WORLD TRADE  
ORGANIZATION  G/SCM/N/123/EEC/Add.19 
26 August 2005 
 (05-3604) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
SUBSIDIES  
 
New and Full Notification Pursuant to Article XVI:1  
of the GATT 1994 and Article 25 of the Agreement  
on Subsidies and Countervailing Measures  
 
EUROPEAN COMMUNITIES 
 
Addendum  
 
 
The following addendum to the notification of the European Community relates to subsidy 
programmes of Poland . 
 
_______________ 
 
 
 G/SCM/N/123/EEC/Add.19 
Page 2  
 
 POLAND  
 
TABLE OF CONTENTS 
 
Page  
I. LOAN FROM EFSAL FUNDS..................................................................................................3 
II. GUARANTEES AND WARRANTIES OF THE STATE TREASURY................................4 
III. CREDIT GUARANTEES FROM THE NATIONAL FUND OF THE CREDIT 
GUARANTeES ESTABLISHED IN THE BANK GOSPODARSTWA 
KRAJOWEGO...................................................................................................................... ...7 
IV. INVESTMENT TAX RELIEFS AND INCOME TAX REDUCTIONS – execution 
of acquired rights ............................................................................................................. ........9 
v. TAX RELIEFS FOR COMPANIES WITH THE FOREIGN CAPITAL – 
EXECUTION OF THE ACQUIRED RIGHTS ..................................................................10 
vi. GRANTS TO SUPPORT PRODUCTI ON OF CALCIUM FERTILIZERS.......................11 
VII. SECTORAL PROGRAMME FO R FISHERIES DEVELOPMENT ..................................13 
VIII. GRANTS FOR THE BUYOUT OF FISHING QUOTAS FOR DEEP SEA 
FISHING........................................................................................................................ .........14 
IX. SALE OF THE FUEL FOR FISHING VESSELS IN THE SUSPENDED EXCISE 
DUTY PROCEDURE............................................................................................................15 
X. SPECIAL ECONOMIC ZONES .............................................................................................16 
XI. THE RESTRUCTURING AND DEVELOPMENT PROGRAMME OF IRON 
AND STEEL INDUSTRY TILL 2006..................................................................................18 
XII. RESTRUCTURING  PROGRAMME FOR MINING INDUSTRY .....................................19 
  G/SCM/N/123/EEC/Add.19 
 Page 3 
 
 
 The notification covers specific subsidies applied in  Poland in 2003-2004 in industrial sector. 
All data concerning the amounts of subsidies granted are given in new Polish Zlotys (PLN)1 
I. LOAN FROM EFSAL FUNDS 
1. Description of the programme  
 
 Instrument supporting the enterprise restructur ing and provision of “hedging” in case of the 
liquidation,  when it is impossible to obtain resources for these purposes from other sources. The entities eligible for the assistance,  which can be granted only once,  are state owned enterprises and 
companies  whose stock is owned by the State Treasury.  
 The agreement between the International Ba nk for Reconstruction and Development (IBRD) 
and the government of Poland (GoP) assumed extend ing of adaptation loans for the enterprises and 
financial sector in three tranches:  1st instalment – USD 125 million (282.356.805 PLN) – granted in 1994 
 
2nd instalment  – USD 100 million (261.920.000 PLN) – granted in April 1995 
 3rd instalment – USD 125 million - the Polish Side  has resigned from applying. 
  The total funds available amounted to: 225 m illion USD (544 mln PLN). Of that amount  for 
31 December 2004 – 19.6 million PLN is still not u tilized (3.6 per cent of the EFSAL funds ).  
 2. Duration of the programme and period covered by the notification 
 
  The programme is intended to function until exha ustion of the funds. Present notification covers 
period 2003 – 2004.  
 3. Policy objective and/or purpose of the subsidy
 
  Support of enterprise restructuring and provision of “hedging” in case of the liquidation.  
4. Authority responsible for the subsidy and legislation under which it is granted
 
  The authorities responsible for the programme are the Minister of Finance empowered by the 
Council of Ministers, ownership entities a nd Industrial Development Agency (IDA). 
 
