) which is under the supervision of the Ministry of Culture 
and Education.  
 
B. POLICY OBJECTIVES  
 
The objective of the Research Fund is to facilitate fundamental research at University institutes or 
other Governmental R&D institut es. G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 76 - 
 
  C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2011: ISK 773 million.  
 
D. RULES AND CONDITIONS  
 
Subsidies are granted only on the basis of  project applications. The Funds grants are for fundamental 
research at Universities and the involvement of private companies is very limited or non -existent.  
 
The Research Fund is the most powerful tool of the public sector for reinforcing the research 
community infrastructure through project grants based on applications from scientists, business 
firms and institutions. The Science and Technology Policy Council encourages the Fund to give young 
scientists an opportunity to establish their work and contribu te to the further accumulation of 
scientific and technical knowledge.  
 
The Research Fund offers grants in accordance with the priorities set by the Science and Technology 
Policy Council and the grants strategy defined by the Science Board based on a peer r eview 
evaluation of research project quality, the competence of the individuals involved and the facilities 
available for completing the project.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE E FFECTS  
 
The support is granted to a variety of small projects and sectors, therefore it is difficult to present 
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
 
Research Fund has been operating since 2004. It took over from the Sc ience Fund which expired 
in 2004.  
 
2.3  Support for R&D in marine aquaculture  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture.  
 
B. POLICY OBJECTIVE  
 
To enhance scientific knowledge in marine aquaculture.  
 
C. FORM OF SUPPORT  
 
Grants.  
 
D. AMOUNT OF SUPPORT  
 
2011: ISK 18.190,0 million . 
 
E. RULES AND CONDITIONS  
 
Grants are awarded on the basis of applications evaluated by a special committee.  
 
F. DURATION  
 
There is no time limit, but each programme is decided on for a year at a time.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  G. LEGAL BASI S 
 
Act no. 72/2008 on the Directorate of Fisheries.  
 
H. TRADE EFFECTS  
 
There is no trade effect due to limited support.  
 
3  JOB CREATION INITIAT IVE (PRIOR TO 1996 K NOWN AS FIRM SPECIFI C SUBSIDIES 
AND EXPORT PROMOTION  (CASE 93 -221))  
A. RESPONSIBLE AUTHORITY  
 
Innovation Center Iceland which is under the supervision of the Ministry of Employment and 
Innovation.  
 
B. POLICY OBJECTIVE  
 
The objective is, to increase the knowledge and competence of entrepreneurs and small and 
medium -sized enterprises such as in manag ing, financing, product development, marketing and 
innovation.  
 
C. FORM OF SUPPORT  
 
Cost items incurred for consultants, product development, marketing and innovation are eligible for 
grants. Support shall in general not cover more than 50% of eligible exp enses.  
 
D. AMOUNT OF SUPPORT  
 
2011: ISK 140 million.  
 
E. RULES AND CONDITIONS  
 
Firms and individuals having a registered domicile in Iceland can apply for a grant. In accordance 
with the de minimis  rule, individuals who apply for grants according to these rules must declare that 
they have not received a grant from the Government amounts to more than 200,000 EURO last 3 
years, the grant applied for included.  
 
F. DURATION  
 
There is no time limit, but each programme is decided on for a year at a time.  
 
G. LEGAL BASIS  
 
The Budget item no. 11 -299-1.48. 
 
H. TRADE EFFECTS  
 
There are no trade effects of the support due to the general framework of the scheme and limited 
support.  
 
4  SUPPORT FOR EMPLOYME NT AND TRAINING  
4.1  Vocational Training Fund Support  for Vocational Training  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Education and Culture.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 78 - 
 
  B. POLICY OBJECTIVE  
 
The main purpose of this programme is to maintain and develop vocational skills, in most cases for 
people already employed.  
 
C. FORM OF STATE AID  
 
Grants.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2011: ISK 1.183,0 million . 
 
E. RULES AND CONDITIONS  
 
Grants to organizations on application to the Vocational Training Fund mainly to make curriculum or 
other teaching materials for the vocational  training courses.  
 
F. DURATION  
 
The programme started in 1992. Duration has not been specified.  
 
G. LEGAL BASIS  
 
Adult Education Act No. 27/2010 and the Budget item no. 02 -451. 
 
4.2  Employment Opportunities for Women in Rural Areas  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture and the Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to create new jobs among women. Areas where high 
unemployment is among women will especially be con sidered.  
 
C. FORM OF STATE AID  
 
Grants, up to 50% of primary R&D costs, innovation costs and cost of new products, process and 
systems for industrial production. Institute of Regional Development pays the grants and controls 
their disposition.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2011: ISK 0 million . 
 
It is difficult to give exact information on how many jobs have been created or maintained, as many 
of these new jobs are just part time jobs.  
 
E. RULES AND CONDITIONS  
 
Grants to women on appl ication to the Institute of Regional Development mainly to new product 
developing and marketing. The grant can only be given to companies, which are at least 50% owned 
by women or have been established by women.  
 
F. DURATION  
 
The programme started in 1990.  Duration has not been specified.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  G. LEGAL BASIS  
 
Governmental decision from 1990.  
 
4.3  Vocational Rehabilitation  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Welfare.  
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to develop, integrate and monitor ser vices in the field of 
vocational rehabilitation; aiming systematically for employment of individuals following illness or 
injury.  
 
C. FORM OF STATE AID  
 
Gross wage State aid to rehabilitation centres.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 20 11 ISK 318 .9 million . 
 
E. RULES AND CONDITIONS  
 
The rehabilitation centres must have operating license from the Ministry of Welfare to apply to the 
Ministry for subsidies.  
 
F. DURATION  
 
The new programme started in 1992. Duration has not been specified.  
 
G. LEGAL BASIS  
 
Act No. 60/2012 ( lög um atvinnutengda starfsendurhæfingu og starfsemi starfsendurhæfingasjóða ) 
and financed by the Budget item no. 08 -856. 
 
4.4  Employment of Handicapped Persons  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Welfare.  
 
B. POLICY OBJECT IVE 
 
The main purpose of this programme is to ensure that disabled persons enjoy human rights and 
freedoms on the same basis as others and that they are guaranteed the support necessary to enjoy 
these rights.  
 
C. FORM OF STATE AID  
 
Gross wage State aid to rehabilitation centres.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2011: ISK 61 .9 million.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  E. RULES AND CONDITIONS  
 
Service institutions for disabled people should be deployed in order to meet their specific needs so 
that they can live independe ntly. 
 
F. DURATION  
 
No time limit; the  amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Act No. 59/1992 on the Affairs of Disabled People and the Budget item no. 08 -809.1.11.  
 
5  REGIONAL SUPPORT  
5.1  Assistance to Employment Development Projects  
A. RESPONSIBLE AUTHORITY  
 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to assist the economic development of the nationally assisted 
areas of Iceland. The assisted projects are small and cover e mployment development, training and 
innovation.  
 
C. FORM OF STATE AID  
 
Grants, as assistance to Employment Development Projects, which fall within the objectives of 
Act No. 106/1999, on the Institute of Regional Development.  
 
D. AMOUNT OF STATE AID  
 
Actual  total expenditure in 2011: ISK 160 .4 million.  
 
E. RULES AND CONDITIONS  
 
The programme is available to individuals, private companies, local development companies and 
municipalities. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
 
F. DURATION  
 
The programme has no time limit; the  amount is decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 10 of Act no. 106 /1999 on the Institute of Regional Development, the Budget item 
no. 04-542. 
 
5.2  Assistance to Local Economic Development  
A. RESPONSIBLE AUTHORITY  
 
Institute of Regional Development ( Byggðastofnun ). 
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  B. POLICY OBJECTIVE  
 
The objective of the programme is to a ssist local economic development companies and to finance 
venturesome projects within the field of local employment development and innovation.  
 
C. FORM OF STATE AID  
 
Grants to finance venturesome projects within the field of local employment development a nd 
innovation.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2011: ISK 7 .50 million.  
 
E. RULES AND CONDITIONS  
 
According to Act No. 106/1999, on the Institute of Regional Development, the assistance is to be in 
accordance with rules laid down by the  Ministry of Employment and Innovation. These rules have 
not yet been issued. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Author ity. 
 
F. DURATION  
 
The programme has no time limit; the  amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 12 of Act no. 106/1999 on the Institute of Regional Development, the Budget item no. 04 -542. 
 
H. ADDITIONAL INFORMATION  
 
The Institute of Regional Development is authorized according to Article 11 of Act No 106/1999 to 
provide loans and guarantees, in accordance with the role of the Institute as stipulated in the Act. 
These loans and guarantees are provided on market terms, with  similar interest rates as on the open 
market.  
 
6  TEMPORARY REPAYMENT OF COSTS OF FILMS PR ODUCTION IN ICELAND  
A. RESPONSIBLE AUTHORITY  
 
Icelandic film centre ( Kvikmyndamiðstöð Íslands ) under the auspice of the Ministry of Industry.  
 
B. POLICY OBJECTIVE  
 
The objective of the Act is to enhance domestic culture and promote the history and nature of Iceland 
by temporarily supporting motion pictures and television programmes produced in Iceland.  
 
According to the Act authorisation is granted for the reimbursement  from the State Treasury of a 
proportion of the production costs incurred in the production of films and television programmes in 
Iceland.  
 
