WORLD TRADE  
ORGANIZATION  G/SCM/Q2/EEC/46 
14 December 2004 
 (04-5507) 
Committee on Subsidies  
and Countervailing Measures Original:   English/ 
 French/  Spanish 
 
  
SUBSIDIES 
 
Replies to Questions from the UNITED STATES
1 Regarding the New and Full  
Notification of the EUROPEAN COMMUNITIES (Austria, Belgium , 
Denmark, Finland, France, Germany, Greece, Italy, Netherlands , 
Portugal, Spain, Sweden, and the United Kingdom ) 
 The following communication, dated 28 October 2004, is being circulated at the request of 
the delegation of the European Commission. 
 
_______________ 
 
                                                      
1 G/SCM/Q2/EEC/43-G/SCM/Q2/EEC/43/Suppl.1 G/SCM/Q2/EEC/46 
Page 2  
 
EC Answers to the Questions from the United States Regarding
 
the New and Full Notification  
(European Communities)  
G/SCM/N/95/EEC 
 1. The United States understands that under the "fifth framework" the amount of funding 
provided to aeronautical and space activities is  €700m illion.  Is this figure correct?  What portion of 
this amount was devoted exclusively to aeronautical activities?  
Answer:  to be supplied. 
 2. Are non-EU entities eligible for assistance under this programme?  Are non-EU companies 
provided access to the results of the activities funde d by the framework programme?  If so, please 
provide examples.  Answer:  to be supplied. 
 
II. Fisheries 
 
Financial Instrument of Fisheries Guidance (FIFG)  
1. Based on our reading of regulation 1263/99 th e following types of activities are financed:  
(a) adjustment of fishing effort (grants for scrapping and creation of joint enterprises), fleet renewal and modernization of fishing vessels;  (b) investme nt in aquaculture, development of coastal areas, 
fishing port facilities, processing and marketing fish eries products (improving quality and hygiene, 
preserving the environment, developing statistical instru ments, etc.);  and, (c) other measures such as 
promoting and seeking new markets and activities by trade organizations (managing fishing quotas, 
temporary cessation of activity, etc.).  Is this correct?  2. Is all the assistance provided in the form of grants?  If not, please specify the type of aid provided based on the three categories listed above.  Answer to questions 1 and 2:  yes. 
 
3. How does the Community ensure that th e assistance provided does not increase fishing 
capacity, particularly with respect to assistance for scrapping, fleet renewal, modernization of fishing 
vessels and helping "young people . . . buy their first boat."? 
 
Answer to question 3: 
 
A simpler system for limiting the fishing capacity of th e EU fleet in order to reach a better match with 
available resources has been adopted.  It will rep lace the former system of Multi-annual Guidance 
Programmes (MAGPs) which has proved to be ineffec tive at tackling the overcapacity of the EU fleet.  
The new system will give more responsibility to  the Member States to achieve a better balance 
between the fishing capacity of their fleets and th e available resources.  It includes the following 
measures: 
 
 - reference levels will be set based on the MAGP levels set for 31 December 2002.  The 
reference levels will be automatically  and permanently reduced whenever any 
capacity is withdrawn with public aid.  (If  a vessel is withdrawn with public aid the 
reference levels will be reduced  by and equivalent capacity); 
  G/SCM/Q2/EEC/46 
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 - for each gross registered tonne introduced  in the fleet with public aid (which will 
only be available for the next two years, 2003 and 2004), Member States will have to decommission, without aid: 
 
 (a) an equivalent amount of capacity (1:1  entry/exit ratio) for vessels up to 100 GT 
(gross registered tonnes) or 
  (b) 1.35 tonnes (1: 1.35 entry/ exit ratio) for vessels over 100 GT; 
 
- over the period 2003 - 2004, Member States that grant public aid for the 
renewal of the fleet, will have to reduce the overall capacity of their fleets by 
a minimum of 3 per cent compa red to their reference levels; 
 
- it will be up to Member States to ensure that the total fishing capacity of new 
vessels entering the fleet does not exceed the capacity of those being 
permanently removed and that fishing c apacity is adjusted to the available 
fish resources. 
  Aid for the renewal of fishing vessels is being phased out and will only be available for two 
more years (up to the end of 2004) and only for vessel s under 400 GT.  It will be restricted to Member 
States which have met their overall MAGP IV capacity targets and its allocation will have to comply 
with the entry/exit ratios described above.  This  two-year plan will allow these Member States to 
continue modernising their fleets while sending a clear signal that no more such aid, which can 
contribute to overfishing, will be available after 2004.   Aid for modernisation of fishing vessels will only be  available for vessels that are at least five 
years old to improve safety, product quality or wo rking conditions, switch to more selective fishing 
techniques or to equip vessels with the VMS (Vessel M onitoring Systems).  When the modernisation is 
to improve safety, product quality or working cond itions, an increase in tonnage will be possible but 
only for improvements on the vessel's superstruct ure (over the main deck).  However, such 
modernisation must not increase the ability of the ve ssel to catch fish.  EU aid will be restricted to 
Member States which have met their overa ll capacity targets set under MAGP IV. 
 
 A € 32 million "scrapping fund" has been est ablished, to help Member States achieve 
additional reductions in fishing effort required under recovery plans.  Vessels whose fishing effort has 
to be reduced by 25 per cent or more as a conseque nce of a recovery plan will be eligible for aid from 
this fund; premiums will be 20 per cent higher t han those available for decommissioning under FIFG. 
 
 The Commission’s “Fisheries” web pages prov ide comprehensive information on the new 
Community’s funding policy for the fisheries sector.  These pages can be consulted at the following 
address:  http://europa.eu.int/comm /fisheries/reform/index_en.htm
 
 
III. Environmental Tax Rebates 
 
1. To what extent do Member States provide exemptions from energy/environmental taxes for 
“dual use” products (e.g., coking coal) or energy intensive processes (e.g., metallurgical processes). 
 
Answer: 
 
To the extent that such exemptions  are specific subsidies they have been notified in the EC’s New and 
Full notification, such as United Kingdom:  Climate Change Levy - Exemption for Certain Secondary 
Recycling Processes, Ireland:  Aughinish Alum ina Relief and Sweden:  Energy Tax Concession. G/SCM/Q2/EEC/46 
Page 4  
 
Questions from the United States Regarding the New and Full Notification
 
(European Communities - Austria)  
G/SCM/N/95/EEC/Add.1 
 
Assistance pursuant to Chapter 27A of the Labour Market Promotion Act (LMPA) 1969 as 
amended in 1994  
 
1. What are the eligibility criteria to receive the benefits under this programme? 
 
 Benefits (§ 27a AMFG) are granted to sma ll and medium-sized enterprises;  definition 
according to EU-rules.  
 The eligibility criteria are: 
 
• labour market criteria (such as the import ance for the labour market;  to create and 
maintain employment with a higher level of qualification;  structure and development 
of unemployment, such as long-term unemployment etc.); 
 
• macroeconomic criteria (structural relevance of the project, such as the innovation 
level, development of demand etc.); 
 
• microeconomic criteria (such as the plausib ility of the concept of the management, 
positive prospects of the project etc.). 
 
2. How is it determined what type of aid (cash gran ts, soft loans or guarantees) will be provided 
to the recipient? 
 
 In general, the type of aid (cash grant , soft loan or guarantee) is determined by 
microeconomic criteria of the individual enterprise. 
 
ERP-Technology Programme
 
 
1. What stage of research does this programme fund? 
  The programme supports mainly basic i ndustrial and applied R&D projects, however, 
fundamental R&D is not excluded per se. 
 
2. What type of industries benefit from this programme? 
 
 There is no restriction to particular enterpri ses in certain industries – so depending on the 
applications there exists a wide range of aid beneficiaries within the manufacturing and the 
production-related service industries. 
 
ERP-Regional Programme
 
 1. What are the “National Assisted Areas” within Austria? 
 
 National assisted areas are regions eligible  for regional aid (correspond. to Art. 87 (3)(a) 
and (c) of the Treaty).  The regions are laid dow n in the assisted areas map stipulated with and 
agreed by the European Commission. 
 
 Please find a detailed list of the regions at our homepage www.erp-fonds.at
 under downloads 
"Regionalfördergebiete".  G/SCM/Q2/EEC/46 
 Page 5 
 
 
 2. What types of industries benefit from this programme? 
 
 Generally speaking, there is no restriction to par ticular enterprises in certain industries – so 
depending on the applications there exists a wide ra nge of aid beneficiaries within the manufacturing 
and the production-related service industries.  Restric tions exist insofar as they are laid down in the 
Guidelines of EC for regional aid.  
3. Which industries received “pertinen t subsidies” above five million? 
  There were no companies receiving a cash grant equivalent (subsidy) above EUR five million in 2003. 
 
Assistance by ECO Plus Lower Austrian Regi onal Development Agency, Ltd. to Regional 
Investment Projects in Lower Austria  
 
1. What are the eligibility criteria for receiving s ubsidies under this programme and to whom is 
this subsidy provided, i.e. , which industry sectors? 
 
 The criteria are: 
 
• regional-economical effects:  new or mainta ined jobs, creation of value, innovation, 
lastingness; 
 
• compatibility with regional planning; 
 
• regional participants. 
  The subsidy is provided to municipalities, small and medium-sized enterprises, local or 
regional associations.  
  The main sectors are:  tourism (hotels, ski areas, amusement parks), culture (theatres, 
museums), telecommunication (broadband) , infrastructure (airfields, ports). 
 
 The promotion of enterprises in industry & trade is done by the department of economic 
development of Lower Austria. 
 
2. Please explain what the “two-step procedure” is , which results in a specific recommendation 
by the Regional Government of Lower Austria. 
  The final decision is made by the Regional Government of Lower Austria on the basis of a funding/promotion-recommendation of Eco Plus.  The recommendation-process itself has the 
following steps:   
• evaluation by a project-evaluator of Eco Plus incl. external experts; 
 
• decision by a council of civil servants incl. Chamber of Commerce; 
 
• decision by the Eco Plus supervisory board; 
 
• decision by the Regional Government of Lower Austria. 
 G/SCM/Q2/EEC/46 
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Regional Investment Promotion Programme
 
 
1. What are the eligibility criteria for receiving subsidies under this programme and to whom is 
this subsidy provided, i.e. , which industry sectors? 
 
• Eligible costs are:  capitalized exp enditures and company produced additions to 
plants and equipment - conform with the current trade licence - which are put on the assets. 
 
• Building costs and max. five per cent planning  cost of the total eligible costs. 
 
• Costs for patent or licences – wh ich are also put on the assets. 
 
 The whole project costs have to  exceed the yearly depreciation. 
  Only those project costs are eligible which ari se after the time of applic ation for the pertinent 
subsidy (date). 
 
• Supported industry sectors in 2003 were:  mi ning, food industry, clothing industry, 
leather goods, woodworking, paper and board industry, print-industry, engineering, 
chemical industry, vulcanised rubber, metal production and machinery, electronics and optics, vehicle construction industry, fu rniture, sport and toys industry, recycling 
industry, building industry, maintenan ce and repair of cars, traffic and news 
transmission, services. 
 