 The EFSAL funds (Enterprise and Financial Sect or Adjustment Loan) were implemented on the 
basis of The Council’s of Ministers regulation of  23 November 1993 concerning the guidelines for the 
state budget implementation regarding the expend itures for support enterprise restructuring and 
“hedging” in case of the liquidation (Journal of Laws No 119, item 531, of 1995 No 128, item 621, 
of 1997 No 30, item 167).  
 From 1 January 1999 legal basis for the support represents The Council’s of Ministers 
resolution No 29/99 of 13 April 1999 concerning the aid financed from the 3599/POL loan, granted to the Republic of Poland by the International Bank for Reconstruction and Development due to the 
credit agreement from 11 October 1993. 
                                                 
1 The average exchange rate between Euro and Polish Zloty was:  in 2003  - 1 Euro = 4.4403 PLN 
        in 2004 – 1 Euro = 4.1438 PLN G/SCM/N/123/EEC/Add.19 
Page 4  
 
  Due to the accesion of Poland to the European Un ion new rules for state aid grants apply.The 
aid from EFSAL funds can be granted pursuant to the provisions of the Regulation of 30 April 2004 
on rules and procedures on state aid. Council of Minist ers resolution No 29/99 stipulates that there is 
de minimis aid or individual aid for restructuring (state aid which requires European Commission’s 
acceptance before granting). 
 
5. Form of the subsidy  
 
- grant - exclusively for the “hedging” purposes  (for allowances for personnel dismissed due to 
group reductions),  
 
- loan - for restructuring investments.  
 
6. Amount of subsidy granted  
 
Total amount granted in 2003: PLN 33.8 million (grants – 5.1 million, loans – 28.7 million)  
Total amount granted in 2004: PLN 320 thousands (grants only)  
 
7. Beneficiaries  
in PLN 
 
No. Branch of economy Total assistance 
granted 
in 2003 and 2004 
  
Grants  
Loans Global 
assistance 
structure 
 2003 33.784.195 5.084.195 28.700.000 100% 
1. Extraction and mining 955.048 955.048 - 2,8% 
2. Food industry 1.245.850 45.850 1.200.000 3,7% 
3. Light industry 427.575 427.575 
 
 - 1,3% 
4. Electro-machine industry 26.277.957 2.277.957 24.000.000 77,8% 
5. Construction  2.133.825 633.825 1.500.000 6,3% 
6. Transport  2.743.940 
 743.940 2.000.000 8,1% 
 2004 320.000 320.000  - 100% 
7. Light industry 320.000 320.000  - 100 
 Total 2003-2004 34.104.195 5.404.195 28.700.000  
 
 8. Trade effects of the subsidy
 
 
 The programme does not directly impact the foreign trade.  
II. GUARANTEES AND WARRANTIES OF THE STATE TREASURY 
1. Description of the programme
 
 
 Entrepreneurs may apply for guarantee or warranty regardless of their legal form and  structure 
of ownership.   According to the provisions of the Law on guaran ties and warranties, the Minister of Finance or 
the Council of Ministers may grant on behalf of the State Treasury:  G/SCM/N/123/EEC/Add.19 
 Page 5 
 
 
  
• The guarantee or warranty if it covers repayment of investment loans or resources from the 
issue of bonds for the financing of the following investment goals: 
 
• maintenance or development of the existing infrastructure, 
 
• environment protection, 
 
• creating new jobs connected with the releva nt investment within the framework of 
regional aid, 
 
• introducing new technical or technological solu tions resulting from research or development 
activities, 
 
• restructuring of enterprises; 
 
• The guarantee or warranty if it covers repayment of investment loans or resources from the 
issue of bonds for the financing of the following: 
 
• financing of the purchase of materials or final products  destined for undertakings being 
production of investments goods, 
 
• reinforcement of the funds created pursuant to other acts in the Bank Gospodarstwa 
Krajowego, if resources for repayment of loans come from other sources than state budget, except for budget resources which were expended to support a loan at the preferential rate; 
 
• opening credits by the banks in order to: 
 
 finance investment undertakings of local gove rnment and small and medium enterprises, 
 co-finance of programmes or projects within the framework of EU aid programmes, 
 
• repayment of loan covered already by the Tr easury guarantee or warranty including interests 
and other direct costs of this loan. 
 
