G/SCM/Q2/NOR/27  
 
3 April 2014  
(14-2055)  Page: 1/4  
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES 
REPLIES TO QUESTIONS POSED BY AUSTRALIA1 REGARDING THE NEW 
AND FULL NOTIFICATION OF NORWAY2 
The following communication, dated 1 April 2014, is being circulated at the request of the 
delegation of Norway.  
_______________ 
  Introduction 
 
Norway is a party to the Agreement on the European Economic Area (the EEA Agreement). The state aid rules in the EEA Agreement are broadly equi valent to the state aid rules in the EU Treaty, 
which apply across the European Union. Like the EU Treaty, the EEA Agreement contains a general 
prohibition on state aid in order to prevent distortions of competition and negative effects on intra-EEA trade. The rules seek to ensure a level playing field for companies across Europe, and to 
prevent government assistance being used as a form of protectionism in the absence of trade 
barriers. The prohibition is, however, subject to numerous exceptions, recognising that government intervention can be necessary to correct market failure and for social purposes, for example through regional policy or efforts to reduce unemployment. 
 
The EEA Agreement incorporates the relevant secondary legislation of the European Council of Ministers and European Commission on the definition of aid and compatibility of aid with the 
functioning of the internal market.  
 The general prohibition on state aid that applies in Norway is enforced by the EFTA Surveillance 
Authority (the Authority). It is also the Authority's role to decide how the exceptions to the 
prohibition are to apply. In its enforcement of the rules, the Authority has equivalent powers and similar functions to those of the European Commission. The Authority is, like the European Commission, independent from the states over which it has jurisdiction. 
 
Plans to grant state aid must be notified to the Authority prior to implementation. The Authority must then assess whether such a plan constitutes state aid and, if it does, examine whether it is 
eligible for exemption. 
 Question 1 
 
Page 5, 2.3 Industrial R& D programmes and projects 
 Norway advises that there are guidelines for these programmes. 
 
 Could Norway please clarify whether the support provided through grants is on 
a discretionary basis? 
Reply 
 
This is a notified scheme, approved by the EF TA Surveillance Authority. The grants are in 
accordance with the Authority's State aid guidelines, chapter 14 State aid for research and 
                                               
1 G/SCM/Q2/NOR/25. 
2 G/SCM/N/253/NOR. G/SCM/Q2/NOR/27 
 
- 2 - 
 
  development and innovation, article 5.1 Aid for R&D projects. The support provided through the 
Industrial R&D Program is discretionary. Ea ch applicant is evaluated individually. 
 Question 2 
 
Page 12, 2.11 FORNY (Comme rcializing R&D results) 
 
Norway notes that funding for this program,  administered by the Research Council of 
Norway, comes from various ministries includ ing the Ministry of Fisheries and Coastal 
Affairs.  
 Could Norway please indicate which in dustry sectors benefited from this 
assistance during the reporting period. 
Reply 
 
This is an aid measure implemented under the General Block Exemption Regulation, Article 35 Aid to young innovative enterprises. The following industry sectors benefited in 2012 (NACE 
codes): 20130 Manufacture of other inorganic basic chemicals, 71129 Other technical 
consultancy, 46750 Wholesale of chemical products, 72110 Research and experimental development on biotechnology, 72190 Other research and experimental development on natural sciences and engineering, and 62010 Computer programming activities.  
 
Question 3  
Page 14, 3.2 Scheme for Newly established small enterprises 
 
 Could Norway clarify how it defines "small enterprises" for the purposes of this 
program. 
 Are these grants discretionary? 
 Are there performance requirements? 
Reply 
 
The Norwegian authorities use the European definition of small enterprises:   
"The category of micro, small and medium-sized enterprises (SMEs) is made up of enterprises 
which employ fewer than 250 persons and which have an annual turnover not exceeding 50 million euro, and/or an annual balance sheet total not exceeding 43 million euro ". 
 
The grants given through the scheme for newly established small enterprises goes almost exclusively to micro entities (companies with up to 10 employees).  
The support provided through the scheme for Newly Established Enterprises is discretionary. Each 
applicant undergoes an individual evaluation.   
There are no specific performance requirements. In the evaluation process, we go through the 
following criteria:  
 Background, experience and education of the applicant 
 Innovation potential of the business idea/plan 
 Potential for growth 
 Financial credit check 
 The financial status and growth potential of the company. G/SCM/Q2/NOR/27 
 
- 3 - 
 
  Question 4 
 Page 19, 4.1 National Innovation scheme  
Norway indicates that the program is for start-up and realisation of a project for small 
and medium sized enterprises (SMEs).  
 Could Norway clarify whether there are performance requirements for projects 
and the nature of those requirements. 
 The form of the assistance is grants, soft loans and guarantees. Could Norway 
clarify how it determines the form of  assistance and wh ether there are any 
restrictions in the level of assistance pr ovided to individual SMEs or projects. 
 Could Norway advise which industry sect ors have benefited from this program. 
Reply 
 
The funding scheme "National Innovation scheme" ha s no specific performance requirements. Each 
applicant is evaluated individually. For this scheme, international growth potential is especially 
important.  
 The form of assistance is determined in the evalua tion process, based on the nature of the project 
and the financial status of the applicant. As far as possible, Innovation Norway prioritizes soft 
loans because of the increased economic efficiency . The level of assistance is determined by the 
EU/EFTA state aid rules.  
The industry sectors that mainly benefit from the program are Manufacturing, Information and 
communication and Professional, scientific and technical activities (NACE categories C, J and M).  
Question 5 
 Page 30, 7.4 Research, development and innovation in the maritime industry 
 
Norway notes the program is to increase th e value added in the maritime industry by 
stimulating research, developm ent and innovation. Australia notes that this scheme is 
now part of the National Innovation Scheme. 
 
 Could Norway please clarify the conditionalities for rece ipt of grants under this 
program. 
 Could Norway please clarify how this program increases value added and 
whether there are performance requiremen ts which require the use of domestic 
inputs. 
Reply 
 
The "Research, development and innovation in the maritime industry program" funds SME's in the 
maritime sector. It is a strict criterion in this scheme that the projects supported is within the 
maritime industry. In addition, as with the other schemes that are handled by Innovation Norway 
the applicant is evaluated individually. The main criteria in the evaluation process are:  
 Background, experience and education of the applicant 
 Innovation potential of the business idea/plan 
 Potential for growth 
 Financial credit check 
 The financial status and growth potential of the company G/SCM/Q2/NOR/27 
 
- 4 - 
 
  The effect of the program is regularly evaluated and show that the program increases value added. 
Recent evaluations conclude with companies receiving support from the scheme "Research, development and innovation in the maritime indu stry" show increased economic growth rates in 
comparison with companies receiving support from other Innovation Norway scheme. The 
evaluation also shows that customers see this scheme as a good tool for increased value creation 
in the maritime industry."  
__________