2. How is it determined what type of aid (cash grants , soft loans or interest rate subsidies) will 
be provided to the recipient?  Is the appli cation process the same for each type of aid? 
 
• The "Regional Investment Promotion Programme " provides soft loans or interest rate 
subsidies.  Soft loans are granted for building projects, e. g. structural works/measures, and interest rate subsidies are granted for equipment investments, 
trucks (except trucks fo r the carrying-trade) and office equipment. 
 
• Yes, the application process is the same for each type of aid. 
 
Lower Austrian Participation Model
 
 1. What are the eligibility criteria for receiving subsidies under this programme and to whom is 
this subsidy provided, i.e.
, which industry sectors? 
 
• Eligibility criteria are:  Good economic sense and in line with the structural policy, 
legal compliance, clear strategic objectives / business plan, supra-regional competitiveness, Creditworthiness and re liability, Small and medium-sized 
enterprises, fulfilment of subsidy focus ( business foundation, launching of commercial 
units, start ups, strategic investments, me rgers and acquisitions, internationalisation). 
 
• Industry sectors:  manufacture, trade, tourism, traffic. 
 
2. Under what circumstances is reimbursement required?  Are the reimbursement criteria the 
same for each project? 
 
• The Lower Austrian participation model provides SME with long term silent 
partnership capital.  The capital has to be repaid according to the participation  G/SCM/Q2/EEC/46 
 Page 7 
 
 
contract.  In case of offence against the participation contract, it has to be 
reimbursed prematurely. 
 
• In general, the reimbursement crit eria are the same for each project. 
 
Programme to Promote the Establishment of Enterprises  
 
1. What are the eligibility criteria for receiving subsidies under this programme and to whom is 
this subsidy provided, i.e. , which industry sectors? 
 
• Eligible costs are:  capitalized exp enditures and company produced additions to 
plants and equipment - conform with the current trade licence – which are put on the 
assets. 
 
• Building costs, max. five per cent planning cost of the total eligible costs. 
 
• Costs for patent or licences – which are put on the assets. 
 
• Structural expenditures and equipment expe nditures are eligible in connection with 
new technologies, product innovations, high industrial services, creation of qualified 
jobs and value added. 
  The whole project costs have to  exceed the yearly depreciation. 
  Only those project costs are eligible which arise after the time of application for a subsidy 
(date). 
 
• Supported industry sectors in 2003 are:  food industry, clothing industry, 
woodworking, paper and board industry, pr int-industry, construction industry, 
engineering, chemical industry, vulcanised rubber industry, electronics and optics, metal production and machinery, electronic and optics, vehicle construction industry, 
furniture, sport and toys industry, recycling. 
 
2. How many projects took place inside and outside the “assisted areas”? 
 
 In the year 2003, there were five projects outside  the “assisted areas“ and 24 projects inside 
the “assisted areas“ of Lower Austria. 
 
Promotion of Market Exploration
 
 
1. What are the eligibility criteria for receiving subsidies under this programme and to whom is 
this subsidy provided, i.e. , which industry sectors? 
 
• Target:  to support the costs of SME for launching their new or already existing 
products into new foreign markets (there mu st not be any sales volume before). 
 
Eligible costs are:  costs fo r basic research of the target  market, costs of market analysis 
(strengths/weaknesses/competitors/price policy/di stribution channel/legal restrictions), costs 
of translating. 
 
Travelling expenses into the target country limite d to 20 per cent of the total eligible project 
costs but only up to the max. absolute amount of € 7.000,--. 
 G/SCM/Q2/EEC/46 
Page 8  
 
• Supported industry sectors in 2003 were:   maintenance and repairs of cars, 
engineering, food industry, chemical i ndustry, electronics and optics, building 
industry. 
 
2. Could Austria please explain what is meant by “enhanced measures of internationalisation”? 
 
• It is given a forced support for SMEs in  case of their very first steps to 
internationalisation.  The eligibility cr iteria for receiving this support are noted 
above. 
 
3. Are the benefits under this programme export contingent?  If so, please explain how this 
programme is in compliance with Article 3 of  the Agreement on Subsidies and Countervailing 
Measures (Subsidies Agreement). 
 
• No, they are not export contingent
. 
 
Impulse Package Tyrol 1999-2006  
 1. What types of large industries receive aid under this programme?  What are the eligibility 
criteria for large industries? 
 
Large enterprises are promoted only if they in vest in research and development and / or if the 
investment location is situated in the national regional assisted area. 
 
2. What types of research activities are funded under this programme? 
 
Research, development and production transition pr ojects (including prototypes, pilot and 
demonstration projects) are subsidized if these pr ojects lead to the production and utilization of 
substantially improved products , production procedures and / or services.  R&D projects by large 
enterprises must go beyond the norma l research work of the company.  G/SCM/Q2/EEC/46 
 Page 9 
 
 
Questions from the United States Regarding the New and Full Notification  
(European Communities - Belgium ) 
G/SCM/N/95/EEC/Add.2 
 
 I. BRUSSELS - CAPITAL REGION 
1. Prototype Advances 
(a) Would you please list the industries represented by the 13 enterprises who were recipients of 
aid under this programme during the reporting period?   (a) In 2002, 13 precompetitive developmen t projects were subsidized in the  
Brussels-Capital Region:    - 7 projects in the ICT sector (information and communication technologies); 
 
 - 4 projects in the technological industry sector; 
  - 2 projects in the chemical and pharmaceutical sector. 
 
 By virtue of the new legal provisions rela ting specifically to the Brussels-Capital Region 
(Ordinance of 21 February 2002), enterprises may opt either for repayable advances or for 
non-repayable subsidies.  In the latter case, the regional intervention rate in the research budget is 
15 per cent lower than that applic able to repayable advances. 
  Of the precompetitive development projects to which financial support was accorded in 2002, 
eight received repayable advances and five were gr anted a subsidy (non-repayable, unless the 
enterprise leaves the Region).  The projec ts that received advances are as follows: 
  - 4 projects in the ICT sector;   - 3 projects in the technological industry sector;  
 - 1 project in the chemical and pharmaceutical sector.  
(b) This programme states that loans are repayable upon marketing.  Would you please provide information as to, on average, what percentage of aid under this programme is repaid to the 
government? 
 
 (b) The clauses on methods of repayment set forth in the agreements are strictly 
observed.  The revenue accounting officers are liable,  through their own a ssets, for the strict 
enforcement of the repayment procedures.   The enterprises are requested each year to establish the amount that is to be repaid, taking 
into account the turnover generated by the product.  Any failure to repay must be justified either by a 
failure to market the product (unfavourable trend in  demand because the project no longer meets the 
needs of the market) or by the bankruptcy of the company.   As long as the advance has not been fully repaid and the product whose development has 
been financed is generating sales, the enterpri se is required to make a repayment each year.  
Consequently, it would be necessary to look back ov er a period of 20 years to establish the definitive 
average repayment rate.  (For example, one en terprise repaid in 2004 the balance of a repayable 
advance granted in 1985). G/SCM/Q2/EEC/46 
Page 10  
 
 
 The current average repayment rate is between 25 per cent and 50 per cent of the total of the 
advances granted, but it changes each year in a ccordance with the comm ercial success of the 
products. 
 
II. BELGIUM – WALLOON REGION 
1. Decree of 5 July 1990 on Aid and Action by  the Walloon Region to Promote Research 
and Technology and Implementing Orders Thereof 
(a) Would you please provide information as to wh at proportion of aid under this programme is 
provided to the civil aviation sector? 
 
 II.1.a. Civil aviation sector:  to be supplied  
  II.1.b. Repayment of advances  
(b) Under what conditions is aid under this progr amme repaid to the government.  Also, please 
explain, on average, what proportion of aid under this programme has been repaid.  
 To be supplied 
 
 II.1.b. Repayment of advances :  to be supplied 
 
(c) Would you please explain the type of evaluation that is made of a project to determine whether the "quality of the project" is sufficient to receive aid under this programme.  Specifically, 
what factors are evaluated under this analysis?   To be supplied 
 
III. BELGIUM – FLEMISH REGION 
1. Law of 30 December 1970 on Economic Growth 
(a) Would you please list the main industries that have benefited from assistance under this 
programme?  In particular, please explain whether the steel industry has directly or indirectly 
benefited from this programme. 
 
 During the period in question, based on the Law of 30 December 1970, the steel industry has 
received no investment aid from the Flemish region.  
 Under the Law of 1970, the following sectors have benefited:  
 - NACE 34:  construction and assembly of mo tor vehicles, trailers and semi-trailers 
(22.2 per cent); 
  - NACE 25:  manufacture of rubber a nd plastic products (10.3 per cent); 
 
 - NACE 17:  textile industry (8.7 per cent);   - NACE 28:  manufacture of fabricated metal products (5.7 per cent);  
 - NACE 20:  manufacture of wood and of products of wood and cork, except furniture;  
manufacture of articles of straw and plaiting materials (5.6 per cent);  G/SCM/Q2/EEC/46 
 Page 11 
 
 
  - NACE 32:  manufacture of radio, television and communication equipment  
(5.6 per cent); 
  - NACE 31:  manufacture of electrical machinery and apparatus (5.1 per cent); 
 
 - NACE 15:  manufacture of food products and beverages (4.6 per cent);   - NACE 24:  manufacture of chemical products (4.1 per cent);  
 - NACE 29:  manufacture of machinery and equipment (3.7 per cent); 
  - NACE 21:  manufacture of pulp, pape r and paper products (3.4 per cent); 
  - NACE 45:  construction (2.9 per cent); 
 
 - NACE 22:  publishing, printing, reproduction (2.6 per cent).  
2. Aid to the Fisheries and Aquaculture Sector 
(a) Would you please explain whether this progr amme takes into consideration over-capacity 
when providing assistance to the fisheries industry? 
 
 FIVA aid, granted by Flanders to the fish eries and agriculture sectors, takes account of all 
the European guidelines in this field.   Belgium (Flanders) has always pursued a poli cy that seeks to determine fleet capacities on 
the basis of the guidelines of the multi-annu al guidance programmes (MAGPs) or successive 
reference levels.   As a result of changes in fleet capacity and the earlier decisions concerning fleet modernization, the guidelines were slightly exceeded in 2002-2003, mainly with regard to 
BT (+ ca. 700 tonnes).  That gave rise to a lim ited scrapping programme, in conformity with the 
terms of Regulation (EC) No.  2792/1999 (2369/2002) which was applicable at that time.  
IV. BELGIUM – FEDERAL STATE 
1. Aid for Research and Development 
(a) Main industries that have benefited 
 
 Construction, textiles, wood, technolog y, metals, ceramics, road construction. 
 