 The above mentioned guaranties and warranties of the Treasury are granted pursuant to the 
following rules: 
 
• entities may apply for obtaining a guarantee or warranty regardless of their legal form and 
structure of ownership; 
 
• the requested amount of guarantee must exceed EURO 5.000.000; 
 
• decision on granting or refusal to grant a guar antee is made on the basis of the financial 
analysis of undertaking as well as analysis of the economic and financial situation of entity 
requesting to be granted a guarantee; the analysis  is aimed at verification of the capacity of 
this entity to repay loan secured with the guarantee; 
 
• guaranties and warranties may be granted if the anal ysis of the request confirms that the entity 
is capable to fulfill obligation secured by the guarantee; 
 
• guaranties and warranties are limited in time a nd granted to the amount indicated in advance; 
the Council of Ministers on the motion of the minister responsible for public finance may 
depart from this requirement when a guarantee is granted for an international financial 
institution of which Poland is a member or  has signed an agreement on cooperation; G/SCM/N/123/EEC/Add.19 
Page 6  
 
  
• coming into effect of a granted guarantee is s ubject to payment of a commission depending on 
amount covered by the guarantee; 
 
• a condition of granting the guarantee is securing clai ms of the Treasure that might arise out of 
and in connection with the liabilities  of the guarantor ;  
 
 With regard to the risk of the parties the fo llowing rule applies: guaranties and warranties may 
be granted to the 60 per cent of the amount remaining to repay (including interests) or 60 per cent of obligation incurred and resulting from the issue of  bonds. Exceptionally, in case of undertaking of 
special significance for the national economy the Council of Ministers may grant a guarantee exceeding 60 per cent; 
 
2. Duration of the programme and period covered by the notification
 
  The duration of the programme is not limited.  Th e value of the grants is set in the state budget 
every year.  Present notification covers period 2003 – 2004.  
 
3. Policy objective and/or purpose of the subsidy
 
  Support for economic undertakings due to a credit facilitation scheme.  4. Authority responsible for the subsidy and legislation under which it is granted
 
 
 The Minister of Finance and the Council of Ministers are the bodies responsible for the programme implementation.   The subsidy is granted under the Law of 8 Ma y 1997 concerning guaranties and warranties of 
the Treasury and some other legal persons (Journal of Laws of 2003 No 174, item 1689; Journal of 
Laws of 2004 No 123, item 1291; Journal of Laws  of 2004 No 145 item 1537; Journal of Laws of 
2004 No 281, item 2785).  5. Form of the subsidy
 
 
• Extending guaranties to the creditors to repa y the loans completely or partially with 
interests and other related costs, 
 
• Warranties by the State Treasury, of the performan ce by the issuer of obligations related to 
bonds issued by it, 
• Extending guarranties and warranties of perfo rming obligations resulting from hedging 
transaction against risk of change of the in terest rate or the currency exchange rate 
connected with the loan or issue of  bonds guarrantied by the State Treasury. 
 
• Extending guaranties to the foreign banks or fore ign financial institutions to repay loans, if 
these institutions extended guarantee to the borrower. 
 