When more than 80% of the total production cost of a motion picture or television programme incurs 
in Iceland, the reimbursement shall be calculated from the total production cost incurring within the 
European Economic Area.  
 
Production costs refers to all costs incurred in Iceland deductible from the revenues of enterprises 
pursuant to the provisions of the Act on Income and Net Wealth Tax. Payments pertaining to 
employees and contractors are only to be included in production costs if they are verifiable taxable 
in Iceland  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  C. FORM OF STATE AID  
 
A specific company shall be established in Iceland for the production; an Icelandic branch or agency 
of a company registered in another Member State of the European Economic Area shall be considered 
a specific company  
 
D. AMOUNT OF STATE AID  
 
Total expenditure (reimbursement of production cost) in 2011: ISK 157 million.  
 
E. RULES AND CONDITIONS  
 
In assessing whether a proportion of the production costs of a motion picture or a television 
programme shall be reimbursed, the following conditions shall be fulfilled:  
 
a. the production shall be suited for promoting Icelandic culture a nd the history and nature 
of Iceland;  
b. the production shall be suited for enhancing the experience, knowledge and artistic 
ambition of those involved in the production;  
c. a specific company shall be established in Iceland for the production; an Icelandic bran ch 
or agency of a company registered in another EEA member state shall be considered a 
specific company;  
d. information on the principal parties involved in the film or television programme shall be 
submitted;  
e. information on domestic parties and their share in the production of the film or television 
programme shall be submitted;  
f. an itemized estimate of the production costs and sources of funding shall be submitted, 
together with confirmation by the funding parties and a declaration by the producer to the 
effect that the production conforms with the aims of the Act No. 43/1999;  
g. information on the content of the proposed film or television programme shall be 
submitted, including a manuscript, synopsis and information about filming locations;  
h. a production plan s hall be available (i.e. filming, post -production and marketing plan), 
providing for completion of the production within three years of receipt of the application 
for reimbursement;  
i. a statement shall be submitted to the effect that the material to be produc ed is intended 
for general distribution to cinemas or television stations, the content of the film or 
television programme shall not violate the Film Censorship and Prohibition of Violent Films 
Act, No. 47/1995, or Article 210 of the Criminal Code, No. 19/ 1940.  
F. DURATION  
 
The programme is limited to end of year 2021.  
 
G. LEGAL BASIS  
 
Act on Temporary Reimbursements in Respect of Film Making in Iceland, No. 43/1999, with 
amendments. The Budget item no. 11 -251.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  7  RURAL TOURISM  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication.  
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to promote rural tourism and assist local museums, and places 
of historical importance, in attracting tourists.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2011: ISK 433 .9 million.  
 
E. DURATION  
 
The programme has no time limit; the  amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 11 -501. 
 
G. ADDITIONAL INFORMATION  
 
The EFTA Surveillance Authority is currently, following a complaint, examining State aid provided to 
promote Icelandic tourism (reference is made to Case No. 47859).  
 
8  AID TO PROMOTE MARKE TING OF ICELANDIC TO URISM  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication and Icelandic Tourism Board ( Ferðamálastofa ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to promote marketing of Icelandic tourism. Further reference is 
made to a correspondence with the Authority concerning Case No. 47859.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2011: ISK 371 .4 million.  
 
E. DURATION  
 
The programme is intended to be temporary, the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 11 -599.1.44.  
  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  2012  
1  THE AGRICULTURAL SEC TOR 
A. NAME OF PROGRAMME  
 
Agricultural Agreements; Payments to dairy farms, sheep farms and horticulture farms  (Budget 
items No: 04 -801, 04 -805 & 04 -807).  
 
B. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture  
 
C. POLICY OBJECTIVE  
 
Agricultural policy is implemented in Iceland in pursuit of objectives which include increasing 
efficiency in the agro -food sector, ensuring self -sufficiency for the country's major agricultural 
production; seeking to util ize domestic inputs to the extent possible; increasing overall efficiency in 
the agricultural food sector; utilizing export opportunities to the extent feasible; securing an 
equitable income for farmers; and integrating environmental issues in agricultural  policy.  
 
D. FORMS OF SUBSIDY  
 
Agricultural subsidies in Iceland is mostly provided through direct payments, based on payment 
entitlements, which are directly or indirectly coupled with production factors. Direct payments are 
provided to cattle (mainly dai ry) and sheep producers, and, on a smaller scale, to certain greenhouse 
producers. Allocations for the Agricultural Agreements in 2012 are made under items  04-801, 04 -
805 and 04 -807 of the State budget (Ministry of Fisheries and Agriculture).  
 
E. AMOUNT OF  SUBSIDY  
 
Items making up the amount of support as measured by total costs in Government Accounts for  2012 
are listed in table 1.  
Table 1 Amount of support in 2012 (Government Accounts); Million ISK  
 2012  
Agricultural Productivity Fund  45 
Stockholding costs; sheep meat program  0 
Directs payments to sheep farmers  2,517  
Quality control scheme; sheep farmers  1,605  
Wool utilization; subsidies  410 
Direct payments to dairy farmers  5,160  
Direct payments to horticulture farmers  251 
Electricity subsidies to horticulture farmers 
(greenhouse)  224 
 
F. RULES AND CONDITIONS  
 
Implementation of the agricultural policy revolves around Agricultural Agreements negotiated 
between the Government and the Farmer's Association. Under Act No. 99/1993 on Agricultural 
Produce, the Minister of Fisheries and Agriculture is given the authority to negotiate with the 
Farmer's Association on behalf of the Government on the total support target for milk and total 
support target for sheep meat entitlements and direct payments for h orticulture. A government -
chaired committee determines a guaranteed minimum price for milk delivered within production 
quotas at the producer level.  
 
Support is provided for dairy farms, sheep farms and horticulture farms (greenhouse).  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  1.  Dairy farmers  
Milk producers receive direct payments from the Government on milk delivered to dairies. The 
annual quantity must be within the allocated supported targets. The amount of monetary 
support is the same for all producers in Iceland.  
2.  Sheep farmers  
Sheep farmers rec eive direct payments from the Government which are based on support 
targets for sheep meat entitlements, for which they must own 70% live sheep. Additional 
payments to sheep farmers are related to a quality control scheme for lamb meat, based on 
animal wel fare, product quality and traceability, and sustainability criteria.  
3.  Sheep farmers; wool  
Sheep farmers receive support from the Government based on quantity and quality of wool 
produced.  
4.  Horticulture farmers  
Horticulture farmers producing cucumbers, peppe rs and tomatoes in greenhouses, mainly 
under artificial lighting receive direct payments from the government. The distribution of 
electricity used for artificial lighting is also subsidized to some extent by the Government.  
G. DURATION  
 
The time of applic ation of the agricultural agreements between the Government and the Farmer's 
Association was until the end of 2016 when the agreements were renegotiated. The agreements 
were not revisited, in essence, during the years 2006 to 2014.  
 
H. LEGAL BASIS  
 
Act No.  99/1993 on Production, Pricing and Sales of Agricultural Products. The State Budget.  
 
I. TRADE EFFECTS  
 
An assessment of the trade effects of the subsidies is not available. Below, in tables 2, 3 and 4 there 
are, however, presented statistics on productio n and exports of the relevant agricultural 
commodities.  
Table 2 Quantity of milk received by dairies and calculated exports by fat -content of milk 
derived products (in 1,000 of litres) for 2012  
Year Milk, received by dairies by fat -
content  Exported product s by fat -content, 
thereof (%)  
2012 114,143  12% 
Table 3 Sheep meat production and exports 2012 (in 1,000 kg)  
Year Production  Exports, thereof (%)  
2012 9,921  25% 
Table 4 Tomato, cucumber and bell pepper production and exports 2012 (in 1,000 kg)  
Tomatoes  Cucumbers  Bell peppers   Total exports, thereof 
(%) 
1,716  1,673  261 <1% 
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  2  SUPPORT FOR R&D AND TECHNOLOGICAL INNOVA TION  
2.1  Technical Development Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic Centre for Research ( RANNÍS ) which is under the supervision of the Ministry of Industry 
and Innovation.  
 
B. POLICY OBJECTIVES  
 
The objective of the Technology Development Fund is to facilitate innovation through supporting 
research and technological development.  
 
C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in  2012: ISK 675 million.  
 
D. RULES AND CONDITIONS  
 
The role of the fund is to support research and development activities, which aim towards innovation 
in Icelandic industry. The Fund will in general operate as a competitive fund through which firms, 
research institutes and universities will have the possibility of financing projects that support 
technological development and innovation. The Fund is intended to give support to spin -off ventures 
and innovative firms to secure that economic benefits accr ue to society from the scientific and 
technical knowledge and the innovation arising from these new ventures.  
 
The Science and Technology Policy Council attaches high importance to close co -ordination between 
the Research Fund and the Technical Development  Fund, as well as co -operation with other public 
funds and venture investors. The Technical Development Fund can take the initiative to establish 
programmes and specific actions prepared in consultation with the business community, research 
institutes and universities. Finally, the Technical Development Fund is permitted to enter into 
partnerships with venture capital investors for seed and early risk financing toward establishing firms 
which base their operations on technological development and research a nd which involves a novelty 
to the economy.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE EFFECTS  
 
The support is granted to a variety of small projects and sectors, therefore it is difficult t o present 
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
 
The Technology Development Fund has been operating since 2004. It took over from the Technology 
Fund which expired in 2004.  
 