(b) Stages of R&D, what costs are covered 
 
 This programme covers mainly applied researc h; costs covered are capital expenditure, 
labour and other current costs. 
 V. AID TO CIVIL AVIATION 
 In response to US questions regarding this programme in previous years, Belgium has not 
disputed that launch aid has been provided to the aerospace industry and has simply asserted that such 
aid does not constitute a subs idy because it is repayable. 
 G/SCM/Q2/EEC/46 
Page 12  
 
(a) Is it Belgium’s position that the repayable ai d provided cannot be considered a subsidy under 
the Subsidies Agreement regardless of the terms and conditions under which such aid is provided?  If 
so, please explain.  
 To be supplied 
 (b) Please describe in detail the amounts of launch aid provided in 2002, the dates the aid was 
provided, the terms and conditions under which the aid was provided a nd the aircraft models to which 
the aid was related.   To be supplied  
(c) Please provide the sales projections which th e Government of Belgium relied upon prior to 
the provision of any launch aid for each of the rele vant aircraft models which benefited in 2002. 
  To be supplied.  G/SCM/Q2/EEC/46 
 Page 13 
 
 
Questions from the United States Regarding the New and Full Notification  
(European Communities – Denmark)  
G/SCM/N/95/EEC/Add.3 
 
VI. FISHERIES 
1. Permanent Withdrawal 
 Would you please explain what is done with pr oductive capacity (i.e., ships) when owners 
take advantage of the aid provide d under this programme?  Specifically, are ships scrapped or are they 
resold?   In most cases ships are scrapped.  In a few cases vessels are declar ed to be of historic value.  
For these vessels a contract is set up to ensure they are maintained and kept in a proper state.  In all 
cases aid is not finally paid until the vessel has be en deleted from the fishing vessel register which 
means it loses all entitlement for commercial fishing.  
2. Aid for Young Fishermen 
 Would you please explain whether this progra mme takes into consideration overcapacity 
when providing assistance?  
 Aid is given for the first acquisition of a commercial fishing vessel.  If the vessel is new or 
imported the fisherman must take out of the fleet at least the same capacity measured in GT and kW. 
 
VII. THE DANISH MINISTRY OF ECONOMIC  AND BUSINESS AFFAIRS, DANISH 
MARITIME AUTHORITY 
1. Subsidies in the Form of Reduction/Cancellation of Stamp Duty 
 Would you please explain what conditions must be met for a ship to receive tax exemptions 
under this programme? 
 
 Denmark operates a shipbuilding subsidy sch eme:  Den midlertidige kontraktbetingede 
driftsstøtteordning (Temporary defensive contract  related subsidy scheme).  Bill No. 305 from 
30 April 2003.  
 Under the scheme a subsidy can be paid as a grant  of up to 6 per cent of the contract value 
within an overall budget of 575 million DKR.  The grant is paid no sooner than at the time a ship is 
delivered to the owner/shipper.    Grants may be given to building of new cont ainerships, chemical tankers, product tankers 
and LNG carriers contracted within the period 1 Jan uary 2003 to 31 March 2004.  The ships must be 
delivered no later than three years after final contract.    The purpose of the subsidy scheme is to support shipbuilding at Danish shipyards. 
  The scheme has been approved by the EU Comm ission in accordance with Council Decision 
No. 1177/2002 from 27 June 2002.   G/SCM/Q2/EEC/46 
Page 14  
 
2. Contract-Subsidy Scheme 
 Would you please explain what conditions must be met for a shipyard to receive subsidies 
under this programme?  
 The duty to pay a fee (stamp duty) on documents of ownership does not only relate to 
ownership to merchant vessels, but also to own ership on property such as a house.  The general 
principle behind the legislation is to levy a fee on the registration of the transfer of ownership or title. 
  When the reduction of stamp duties for ship s was introduced the fee was applied on the 
issuance of a document of transfer of ownership such as  a Bill of Sale, which is similar to a deed on a 
house.  The fee is levied when a shipowner regi sters a ship under the Danish flag or transfers the 
ownership/title to the ship (sells a ship), which is already registered in Denmark.  The fee is 
calculated on the basis of the sales price and is now currently a registration fee or tax on these types 
of documents when or if the docum ent is registered in Denmark. 
 
 As the fee is a registration fee foreign shi powners are exempted from paying the fee unless 
they register a ship under Danish flag.  The cer tificate (builder’s certificate) as documentation of a 
ship built for and on behalf of a foreign shipowner or a Danish shipowner at Danish shipbuilding yards is exempted from the fee as mentioned in th e Danish notification of this measure.  The same 
goes for similar documents issued  by a foreign shipbuilding yard.  G/SCM/Q2/EEC/46 
 Page 15 
 
 
Questions from the United States Regarding the New and Full Notification  
(European Communities - Finland)  
G/SCM/N/95/EEC/Add.4 
 
State Aid for the Internationalization of SMEs  
 
1. Would Finland please explain what is meant by "internationalization skills"? 
 
 “Internationalization skills” refer to the knowledge and skills requi red from SMEs for 
mapping out the conditions of starting or develop ing business in foreign markets.  In practice, 
internationalization skills comprise knowledge of foreign markets and of the market potential of 
various target areas, of the structure of dem and and the anticipated development of demand, and of 
the properties required from products on those spec ific markets.  Interna tionalization skills also 
comprise developing the company’s business practic es, such as marketing skills, communication and 
negotiation skills, and skills relating to inform ation gathering and business planning that are 
necessary for a successful internationalization of enterprises or successful operations outside the 
home market.  The state aid is not in any way conti ngent on a company’s exports or the volume of 
exports. 
 
2. Are the benefits under this programme expor t contingent?  If so, please explain how this 
programme is in compliance with Article 3 of  the Agreement on Subsidies and Countervailing 
Measures (Subsidies Agreement). 
 
 No, they are not export contingent. 
 
Investment aid  
 
1. Which areas qualify as "regional deve lopment areas" under this programme? 
 
 The Government can declare the least develope d areas in the country “development areas” 
because of their level of development and developmen t needs.  Development areas are divided into 
support areas I, II, and III.  Regional development areas are defined according to the EC state aid 
rules (Regional aid guidelines).  
2. What are the eligibility criteria for receiving subsidies under this programme and to whom is 
this subsidy provided, i.e.
, which industry sectors? 
  The objective of investment aid is to promote such investment projects improving the competitiveness of businesses that c an be expected to considerably contribute to the improvement of 
the standard of products and production, productiv ity, internationalization, employment or the 
economic and industrial structure. 
 
 Funding for investment projects can be gr anted for business activities, excluding businesses 
operating in agriculture and forestry and in the fishing i ndustry.  As far as projects involving steel or 
coal industry, shipbuilding, synthetic fibres, moto r vehicle manufacturing or the transport sector are 
concerned, also the separate provisions of the Co mmunity legislation on gran ting State aid shall be 
applied to the above sectors. 
 
 Funding for investment projects can be granted  for investments in fixed assets when the firm 
is starting or expanding its operations.  Funding c an be granted for purchase of assets, such as 
machinery and equipment, buildings a nd the pertaining land areas.  
  A precondition for granting investment aid is that a firm is deemed to be capable of 
continuous profitable operations.  Another prec ondition is that when a firm is expanding its G/SCM/Q2/EEC/46 
Page 16  
 
operations or modernizing its fixed assets, this is  expected to essentially increase the number of jobs 
or value added of production or services at the operational unit involved. 
 
Investment Aid Programme Related to Pro cessing and Marketing Agricultural Products
 
 1. Would Finland please explain what is meant by "promotion of the enterprise’s 
internationalization"?  
 Investment aid can be granted for projects improving the competitiveness of the firms 
processing agricultural products, primarily to small and medium sized enterprises.  The objective is 
to raise the standard of a firm’s products and pr oduction, business management, marketing skills and 
promote internationalization and prod uctivity of labour.  So the internationalization can be one of the 
objectives, which shall be considered to support the granting of the aid. 
 
2. Are the benefits under this programme expor t contingent?  If so, please explain how this 
programme is in compliance with Artic le 3 of the Subsidies Agreement. 
 
 No, they are not export contingent.  G/SCM/Q2/EEC/46 
 Page 17 
 
 
 
Questions from the United States Regarding the New and Full Notification  
(European Communities – France)  
G/SCM/N/95/EEC/Add.5 
 
1. Tax Credit to Promote Research 
 
(a) Would you please list the main industries that have benefited from assistance 
provided under this programme? 
(b) Please provide information regarding the stages of R&D encompassed under this 
programme and what costs are covered by this assistance. 
Reply: 1.  Tax credit to promote research 
 
List of main industries that ha ve benefited from this measure  
 
 All industrial sectors benefit from the system of tax credits to promote research, in particular, 
the electrical and electronic industry, the automotive industry, the chemical industry, the engineering 
industry and the textile industry.  The various stages of the research and development pr ocess coming within the scope of the tax credit 
to promote research and costs eligible under this regime.  
 
Definition of research activities 
 
 The scientific or technical research activities e ligible for tax credits to promote research are 
defined by Article 49 septies F of Annex III of the General Taxation Code and come under three 
categories:  basic research, applied research and e xperimental development activ ities.  This definition 
is in line with that used by the OECD (Frascati Manual).   Basic research seeks to make a theoretical or experimental contribution to solving technical 
problems and involves the analysis of properties, structures and physical and natural phenomena with a view to organizing, by means of explanatory sc hemas or interpretative theories, the facts that 
emerge from such an analysis. 
  Applied research, on the other hand, seeks to id entify the possible applications of the findings 
of basic research or to find new solutions that w ill enable the enterprise to  attain a predetermined 
objective.  The outcome of applied research is therefore a demonstration model of a product, 
operation or method. 
  Finally, experimental development operations are activities which are carried out through the 
use of prototypes or pilot installations, in order to  assemble all the information necessary to provide 
the technical basis for decisions, with a view to producing new materials, devices, products, processes, systems or services or with a view to their substantial improvement.  Substantial 
improvement means innovative change as opposed to change arising merely from the use of the 
existing technique.  
Expenditure covered by the ta x credit to promote research 
  Expenditure giving entitlement to the tax credit to  promote research is defined in Article 244 
quater B of the General Ta xation Code.  It covers: 
 
• The funds allocated to the amortization of fixed assets used for research; G/SCM/Q2/EEC/46 
Page 18  
 
 
• staff costs relating to researchers and research technicians; 
 
• operating costs listed as being for research operations; 
 
• expenditure relating to research operations carried out outside the enterprise by public 
research organizations, registered privat e research bodies, universities and approved 
scientific or technical experts. 
  In assessing the tax credit, in accordance with  the administrative regulations, the following 
are also taken into account:  
• the costs involved in taking out and retaining patents; 
 
• the standardization costs for the products of the enterprise; 
 
• expenditure relating to the development of new collections displayed in the industrial 
enterprises of the textile-clothing-leather sector and similar expenditure on fashion 
designers or registered fashion design offices. 
 
2. Industrial Innovation Fund (FII) 
 
 (a) Would you please list the main industries that have benefited from assistance 
provided under this programme? 
  (b) Would you please provide information as to what percentage of the repayable 
advances provided under this programme have actually been repaid to the 
government? 
 
