G/SCM/Q2/EU/39  
 
22 October 2014  
(14-6094)  Page: 1/6  
Committee on Subsidies and Countervailing Measures  Original: English  
 
 SUBSIDIES 
REPLIES TO QUESTIONS FROM AUSTRALIA1 REGARDING THE NEW AND FULL 
NOTIFICATION OF THE EUROPEAN UNION2 
The following communication, dated 17 October 2014, is being circulated at the request of the 
delegation of the European Union.  
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  Page 32, 5. European Fisheries Fund (EFF) 
 
The EFF exists to support the EU's fisheries sector to adapt to ch anges required in the 
sector.  
 
 With reference to Axis 1, adjustment of the fleet, can the EU please specify the 
eligibility criteria for access to the fund?  
Reply 
 
There is not a single set of eligibility criteria fo r the whole of Axis 1. Rather, the EFF Regulation 
and the EFF implementing Regulation set eligibility conditions and other requirements per measure 
(permanent cessation, temporary cessation, etc.). That legal basis obliges Member States to give 
additional details in their operational programmes (OP) for the EFF (e.g.: the operational programme shall specify the method for calculating the scrapping premiums). OPs implement the 
policies and priorities to be co-financed by the E FF in each MS. OPs (and modifications thereof) are 
approved by the European Commission.   
 Could the EU please provide a list of projects that have received support 
in 2011-2012 under Axis 1? 
Reply 
 
That information is only available to Managing Authorities in the MS. In any event, in terms of 
numbers there are close to 77 000 operations co-financed by the EFF (1/1/2007 to 31/5/2013). 
Together they represent close to 75% of the tota l number of operations co-financed by the EFF. 
 
Axis 1 - Measure Number of operations 
(1/1/2007 – 31/5/2013)  
Permanent cessation (Article 23 of the EFF) 4 025 
Temporary cessation (Article 24 of the EFF) 54 826 
Investments on board (Article 25 of the EFF) 11 341 
Small-scale coastal fishing (Article 26 of the EFF) 3 059 
Socio-economic compensation (Article 27 of the EFF) 4 880 
 
 Who are the beneficiaries of funding for permanent ceasing of fishing activities 
under Axis 1? 
                                               
1 G/SCM/Q2/EU/32. 
2 G/SCM/N/253/EU. G/SCM/Q2/EU/39 
 
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  Reply 
 
"Fishermen and owners of fishing vessels established in the EU".    
 Could the EU elaborate on the compari son of aid for permanent ceasing of 
fishing activities with temporary ceasin g of fishing activities under Axis 1? 
Reply 
 
The EU understands that Australia is seeking the number of projects devoted to permanent ceasing versus temporary ceasing, and perhaps the corresponding amounts of support granted.  
Regarding permanent cessation, in terms of commitments, until 31 May 2013, EUR 486 million of 
EFF money were committed to scrapping (EUR 122 233 per operation). The national contribution amounted to a further EUR 329.9 million (EUR 82 957 per operation). The total public cost was 
EUR 205 190. 
 Regarding temporary cessation, by 31 May 2013, the number of operations was 54 826 (over 50% 
of the total number of operations). Public su pport per operation was EUR 6 397 (EUR 3 914 EFF 
and EUR 2 484 national public).  Page 36, 5.1 Common Organisation of Market s in Fishery and Aquaculture Products  
 
One of the five objectives of this instru ment is to support fishermen's incomes. 
 
 Could the EU please provide details of  eligibility criteria and guidelines 
supporting this objective?  
Reply 
 
Income support is not one of the objectives of th e EFF. The objectives of the EFF are listed in 
Article 5 - Assistance under the EFF shall aim to:  
(a) support the common fisheries policy so as to ensure exploitation of living aquatic resources 
and support aquaculture in order to provide su stainability in economic, environmental and 
social terms; 
 
(b) promote a sustainable balance between resources and the fishing capacity of the Community 
fishing fleet; 
 
(c) promote a sustainable development of inland fishing; 
 (d) strengthen the competitiveness of the oper ating structures and the development of 
economically viable enterprises in the fisheries sector; 
 (e) foster the protection and the enhancement of  the environment and natural resources where 
related to the fisheries sector; 
 (f) encourage sustainable development and the improv ement of the quality of life in areas with 
activities in the fisheries sector; 
 (g) promote equality between men and women in the development of the fisheries sector and 
fisheries areas. 
 