2.2  Research Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic Centre for Research ( RANNÍS ) which is under the supervision of the Ministry of Culture 
and Education.  
 
B. POLICY OBJECTIVES  
 
The objective of the Research Fund is to facilitate fundamental research at University institutes or 
other Governmental R &D institutes.  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2012: ISK 773 million.  
 
D. RULES AND CONDITIONS  
 
Subsidies are granted only on the basis of  project applications. The Funds grants are for fundamental 
research at Universities and the involvement of private companies is very limited or non -existent.  
 
The Research Fund is the most powerful tool of the public sector for reinforcing the research 
community infrastructure through project grants based on applications from scientists, business 
firms and institutions. The Science and Technology Policy Council encourages the Fund to give young 
scientists an opportunity to establish their work and contribu te to the further accumulation of 
scientific and technical knowledge.  
 
The Research Fund offers grants in accordance with the priorities set by the Science and Technology 
Policy Council and the grants strategy defined by the Science Board based on a peer r eview 
evaluation of research project quality, the competence of the individuals involved and the facilities 
available for completing the project.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE E FFECTS  
 
The support is granted to a variety of small projects and sectors, therefore it is difficult to present 
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
 
Research Fund has been operating since 2004. It took over from the Sc ience Fund which expired 
in 2004.  
 
2.3  Support for R&D in marine aquaculture  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture.  
 
B. POLICY OBJECTIVE  
 
To enhance scientific knowledge in marine aquaculture.  
 
C. FORM OF SUPPORT  
 
Grants.  
 
D. AMOUNT OF SUPPORT  
 
2012: ISK 13.850,0 million . 
 
E. RULES AND CONDITIONS  
 
Grants are awarded on the basis of applications evaluated by a special committee.  
 
F. DURATION  
 
There is no time limit, but each programme is decided on for a year at a time.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  G. LEGAL BASI S 
 
Act no. 72/2008 on the Directorate of Fisheries.  
 
H. TRADE EFFECTS  
 
There is no trade effect due to limited support.  
 
3  SUPPORT TO SMALL AND  MEDIUM -SIZED COMPAN IES 
3.1  Job Creation Initiative (prior to 1996 known as Firm specific subsidies and export 
promoti on (Case 93 -221))  
A. RESPONSIBLE AUTHORITY  
 
Innovation Center Iceland which is under the supervision of the Ministry of Employment and 
Innovation.  
 
B. POLICY OBJECTIVE  
 
The objective is, to increase the knowledge and competence of entrepreneurs and small and 
medium -sized enterprises such as in managing, financing, product development, marketing and 
innovation.  
 
C. FORM OF SUPPORT  
 
Cost items incurred for consultants, product development, marketing and innovation are eligible for 
grants. Support shall in ge neral not cover more than 50% of eligible expenses.  
 
D. AMOUNT OF SUPPORT  
 
2012: ISK 70 million.  
 
E. RULES AND CONDITIONS  
 
Firms and individuals having a registered domicile in Iceland can apply for a grant. In accordance 
with the de minimis  rule, individuals who apply for grants according to these rules must declare that 
they have not received a grant from the Government amounts to more than 200,000 EURO last 3 
years, the grant applied for included.  
 
F. DURATION  
 
There is no time limit, but  each programme is decided on for a year at a time.  
 
G. LEGAL BASIS  
 
The Budget item no. 11 -299-1.48. 
 
H. TRADE EFFECTS  
 
There are no trade effects of the support due to the general framework of the scheme and limited 
support.  
 
3.2  Regional Development Fund  
A. RESPONSIBLE AUTHORITY  
 
Innovation Center Iceland ( Nýsköpunarmiðstöð Íslands ) which is under the supervision of the 
Ministry of Employment and Innovation.  
 
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  B. POLICY OBJECTIVE  
 
To promote cooperation between local governments, safeguard their interests,  support industries 
and enhance quality of life in the entire region economically, socially and culturally.  
 
C. FORM OF SUPPORT  
 
Grants.  
 
D. AMOUNT OF SUPPORT  
 
2012: ISK 219 .40 million . 
 
E. RULES AND CONDITIONS  
 
Grants are awarded on the basis of applicat ions evaluated by a special committee.  
 
F. DURATION  
 
There is no time limit.  
 
G. LEGAL BASIS  
 
Act No 106/1999 ( Lög um Byggðastofnun ) and the Budget item no. 09 -992-1.10. 
 
H. TRADE EFFECTS  
 
There are no trade effects of the support due to the general framework of the scheme and limited 
support.  
 
4  SUPPORT FOR EMPLOYME NT AND TRAINING  
4.1  Vocational Training Fund Support  for Vocational Training  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Education and Culture.  
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme  is to maintain and develop vocational skills, in most cases for 
people already employed.  
 
C. FORM OF STATE AID  
 
Grants.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2012: ISK 1.393,0 million . 
 
E. RULES AND CONDITIONS  
 
Grants to organizations on ap plication to the Vocational Training Fund mainly to make curriculum or 
other teaching materials for the vocational training courses.  
 
F. DURATION  
 
The programme started in 1992. Duration has not been specified.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  G. LEGAL BASIS  
 
Adult Education Act No. 27/2010 and the Budget item no. 02 -451. 
 
4.2  Employment Opportunities for Women in Rural Areas  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture and the Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECT IVE 
 
The main purpose of this programme is to create new jobs among women. Areas where high 
unemployment is among women will especially be considered.  
 
C. FORM OF STATE AID  
 
Grants, up to 50% of primary R&D costs, innovation costs and cost of new products , process and 
systems for industrial production. Institute of Regional Development pays the grants and controls 
their disposition.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2012: ISK 0 million . 
 
It is difficult to give exact information on how m any jobs have been created or maintained, as many 
of these new jobs are just part time jobs.  
 
E. RULES AND CONDITIONS  
 
Grants to women on application to the Institute of Regional Development mainly to new product 
developing and marketing. The grant can only be given to companies, which are at least 50% owned 
by women or have been established by women.  
 
F. DURATION  
 
The programme started in 1990. Duration has not been specified.  
 
G. LEGAL BASIS  
 
Governmental decision from 1990.  
 
4.3  Vocational Rehabilitation  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Welfare.  
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to develop, integrate and monitor services in the field of 
vocational rehabilitation; aiming systematically for employment of individuals following illness or 
injury.  
 
C. FORM OF STATE AID  
 
Gross wage State aid to rehabilitation centres.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2012: ISK 486 .8 million . G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 91 - 
 
  E. RULES AND CONDITIONS  
 
The rehabilitation centres must have operating license from the Ministry of Welfare to apply to the 
Ministry for subsidies.  
 
F. DURATION  
 
The new programme started in 1992. Duration has not been specified.  
 
G. LEGAL BASIS  
 
Act No. 60/2012 ( lög um atvinnu tengda starfsendurhæfingu og starfsemi starfsendurhæfingasjóða ) 
and financed by the Budget item no. 08 -856. 
 
4.4  Employment of Handicapped Persons  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Welfare.  
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to ensure that disabled persons enjoy human rights and 
freedoms on the same basis as others and that they are guaranteed the support necessary to enjoy 
these rights.  
 
C. FORM OF STATE AID  
 
Gross wage State aid to rehabilitation centres.  
 
D. AMOUNT OF STATE AI D 
 
Actual total expenditure in 2012: ISK 67 .2 million.  
 
E. RULES AND CONDITIONS  
 
Service institutions for disabled people should be deployed in order to meet their specific needs so 
that they can live independently.  
 
F. DURATION  
 
No time limit; the  amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Act No. 59/1992 on the Affairs of Disabled People and the Budget item no. 08 -842.1.21.  
 
5  REGIONAL SUPPORT  
5.1  Assistance to Employment Development Projects  
A. RESPONSIBLE AUTHORITY  
 
Institute of  Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to assist the economic development of the nationally assisted 
areas of Iceland. The assisted projects are small and cover employment development, training and 
innovation.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 92 - 
 
  C. FORM OF STATE AID  
 
Grants, as assistance to Employment Development Projects, which fall within the objectives of 
Act No. 106/1999, on the Institute of Regional Development.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2012: ISK 164 .7 million.  
 
E. RULES AND CONDITIONS  
 
The programme is available to individuals, private companies, local development companies and 
municipalities. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines a nd the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
 
F. DURATION  
 
The programme has no time limit; the  amount is decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 10 of Act no. 106/1999 on the Institute of Regional Developmen t, the Budget item 
no. 04-542. 
 
5.2  Assistance to Local Economic Development  
A. RESPONSIBLE AUTHORITY  
 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to assist local economic development companies an d to finance 
venturesome projects within the field of local employment development and innovation.  
 
C. FORM OF STATE AID  
 
Grants to finance venturesome projects within the field of local employment development and 
innovation.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2012: ISK 3 .40 million.  
 