Reply: 2. Industrial Innovation Fund (FII)  (former title of the Fund for Business 
Competitiveness) 
 
 (a) The main industries that have benefited.    The main sectors that have benefite d are the new information and communication 
technologies, the life sciences and sustainable development. 
 
 (b) Percentage of repayments made (on advances). 
   The repayable advances represent only part  of the budget of the Fund:  40 per cent in 
2000, 36 per cent in 2001, 31 per cent in 200 2.  The advances due for repayment in 
those years of course correspond to advances made in previous years and thus there is 
no significant correlation between advances and repayments in any given year.  
However, it is generally the case that on average the repayment rate is between 
20 per cent and 25 per cent, which is largely explained by the fact that the research often takes place well upstream. 
 
3. National Agency for the Promotion of Research (ANVAR) 
 
 (a) Would you please list the main industries that have benefited from assistance 
provided under this programme? 
  G/SCM/Q2/EEC/46 
 Page 19 
 
 
 (b) Would you please provide information as to what percentage of the repayable 
advances provided under this programme have actually been repaid to the 
government? 
 
Reply:  3.  National Agency for the Promotion of Research (ANVAR) 
 
 (a) The main industries that have benefited.    The main industries that have benefited ar e, in decreasing order of the sums allocated 
to enterprises in these sector s, information technologies, the life sciences, the basic 
industries and the construction industr y, capital goods and consumer goods. 
  (b) Percentage of repayments made (on advances).    On average, the repayment rate is 55 per cen t.  It should be noted that the advances 
are converted into subsidies in the event of failure of the research project.  However, 
even in such cases, part of the advan ce must be repaid (10 per cent) by the 
beneficiary, under the heading of technology acquisition. 
 
4. Aid to Research Institutions in the Civil Aviation Sector 
 
Civil Aviation Research 
 
 (a) Please explain what the specific eligibility criteria are to receive funding under these 
programmes. 
 
 (b) Are non-French or non-EU companies e ligible?  Are the research results in all 
instances proprietary, or are they made available to the public? 
  (c) How are aerospace manufacturers involved in this research?  How do they benefit 
from it? 
 
Response:   to be supplied. 
 
5. Launch Aid 
 
 In response to US questions regarding this programme in previous years, France has not 
disputed that launch aid has been provided to the aerospace industry and has simply asserted that such 
aid does not constitute a subs idy because it is repayable. 
  (a) Is it France’s position that the repayabl e aid provided cannot be considered a subsidy 
under the Subsidies Agreement regardless of the terms and conditions under which such aid is provided?  If so, please explain. 
 
 (b) Please describe in detail the amounts of launch aid provided in 2002, the dates the aid 
was provided, the terms and conditions under which the aid was provided and the 
aircraft models to which the aid was related. 
 
 (c) Please provide the sales projections which the Government of France relied upon 
prior to the provision of any launch aid for each of the relevant aircraft models which benefited in 2002. 
 Response :  to be supplied. 
 G/SCM/Q2/EEC/46 
Page 20  
 
6. Funding for A380 production and infrastructure 
 
 The United States understands that, during the current reporting period, various levels of 
governments within France are providing approxima tely €150 million for improvements necessary for 
the transport of outsized Airbus A380 components between Langon and Toulouse, France.  In 
addition, it is our understanding that the government of France has also supplied Airbus with 
infrastructure support in the areas of Nantes and T oulouse. For example, the Government of France 
reportedly provided funding of €125  million for a new urban development project in the Toulouse 
area, most of which reportedly was for the building of a large assembly plant that will accommodate 
the Airbus A380.  Further, information indicates th at the Airbus facility in  Nantes was expanded for 
the A380 and other Airbus programmes at a cost of FF1.1 billion ($147 million). 
  (a) Would you please confirm whether the above information is correct?  If not, please 
provide the correct figures. 
 
 (b) Please explain why this assistance to the aerospace industry does not qualify as 
notifiable under Article 25 of the Subsidies Agreement.  If it does qualify as notifiable, please provide the information required under Article 25. 
 Response :  to be supplied. 
  G/SCM/Q2/EEC/46 
 Page 21 
 
 
Questions from the United States Regarding the New and Full Notification  
(European Communities - Germany)  
G/SCM/N/95/EEC/Add.6 
 
I. REDUCTION OF RATES ON INHERITABLE LAND-USE RIGHTS (BERLIN) 
1. The description of this programme states that  a reduction of the rates payable on land-use 
rights is provided to projects "worthy of speci al promotion".  Would you please explain what 
types of projects are "worthy of special prom otion" and what "regional promotion purposes" 
entails? 
 Response: 
 
Reduction of ground rent to three to five per cent for projects of the manufacturing industry 
which are particularly eligible for assistance depende nt on the extent of the utilization of buildings.  
 II. NATIONAL PROGRAMME FOR CIVIL AERONAUTICAL RESEARCH 
1. Please explain what the specific eligibility criteria are to receive funding under this 
programme.  Are non-EU or non-German  entities eligible for funding? 
 Response :  to be supplied. 
 
2. Are the research results in all instances proprieta ry, or are they made available to the public? 
 Response:   to be supplied. 
 4. How are aerospace manufacturers involved in th is research?  How do they benefit from it? 
 
Response:  to be supplied. 
 
III. LAUNCH AID 
 In response to US questions regarding this programme in previous years, Germany has not 
disputed that launch aid has been provided to the aerospace industry and has simply asserted that such 
aid does not constitute a subs idy because it is repayable. 
 1. Is it Germany’s position that the repayable ai d provided cannot be considered a subsidy under 
the Subsidies Agreement regardless of the te rms and conditions under which such aid is 
provided?  If so, please explain. 
 
Response:  to be supplied. 
 2. Please describe in detail the amounts of launc h aid provided in 2002, the dates the aid was 
provided, the terms and conditio ns under which the aid was provi ded and the aircraft models 
to which the aid was related. 
 
Response:   to be supplied. 
 
3. Please provide the sales projections which the Government of Germany relied upon prior to 
the provision of any launch aid for each of the re levant aircraft models which benefited from 
launch aid in 2002. 
 Response:  to be supplied. G/SCM/Q2/EEC/46 
Page 22  
 
IV. FUNDING FOR A380 PRODUCTI ON AND INFRASTRUCTURE 
 According to press reports, the City of Hambur g is spending about 665 million to close up a 
section of marsh lands (Mühlberger Loch) for use by Airbus to build components and a delivery 
centre for the Airbus A380.  The United States unders tands that as of March 2002, 300 million of the 
665 million had been distributed. 
 
1. Would you please confirm whether the above in formation is correct?  If not, please provide 
the correct figures. 
 Response:  to be supplied. 
 
2. Please explain why this assistance to th e aerospace industry does not qualify as notifiable 
under Article 25 of the Subsidies Agreement.  If it does qualify as notifiable, please provide the information required under Article 25. 
 
Response:  to be supplied. 
 
V. AID TO THE PULP AND PAPER INDUSTRY 
1. The United States has previously requested in formation concerning regional government of 
Brandenburg aid to the pulp and paper industry.   Specifically, it has been our understanding 
that Brandenburg agreed to provide assistance to Hamburger AG for the construction of a 
liner board mill.  In G/SCM/Q2/EEC/40, you stated that Brandenburg did not provide any 
subsidies during the notification period.  Woul d you please explain whether any of this aid 
was provided during 2001 or 2002?  If so, please pr ovide the required information pursuant to 
Article 25 of the Subsidies Agreement. 
 Response: 
 
 On 26 July 2002 the administrative act for granting State aid was taken for Zellstoff Stendal 
GmbH.  The approval of the European Commission fo r the aid was given an 19 June 2002.  The aid 
have been paid in parts from 2003 on.  A guarantee of  80 percent was given on 20 June 2002 for loans 
of 587 Mio Euro. 
 
2. We also previously requested information concerning aid by the regional government of 
Saxony-Anhalt to support Zellstoff Ste ndal GmbH to build a pulp mill.  With respect to this aid, you 
stated that the Federal State of Saxony - Anhalt di d not allocate any aid to Zellstoff Stendal GmbH 
during the notification period.  Could you please expl ain whether any of this aid was provided during 
2001 or 2002?  If so, please provide the required in formation pursuant to Article 25 of the Subsidies 
Agreement.  
Response: 
 
 See answer to question IV1. 
  G/SCM/Q2/EEC/46 
 Page 23 
 
 
New and Full Notification (European Communities - Greece)  
G/SCM/N/95/EEC/Add.7 
 
1. It is our understanding that Greece main tains the following six Priority Pivots 
programmes, which have not been notified this reporting period.  These programmes 
were previously outlined in document G/ SCM/N/Q2/EEC/40.  Please clarify whether 
these programmes still exist:  
 
 −  Pivot 1 Fishing vessels demolitions; 
 
 −  Pivot 2 Building new vessels; 
 
 −  Pivot 3 Protection and Conservation of Fishing Resources; 
 
 −  Pivot 4 Small-scale inshore fisheries; 
 
 −  Pivot 5 Technical Assistance; 
 
 −  Pivot 6 Financial Activities. 
 
Answer: 
 
 With regard to the fisheries sector programm es that receive cofinancing from the European 
Union with FIFG and ERDF participation:  
 The priority pivots of the fisheries programme are the same and have undergone no 
modification, having been authorized by European Commission Decision No.(817)/28-3-01 under member States' Fisheries Operational Programmes.  
2. If these programmes continue to exist, please explain why they do not qualify as 
notifiable under Article 25 of the Agreement on Subsidies and Countervailing Measures.  
If these programmes are notifiable or if other programmes have taken their place, 
please provide the information required under Article 25. 
 
Answer: 
  The mentioned programmes are in accordance with the EC Regulation n. 2792/99 laying 
down detailed rules and arrangements regarding Co mmunity structural assistance in the fisheries 
sector, as modified by EC Regulation n. 2369/02.  Th is Regulation fixes detailed rules for the granting 
of indemnities and financial compensation aimed at: fl eets restructuring, aid for definitive cessation of 
activity, aquaculture, fishery products pro cessing, promotion and technical assistance. 
 
 In both cases, these are UE contributions that necessarily involve national co-financing.  For 
this reason the mentioned national measures are not subject to notification, coming within European 
Commission approved programmes under Art. 19 from EC Reg. 2792/99, as modified by 
EC Reg.  n. 2369/02. G/SCM/Q2/EEC/46 
Page 24  
 
Questions from the United States Regarding the New and Full Notification
 
(European Communities - Italy)  
G/SCM/N/95/EEC/Add.9 
 
General Fishery Questions  
 
1. It is our understanding that Italy mainta ins the following fishery-financing programmes, 
which have not been notified this reporting period.   These programmes were previously outlined in 
document G/SCM/N/Q2/EEC/40.  Please clarify whether these programmes still exist:  
DOCUP 2000/2006; 
 
PON Pesca; 
 
POR for the Regions. 
 
 The programmes DOCUP 2000-2006, PON Pesca e POR for the Regions  are currently in 
force and partly already implemented. 
 