 How much support has been provided  in pursuit of this objective? 
Reply 
 
As income support is not an objective of the EFF, no support has been provided.  G/SCM/Q2/EU/39 
 
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  GERMANY (G/SCM/N/253/EU/ADD.10) 
 Page 3, 2 German Shipyards   
The subsidy scheme is said to support innovati on in existing shipbuilding, ship repair or 
ship conversion.   
 Could Germany please clarify the eligib ility criteria for this programme and 
provide a list of proj ects that have benefited from this scheme? 
Reply 
 
The subsidy scheme of the Federal Ministry for Econ omic Affairs and Energy is entitled Innovative 
Shipbuilding Safeguards Competitive Jobs.  
Innovation subsidies can be granted to existing shipbuilding, ship-repair and ship-conversion yards 
which are based and operate in the Federal Republic of Germany and which execute (parts of) a shipbuilding contract which involves the application of eligible shipbuilding innovations in the 
Federal Republic of Germany. 
 The subsidies are paid towards innovations within the meaning of the German subsidies guidelines. Eligible shipbuilding innovations are industrial applications of innovative concepts, products and 
processes which are new in terms of the technical st ate-of-the-art of the shipbuilding industry of 
the member states of the European Union.  
In detail, eligible shipbuilding innovations are: 
 1) New types of vessels: the development and design  of the first vessel of a potential series of 
new vessels or of a vessel, the new overall concept of which is suited to being used in future 
vessels (sustainability of the shipbuilding innovation), and where new components or new processes are used in this.   
2) New components and systems of a vessel: industrial application of individual innovative 
products including their implementation in vessels.   
3) New processes in shipbuilding: development and introduction of innovative processes and 
procedures for planning, design, manufacture, logistics.  
The Federal Government makes €12m p.a. available for the programme (2014: €14m); this 
funding allocation has never been fully utilised.   
ROMANIA (G/SCM/N/253/EU/ADD.22) 
 Page 31, 7.2 Regional Development, D. Law no 58/2010 for ratifying the Agreement of 
Guarantee between Romania an d European Investment Bank , signed at Bucharest on 
21 January 2010, on the guarantee in proportion of 80% of the obligations incurred from the Financing Contract between the European Investment Bank and SC FORD 
ROMANIA S.A. in amount of 400.000.000 euros fo r the modernization of Craiova facility.  
 The investment allows for the development of a new low-Co2 engine and subsequent 
production of vehicles with the engine. The overall project involves the Romanian plant 
and Ford Werke GmbH in Germany, where research and development activities are 
carried out.  
 Could Romania please clarify whether th ere are performance criteria for this 
guarantee? G/SCM/Q2/EU/39 
 
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  Reply 
 
On 7 August 2009, based on The Temporary Framework for State aid measures to support access to finance in the current financial and economic crisis, Romanian Ministry of Public Finance notified 
to the European Commission the state aid in the form of the state guarantee which covered 80% 
of an EIB loan in an amount of 400 million euros which has been granted to SC FORD ROMÂNIA S.A.  
 
The loan of 400 million euros granted by EIB was contracted by Ford for financing the modernization of the plant in Craiova.  
On the basis of the notification, the European Commission authorized the aid by Decision 
no. 478/2009 from 13 November 2009.  
As a result of improving the rating for Ford Mo tor Company by Standard & Poor's, Ministry of 
Finance has notified to the European Commission the change of the guarantee premium for the EIB loan. 
 
The European Commission issued Decision no. 680/2009 from 17 December 2009.  On 21 January 2010, Romania and the European In vestment Bank signed a Guarantee Agreement 
related to the guarantee of 80% of the obligations under the Financing Contract between the 
European Investment Bank and the SC FORD RO MÂNIA S.A of 400 million euros for modernizing 
the plant in Craiova. The guarantee was granted according to GEO No. 64/2007 on public debt, as 
amended and supplemented. 
 The obligations and performance criteria that SC FORD ROMÂNIA S.A must meet in relation to 
investment in Craiova are provided by Government Emergency Ordinance no. 109/2008
3, namely: 
 To achieve a total investment until 31.12.2012 in an amount of 869,09 million euros; To realize during 1 January 2013 – 31 December 2017 a production volume of 810.000 units of 
vehicles and, 1.500.000 units of engines respectively. 
 SC FORD ROMÂNIA S.A fulfilled its obligation on achieving the total amount of investment in 
Craiova. 
 If, between 1 January 2013 – 31 December 2017, th e output of SC FORD ROMÂNIA S.A is less 
than 810.000 vehicles, respectively 1.500.000 engines, according to art. 79 1 of GEO 
no. 109/2008, the aid will be recovered proportion ally to the degree of failure of production 
volumes.  
 Could Romania indicate when this engine is expected to come in production and 
provide forecasts for production of vehicles with this engine? 
Reply 
 
The low CO2 emissions EcoBoost engine production was launched in May 2012. Ford has targeted the production of 1.500.000 engines out of Craiova between 1 January 2013 and 
31 December 2017. Typically, around 0,1% of the engines will be for service use with the rest 
being installed directly into vehicles.  Page 32, 7.3 State aid granted for strength ening and modernizing the production of 
SMEs 
 
 Could Romania please provide details on  the eligibility criteria and whether 
there are any performance requirements? 
                                               