E. RULES AND CONDITIONS  
 
According to Act No. 106/1999, on the Institute of Regional Development, the assistance is to be in 
accordance with rules laid down by the Ministry of Employment and Innovation. These rules have 
not yet been issued. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
 
F. DURATION  
 
The programme has no time limit; the  amounts are decided on in the Budget each year.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  G. LEGAL BASIS  
 
Article 12 of Act no. 106/1999 on the Institute of Regional Development, the Budget item 
no. 04-542. 
 
H. ADDITIONAL INFORMATION  
 
The Institute of Regional  Development is authorized according to Article 11 of Act No 106/1999 to 
provide loans and guarantees, in accordance with the role of the Institute as stipulated in the Act. 
These loans and guarantees are provided on market terms, with similar interest rat es as on the open 
market.  
 
6  TEMPORARY REPAYMENT OF COSTS OF FILMS PR ODUCTION IN ICELAND  
A. RESPONSIBLE AUTHORITY  
 
Icelandic film centre ( Kvikmyndamiðstöð Íslands ) under the auspice of the Ministry of Industry.  
 
B. POLICY OBJECTIVE  
 
The objective of the Act is to enhance domestic culture and promote the history and nature of Iceland 
by temporarily supporting motion pictures and television programmes produced in Iceland.  
 
According to the Act authorisation is granted for the reimbursement from the State Treasury of a 
proportion of the production costs incurred in the production of films and television programmes in 
Iceland.  
 
When more than 80% of the total production cost of a motion picture or television programme incurs 
in Iceland, the reimbursement shall be calculated from the total production cost incurring within the 
European Economic Area.  
 
Production costs refers to all costs incurred in Iceland deductible from the r evenues of enterprises 
pursuant to the provisions of the Act on Income and Net Wealth Tax. Payments pertaining to 
employees and contractors are only to be included in production costs if they are verifiable taxable 
in Iceland  
 
C. FORM OF STATE AID  
 
A speci fic company shall be established in Iceland for the production; an Icelandic branch or agency 
of a company registered in another Member State of the European Economic Area shall be considered 
a specific company  
 
D. AMOUNT OF STATE AID  
 
Total expenditure (r eimbursement of production cost) in 2012: ISK 400 million.  
 
E. RULES AND CONDITIONS  
 
In assessing whether a proportion of the production costs of a motion picture or a television 
programme shall be reimbursed, the following conditions shall be fulfilled:  
 
a. the production shall be suited for promoting Icelandic culture and the history and nature 
of Iceland;  
b. the production shall be suited for enhancing the experience, knowledge and artistic 
ambition of those involved in the production;  
c. a specific company shall  be established in Iceland for the production; an Icelandic branch 
or agency of a company registered in another EEA member state shall be considered a 
specific company;  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  d. information on the principal parties involved in the film or television programme shall  be 
submitted;  
e. information on domestic parties and their share in the production of the film or television 
programme shall be submitted;  
f. an itemized estimate of the production costs and sources of funding shall be submitted, 
together with confirmation by the funding parties and a declaration by the producer to the 
effect that the production conforms with the aims of the Act No. 43/1999;  
g. information on the content of the proposed film or television programme shall be 
submitted, including a manuscript, synop sis and information about filming locations;  
h. a production plan shall be available (i.e. filming, post -production and marketing plan), 
providing for completion of the production within three years of receipt of the application 
for reimbursement;  
i. a statement  shall be submitted to the effect that the material to be produced is intended 
for general distribution to cinemas or television stations, the content of the film or 
television programme shall not violate the Film Censorship and Prohibition of Violent Film s 
Act, No. 47/1995, or Article 210 of the Criminal Code, No. 19/1940.  
F. DURATION  
 
The programme is limited to end of year 2021.  
 
G. LEGAL BASIS  
 
Act on Temporary Reimbursements in Respect of Film Making in Iceland, No. 43/1999, with 
amendments. The Budget item no. 11 -251.  
 
7  RURAL TOURISM  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication.  
 
B. POLICY OBJECTIVE  
 
The objective of the pr ogramme is to promote rural tourism and assist local museums, and places 
of historical importance, in attracting tourists.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2012: ISK 458 million.  
 
E. DURATION  
 
The programme has no time limit; the  amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 11 -501. 
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  8  AID TO PROMOTE MARKE TING OF ICELANDIC TO URISM  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication and Icelandic Tourism Board ( Ferðamálastofa ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to promote marketing of Icelandic tourism. Further reference is 
made to a correspondence with the Authority concerning Case No. 47859.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2012: ISK 371 .4 million.  
 
E. DURATION  
 
The programme is intended to be temporary, the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 11 -559.1.44.  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 •  
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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2013  
1  THE AGRICULTURAL SEC TOR 
A.  NAME OF THE PROGRAMM E 
 
Agricultural Agreements; Payments to dairy farms, sheep farms and horticulture farms (Budget 
items No: 04 -801, 04-805 & 04 -807).  
 
B. RESPONSIBLE AUTHORIT Y 
 
Ministry of Industries and Innovation.  
 
C. POLICY OBJECTIVE  
 
Agricultural policy is implemented in Iceland in pursuit of objectives which include increasing 
efficiency in the agro -food sector, ensuring self-sufficiency for the country's major agricultural 
production; seeking to utilize domestic inputs to the extent possible; increasing overall efficiency in 
the agricultural food sector; utilizing export opportunities to the extent feasible; securing an 
equitable income for farmers; and integrating environmental issues in agricultural policy.  
 
D. FORMS OF SUBSIDY  
 
Agricultural subsidies in Iceland is mostly provided through direct payments, based on payment 
entitlements, which are directly or indirectly co upled with production factors. Direct payments are 
provided to cattle (mainly dairy) and sheep producers, and, on a smaller scale, to certain greenhouse 
producers. Allocations for the Agricultural Agreements in 2013 are made under items 04 -801, 04 -
805 and 04-807 of the State budget (Ministry of Industries and Innovation).  
 
E.  AMOUNT OF SUBSIDY  
 
Items making up the amount of support as measured by total costs in Government Accounts for 
2013 are listed in table 1.  
Table 1 Amount of support in 2013 (Governmen t Accounts); Million ISK  
 2013  
Agricultural Productivity Fund  70 
Stockholding costs; sheep meat program  0 
Directs payments to sheep farmers  2,589  
Quality control scheme; sheep farmers  1,651  
Wool utilization; subsidies  422 
Direct payments to dairy farmers  5,307  
Direct payments to horticulture farmers  261 
Electricity subsidies to horticulture farmers (greenhouse)  228 
 
F. RULES AND CONDITI ONS 
 
Implementation of the agricultural policy revolves around Agricultural Agreements negotiated 
between the G overnment and the Farmer's Association. Under Act No. 99/1993 on Agricultural 
Produce, the Minister of Fisheries and Agriculture is given the authority to negotiate with the 
Farmer's Association on behalf of the Government on the total support target for m ilk and total 
support target for sheep meat entitlements and direct payments for horticulture. A government -
chaired committee determines a guaranteed minimum price for milk delivered within production 
quotas at the producer level.  
 
Support is provided for dairy farms, sheep farms and horticulture farms (greenhouse) : G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  1.  Dairy farmers  
Milk producers receive direct payments from the Government on milk delivered to dairies. The 
annual quantity must be within the allocated supported targets. The amount of monetary 
support is the same for all producers in Iceland.  
2.  Sheep farmers  
Sheep farmers receive direct payments from the Government which are based on support 
targets for sheep meat entitlements, for which they must own 70% live sheep. Additional 
payments to sheep f armers are related to a quality control scheme for lamb meat, based on 
animal welfare, product quality and traceability, and sustainability criteria.  
3.  Sheep farmers; wool  
Sheep farmers receive support from the Government based on quantity and quality of woo l 
produced.  
4.  Horticulture farmers  
Horticulture farmers producing cucumbers, peppers and tomatoes in greenhouses, mainly 
under artificial lighting, receive direct payments from the government. The distribution of 
electricity used for artificial lighting is also subsidized to some extent by the Government.  
G. DURATION  
 
The time of application of the agricultural agreements between the Government and the Farmer's 
Association was until the end of 2016 when the agreements were renegotiated. The agreements 
were not revisited, in essence, during the years 2006 to 2014.  
 
H. LEGAL BASIS  
 
Act No. 99/1993 on Production, Pricing and Sales of Agricultural Products. The State Budget.  
 
I. TRADE EFFECTS  
 
An assessment of the trade effects of the subsidies is not available.  Below, in tables 2, 3 and 4 there 
are, however, presented statistics on production and exports of the relevant agricultural 
commodities.   
Table 2 Quantity of milk received by dairies and calculated exports by   
fat-content of milk derived products (in 1,000 of litres) for 2013  
Year Milk, received by dairies by fat -
content  Exported products by fat -content, 
thereof (%)  
2013 120,803  3% 
Table 3 Sheep meat production and exports 201 3 (in 1,000 kg)  
Year Production  Exports, thereof (%)  
2013 9,891  28% 
Table  4 Tomato, cucumber and bell pepper production and exports 201 3 (in 1,000 kg)  
Tomatoes  Cucumbers  Bell peppers   Total exports, thereof 
(%) 
1,560  1,781  243 <1% 
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  2  SUPPORT FOR R&D AND TECHNOLOGICAL INNOVA TION  
2.1  Technical Development Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic Centre for Research ( RANNÍS ) which is under the supervision of the Ministry of Industry 
and Innovation.  
 