2. If these programmes do exist, please explai n why they no longer qualify as notifiable under 
Article 25 of the Agreement on Subsidies and Countervailing Duties (Subsidies Agreement).  
Otherwise, please provide the required information. 
 
 The mentioned programmes are in accordan ce with the EC Regulation n. 2792/99 laying 
down detailed rules and arrangement s regarding Community structural  assistance in the fisheries 
sector, as modified by EC Regulatio n n. 2369/02.  This Regulation fi xes detailed rules for the granting 
of indemnities and financial compensation aimed at:  fleets restructuring, aid for definitive cessation 
of activity, aquaculture, fishery products pro cessing, promotion and technical assistance. 
  In both cases, these are UE contributions that necessarily involve national co-financing.  For 
this reason the mentioned nati onal measures are not subject to notification, coming within 
European Commission approved programmes under Art. 19 from EC Reg. 27 92/99, as modified by 
EC Reg. n. 2369/02.  
Measures for Investment in the Naval Sector (New)
 
 
1. Are commercial fishing vessels eligible for the interest subsidy under this programme? 
 
 The commercial fishing vessels are not eligible for interest subsidy provided by the Italian 
Law n.88/01 dated 16 March 2001 (implementing the Council Regulation n. 1540/98 EC) to 
shipowners (Italian and EU) who made new commercial ships  in the Italian or European shipyards. 
 
2. Does this programme directly or indirectly promote the construction of new fishing vessels? 
 
 This programme does not promote the construc tion of new fishing vessels.  Particularly the 
above mentioned ship-owners’ subsidy was availabl e for new commercial building contracts until 
31 December  2000. 
  G/SCM/Q2/EEC/46 
 Page 25 
 
 
Soft Loans to Companies to Favour a Long -Lasting Penetration in Non-EU Countries  
Soft Loans for Italian Enterprises to Cov er Expenses Concerning the Participation in 
International Tenders Held in Non-EU Countries  
 
1. For the above programmes, will you confirm th at the interest rate is still calculated at 
40 per cent of the reference rate?  If not, how is the interest rate determined? 
 
 Interest rates are always calculat ed at 40 per cent of the referen ce rate of the month in which 
the loan is granted to the beneficiary company.  Suc h a rate remains fixed for the entire duration of 
the loan. 
 2. Do the terms of the loan differ for SMEs and other eligible Italian companies?  If so, please 
explain how they differ.  
 The terms of the loans do not differ for SMEs and big companies. 
 3. What non-SMEs companies are eligible for assistance under this programme?  Are the loans 
contingent upon exportation?  If so, please explai n how this programme is in compliance with 
Article 3 of the Subsidies Agreement.  
 All companies, included non- SMEs, are eligib le for financing under this programme.  Loans 
are granted to set up permanent commercial facilities and, as a consequence, they cannot be 
considered export subsidies. 
 
Extraordinary Intervention in the South Italy (MIUR)
 
Extraordinary Intervention in the South Italy (MAP 4)  
 
1. Can you please explain how the above programmes differ from one another?  
 The law n. 488/1992 “Organic discipline for Extraordinary Intervention in the South Italy” 
regulates on the one side the granting, by the Mi nistry of Productive Activities, of concessions for 
productive activities in Italian depressed areas, and, on the other, the granting, by the Ministry of 
Research, of concessions for projects aimed at supporting industrial research, vocational training 
and technological transfer involved in the above activities. 
 
Urgent Measures for the Economy – Automatic Incentives
 
 1. Could you please explain what is mean t by "fiscal bonus in tax payment"? 
 
 The law n. 488/1992 does not
 involve granting of concessions in the form of “fiscal bonus in 
tax payment”, but only as lump sum granted. 
 
2. What types of activities are eligible to  receive tax concessions under this programme? 
 
 Enterprises eligible to concessions are: 
 
Mining and manufacturing industries; 
 
Electric energy, steam and hot water production and supply industries; 
 
Building companies; 
 
Services supply companies. 
 G/SCM/Q2/EEC/46 
Page 26  
 
3. Do all companies investing in machin ery automatically receive tax concessions? 
 
 The law provides that the granting of contribu tions is conditional to the following criteria: 
 
internal funds; 
 
employment increasing; 
 
environmental protection; 
 
 aiming at awarding most deserving enterprises. 
 
 The granting of concessions is not automatic:  eligible projects are recorded in a list 
according to which, within the funds avail able, contributions are subsequently granted.  G/SCM/Q2/EEC/46 
 Page 27 
 
 
New and Full Notification  
(European Communities - Netherlands)  
G/SCM/N/95/EEC/Add.11 
 
Environmental pollution in order to establish cleaner production 
 
Question Has this programme been terminated?  H as another similar programme replaced it?  If 
so, please provide the required informati on under Article 25 of the Subsidies 
Agreement. 
 Answer  
 
 This programme has been terminated at the end of 2002 and was not replaced by another 
similar programme.  
Eureka Project ITEA  
Question On average, how many projects ar e funded under this programme each year? 
 
Answer 
 
 On average, approximately eight to ten proj ects are funded under the ITEA programme each 
year.  Regulatory Energy Tax 
 Question Is a company able to receive a tax cred it and the zero-rate tax exemption for the same 
project? 
 
Answer 
 
 In general, cumulation of fi scal facilities is monitored by  the Dutch Government.  When 
cumulation should occur, (part of) the facilities can be cut back. 
  As far as the reduced zero-rate green electricity measure is concerned, it must be stated that 
this specific facility has been cut back from 2004 and will be lifted from 2005.  Therefore, cumulation 
with other fiscal facilities is not likely to occur in  2004 (nor has it occurred in the years before) and 
will no longer be an issue from 2005. 
 Subsidy Scheme for Environmental Technology The Regulation on Environmental Investment Deduction 2001 and 2002 
 
Question For the above programmes, what are the eligibility criteria to receive the incentives? 
 
Answer 
  The eligibility criteria for the Subsidy Scheme for Environmental Technology are:  
• Environmental performance; 
 
• Cost-effectiveness; 
 
• Innovation; G/SCM/Q2/EEC/46 
Page 28  
 
 
• Financial and technological risk; 
 
• Amount of added knowledge; 
 
• Transferability of results; 
 
• Market potential. 
  The eligibility criteria for the Regulation on  Environmental Investment Deduction 2001 and 
2002 are:  
• Asset requirement:  Only for items wh ich have been capitalised tax-wise. 
 
• Controllability:  The asset must be quickly and unambiguously definable both in 
technical terms and in terms of cost-structure. 
 
• Not in common use:  The sch eme focuses on new technologies that are not in common 
use. 
 
• Scope of application:  The scheme is not in tended as a means of providing support to 
one individual company.  Consequently th e equipment should be deployable in more 
than one establishment. 
 
• Surmounting environmental standards:  Envir onmental performance of the equipment 
should be better than required by envi ronmental standards and environmental 
regulations or permits. 
 
• Compensation amounts to less than 30 per cent of the extra-investment costs. 
 
• No overlap with other instruments r esulting into an exceeding of 30 per cent 
compensation of the add itional investment costs.  G/SCM/Q2/EEC/46 
 Page 29 
 
 
Questions from the United States Regardi ng the New and Full Notification the  
European Communities  
(G/SCM/N/95/EEC/Add. 12) 
 
REPLIES FROM PORTUGAL TO  THE QUESTIONS POSED BY 
THE UNITED STATES 
 
Operational Programme for Economy 
 
Question 1:  What are the eligibility criteria for receiving subsidies under this programme? 
 
Answer:   Eligibility criteria for receiving subsidies under the Portuguese Economy Programme 
(PRIME - Incentives Programme for Economic Moderni zation) are required at the promoter level and 
also for the project. Then, accord ing to the incentive scheme or s upport measure each project has its 
Economic Value (EV) estimated according to speci fic implementing rules and taking into account 
some variables such as GAV (Gross Ad ded Value) and eligible expenses. 
  The recipient of grants should:   - demonstrate technical and manageme nt capacity to fulfil investments; 
 
 - present adequate minimum economic ratios. 
  Moreover, the following conditions must also be met, prior to any decision:   - the existence of a human resources stru cture, adequate to the project or the 
commitment into professional training; 
  - no tax or debts overdue, and the existence of an organized and certified account 
system. 
  The Programme is aimed, mainly, to:  i ndustrial (building construction included), 
commercial, services, energy and tourism sectors. 
 
Question 2:  Are companies that receive assist ance under this programme required to export?  
If so, please explain how this programme is in  compliance with Article 3 of the Agreement on 
Subsidies and Countervailing Measures (Subsidies Agreement). 
 Answer:  No, the main purpose of this programme is to reinforce enterprise productivity and 
competitiveness, as well as to promote a new potential for development.   Although PRIME includes instruments for internationalization, the main purpose lies on the establishment of strategic objectives, strengthening the competitiveness of Portuguese companies in 
the global market, and promoting potential development areas. 
  The Programme is financed by the European  Funds and consequently cannot grant support 
aids.  Question 3:  How is it determined which type of  aid (grants, soft bans, reimbursable subsidies or 
venture capital interventions) will be provided to the recipient?  
Answer:   The relevant State Aid regulation and the type  of investment in question determine the type 
of aid granted. 
 G/SCM/Q2/EEC/46 
Page 30  
 
 First and foremost the aid provided to the recipient must always be granted according to the maximum incentive rates expressed in GGE (Gross Gr ant Equivalent), approved by the European 
Commission within the scope of the regional aid map.   The type of aid is first of all determined  by the goal of the incentive scheme or support 
measure, but attends also to the project’s charact eristics and to final recipient (e.g., surcharges 
according to the promoter’s type).   Aid is normally in the form of grants or loans.  usually it is granted an incentive base rate of 
the eligible expenses (e.g. 30 per cent).  Then, depending on project result and if was granted a 
refundable incentive, it may be converted into  a bonus, based on the rate of economic value 
attainment.  The achievement bonus corresponds to the conversion of part or the total of the 
refundable incentive granted into a non refundabl e incentive, according to performance of the 
enterprise (measured through the mid-term and final reviews).  RETEX Operational Programme, Regional In centive System SIR, PEDIP II, PAIEP2 
 
Question 1:  In your notification, you stated that the above programmes were completed on 
31 December 2001.  Have other similar programmes replaced these?  If so, please provide the 
required information under Article 25 of the Subsidies Agreement for the new programmes. 
 Answer:   RETEX as well as SIR were co-financed under the second programming period of the 
Structural Funds (1994-1999) and were closed by the end of 2001.   PEDIP II and PAIEP 2 were integrated in th e Operational Programme “Modernization of the 
Portuguese Economic Fabric” for the programming peri od 1994-1999.  They are now included in the 
new programme PRIME (Incentives Programme for Econom ic Modernization) that integrates a set of 
medium term economic policy instruments for the period 2000-2006.   The whole instruments concerning PRIME were designed for several sectors, including those which were covered by PEDIP II and PA IEP 2:  industry, trade and services. 
 