3 GEO no. 109/2008 on granting individual aid for re gional development, published in the Official 
Gazette of Romania, Part I, no. 439 of 28 June 2007, approved by Law 56/2009, as amended by Ordinance No. 5/2012. G/SCM/Q2/EU/39 
 
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  Reply 
 
Information about the Sectoral Operational Programme "Increase of Economic Competitiveness" 2007-2013 (SOP IEC): 
 
 The programme was approved by EC Decision C(2007) 3472 of July 12, 2007, further on 
amended by EC Decision C(2012) 2080 of March 27, 2012 and EC Decision C(2014) 363 of 
January 24, 2014. 
  The programme is financed from Structural Funds, more precisely European Regional 
Development Fund at a ratio of 85% ERDF and 15% Romanian State Budget. 
 
 The strategy comprises 4 Priority Axis (plus th e 5-th, Technical Assistance). PA 1 is mainly 
dedicated to SMEs and for the operations related to productive investment in SMEs the aid is 
granted on a State aid scheme. 
  The first version of the Scheme was based on Regulation (EC) no. 1628/2006 to apply 
art. 87 and 88 of the Treaty (Ministry of Econ omy Order no. 477/2008 regarding the approval the 
state aid scheme - XR 57/2008). The budget and validity period were planned for the whole programming period.  
 During the 2011 implementation year the Monitoring Committee for SOP IEC approved the 
increase of the Scheme's budget and because th e Regulation (EC) no. 1628/2006 to apply art. 87 
and 88 of the Treaty was repealed, a new scheme was issued based on Commission 
Regulation (EC) No 800/2008 of 6 August 2008 declaring certain categories of aid compatible with 
the common market in application of Article 87 and 88 of the Treaty (General Block 
Exemption Regulation) and according to the Regi onal map for state intensities approved for 
Romania 2007-2013 (Minister order 1055/24.05.2011). The validity of the new scheme was up to 
December 31, 2013, as the validity of the GBER Regulation. Because of the EC Decision of extension of the period till June 30, 2014, the scheme was amended accordingly.  
With reference to eligibility criteria , they are detailed within the Application Guide to which the 
Scheme is closely linked (The provisions of the Guide to be followed are mentioned within the Scheme, Minister order 1055/24.05.2011, at Chapter 5, Art. 10, Chapter 6, Art. 15 (7), 
Chapter XI, Art. 27 (7): 
  Eligibility of economic activities of the project (eligible NACE codes) Chapter 4, Art. 8 of the 
Minister order 1055/24.05.2011. 
  Eligibility of the beneficiary (undertaking) Chapter V, Art. 10-11. 
 
 Eligibility of activities Chapter VII, Art. 16. 
  Eligibility of expenditures is to be fulfilled according to Minister's order 184/21.01. 2008, 
Annex 1, regarding the approval of the eligible ex penditures list for Support for the strengthening 
and modernization of the productive sector through investments made by small and medium enterprises corresponding operation A). Support for the strengthening and modernization 
of the productive sector through investment s tangible and intangible, "Major area of 
intervention" 1.1 Productive investments and preparation for market competition to enterprises especially SMEs - Priority Axis 1- an innovative and eco-efficient production system from Sectorial Operational Programme "Increasing Economic Competitiveness". 
 
All the documents mentioned above (the Scheme in all versions, the eligibility list, the Application Guide), are published on the Managing Authority web site: http://amposcce.minind.ro/. 
 With reference to the performance requirements, they  are included in Chapter XI of the minister's 
order approving the scheme and refer to the eval uation criteria (approved by the Monitoring 
Committee) detailed within the Guide in the Evaluation grids. 
 G/SCM/Q2/EU/39 
 
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  Page 39, 7.10 State aid for strengthening and modernizing large enterprises 
 
 What is the definition of a large enterprise? 
 Could Romania please clarify whether there are performance requirements? 
Reply 
 
For the operations related to productive investment in large enterprises the aid is granted based 
on a State aid scheme similar to the one mentioned above for SMEs. The Scheme is approved by 
minister's order nr. 479/2008, as further on amended (the link on MA web site:   http://amposcce.minind.ro/fonduri_structura le/pdf/Ordin_1054_din_24_05_2011_modif_anexa_la
_479_din_20_02_2011_ref_Schema_aj_de_stat_i nvestitii_intrep_mari_30052011.pdf) 
 Within the Scheme, in Chapter V, Art.7 (b) the de finition of large enterp rise is as follows: 
 
A large enterprise is any enterprise that does no t comply with the SME's definition, according to 
the Annex to GBER.  
 
The same interpretation is given within the Application guide for this specific operation (the link on MA web site:  
http://amposcce.minind.ro/fonduri_structurale/pdf/Ghid_solicitant_pentru_intreprinderi_mari-
2011_24052011.pdf)  
 
 
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