B. POLICY OBJECTIVES  
 
The objective of the Technology Development Fund is to facilitate innovation through supporting 
research  and technological development.  
 
C. AMOUNT AND FORM OF S TATE AID  
 
The amount of State aid in 2013: ISK 1.060 million.  
  
D. RULES AND CONDITIONS  
 
The role of the fund is to support research and development activities, which aim towards innovation 
in Icelandic industry. The Fund will in general operate as a competitive fund through which firms, 
research institutes and universities will have the possibility of financing projects that support 
technological development and innovation. The Fund is intended  to give support to spin -off ventures 
and innovative firms to secure that economic benefits accrue to society from the scientific and 
technical knowledge and the innovation arising from these new ventures.  
 
The Science and Technology Policy Council attache s high importance to close co -ordination between 
the Research Fund and the Technical Development Fund, as well as co -operation with other public 
funds and venture investors. The Technical Development Fund can take the initiative to establish 
programmes and  specific actions prepared in consultation with the business community, research 
institutes and universities. Finally, the Technical Development Fund is permitted to enter into 
partnerships with venture capital investors for seed and early risk financing t oward establishing firms 
which base their operations on technological development and research and which involves a novelty 
to the economy.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE EFFECTS  
 
The support is granted to a variety of small projects and sectors; therefore, it is difficult to present 
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
 
The Technology Development Fund has been operating since 2004. It took ove r from the Technology 
Fund which expired in 2004.  
 
2.2  Research Fund  
A. RESPONSIBLE AUTHORIT Y 
The Icelandic Centre for Research ( RANNÍS ) which is under the supervision of the Ministry of Culture 
and Education.  
 
B. POLICY OBJECTIVES  
 
The objective of the Research Fund is to facilitate fundamental research at University institutes or 
other Governmental R&D institutes.  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  C. AMOUNT AND FORM OF S TATE AID  
 
The amount of State aid in 2013: ISK 915 million.  
 
D. RULES AND CONDITIONS  
 
Subsidies are granted only on th e basis of project applications. The Funds grants are for fundamental 
research at Universities and the involvement of private companies is very limited or non -existent.  
 
The Research Fund is the most powerful tool of the public sector for reinforcing the r esearch 
community infrastructure through project grants based on applications from scientists, business 
firms and institutions. The Science and Technology Policy Council encourages the Fund to give young 
scientists an opportunity to establish their work an d contribute to the further accumulation of 
scientific and technical knowledge.  
 
The Research Fund offers grants in accordance with the priorities set by the Science and Technology 
Policy Council and the grants strategy defined by the Science Board based o n a peer review 
evaluation of research project quality, the competence of the individuals involved and the facilities 
available for completing the project.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE EFFECTS  
 
The support is granted to a variety of small projects and sectors; therefore, it is difficult to present 
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
 
Research Fund has been operating since 2004. It took over from the Science Fund which expired in 
2004.  
 
2.3  Support for R&D in marine aquaculture  
A.  RESPONSIBLE AUTHORIT Y 
 
Ministry of Fisheries and Agriculture.  
 
B. POLICY OBJECTIVE  
 
To enhance scientific kno wledge in marine aquaculture.  
 
C.  FORM OF SUPPORT  
 
Grants.  
D. AMOUNT OF SUPPORT  
 
2013: ISK 17.265 million.  
 
E. RULES AND CONDITIONS  
 
Grants are awarded on the basis of applications evaluated by a special committee.  
 
F. DURATION  
 
There is no time limit, but each programme is decided on for a year at a time.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  G. LEGAL BASIS  
 
Act no. 72/2008 on the Directorate of Fisheries.  
 
H. TRADE EFFECTS  
 
There is no trade effect due to limited support.  
 
3  SUPPORT TO SMALL AND  MEDIUM -SIZED COMPANIES  
3.1  Job Creation Initiative (prior to 1996 known as Firm specific subsidies and export  
promotion (Case 93 -221))  
A. RESPONSIBLE AUTHORIT Y 
 
Innovation Center Iceland which is under the supervision of the Ministry of Employment and 
Innovation.  
 
B. POLIC Y OBJECTIVE  
 
The objective is to increase the knowledge and competence of entrepreneurs and small and medium -
sized enterprises such as in managing, financing, product development, marketing and innovation.  
 
C. FORM OF SUPPORT  
 
Cost items incurred for consu ltants, product development, marketing and innovation are eligible for 
grants. Support shall in general not cover more than 50% of eligible expenses.  
  
D. AMOUNT OF SUPPORT  
 
2013: ISK 68 million.  
 
E. RULES AND CONDITIONS  
 
Firms and individuals having a registered domicile in Iceland can apply for a grant. In accordance 
with the de minimis  rule, individuals who apply for grants according to these rules must declare that 
they have not received a grant from the Government amounts to more than 200,000 EURO last 3 
years, the grant applied for included.  
 
F. DURATION  
 
There is no time limit, but  each programme is decided on for a year at a time.  
 
G. LEGAL BASIS  
 
The Budget item no. 04 -528-1.48. 
 
H. TRADE EFFECTS  
 
There are no trade effects of the support due to the general framework of the scheme and limited 
support.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  3.2  Regional Development Fund  
A.  RESPONSIBLE AUTHORIT Y 
 
Innovation Center Iceland ( Nýsköpunarmiðstöð Íslands ) which is under the supervision of the 
Ministry of Employment and Innovation.  
 
B. POLICY OBJECTIVE  
 
To promote cooperation between local governments, safeguard their interests, support industries 
and enhance quality of life in the entire region economically, socially and culturally.  
 
C. FORM OF SUPPORT  
 
Grants.  
 
D. AMOUNT OF SUPPORT  
 
2013: ISK 400 million.  
 
E. RULES AND CONDITIONS  
 
Grants are awarded on the basis of  applications evaluated by a special committee.  
 
F. DURATION  
 
There is no time limit.  
 
G. LEGAL BASIS  
 
Act No 106/1999 ( Lög um Byggðastofnun ) and the Budget item no. 09 -992-1.10. 
 
H.  TRADE EFFECTS  
 
There are no trade effects of the support due to the general framework of the scheme and limited 
support.  
 
4  SUPPORT FOR EMPLOYME NT AND TRAINING  
4.1  Vocational Training Fund Support  for Vocational Training  
A. RESPONSIBLE AUTHORIT Y 
 
Ministry of Education and Culture.  
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to maintain and develop vocational skills, in most cases for 
people already employed.  
  
C. FORM OF STATE AID  
 
Grants.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 102 - 
 
  D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2013: ISK 1.358,9 million.  
 
E. RULES AND CONDITIONS  
 
Grants to organizations on application to the Vocational Training Fund mainly to make curriculum or 
other teaching materials for the vocational training courses.  
 
F. DURATION  
 
The programme started in 1992. Duration has not been specified.  
 
G. LEGAL BASIS  
 
Adult Edu cation Act No. 27/2010 and the Budget item no. 02 -451. 
 
4.2  Employment Opportunities for Women in Rural Areas  
A. RESPONSIBLE AUTHORIT Y 
 
Ministry of Fisheries and Agriculture and the Institute of Regional Development ( Byggðastofnun ). 
  
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to create new jobs among women. Areas where high 
unemployment is among women will especially be considered.  
  
C. FORM OF STATE AID  
 
Grants, up to 50% of primary R&D costs, innovation costs and cost of new products, pr ocess and 
systems for industrial production. Institute of Regional Development pays the grants and controls 
their disposition.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2013: ISK 0 million . 
 
It is difficult to give exact information on how many jobs have been created or maintained as many 
of these new jobs are just part time jobs.  
 
E. RULES AND CONDITIONS  
 
Grants to women on application to the Institute of Regional Development mainly to new product 
developing and marketing. The grant can only be given to companies, which are at least 50% owned 
by women or have been established by women.  
 
F. DURATION  
 
The programme started in 1990. Duration has not been specified.  
 
G. LEGAL BASIS  
 
Governmental decision from 1990.  
 
4.3  Vocational Rehabilitation  
A. RESPONSIBLE AUTHORIT Y 
 
Ministry of Welfare.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 103 - 
 
  B. POLICY OBJECTIVE  
 
The main purpose of this programme is to develop, integrate and monitor services in the field of 
vocational rehabilitation, aiming systematically for employment of individuals following illn ess or 
injury.  
 
C. FORM OF STATE AID  
 
Gross wage State aid to rehabilitation centres.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2013 ISK 298 .2 million.  
 
E. RULES AND CONDITIONS  
 
The rehabilitation centres must have operating license from the Min istry of Welfare to apply to the 
Ministry for subsidies.  
 
F. DURATION  
 
The new programme started in 1992. Duration has not been specified.  
 
G. LEGAL BASIS  
 
Act No. 60/2012 ( lög um atvinnutengda starfsendurhæfingu og starfsemi starfsendurhæfingasjóða ) 
and financed by the Budget item no. 08 -856.  
 
4.4  Employment of Handicapped Persons  
A. RESPONSIBLE AUTHORIT Y 
 
Ministry of Welfare.  
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to ensure that disabled persons enjoy human rights and 
freedoms on  the same basis as others and that they are guaranteed the support necessary to enjoy 
these rights.  
 