6. Amount of subsidy granted  
 
 In 2003 five guaranties for foreign subjects were granted of PLN 1 256 million  value. 
Additionaly 17 guaranties for local subjects were granted of PLN 2 031 million value. Total amount 
granted in 2003 was PLN 3 287 million.    G/SCM/N/123/EEC/Add.19 
 Page 7 
 
 
  In 2004 five guaranties for foreign subj ects were granted of PLN 917 million value. 
Additionally, 9 guaranties for local subjects were granted of PLN 1 781 million value. Total amount 
granted in 2004 PLN was 2 698 million.   Total expenses in 2003 resulting form guarantie s granted by the State Treasury under the 
provisions of The Law of 8 May 1997 equale d to PLN 374.6 million including PLN 362 million 
resulting from the capital employed payments a nd PLN 12.6 million covering costs of rates and 
miscellaneous.   Total expenses in 2004 resulting form guarantie s granted by the State Treasury under the 
provisions of The Law of 8 May 1997 equaled to  PLN 6.4 million including PLN 6.1 resulting from 
the capital employed payments and PLN 0.3 million covering costs of rates. 
 7. Beneficiaries
 
 
 The guaranties and warrants extended by the State Treasury covered the banking loans for 
financing the following undertakings (within th e total amount of the guaranties and warranties 
extended by the Treasury):  In 2003: 
 
• projects concerning shipbuilding sector 29,7 %
• projects concerning food and agriculture sector 31,4 %
• projects concerning steelworks sector 0,7 %
• projects concerning regional development 37,9 %
• projects concerning cultural development 0,3 %
 
In 2004: 
 
• projects concerning shipbuilding sector 31,32 %
• projects concerning steelworks sector 10,37 %
• projects concerning transport sector 15,53 %
• projects concerning army sector 24,31 %
• projects concerning regional development 16,87 %
• projects concerning cultural development 1,6 %
 
8. Trade effects of the subsidy
 
  The programme does not directly impact the foreign trade.  
III. CREDIT GUARANTEES FROM THE NATIONAL FUND OF THE CREDIT 
GUARANTEES ESTABLISHED IN THE BANK GOSPODARSTWA KRAJOWEGO  
1. Description of the programme
 
  The terms and procedure of granting credit gua ranties and warranties from the National Fund of 
the Credit Guaranties (the Fund) are stipulated  by the agreement between the State Treasury 
represented by the Minister of Finance and the Bank Gospodarstwa Krajowego (BGK) concluded on 
12 March 2002 with subsequent am endments. The contract was signed on the basis of the Law on 
guaranties and warranties of the Treasury and certain legal entities of 8 May 1997.  G/SCM/N/123/EEC/Add.19 
Page 8  
 
  The BGK grants guaranties and warranties in cooperation with 26 banks – signatories of the 
cooperation agreement – which have in disposal ov er four thousands of representative offices. It 
assures nationwide availability of guaranties granted from the resources of the Fund.  
  Guarantee or warranty is being granted after secu ring claims of the BGK by the loan-taker in a 
form of blank bill of exchange or additiona lly in another form indicated by the BGK. 
  A granted guarantee is subject to payment of  a commission at 2 per cent rate and depending on 
period covered by the guarantee. Warranties  granted  are commissioned  twice as much as guaranties.  
 
 Guarantees and warranties may be granted both in  regular and summary (simplified) procedure. 
Guarantee or warranty may be granted in the regular procedure, i.e. after standard legal, economic and 
financial analysis of a petition, if the amount of guarantee or warranty exceeds 100 000 EUR. It may  
then cover up to 70 or 80 per cento f the credit (not including interests).  
 
 Guarantee or warranty may be granted in the summary procedure if the amount of guarantee or 
warranty does not exceed 100 000 EUR and covers up to  50 per cent of the credit. The BGK carries 
out merely the legal analysis of the petition and a bank granting the credit submits the statement of 
credit capacity of the credit-taker.     The BGK may also grant to banks guaranties fo r the credit portfolios from which the credits are 
to be given to very small, small and medium bus iness. The amount of a single guarantee within one 
portfolio may not exceed 50.000 EUR and then may not constitute more than 50 of a credit or may not exceed 25.000 EUR and then may not constitu te more than 70per cent of a credit.  
  The BGK may also take up or acquire shares in local and regional guarantee funds which act 
towards business development, granting guaranties fo r liabilities of very small, small and medium 
business resulting from repayment of loans and credits.   2. Duration of the programme and period covered by the notification 
 
  The Law does not define the duration of the programme. Present notification covers period 
2003 – 2004.  
 3. Policy objective and/or purpouse of the subsidy
 
  Support of small and medium enterprises. 
 