 Whether measures constitute state aid, the Comm ission is called to assess whether they can be 
found compatible with the common market under ar ticle 87.  Those incentive schemes provided by 
PRIME Programme were notified under the Artic le 25°of the Agreement on Subsidies and 
Countervailing Measures (e.g. Aid Number N 457100, N 707/01, N 60/02) currently provided - the 
last update concerns the 2002 expenditure. 
 
General Fisheries Questions 
 
Question1:  It is our understanding that Portu gal maintains the following incentives measures 
for the fisheries sector, which have not been notified for this reporting period.  These 
programmes were previously outlined in docu ment G/SCM/N/Q2/EEC/40.  Please clarify 
whether these programmes still exists: PROPESCA, ICPESCA. 
 
Answer:   Both PROPESCA and ICPESCA were implem ented from 1994 to 1999 and were closed by 
the end of 2001(ICPESCA) and by 31 July 2 002 (PROPESCA).  ICPESCA was not replaced by a 
similar programme, however it was an EU initiate d programme and EU did not replace it until now. 
 
Question 2:  If so, please explain why they do not qualify as notifiable under Article 25 of the 
Subsidies Agreement.  Otherwise, please provide  the required information under Article 25. 
 
Answer:   Information about the following PROPESCA sc heme will be provided in the next general 
notification under Article 25.  G/SCM/Q2/EEC/46 
 Page 31 
 
 
Questions from the United States Regarding the New and Full Notification  
(European Communities – Spain)  
G/SCM/N/95/EEC/Add.13 
 
Renovation and modernization of the fishing fleet  
 
1. Would Spain please clarify whether this progr amme is intended to renovate and modernize 
existing fishing fleets or to build new vessels?  
 Since – and even before – its entry into the EEC, Spain has pursued a policy of downsizing, 
that is to say, the construction of new boats or the introduction of greater fishing capacity in existing 
boats necessarily involves the prio r destruction of vessels of similar tonnage and engine capacity.  
Consequently, the aim is to renovate or modernize existing vessels.  
2. Would Spain please explain further the form of the subsidy, in particular what is meant by 
"non-repayable subsidies"?  Are these grants to reduce the effective interest rate or low-interest loans 
or some other form of assistance?  
 They are non-refundable grants.  In accordance w ith the European regulations, the aid is set 
on a pre-established scale, lower than the real cost of the boat, and the grants are paid on that basis, consisting of 40 per cent jointly financed from European funds (FIFG) (35 per cent) and national 
funds (5 per cent).  In fact, on average a maximu m of 30 per cent of the value of the boat may be 
granted. 
 
Special Economic Aid to Owners of Fishing Vessels Operating in the Moroccan Fishing 
Grounds, on Account of the Stoppage of Fishing  
 
1. Would Spain please explain further the form of the subsidy, in particular what is meant by 
"non-repayable subsidies"?  
 Non-repayable subsidies are subsidies that are not refundable.  They are granted only for 
boats more than 10 ten years old, on the basis of a sc ale laid down in the Community regulations;  an 
owner who freely decides to stop fishi ng by scrapping the boat is grant ed a subsidy on the basis of the 
above-mentioned scale.  The value fixed on the scale  is normally less than the real value of the boat. 
 
2. Does this programme still exist or has it been  replaced by another similar programme?  If so, 
please provide details. 
 
 These subsidies were applied only once and only in the case of boats operating in the 
Moroccan fishing grounds.  They have not been replaced by any other programme.  Pilot Projects for Experimental Fishing
 
 1. What type of projects qualify as "experimental fishing"? 
 
 According to Council Regulation (EC) No. 2 792/1999 of 17 December 1999 an experimental 
fishing pilot project means a project carried out by an economic operator, a scientific or technical 
body or another competent body to test, in conditions  approaching actual conditions in the industry, 
the technical reliability and/or financial viability of  a new technology with a view to acquiring and, 
subsequently, disseminating techni cal and/or financial knowledge of  the technology being tested.  
Pilot projects shall always comprise scientific monitori ng of sufficient intensity and duration to obtain 
significant results.  They must have as their aim the conservation of fishery resources, with a view to 
the implementation of more selective techniques. 
 G/SCM/Q2/EEC/46 
Page 32  
 
Technical Research Development Programme (PROFIT)
 
 
 Which technological areas are defined as "of interest" by this programme? 
 
 The areas defined as "of in terest" in the PROFIT programme are of two kinds:  scientific-
technological areas and sectoral areas.   
  Scientific-technical areas:  astronomy and astrophysics, particle physics and large 
accelerators, thermo-nuclear fusion, biomedicine,  biotechnology, industrial design and production, 
chemical materials, processes and products, natural  resources, agri-food technologies, information 
and communication technologies, and the social economy. 
  Sectoral areas:  aeronautics, road transpor t, food, defence industry, space, energy, 
environment, social/medical, information society, and transport and land-use planning.  
2. It is noted that the PROFIT programme's dur ation is until 2003.  Has this programme been 
replaced?  If so, please explain the new programme.  
 The PROFIT programme has been replaced by a new programme which covers the period 
2004 – 2007.  The updated provisions of this ai d programme were established by an Order of the 
Ministry of Science and Technology issued on 12 November and published in the Official Journal of 
the State on15 November 2003.  
Shipbuilding Subsidies Programme
 
 
1. It is our understanding that Spain also maintains a "Temporary Defensive Measures" 
Programme for the shipbuilding industry.  Woul d you please explain why this programme does not 
qualify as notifiable under Article 25 of the Subsidies Agreement?  If the programme is notifiable, 
please provide the information required under Articl e 25.  In addition, please explain whether the 
same shipyards that would receive benefits under the Shipbuilding Subsidies Programme also benefit 
from the Temporary Defensive Measures Programme.   On 27 June 2002 the Council of the European Union approved Regulation (EC) No. 1177/2002, relating to a "temporary defensive m echanism", with a view to mitigating the effects 
of continuing unfair competition by third countries on the shipbuilding industry in Europe.     That "temporary defence mechanism" came in to force upon its publication by the Commission 
in the Official Journal of the European Communities and its period of application has been extended 
by Council Regulation (EC) No. 502/2004.   Until this year it could not be applied in th e Kingdom of Spain, since it was not until 
11 November 2003 that regulations  for its introduction into Spanish law were approved by the 
Commission of the European Union. 
 
 Consequently, until that date, no aid envi saged under the "temporary defence mechanism" 
had been granted.  Furthermore, in its last communication (12 February 2004) to the Commission on 
the application of that subsidy regime, the Ki ngdom of Spain informed the Commission that no aid 
under the above-mentioned regulation had been granted up to that date. 
  G/SCM/Q2/EEC/46 
 Page 33 
 
 
Funding for Airbus A380 production and infrastructure  
 
According to press reports the Andalusian Regional Government granted €17.5 million to Airbus for 
the purpose of modifying an Airbus facility in Cadiz, Spain so that the facility could take part in the 
production of the Airbus A380.  An  additional €13.13 million was also reportedly granted in regional 
aid by the central government of Spain. 
 1. Would you please confirm whether the above information is correct?  If not, please provide 
the correct figures.  To be supplied  
2. Please explain why this assistance to th e aerospace industry does not qualify as notifiable 
under Article 25 of the Subsidies Agreement.  If it does qualify as notifiable, please provide the 
information required under Article 25.  To be supplied G/SCM/Q2/EEC/46 
Page 34  
 
Questions from the United States Regarding the New and Full Notification
 
(European Communities - Sweden)  
G/SCM/N/95/EEC/Add.14 
 
VI. SUBSIDIES TO SWEDISH FISHERY 
A. INVESTMENT AID TO FISHING ENTERPRISES  
1. Aid for Fleet Renewal and Modernization of Fishing Vessels 
B. INVESTMENT AID TO FISHING PORT FACILITIES  
C. INVESTMENT AID TO INLAND FISHING  
D. COLLECTIVE INVESTMENT AID IN SMALL -SCALE COASTAL AND FRESHWATER FISHING  
E. INVESTMENT AID FOR SOCIO -ECONOMIC MEASURES  
 Would you please explain how overcapacity in the industry is taken into consideration in the 
evaluation of aid requests for the above-listed programmes?  
A. I
NVESTMENT AID TO FISHING ENTERPRISES  
1. Aid for Fleet Renewal and Modernization of Fishing Vessels 
 In order to receive public aid for renewal and  modernization of fishing vessels the vessel must 
be registered in the Community fleet register and hold a vessel permit. 
 
 By amendments in Community regulations public aid for ren ewal of fishing vessels will be 
suspended as from 1 January 2005 and further restric tions for public aid for modernization will be 
implemented.  
 Beside these restrictions there is no public ai d in Sweden since 2002 for renewal of vessels 
above the length of 18 meter. Regarding public aid for modernization vessels above the length of 18 meter can only receive this for improvement of safety conditions, hygiene and quality or more 
selective fishing methods.  
 If measures effect the vessel  capacity in terms of tonnage or  engine power a new vessel permit 
must be granted.  This is only granted if capacity equivalent to the new capacity exits the fleet.  This 
also applies to small-scale fis heries, vessels under 12 meter, usi ng passive gears.  During 2001 
stricter entry-exit demands than 1:1 ratio was implemented for the pelagic fisheries. 
 
 Consequently the capacity is controlled bot h through the conditions for public aid and the 
regulations concerning vessel permits and entry-exit regime. 
 
B. I
NVESTMENT AID TO FISHING PORT FACILITIES  
 Public aid to fishing port facilities concerns me asures to improve the quality of the landed 
catch and improved environment,  safety and working conditions. 
 
 There is no aid for increasing the ports capacity  in terms of building docks or new ports.  
Outside objective 1 areas, where the major part of the Swedish fisheries sector operate, there is no 
public aid for dredging which can increase the landing capacity.  G/SCM/Q2/EEC/46 
 Page 35 
 
 
C. INVESTMENT AID TO INLAND FISHING  
 For inland fisheries a fishing license is required .  The national authorities also regulate the 
fishing through different gear restrictions. 
 
D. COLLECTIVE INVESTMENT AID IN SMALL -SCALE COASTAL AND FRESHWATER FISHING  
 The purpose of this measure is to strengthe n sustainable small-scale fisheries.  Thus the 
public aid is not granted for measures that increase fishing effort.  There is no aid for renewal or modernization of small-scale vessels.  Such investme nts can only be granted aid within the framework 
of point A above. 
 
E. I
NVESTMENT AID FOR SOCIO -ECONOMIC MEASURES  
 Aid for socio-economic measures is granted to  fishermen younger than 35 years who acquire 
for the first time part or total ownership in a fishing vessel.  Aid is granted if the fisherman can 
demonstrate that he/she has worked at least five yea rs as fisherman or can demonstrate equivalent 
vocational training.  Thus there is no other prof ession than fishermen within the sector that can 
receive the aid.  
  Other conditions are that the vessel must be registered in the Community fleet register and 
the vessel owner must hold a vessel permit which me ans the entry-exit regime applies.  Increased 
capacity is therefore not a result of the measure.  G/SCM/Q2/EEC/46 
Page 36  
 
Questions from the United States Regarding the
 
New and Full Notification  
(European Communities - United Kingdom)  
G/SCM/N/95/EEC/Add.15 
 
1. Aeronautics Research Programme 
(a) Would you please explain whether the require ments to receive aid under the Aeronautics 
Research Programme differ from those specified under the CARAD programme?  If so, please provide information regarding the conditions that  must be met for a research establishment or 
university to receive funding under this programme. 
 