C. FORM OF STATE AID  
 
Gross wage State aid to rehabilitation centres.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2013: ISK 69 .4 million.  
 
E. RULES AND CONDITIONS  
 
Service institutions for disabled people should be deployed in order to meet their specific needs so 
that they can live independently.  
 
F. DURATION  
 
No time limit; the amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Act No. 59/1992 on the Affairs of Disabled People and the Budget item no. 08 -842.1.21.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  5  REGIONAL SUPPORT  
5.1  Assistance to Employment Development Projects  
A. RESPONSIBLE AUTHORIT Y 
 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The objec tive of the programme is to assist the economic development of the nationally assisted 
areas of Iceland. The assisted projects are small and cover employment development, training and 
innovation.  
 
C. FORM OF STATE AID  
 
Grants, as assistance to Employment D evelopment Projects, which fall within the objectives of Act 
No. 106/1999, on the Institute of Regional Development.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2013: ISK 172 .20 million.  
 
E. RULES AND CONDITIONS  
 
The programme is available to individuals, private companies, local development companies and 
municipalities. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
 
F. DURATION  
 
The programme has no time limit; the amount is decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 10 of Act no. 106/1999 on the Institute of Regional Development, the Budget item  
no. 04-542. 
 
5.2  Assistance to Local Economic Development  
A. RESPONSIBLE AUTHORIT Y 
 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to assist local economic development companies and to finance 
venturesome projects within the field of local e mployment development and innovation.  
 
C. FORM OF STATE AID  
 
Grants to finance venturesome projects within the field of local employment development and 
innovation.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2013: ISK 6 .5 million.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 105 - 
 
  E. RULES AND C ONDITIONS  
 
According to Act No. 106/1999, on the Institute of Regional Development, the assistance is to be in 
accordance with rules laid down by the Ministry of Employment and Innovation. These rules have 
not yet been issued. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
 
F. DURATION  
 
The programme has no time limit; the  amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 12 of Act no. 106/1999 on the Institute of Regional Development, the Budget item  
no. 04-542 
  
H. ADDITIONAL INFORMATI ON 
 
The Institute of Regional Development is authorized according to Article 11 of Act No  106/1999 to 
provide loans and guarantees, in accordance with the role of the Institute as stipulated in the Act. 
These loans and guarantees are provided on market terms, with similar interest rates as on the open 
market.  
 
6  TEMPORARY REPAYMENT OF COSTS OF FILMS PR ODUCTION IN ICELAND  
A. RESPONSIBLE AUTHORIT Y 
 
Icelandic film centre ( Kvikmyndamiðstöð Íslands ) under the auspice of the Ministry of Industry.  
 
B. POLICY OBJECTIVE  
 
The objective of the Act is to enhance domestic culture and promote the history and nature of Iceland 
by tempora rily supporting motion pictures and television programmes produced in Iceland.  
 
According to the Act authorisation is granted for the reimbursement from the State Treasury of a 
proportion of the production costs incurred in the production of films and tel evision programmes in 
Iceland.  
 
When more than 80% of the total production cost of a motion picture or television programme incurs 
in Iceland, the reimbursement shall be calculated from the total production cost incurring within the 
European Economic Area.  
 
Production costs refers to all costs incurred in Iceland deductible from the revenues of enterprises 
pursuant to the provisions of the Act on Income and Net Wealth Tax. Payments pertaining to 
employees and contractors are only to be included in prod uction costs if they are verifiable taxable 
in Iceland.  
 
C. FORM OF STATE AID  
 
A specific company shall be established in Iceland for the production; an Icelandic branch or agency 
of a company registered in another Member State of the European Economic Are a shall be considered 
a specific company.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure (reimbursement of production cost) in 2013: ISK 850 million.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 106 - 
 
  E. RULES AND CONDITIONS  
 
In assessing whether a proportion of the production costs of a motion picture or a t elevision 
programme shall be reimbursed, the following conditions shall be fulfilled:  
 
a. the production shall be suited for promoting Icelandic culture and the history and nature 
of Iceland;  
b. the production shall be suited for enhancing the experience, knowle dge and artistic 
ambition of those involved in the production;  
c. a specific company shall be established in Iceland for the production; an Icelandic branch 
or agency of a company registered in another EEA member state shall be considered a 
specific company;  
d. information on the principal parties involved in the film or television programme shall be 
submitted;  
e. information on domestic parties and their share in the production of the film or television 
programme shall be submitted;  
f. an itemized estimate of the pro duction costs and sources of funding shall be submitted, 
together with confirmation by the funding parties and a declaration by the producer to the 
effect that the production conforms with the aims of the Act No. 43/1999;  
g. information on the content of the proposed film or television programme shall be 
submitted, including a manuscript, synopsis and information about filming locations;  
h. a production plan shall be available (i.e. filming, post -production and marketing plan), 
providing for completion of the pro duction within three years of receipt of the application 
for reimbursement;  
i. a statement shall be submitted to the effect that the material to be produced is intended 
for general distribution to cinemas or television stations; the content of the film or 
television programme shall not violate the Film Censorship and Prohibition of Violent Films 
Act, No.  47/1995, or Article 210 of the Criminal Code, No. 19/1940.  
F. DURATION  
 
The programme is limited to end of year 2021.  
 
G. LEGAL BASIS  
 
Act on Temporary Reimbursements in Respect of Film Making in Iceland, No. 43/1999, with 
amendments. The Budget item no. 04 -521.  
 
7  RURAL TOURISM  
A. RESPONSIBLE AUTHORIT Y 
 
Ministry of Transport and Communication.  
 
B. POLICY OBJECTIVE  
 
The objective of the pr ogramme is to promote rural tourism and assist local museums, and places 
of historical importance, in attracting tourists.  
 
C. FORM OF STATE AID  
 
Grants to projects.  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2013: ISK 483 .3 million.  
 
E. DURATIO N 
 
The programme has no time limit; the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget item no. 04 -551. 
 
8  AID TO PROMOTE MARKE TING OF ICELANDIC TO URISM  
A. RESPONSIBLE AUTHORIT Y 
 
Ministry of Transport and Communication and Icelandic Tourism Board ( Ferðamálastofa ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to promote marketing of Icelandic tourism. Further reference is 
made to a correspondence with the Authority concerning Case No. 47859.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2013: ISK 370 .4 million.  
 
E. DURATION  
 
The programme is intended to be temporary; the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget item no. 04 -559.1.44.  
 
9  SCHEME TO SUPPORT INNOVATION C OMPANIES  
A. RESPONSIBLE AUTHORIT Y 
 
Ministry of Industries and Innovation.  
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to promote research and development work and to improve the 
competitive conditions of innovation companies  by giving them the right to deduct tax for the cost 
of innovation projects.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2013: ISK 1.240,10 million.  
  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  E. DURATION  
 
The programme is limited to end of year  2019.  
 
 F. LEGAL BASIS  
 
Act No. 152/2009 on support for innovation enterprises.  
  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  2014  
1  THE AGRICULTURAL SEC TOR 
A. NAME OF PROGRAMME  
 
Agricultural Agreements; Payments to dairy farms, sheep farms and horticulture farms  (Budget 
items No: 04 -801, 04 -805 & 04-807).  
 
B. RESPONSIBLE AUTHORITY  
 
Ministry of Industries and Innovation  
 
C. POLICY OBJECTIVE  
 
Agricultural policy is implemented in Iceland in pursuit of objectives which include increasing 
efficiency in the agro -food sector, ensuring self -sufficiency fo r the country's major agricultural 
production; seeking to utilize domestic inputs to the extent possible; increasing overall efficiency in 
the agricultural food sector; utilizing export opportunities to the extent feasible; securing an 
equitable income for  farmers; and integrating environmental issues in agricultural policy.  
 
D. FORMS OF SUBSIDY  
 
Agricultural subsidies in Iceland is mostly provided through direct payments, based on payment 
entitlements, which are directly or indirectly coupled with producti on factors. Direct payments are 
provided to cattle (mainly dairy) and sheep producers, and, on a smaller scale, to certain greenhouse 
producers. Allocations for the Agricultural Agreements in 2014 are made under items  04-801, 04 -
805 and 04 -807 of the State  budget (Ministry of Industries and Innovation).  
 
E. AMOUNT OF SUBSIDY  
 
Items making up the amount of support as measured by total costs in Government Accounts for  2014 
are listed in table 1.  
Table 1 Amount of support in 2014 (Government Accounts); Million  ISK 
 2014  
Agricultural Productivity Fund  72 
Stockholding costs; sheep meat program  0 
Directs payments to sheep farmers  2,667  
Quality control scheme; sheep farmers  1,701  
Wool utilization; subsidies  435 
Direct payments to dairy farmers  5,466  
Direct payments to horticulture farmers  204 
Electricity subsidies to horticulture farmers 
(greenhouse)  305 
 
F. RULES AND CONDITIONS  
 
Implementation of the agricultural policy revolves around Agricultural Agreements negotiated 
between the Government and the Farmer's Association. Under Act No. 99/1993 on Agricultural 
Produce, the Minister of Fisheries and Agriculture is given the authority to negotiate with the 
Farmer's Association on behalf of the Government on the total support target for milk and total 
support target for sheep meat entitlements and direct payments for horticulture. A government -
chaired committee determines a guaranteed minimum price for milk delivered within production 
quotas at the producer level.  
 