4. Authority responsible for the subsidy and legislation under which it is granted
  
 The authority responsible for the programme is th e Minister of Finance. The legal basis of the 
programme is the Law on guaranties and warranties of the Treasury and certain legal entities, of 
8 May 1997 (Dz. U. of 2003 Nr 174 poz. 1689 with subsequent amendments). 
 
5. Form of the subsidy  
 
 Form is the following: 
 
(a) Guaranties and warranties of loan repayment and guaranties and warranties of 
execution of liabilities resulting from the issue of bonds and also 
  G/SCM/N/123/EEC/Add.19 
 Page 9 
 
 
 (b) guaranties for obligations incurred an d resulting from supporting of small and 
medium enterprises’ activity by the guaran ties of loan repayment granted with the 
participation of public resources or credits and 
 
(c) taking up or acquisition shares and stoc ks of local and regional guarantee funds. 
 
6. Amount of subsidy granted  
 
 In 2003-2004 the BGK guaranteed repayment of business credits in the amount of 336.8  
million PLN from the resources of the Fund.  
 
 In 2003-2004 there were shares and stocks in 6 local and 8 regional guara ntee funds taken up or 
acquired with the resources of the Fund;  the total amount was 28.2 million PLN. 
 
7. Beneficiaries  
 
 Each Polish enterprise may apply for bei ng granted a guarantee from the Fund. However 
considering the fact that the BGK within this Fu nd may grant guaranties and warranties to the amount 
not exceeding 5.000.000 EUR, it is clear that th e Fund is an instrument of supporting small and 
medium enterprises.  
 
8. Evaluation of the effect s of the subsidy on trade  
 
 Taking into account purposes of this programme it does not have an impact on foreign trade or 
it is negligible. 
 
IV. INVESTMENT TAX RELIEFS AND INCOME TAX REDUCTIONS – EXECUTION OF 
ACQUIRED RIGHTS 
1. Description of the programme  
 
 Investment tax relief created the possibility to subtract from a tax base in a fiscal year all 
investment expenses which were effectively incurred in that very year (investment relief term was defined). In the following fiscal year the tax payer had a right to so called investment premium – the right to deduct, from the tax base, a certain amount which constituted the half of investment expenses 
in the previous year. Income tax payers (only legal persons) were subject to such relief.  
 
 Following restrictions applied in this context: 
• tax payer could not make use of othe r sort of tax reliefs or reductions’ 
• there was a certain threshold of profitability fo r the entitiy applying investment tax relief, 
• the tax payer had to meet deadlines when performing certain obligations to the state budged. 
  From 1 January 2000 the regulations concerning th e investment tax reliefs for tax payers being 
a legal person ceased to exist. Ta x payers, who carried on with its i nvestment which has started before 
1 January 2000 and which was covered by investment  tax relief, were granted a right to deduct all 
investment expenses incurred till 31 December 2002. Ac quired rights to the investment relief lapsed 
by the end of the next consecutive fiscal year in due regard to the possibility of the investment 
premium.  2. Duration of the programme and period covered by the notification
 
 
 The programme was in function until 2004 (it w as merely the execution of acquired rights). 
Present notification covers 2003.  G/SCM/N/123/EEC/Add.19 
Page 10  
 
  
3. Policy objective and/or purpose of the subsidy  
  Revealing the income by tax payers and increase of investment expenditures.  4. Authority responsible for the subsidy an d legislation under which it is granted. 
 