Answer:  to be supplied. 
 (b) Are non-UK or non-EU entities eligible for assistance under this programme?  
Answer :  to be supplied.  
 
2. Cleaner Coal R&D Programme 
(a) One of the stated policy objectives of the Cl eaner Coal R&D Programme is to “promote the 
development and export of environmentally fri endly technologies.”  Would you please explain in 
what way this programme provides assistance to pr omote export and development of such technology 
and what costs are covered in this regard? 
 
Answer 
 
 The Cleaner Coal R&D Programme includes bot h a portfolio of R&D projects into cleaner 
coal technologies (CCTs) and supporting technolog y transfer and export promotion activities.  
Objectives include reducing the barriers to the take -up of CCTs, promoting UK expertise in CCTs to 
export markets, managing R&D projects relating to  carbon dioxide (CO2), coalbed methane (CBM) 
and underground coal gasification (UCG), and c oncluding R&D projects committed prior to the 
launch of the new R&D Programme.  
Activities undertaken include
: 
 
• Helping develop collaborative projects with organisations in China and India to build 
relations between UK-Chinese and UK-Indian counterparts and, in the longer term, to 
promote export of UK goods and services. 
 
• Development of a broad base of publications, including an export directory of 
UK CCTs, status reports on specific technology areas, brochures outlining UK best practice and capability in certain fields a nd case studies to illustrate the commercial 
application of recently developed products. 
 
• Organisation of trade promotional activities such as running missions and exhibiting 
at key international events. 
 
• Maintenance of close liaison with inte rnational bodies supporting the development 
and uptake of CCTs, including the Intern ational Energy Agency (IEA), the World 
Bank, the Asian Development Bank (ADB), the European Commission (EC) and other national governments." 
  G/SCM/Q2/EEC/46 
 Page 37 
 
 
 In Financial Year 2003/04, £4.5M was spent under the Programme  
3. Home Shipbuilding Credit Guarantee Scheme 
(a) To what extent does the government guarant ee lower the interest rate paid on the loan 
guaranteed? 
 
Answer 
 
 The commercial interest reference rate that applies to the UK's Home Shipbuilding Credit 
Guarantee Scheme is not below commercial interest rates 
 
4. Launch Investment for Civil Aerospace Projects 
(a) Please describe in detail the terms and conditions  (e.g., the rate of return or interest rate 
expected) under which the aid was provided and the ai rcraft models or engines to which the aid was 
related. 
 
Answer:  to be supplied. 
 (b) Please provide the sales projections which the Government of the United Kingdom relied upon prior to the provision of any launch aid for each of the relevant aircraft models or engines which 
benefited in 2002. 
 
Answer :  to be supplied.  
 
5. Support to Airbus 
 It is our understanding that, in addition to EC loans to Airbus at near government cost of 
funds, the government of the United Kingdom has also  supplied Airbus with infrastructure support in 
the area of Broughton.  Specifically, information indicates that the UK provided $30.2 million in 
order to build a wing factory in the area.  (a) Would you please confirm whether the above information is correct?  If not, please provide 
the correct figures. 
 
Answer: to be supplied. 
 (b) Please explain why this assistance to the aerospace industry does not qualify as notifiable under Article 25 of the Subsidies Agreement.  If it does qualify as notifiable, please provide the 
information required under Article 25.  
 Answer :  to be supplied.  
 
6. Fisheries 
 This notification did not include any informa tion regarding fisheries subsidies administered 
by the United Kingdom.  The United States understands that the United Kingdom administers the 
following programmes to the benefit of the fisher ies industry, which were outlined in document 
G/SCM/Q2/EEC/40, Replies by the European Communities to Questions posed by the United States : 
  1. Grants Towards the Acquisition of  Freshwater Fishing Vessels and Engines 
(Northern Ireland); 
 G/SCM/Q2/EEC/46 
Page 38  
 
 2. Aid to Highlands and Island s Fish Farmers and Processors; 
  3. Highland Prospect Limited: Fish Processing and Fish Farming Loans;   4. Highland Opportunity Limited: Fishi ng Vessel, Fish Processing and Fish Farming 
Loans 
  5. Aid to Highlands and Islands Fishermen;   6. Safety Improvements on Fishing Vessels; 
 
 7. The Fish Producer’s Organization (Formation Grants) Scheme;   8. Relief from Excise Duty on Mineral Oil used on Commercial Marine Voyages;  
 9. Fisheries and Aquiculture (Wales); 
  10. Small Firms Loan Guarantee Scheme (SFLGS).  (a) Would you please explain why these programmes have not been notified?  If notifiable, 
please provide the required information regarding these programmes pursuant to Article 25 of the 
Subsidies Agreement and explain whether overcap acity is taken into account prior to providing 
assistance.  
Answer 
  The schemes were not notified due to lack of administrative resources in the Department 
responsible for those schemes.  This has now been  resolved.  The required information follows.  
Future notifications will be provided in the established timetable.   Overcapacity is always taken into account prior to providing assistance.  All schemes conform to the European Commission’s guidelin es on state aid to fisheries and aquaculture 
(2001/C 19/05), under which state aid can only be give n where it can be demonstrated that the aid will 
not contribute to the maintenance or  development of fishing capacity where there is excess capacity in 
a fishery and will not contribute to reduced biodiversity.  
1. Grants towards the Acquisition of Freshwater Fishing Vessels and Engines 
(Northern Ireland)  
1. Period covered by the notification
 
  2001 and 2002  
2. Policy objectives
  
  To encourage the modernisation of the freshwa ter fishing fleet and to sustain the local boat 
building industry.  
Background and authority for the scheme
 
  The grant is payable under the Freshwater Fishing Vessels (Grants) Scheme (Northern Ireland) 1982 made under section 1 of the Fishing V essels (Grants) Act (Northern Ireland) 1967.   
Subject to the provisions of the Scheme, grant is available to any person carrying on or proposing to  G/SCM/Q2/EEC/46 
 Page 39 
 
 
carry on a business in the freshwater fishing industry  in Northern Ireland, which is based in Lough 
Erne and Lough Neagh (mainly the latter). 
 
4. Form of the subsidy  
 
 Grant  5. To whom and how the subsidy is provided
  
 
 Grant of 25 per cent of approved expenditure incurred to those providing a freshwater fishing 
vessel under 7.924m or in providing a new engine for such.  6. Total amount budgeted 
 
  2001/02:  £2,850 
 2002/03:  £14,525 
 7. Duration of programme
 
  Indefinite. 
 
8. Assessment of trade effects
 
  Unavailable.  2. Aid to Highlands and Islands Fish Farmers and Processors 
 
1. Period covered by the notification
 
  2001 and 2002  
2. Policy objectives
 
  To maintain and increase employment and incomes in fragile areas.  3. Background and authority for the scheme
 
 
 Section 8 of the Enterprise and New Towns (Scotland) Act 1990.  4. Form of the subsidy
 
  Grant 
 Loan 
 Equity  5. To whom and how the subsidy is provided
 
 
 Variable grants and loans up to 50 per cent of project costs, dependent on the nature of the 
project.  G/SCM/Q2/EEC/46 
Page 40  
 
6. Total amount budgeted
 
  2001/02 Actual payments:   £3,892,901   Loan     £230,00   Equity     £320,00 
 
 2002/03 Actual payments:   £5,396,731   Loan     £518,300   Equity     £420,000  
7. Duration of programme
 
  Indefinite.  8. Assessment of trade effects
 
 
 Unavailable.  
3. Highland Prospect Ltd: Fish Processing and Fish Farming Loans  
 
1. Period covered by the notification
 
 
 2001 and 2002  2. Policy objectives
 
 
 To assist the limited financial capacity of SM Es trading as fish processing and fish farms, 
thereby supporting sustainable regional develo pment opportunities and related employment, 
particularly in peripheral locations.  3. Background and authority for the scheme
 
 
 Section 8 of the Enterprise and New Towns (Scotland) Act 1990. 
 4. Form of the subsidy 
 
  Discretionary reduced interest loans lin ked to free technical and business advice. 
 
5. To whom and how the subsidy is provided
  
  SMEs trading as fish processing and fish farms can receive loans of up to £500,000 per annum.  
6. Total amount budgeted
 
  2001/02:  None  2002/03:  None  
7. Duration of programme
 
  Indefinite, subject to available funds.   G/SCM/Q2/EEC/46 
 Page 41 
 
 
8. Assessment of trade effects  
  Unavailable.  
4. Highland Opportunity Ltd: Fishing Vessel, Fish Processing and Fish Farming Loans 
(Aid N44/1995)  
1. Period covered by the notification
 
  2001 and 2002 
 
2. Policy objectives
 
  To assist the limited financial capacity of SM Es trading as fishing vessels, fish processing and 
fish farms, thereby supporting sustainable regional development opportunities and related 
employment, particularly in peripheral locations. 
 3. Background and authority for the scheme
 
  Section 8 of the Enterprise and New Towns (Scotland) Act 1990.  
4. Form of the subsidy
 
  Loan  5. To whom and how the subsidy is provided
 
 
 Loans up to a maximum of £30,000 per annum  are provided to businesses in the above 
sectors.  6. Total amount budgeted 
 
 
 2001/02:   £30,000 (Loans) 
 2002/03:   £19,500 (Loans)  7. Duration of programme
 
 
 Indefinite Subject to available Funds and Annual Reviews. 
 8. Assessment of trade effects
 
  Unavailable.  5. Aid to Highlands and Islands Fishermen 
 
1. Period covered by the notification
 
  2001 and 2002 
 
2. Policy objectives
 
  To maintain and increase employment and incomes in fragile areas.  G/SCM/Q2/EEC/46 
Page 42  
 
3. Background and authority for the scheme
 
  Section 8 of the Enterprise and New Towns (Scotland) Act 1990.  4. Form of the subsidy
 
 
 Grant  5. To whom and how the subsidy is provided
 
 
 Variable dependent on the viability of the project under the following headings: 
 
New vessels over 12 metres 
 
 Grants of up to 20 per cent where SFIA assistan ce was not available.  Otherwise variable 
concessionary rate loans effectively up to £500,000  (our maximum discretionary limit).  No vessel 
would be assisted without aggregation of existing pressure stock licences.  
New vessels under 12 metres 
 
 Grant and loan based on a minimum private c ontribution of 30 per cent from the applicant.  
Grant level being 20 per cent and loan the remainder over a period of up to 15 years at concessionary 
rates of interest.  
Second-hand vessels 
  Concessionary loans of up to 50 per cent of th e cost within a ceiling of £500,000.  Loans 
normally to be repaid within 10 years.  All assist ance for second-hand vessels is subject to a condition 
that the vessel will not normally be greater than 10 years of age.  
Port infrastructure 
  Assistance to small piers, harbours and fish markets with grant aid of up to 30 per cent. 
 6. Total amount budgeted
 
  2001/02 Grant:   £673,093 
  Loan:   £60,280 
 2002/03 Grant:   £250,172  7. Duration of programme
 
  Indefinite. 
 