Support is provided for dairy farms, sheep  farms and horticulture farms (greenhouse).  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  1.  Dairy farmers  
Milk producers receive direct payments from the Government on milk delivered to dairies. The 
annual quantity must be within the allocated supported targets. The amount of monetary 
support is the same for all producers in Iceland.  
2.  Sheep farmers  
Sheep farmers receive direct payments from the Government which are based on support 
targets for sheep meat entitlements, for which they must own 70% live sheep. Additional 
payments to sheep farmers are rela ted to a quality control scheme for lamb meat, based on 
animal welfare, product quality and traceability, and sustainability criteria.  
3.  Sheep farmers; wool  
Sheep farmers receive direct payments from the Government which are based on support 
targets for shee p meat entitlements, for which they must own 65% of live sheep.  
4.  Horticulture farmers  
Horticulture farmers producing cucumbers, peppers and tomatoes in greenhouses, mainly 
under artificial lighting receive direct payments from the government. The distribut ion of 
electricity used for artificial lighting is also subsidized to some extent by the Government.  
G. DURATION  
 
The time of application of the agricultural agreements between the Government and the Farmer's 
Association was until the end of 2016 when the  agreements were renegotiated. The agreements 
were not revisited, in essence, during the years 2006 to 2014.  
 
H. LEGAL BASIS  
 
Act No. 99/1993 on Production, Pricing and Sales of Agricultural Products. The State Budget.  
 
I. TRADE EFFECTS  
 
An assessment of t he trade effects of the subsidies is not available. Below, in tables 2, 3 and 4 there 
are, however, presented statistics on production and exports of the relevant agricultural 
commodities.  
Table 2 Quantity of milk received by dairies and calculated exports  by fat -content of milk 
derived products (in 1,000 of litres) for 2014  
Year Milk, received by dairies by fat -
content  Exported products by fat -content, 
thereof (%)  
2014 128,968  1% 
Table 3 Sheep meat production and exports 2014 (in 1,000 kg)  
Year Production  Exports, thereof (%)  
2014 10,100  34% 
Table 4 Tomato, cucumber and bell pepper production and exports 2014 (in 1,000 kg)  
Tomatoes  Cucumbers  Bell peppers  Total exports, thereof 
(%) 
1,516  1,807  223 <1% 
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  2  SUPPORT FOR R&D AND TECHNOLOGICAL INNOVATION  
2.1  Technical Development Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic Centre for Research ( RANNÍS ) which is under the supervision of the Ministry of Industry 
and Innovation.  
 
B. POLICY OBJECTIVES  
 
The objective of the Technology Development Fund is  to facilitate innovation through supporting 
research and technological development.  
 
C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2014: ISK 943 million.  
 
D. RULES AND CONDITIONS  
 
The role of the fund is to support research and development activities, which aim towards innovation 
in Icelandic industry. The Fund will in general operate as a competitive fund through which firms, 
research institutes and universities will have the possibility of financing projects that support 
technological deve lopment and innovation. The Fund is intended to give support to spin -off ventures 
and innovative firms to secure that economic benefits accrue to society from the scientific and 
technical knowledge and the innovation arising from these new ventures.  
 
The S cience and Technology Policy Council attaches high importance to close co -ordination between 
the Research Fund and the Technical Development Fund, as well as co -operation with other public 
funds and venture investors. The Technical Development Fund can tak e the initiative to establish 
programmes and specific actions prepared in consultation with the business community, research 
institutes and universities. Finally, the Technical Development Fund is permitted to enter into 
partnerships with venture capital i nvestors for seed and early risk financing toward establishing firms 
which base their operations on technological development and research and which involves a novelty 
to the economy.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Resear ch, with later amendments.  
 
F. TRADE EFFECTS  
 
The support is granted to a variety of small projects and sectors, therefore it is difficult to present 
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
 
The Technology Development Fund  has been operating since 2004. It took over from the Technology 
Fund which expired in 2004.  
 
2.2  Research Fund  
A. RESPONSIBLE AUTHORITY  
 
The Icelandic Centre for Research ( RANNÍS ) which is under the supervision of the Ministry of Culture 
and Education.  
 
B. POLICY OBJECTIVES  
 
The objective of the Research Fund is to facilitate fundamental research at University institutes or 
other Governmental R&D institutes.  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2014: ISK 1.235,0 million.  
 
D. RULES AND CONDITIONS  
 
Subsidies are granted only on the basis of project applications. The Funds grants are for fundamental 
research at Universities and the involvement of private companies is very limited or non -existent.  
 
The Research Fund is the most powerful too l of the public sector for reinforcing the research 
community infrastructure through project grants based on applications from scientists, business 
firms and institutions. The Science and Technology Policy Council encourages the Fund to give young 
scientis ts an opportunity to establish their work and contribute to the further accumulation of 
scientific and technical knowledge.  
 
The Research Fund offers grants in accordance with the priorities set by the Science and Technology 
Policy Council and the grants s trategy defined by the Science Board based on a peer review 
evaluation of research project quality, the competence of the individuals involved and the facilities 
available for completing the project.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for S cientific Research, with later amendments.  
 
F. TRADE EFFECTS  
 
The support is granted to a variety of small projects and sectors, therefore it is difficult to present 
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
 
Research Fund h as been operating since 2004. It took over from the Science Fund which expired 
in 2004.  
 
2.3  Support for R&D in marine aquaculture  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture.  
 
B. POLICY OBJECTIVE  
 
To enhance scientific knowledge in marine  aquaculture.  
 
C. FORM OF SUPPORT  
 
Grants.  
 
D. AMOUNT OF SUPPORT  
 
2014: ISK 13.420,0 million . 
 
E. RULES AND CONDITIONS  
 
Grants are awarded on the basis of applications evaluated by a special committee.  
 
F. DURATION  
 
There is no time limit, but each program me is decided on for a year at a time.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  G. LEGAL BASIS  
 
Act no. 72/2008 on the Directorate of Fisheries.  
 
H. TRADE EFFECTS  
 
There is no trade effect due to limited support.  
 
3  SUPPORT TO SMALL AND  MEDIUM -SIZED COMPAN IES 
3.1  Job Creation Initiative (prior to 1996 known as Firm specific subsidies and export 
promotion (Case 93 -221))  
A. RESPONSIBLE AUTHORITY  
 
Innovation Center Iceland which is under the supervision of the Ministry of Employment and 
Innovation.  
 
B. POLICY OBJECTIVE  
 
The objective is, to increase t he knowledge and competence of entrepreneurs and small and 
medium -sized enterprises such as in managing, financing, product development, marketing and 
innovation.  
 
C. FORM OF SUPPORT  
 
Cost items incurred for consultants, product development, marketing and innovation are eligible for 
grants. Support shall in general not cover more than 50% of eligible expenses.  
 
D. AMOUNT OF SUPPORT  
 
2014: ISK 67 million.  
 
E. RULES AND CONDITIONS  
 
Firms and individuals having a registered domicile in Iceland can apply for a grant. In accordance 
with the de minimis  rule, individuals who apply for grants according to these rules must declare that 
they have not received a grant from the Government amounts to more than 200,000 EURO last 3 
years, the grant applied for included.  
 
F. DURATION  
 
There is no time limit, but each programme is decided on for a year at a time.  
 
G. LEGAL BASIS  
 
The Budget item no. 04 -528-1.48. 
 
H. TRADE EFFECTS  
 
There are no trade effects of the support due to the general framework of the scheme and limited 
support.  
 
3.2  Regional Development Fund  
A. RESPONSIBLE AUTHORITY  
 
Innovation Center Iceland ( Nýsköpunarmiðstöð Íslands ) which is under the supervision of the 
Ministry of Employment and Innovation.  
 
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  B. POLICY OBJECTIVE  
 
To promote cooperation between l ocal governments, safeguard their interests, support industries 
and enhance quality of life in the entire region economically, socially and culturally.  
 
C. FORM OF SUPPORT  
 
Grants.  
 
D. AMOUNT OF SUPPORT  
 
2014: ISK 101 .5 million . 
 
E. RULES AND CONDITIONS  
 
Grants are awarded on the basis of applications evaluated by a special committee.  
 
F. DURATION  
 
There is no time limit.  
 
G. LEGAL BASIS  
 
Act No 69/2015 ( Lög um byggðaáætlun og sóknaráætlun ) and the Budget item no. 09 -992-1.10. 
 
H. TRADE EFFECTS  
 
There are  no trade effects of the support due to the general framework of the scheme and limited 
support.  
 
4  SUPPORT FOR EMPLOYME NT AND TRAINING  
4.1  Vocational Training Fund Support  for Vocational Training  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Education and Culture.  
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to maintain and develop vocational skills, in most cases for 
people already employed.  
 
C. FORM OF STATE AID  
 
Grants.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2014: ISK 1.363,9 million . 
 
E. RULES AND CONDITIONS  
 
Grants to organizations on application to the Vocational Training Fund mainly to make curriculum or 
other teaching materials for the vocational training courses.  
 