 The authority responsible for the programme is th e Minister of Finance. The legal basis is the 
following:   
- art. 6 par. 2 of the Law of 21.11.1996 amending the Law on corporate income tax 
(Dz. U. Nr 137, poz. 639),  
 - art. 3 par. 4 and 5 of the Law of  20.11.1999 amending the Law on corporate income 
tax (Dz. U. Nr 95, poz. 1101 with subsequent amendments), 
 
- art. 5 par. 2 of the Act of  21.11.19 96 amending the Law on personal income tax 
(Dz. U. Nr 137, poz. 638), 
 - art. 7 of the Act of 9.11.2000 amendi ng the Law on personal income tax and 
amending other acts (Dz. U. Nr 104, poz. 1104 with subsequent amendments),  
 
5. Form of the subsidy
 
  Income tax reliefs connected to investments expenditures.  6. Amount of subsidy granted
 
 
 In 2003 the subsidy granted in this form am ounted  to PLN 3.7 million for legal persons and 
PLN 975 thousand for natural persons.  The data for 2004 is not available yet.  It will be available in 
the second half of the year 2005. 
 
7. Beneficiaries  
 
 42 legal persons and 796 na tural persons were grante d this subsidy in 2003. 
 
8. Evaluation of the effect s of the subsidy on trade  
 
 There is no direct impact of this programme on the foreign trade. 
 
V. TAX RELIEFS FOR COMPANIES WITH THE FOREIGN CAPITAL – EXECUTION 
OF THE ACQUIRED RIGHTS 
1. Description of the programme  
 
  Minister of Finance having aquired the acceptanc e of the Minister of the State Treasury had the 
right to exempt the company with the foreign capital from income tax if one of the following 
requirements has been fulfilled: 
 
• the share of the stock capital in the company aquired by the foreign partner was or exceeded 
certain level, 
  G/SCM/N/123/EEC/Add.19 
 Page 11 
 
 
 • economic activity of the compan y was conducted in the regions w ith high level of structural 
unemployment, 
 
• the investment implemented new tchnological solution in the Polish economy, 
 
 Total amount of the exempted income tax could not exceed the value of shares or stock aquired 
by the foreign investor. 
 
 The regulation being the legal basis of this subsidy was terminated in 1996. However the 
economic entities may use the exemptions granted unde r this regulation if they started operations and 
released the first invoice before 31 March 1994.  
 
2. Duration of the programme and period covered by the notification  
 
 The programme works only witin the framewor k of rights acquired  until 31 December 1996. 
Present notification covers year 2003. 
 
3. Policy objective and/or purpouse of the subsidy  
 
 Creation of incentives for foreign investments.  
 
4. Authority responsible for the subsidy and legislation under which it is granted  
 
 The authority responsible for this programme is the Minister of Finance acting pursuant to 
art. 93 of the Law of 19.11.1999 “Law on econom ic activity” (Dz.U. Nr 101, poz. 1178 with 
subsequent amendments).  
 
5. Form of the subsidy  
 
 Income tax reliefs for comp anies with the foreign capital.  
 
6. Amount of subsidy granted  
  In 2003 the subsidy granted in this form amount ed to PLN 303.7 million.  The data for 2004 is 
not available yet.  It will be available in the second half of the year 2005. 
 
7. Beneficiaries
 
 
 42 legal persons  were gr anted this subsidy in 2003.  
 
8. Evaluation of the effect s of the subsidy on trade  
 There is no direct impact of this programme on the foreign trade. 
 