8. Assessment of trade effects
 
  Unavailable.  6. Safety Improvement on Fishing Vessels 
 
1. Period covered by the notification
 
  2001 and 2002 
  G/SCM/Q2/EEC/46 
 Page 43 
 
 
2. Policy objectives  
  To enable applicants to make essential safety improvements in order to obtain Department for Transport Safety Certificate.  
3. Background and authority for the scheme
 
  The Fishing Vessels (Safety Improvements) (Grants) Scheme 1995/ The Fisheries and Aquaculture Structures (Grants) Regulations 1995.  
4. Form of the subsidy
 
  Grants.  5. To whom and how the subsidy is provided
 
 
 Five per cent of total approved costs to vessel owners.  6. Total amount budgeted
 
  2001/02 Actual payments (Grants):  £1,706 
 2002/03 Actual payments (Grants):  NIL 
 7. Duration of programme
 
  The scheme closed to new applications on 31 December 1999.  Remaining payments were 
made up to 31 December 2001.  The scheme closed  after this date and there were therefore no 
payments in 2002.  8. Assessment of trade effects
 
  Unavailable. 
 
7. The Fish Producer’s Organisation (Formation Grants) Scheme 
 
1. Period covered by the notification
 
 
2001 and 2002 
 2. Policy objectives
 
  To encourage the development of recognised Fish Producers’ Organisations in the UK and 
facilitate their operation in the early years. 
 
3. Background and authority for the scheme
 
  Regulation (EC) No 2792/1999  
4. Form of the subsidy
 
  Grant  G/SCM/Q2/EEC/46 
Page 44  
 
5. To whom and how the subsidy is provided
 
  The annual aid granted cannot exceed the lesser  of three per cent, two per cent and one per 
cent respectively of the value of the Organization’ s marketed production over a previous three year 
period or of 60 per cent, 40 per cent and 20 per cent of its administrative expenses in the first, second 
and third year respectively. 
 6. Total amount budgeted
 
  2001/02 Actual payments    NIL 
 
 2002/03 Actual payments:   NIL  7. Duration of programme
 
 
 First three years following recognition of Producer Organisation. 
 8. Assessment of trade effects
 
  Unavailable.  8. Relief from Excise Duty on Mineral Oil used on Commercial Marine Voyages -Marine 
Voyages Scheme 
 
**Please note that this is for all claimants unde r the Scheme and not just for fishermen. 
 
1. Period covered by the notification
 
  2001 and 2002  2. Policy objectives
 
 
 To provide relief from excise duty on oi l used in commercial marine voyages. 
 3. Background and authority for the scheme
 
  EC Directive 92/81/EC 
 
4. Form of the subsidy
 
  Tax concession.  5. To whom and how the subsidy is provided
 
 
 Operators in the commercial marine sector be nefit from reduced duty on mineral oil.  Heavy 
Oil may be shipped duty free direct from warehous e to entitled vessel OR repayment of excise duty 
may be claimed on all mineral oil used as fuel on board entitled vessel.  
6. Total amount budgeted
 
  2001/02 Actual payments:   £10,818,653  2002/03 Actual payments:   £8,018,730   G/SCM/Q2/EEC/46 
 Page 45 
 
 
7. Duration of programme  
  Subject to EC Review  8. Assessment of trade effects
 
 
 Unknown  
9. Fisheries and Aquaculture (Wales) 
 1. Period covered by the notification
 
  2001 and 2002  2. Policy objectives
 
 
 To provide necessary national b ackup for 1994-1999 FIFG scheme. 
 3. Background and authority for the
 
  Regulation (EC) 2052/1988 and 4253/1988 
 
4. Form of the subsidy
 
  Grant  
5. To whom and how the subsidy is provided
 
  Grants to fisheries and aquaculture produ cers of five per cent total project costs. 
 6. Total amount budgeted
 
 
 2001/02 Actual payments:   £4,843 
 2002/03 Actual payments:   £0  7. Duration of programme
 
 
 The scheme closed to new applications on 31 December 1999.  Remaining payments were 
made up to 31 December 2001.  The scheme closed  after this date and there were therefore no 
payments in 2002.  8. Assessment of trade effects
 
 
 Unknown. 
 
10. Small Firms Loan Guarantee Scheme (SFL GS) (Fisheries and Aquaculture guarantees 
only) (Aid N 53/96 ) 
 1. Period covered by the notification
 
  2001 and 2002  G/SCM/Q2/EEC/46 
Page 46  
 
2. Policy objectives
 
  The purpose of the scheme is to enable small businesses without sufficient collateral to obtain 
bank loans at normal commercial rates of interest to  help them develop their businesses.  The scheme 
is thus particularly relevant to small businesses without significant assets.  It makes commercial loans 
available to such operators on the same basis th at they ware already available commercially to 
comparable businesses with collateral.    3. Background and authority for the scheme
 
 
 Section 8 of the Industrial Development Act 1982 provides the legislative authority for the 
scheme.  4. Form of the subsidy
 
 
 Guarantee 
 5. To whom and how the subsidy is provided
 
  Guarantees are given against loans to eligib le businesses to be used for eligible business 
purposes.  Eligible businesses are sole traders, partnerships, franchises, co-operatives and limited 
companies.  There is an overriding limit of 200 employees per firm.  Turnover is also taken into 
account in establishing what is a small firm: in the fi sheries and aquaculture sector turnover can be no 
more than £1.5m p.a. Groups of companies with br oadly similar ownership or control are considered 
as one unit.  The finance may be used for starti ng trading, expanding an existing business, improving 
efficiency or developing a project.  It cannot be used for operating aid, buying shares, buying out 
members of a partnership, replacing existing loan  and overdraft facilities or financing interest 
payments.  Guarantees may cover loans of be tween £5,000 and £100,000 to any one borrower 
(£250,000 for established businesses trad ing for two years or more). 
 6. Total amount budgeted
 
 
 2001/02 Actual payments:    NIL 
 2002/03 Actual payments:   £1,546  7. Duration of programme
 
 
 Indefinite. 
 8. Assessment of trade effects
 
  Unavailable.  11. Angus Fisheries Aid Programme (Aid N 507/99) 
 
1. Period covered by the notification
 
  2001 and 2002 
 
2. Policy objectives
 
  To support small scale infrastructure projects in support of the Angus fishing sector.   G/SCM/Q2/EEC/46 
 Page 47 
 
 
3. Background and authority for the scheme  
  Council Regulation (EC) No 2468/98  4. Form of the subsidy
 
 
 Grant  5. To whom and how the subsidy is provided
 
 
 Grants were considered from public and private organisation involved in the fishing sector in 
the Tayside/Fife area.  6. Total amount budgeted
 
 
 2001/02 Actual payments:   £85,500 
 2002/03 Actual payments:   NIL  7. Duration of programme
 
  21/10/99 – 31/12/99 (Scheme completed).  Residual payments were made up to 
31 December 2001. 
 8. Assessment of trade effects
 
  Unavailable. 
 
12. Buy-out scheme for Salmon Fisheries (NI)  (Aid N 719/2001) 
 
1. Period covered by the notification
 
  2001 and 2002 
 
2. Policy objectives
 
  To compensate salmon netsmen in Northern Ireland for the permanent withdrawal of their 
nets and licences, in order to protect wild salmon stocks 
 
3. Background and authority for the scheme 
 
  Contractual agreement with powers contained in 1975 Salmon and Freshwater Fisheries Act.  4. Form of the subsidy
 
 
 Compensation payment.  5. To whom and how the subsidy is provided
  
 
 Provided to fishermen holding a current net licence.  Compensation payments are based on 
bids submitted covering the value of the net and licence.  G/SCM/Q2/EEC/46 
Page 48  
 
6. Total amount budgeted
 
  2001:  £0  2002:  £2,071,594  
7. Duration of programme
 
  2001-2004  8. Assessment of trade effects
 
 
 Unavailable.  
13. Fishing Vessels Decommissioning scheme (Aid N 490/2001 and Aid N 760/2001) 
 1. Period covered by the notification
 
  2001 and 2002  2. Policy objectives
 
 
 To permanently remove capacity from the UK fleet. 
 3. Background and authority for the scheme
 
  The Fishing Vessels (Decommissioning) (Scotland) Scheme 2001 
 The Fishing Vessels (Decommissioning) (England) Scheme 2001 
 Council Regulation (EC) 2792/1999  4. Form of the subsidy
 
  Grant 
 
5. To whom and how the subsidy is provided
 
  Compensation payments are provided to vessel  owners who decommission their vessels and 
surrender their vessel licence. 
 
6. Total amount budgeted
 
  2001:  None  2002:  £24,847, 305  
7. Duration of programme
 
  Closing date for paym ents end of March 2002 
 8. Assessment of trade effects
 
 
 Unavailable.   G/SCM/Q2/EEC/46 
 Page 49 
 
 
14. Infectious Salmon Anaemia (ISA): Rest arting Programme (Scotland – Highlands and 
Islands) (Aid N 69/2000) 
 
1. Period covered by the notification  
 
 2001 and 2002 
 2. Policy objectives
 
  To implement a restarting programme for salmon aquaculture farms affected by Infectious 
Salmon Anaemia. 
 3. Background and authority for the scheme
 
  Enterprise and New Towns (Scotland) Act 1990 
 Council Directive 93/53/EEC  
 4. Form of the subsidy
 
  Grant and or loan  
5. To whom and how the subsidy is provided
 
  Grants of up to 50 per cent total project co sts are given to underta king who have suffered 
losses due to ISA, for investment in new plant and stock.  Grants may be supplemented or replaced by loans at variable concessionary rates of interest, but  the net grant equivalent remains within the above 
limit. 
 6. Total amount budgeted
 
  2001:  £2,182,295  2002: £2,182,295 
 
7. Duration of programme
 
  Unknown.  
8. Assessment of trade effects
 
  Unavailable.  
15.  Salmon net licences buy-out scheme (Aid N 509/2001 as amended by N 136/2003 and 
N 159/2004) 
 
1. Period covered by the notification
 
  2001 and 2002  
2. Policy objectives
 
  To compensate salmon netsmen in England for the permanent withdrawal of their nets and licences, in order to protect wild salmon stocks.  G/SCM/Q2/EEC/46 
Page 50  
 
3. Background and authority for the scheme
 
  Salmon and Freshwater Fisheries Act 1975  4. Form of the subsidy
 
 
 Grant  5. To whom and how the subsidy is provided
 
 
 Provided to fishermen holding a current net licence.  Compensation payments are based on 
bids submitted covering the value of the net and licence.  6. Total amount budgeted
 
 
 2001:  £1,068,000 
 2002:  £0  7. Duration of programme
 
  2000-2004 
 
8. Assessment of trade effects
 
  Unavailable.  
__________