F. DURATION  
 
The programme started in 1992. Duration has not been spec ified. 
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  G. LEGAL BASIS  
 
Adult Education Act No. 27/2010 and the Budget item no. 02 -451. 
 
4.2  Employment Opportunities for Women in Rural Areas  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture and the Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to create new jobs among women. Areas where high 
unemployment is among women will especially be considered.  
 
C. FORM OF STATE AID  
 
Grants, up to 50% of primary R&D costs, innovati on costs and cost of new products, process and 
systems for industrial production. Institute of Regional Development pays the grants and controls 
their disposition.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2014: ISK 0 million . 
 
It is difficult to give exact information on how many jobs have been created or maintained, as many 
of these new jobs are just part time jobs.  
 
E. RULES AND CONDITIONS  
 
Grants to women on application to the Institute of Regional Development mainly to new product 
developin g and marketing. The grant can only be given to companies, which are at least 50% owned 
by women or have been established by women.  
 
F. DURATION  
 
The programme started in 1990. Duration has not been specified.  
 
G. LEGAL BASIS  
 
Governmental decision from 19 90. 
 
4.3  Vocational Rehabilitation  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Welfare.  
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to develop, integrate and monitor services in the field of 
vocational rehabilitation; aiming systematically for emplo yment of individuals following illness or 
injury.  
 
C. FORM OF STATE AID  
 
Gross wage State aid to rehabilitation centres.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2014 ISK 351 .6 million . G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  E. RULES AND CONDITIONS  
 
The rehabilitation centres must have operating license from the Ministry of Welfare to apply to the 
Ministry for subsidies.  
 
F. DURATION  
 
The new programme started in 1992. Duration has not been specified.  
 
G. LEGAL BASIS  
 
Act No. 60/2012 ( lög um atvinnu tengda starfsendurhæfingu og starfsemi starfsendurhæfingasjóða ) 
and financed by the Budget item no. 08 -856. 
 
4.4  Employment of Handicapped Persons  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Welfare.  
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to en sure that disabled persons enjoy human rights and 
freedoms on the same basis as others and that they are guaranteed the support necessary to enjoy 
these rights.  
 
C. FORM OF STATE AID  
 
Gross wage State aid to rehabilitation centres.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2014: ISK 71 .8 million.  
 
E. RULES AND CONDITIONS  
 
Service institutions for disabled people should be deployed in order to meet their specific needs so 
that they can live independently.  
 
F. DURATION  
 
No time limit; the  amounts a re decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Act No. 59/1992 on the Affairs of Disabled People and the Budget item no. 08 -842.1.21.  
 
5  REGIONAL SUPPORT  
5.1  Assistance to Employment Development Projects  
A. RESPONSIBLE AUTHORITY  
 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to assist the economic development of the nationally assisted 
areas of Iceland. The assisted projects are small and cover employment development, training and 
innovation.  
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 117 - 
 
  C. FORM OF STATE AID  
 
Grants, as assistance to Employment Development Projects, which fall within the objectives of Act 
No. 106/1999, on the Institute of Regional Development.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2014: ISK 172 .40 million.  
 
E. RULES AND CONDITIONS  
 
The programme is available to individuals, private companies, local development companies and 
municipalities. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Ma p of Regional Aid approved by the EFTA Surveillance 
Authority.  
 
F. DURATION  
 
The programme has no time limit; the  amount is decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 10 of Act no. 106/1999 on the Institute of Regional Development, the Bu dget item 
no. 04-542. 
 
5.2  Assistance to Local Economic Development  
A. RESPONSIBLE AUTHORITY  
 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to assist local economic development companies and to finance 
venturesome projects within the field of local employment development and innovation.  
 
C. FORM OF STATE AID  
 
Grants to finance venturesome projects within the field of local employment development and 
innovation.  
 
D. AMOUNT OF STATE AID  
 
Actual tot al expenditure in 2014: ISK 6 .95 million.  
 
E. RULES AND CONDITIONS  
 
According to Act No. 106/1999, on the Institute of Regional Development, the assistance is to be in 
accordance with rules laid down by the Ministry of Employment and Innovation. These rule s have 
not yet been issued. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
 
F. DURATION  
 
The programme has no time limit; the  amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 12 of Act no. 106/1999 on the Institute of Regional Development, the Budget item no.  04-542 
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 118 - 
 
  H. ADDITIONAL INFORMATION  
 
The Institute of Regional Development is authorized according to Article 11 of Act No 106/1999 to 
provide loans and guarantees, in accordance with the role of the Institute as stipulated in the Act. 
These loans and guarantees are provided on market terms, with similar interest rates as on the open 
market.  
 
6  TEMPORARY REPAYMENT OF COSTS OF FILMS PR ODUCTION IN ICELAND  
A. RESPONSIBLE AUTHORITY  
 
Icelandic film centre ( Kvikmyndamiðstöð Íslands ) under the auspice of the Ministry of Industry.  
 
B. POLICY OBJECTIVE  
 
The objective of the Act is to enhance domestic culture and promote the history and nature of Iceland 
by temporarily supporting motion pictures and television programmes produced in Iceland.  
 
According to the Act authorisation is granted for the reimburse ment from the State Treasury of a 
proportion of the production costs incurred in the production of films and television programmes in 
Iceland.  
 
When more than 80% of the total production cost of a motion picture or television programme incurs 
in Iceland, the reimbursement shall be calculated from the total production cost incurring within the 
European Economic Area.  
 
Production costs refers to all costs incurred in Iceland deductible from the revenues of enterprises 
pursuant to the provisions of the Act on  Income and Net Wealth Tax. Payments pertaining to 
employees and contractors are only to be included in production costs if they are verifiable taxable 
in Iceland  
 
C. FORM OF STATE AID  
 
A specific company shall be established in Iceland for the production;  an Icelandic branch or agency 
of a company registered in another Member State of the European Economic Area shall be considered 
a specific company  
 
D. AMOUNT OF STATE AID  
 
Total expenditure (reimbursement of production cost) in 2014: ISK 837 .2 million.  
 
E. RULES AND CONDITIONS  
 
In assessing whether a proportion of the production costs of a motion picture or a television 
programme shall be reimbursed, the following conditions shall be fulfilled:  
 
a. the production shall be suited for promoting Icelandic cultur e and the history and nature 
of Iceland;  
b. the production shall be suited for enhancing the experience, knowledge and artistic 
ambition of those involved in the production;  
c. a specific company shall be established in Iceland for the production; an Icelandic branch 
or agency of a company registered in another EEA member state shall be considered a 
specific company;  
d. information on the principal parties involved in the film or television programme shall be 
submitted;  
e. information on domestic parties and their sh are in the production of the film or television 
programme shall be submitted;  G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
- 119 - 
 
  f. an itemized estimate of the production costs and sources of funding shall be submitted, 
together with confirmation by the funding parties and a declaration by the producer to the  
effect that the production conforms with the aims of the Act No. 43/1999;  
g. information on the content of the proposed film or television programme shall be 
submitted, including a manuscript, synopsis and information about filming locations;  
h. a production pl an shall be available (i.e. filming, post -production and marketing plan), 
providing for completion of the production within three years of receipt of the application 
for reimbursement;  
i. a statement shall be submitted to the effect that the material to be pr oduced is intended 
for general distribution to cinemas or television stations, the content of the film or 
television programme shall not violate the Film Censorship and Prohibition of Violent Films 
Act, No. 47/1995, or Article 210 of the Criminal Code, No.  19/1940.  
F. DURATION  
 
The programme is limited to end of year 2021.  
 
G. LEGAL BASIS  
 
Act on Temporary Reimbursements in Respect of Film Making in Iceland, No. 43/1999, with 
amendments. The Budget item no. 04 -521.  
 
7  RURAL TOURISM  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication.  
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to promote rural tourism and assist local museums, and places 
of historical importance, in attracting tourists.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2014: ISK 478 .4 million.  
 
E. DURATION  
 
The programme has no time limit; the  amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 04 -551. 
 
8  AID TO PROMOTE MARKE TING OF ICELANDIC TOURISM  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication and Icelandic Tourism Board ( Ferðamálastofa ). 
 G/SCM/N/155/ISL/Rev.1 • G/SCM/N/186/ISL/Rev.1 • G/SCM/N/220/ISL/Rev.1 • 
G/SCM/N/253/ISL/Rev.1 • G/SCM/N/284/ISL/Rev.1  
 
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  B. POLICY OBJECTIVE  
 
The objective of the programme is to promote marketing of Icelandic tourism. Further reference is 
made to a corres pondence with the Authority concerning Case No. 47859.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2014: ISK 255 .4 million.  
 
E. DURATION  
 
The programme is intended to be temporary, the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 04 -559.1.44.  
 
9  SCHEME TO SUPPORT IN NOVATION COMPANIES  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Industries and Innovation.  
 
B. POLICY OBJECTIVE  
 
The objective of the programme is to promote r esearch and development work and to improve the 
competitive conditions of innovation companies by giving them the right to deduct tax for the cost 
of innovation projects.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure  allowed in 2014: ISK 1.302,40  million.  
 
E. DURATION  
 
The programme is limited to end of year 2019.  
 
F. LEGAL BASIS  
 
Act No. 152/2009 on support for innovation enterprises.  
 
__________