VI. GRANTS TO SUPPORT PRODUC TION OF CALCIUM FERTILIZERS 
1. Description of the programme  
 
 In 2003 and 2004 the state assistance consisting in subsidizing production of calcium fertilizers 
was continued (subsidizing the production costs an d sales). The subsidies are meant to reduce the 
price of this type of fertilizers to enable a pplying them by broad ra nge of Polish farmers. 
The assistance is justified by the need to de-acidify  considerable part of arable land (acidification of 
the soil adversely influences the crops) from one  hand, and from the other hand by the low 
profitability of large part of the farms, which preven ts them to purchase calcium fertilizers at their full 
price. G/SCM/N/123/EEC/Add.19 
Page 12  
 
  
 The state assistance involves gr ants awarded to the fertilizers' producers, proportionally to the 
number of tons of pure CaO and MgO in the volume of the produced and sold fertilizers.   Despite the fact that the assistance was granted directly to producers of the fertilizers, it 
supports farmers by allowing them purchase of the fertilizers at lower price. 
 2. Duration of the programme and period covered by the notification
 
  Programme was terminated on 1 May 2004 since Poland has become EU member. Subsidizing 
of production of calcium fertilizers is not consis tent with EU’s common agriculture policy. Present 
notification covers 1 January 2003 – 30 April 2004.  3. Policy objective and/or purpose of the subsidy
 
 
 To reduce prices of calcium fertilizers u sed by farmers to de-acidify the soil. 
 4. Authority responsible for the subsidy and relevant legislation
 
  Minister of Agriculture and Rural Developmen t and Minister of Finance are responsible for 
proper conduct of the programme. 
 
 Legal basis of the programme:  
(a)  for the year 2003 
 
• The Law of 26 November 1998 on public finances (Journal of Laws No 155, 
item 1014 with subsequent changes); 
• 2003 Budgetary Law of 18 December 2002 (Journal of Laws 235, item 1981); 
• Minister’s of Agriculture and Rura l Development Regulation of 22 May 2002 
concerning grant rates for the agricultural sector and detailed rules and procedures for 
awarding these grants (Journal of Laws No  65, item 595 with subsequent changes). 
 
(b)  For the year 2004 
 
• The Law of 26 November 1998 on public fina nces (Journal of Laws No 155, item. 
1014 with subsequent changes); 
 
• 2004 Budgetary Law of 23 December 2004 (Journal of Laws 17, item 167); 
 
• Minister’s of Agriculture and Rural De velopment Regulation of 15 April 2004  
concerning grant rates for the agricultural sector and detailed rules and procedures for 
awarding these grants (Journal of Laws No 72, item 655). 
 
5. Form of the subsidy
 
 
 Grant from the state budged. 
 
6. Amount of subsidy granted  
 
 Total amount granted in 2003 - PLN 54.2 thousand  
 Total amount granted in 2004 - PLN 19.8 thousand  G/SCM/N/123/EEC/Add.19 
 Page 13 
 
 
 7. Beneficiaries  
 
 All calcium fertilizers producers were awarded the grants, however defecation lime producers 
were exempted from the programme in 2004.  8. Evaluation of the effect s of the subsidy on trade
 
 
 The programme does not directly impact the foreign trade. 
 
VII. SECTORAL PROGRAMME FOR FISHERIES DEVELOPMENT 
1. Description of the programme  
 
 The Programme contains measures on development of fishing industry in Poland.  It provides 
payments for the loans granted to the companies operating in the fish ing industry.  The loan can be 
used for: 
 
• Purchase of machineries and devicies made from st ainless steel or teflon which are used in the 
fish, crustaceans and molluscs processing, 
• purchase of buildings and equipment designed for the fish, crustaceans and molluscs 
processing with the ground on which those buildings are located, 
• buildings’ modernisation, 
• construction of water purification system, 
• purchase of freezing and defreezing chambers and/or watercoolers, 
• purchase of the new smokeing chambers, 
• purchase of the icemaking machines, 
• purchase of the equipment designed for the intr oduction of the quality control systems, 
• modernisation and revitalisation of  the fishing boats and cutters, 
• other undertakings in freshwater fishing. 
 
2. Duration of the programme and period covered by the notification  
  The programme was due for 2000 – 2006. After ac cesion of Poland to the European Union it 
ceased to exist from 1 May 2004. Following notifica tion covers the period from 1 January 2003 to 30 
April 2004.   
3. Policy objective and/or purpouse of the subsidy
 
 
• Enhancing the quality of the manufactured products, 
• Improving the sanitary conditions on the fishing boats, 
• Restructuring the freshwater fishing industry 
 4. Authority responsible for the subsidy and legislation under which it is granted
 
 
 Minister of Agriculture and Rural Developm ent is responsible for proper conduct of the 
programme. Agency for Restructurisation and Modern isation of the Agriculture is responsible for 
financial supervision of the programme.  
 Council’s of Ministers regulation concering the activities of the Agency for Restructurisation 
and Modernisation of the Agriculture cons titutes the legal basis of the programme.  
 5. Form of the subsidy
  
 
 Payments to the loans’ interests G/SCM/N/123/EEC/Add.19 
Page 14  
 
 6. Amount of subsidy granted  
 
 13 loans within the credit line BR/12 in total amount of  PLN 7 million were granted in 2003. 
Among them 3 concerned fleet development, 2 con cerned fish processing industry and 8 concerned 
freshwater fishing. 
 
 From 1 January 2004 to 30 April 2004, 5 loans were granted in total amount of PLN 1 million. 
Among them 4 concerned fleet development, 1 concerned fishery processing. 
 7. Beneficiaries
 
  Companies, organisations, institutions operating in the fish processing and fishing industry.  
In the period covered by notification 18 entities were subject to this subsidy. 
 
8. Trade effects of the subsidy
 
  The programme does not directly impact the foreign trade.  VIII. GRANTS FOR THE BUYOUT OF FISHING QUOTAS FOR DEEP SEA FISHING 
1. Description of the programme
 
  In order to be allowed to fish on the waters wh ich are under the jurisdiction of the other states or 
under jurisdiction of International Fishing Orgaisa tions (eg. CCAMLR) Polish fishing companies had 
to buy fishing licences.  The purchase price depended on the length of fishing period and the value of 
the catch. Minister of Agriculture and Rural Deve lopment decided on giving the grant to that purpose 
after examining the application (for grant) and othe r documents certifing the cost of licence.  The 
grant could not exceed 90 per centof the licence costs. 
 
2. Duration of the programme and period covered by the notification
 
  The time frame for the programme was set fo r 1995 – 2004 period. The notification covers 
period 2003 – 2004.  
 
3. Policy objective and/or purpouse of the subsidy
 
 
 Grants for buyout deep sea fishing quotas aiming at increasing the competetivenes of the market 
operators.  
 
4. Authority responsible for the subsidy and legislation under which it is granted  
 
 Minister of Agriculture and Rural Developm ent is responsible for proper conduct of the 
programme. Budged law constitutes the legal basis of the programme.  
 
5. Form of the subsidy  
  Grant. 
 
6. Amount of subsidy granted
 
 
 In 2003 PLN 785 thousand was granted corresponding with PLN 608 thousand in 2004. 
  G/SCM/N/123/EEC/Add.19 
 Page 15 
 
 
 7. Beneficiaries  
  In the period covered by the notificati on 1 entitiy was a subject to the grants. 
 8. Trade effects of the subsidy
 
 
 he programme does not directly impact the foreign trade.  
IX. SALE OF THE FUEL FOR FISHING VE SSELS IN THE SUSPENDED EXCISE DUTY 
PROCEDURE 
1. Description of the programme
 
  All Polish fishing boats owners were eligible for a programme pr oviding that they could submit 
valid fishing licences and their boats were equiped with internal combustion engine. The limits of 
support were set according to the class of the fish ing vessel (engine power) and were subject to the 
quarterly reports.  Within those limits fisherman were allowed to purchase fuel in the procedure of 
suspended excise duty.  2. Duration of the programme and period covered by the notification
 
  The programme has been running since 1992.. The notification covers 1 January 2003 – 
30 April 2004.  
 3. Policy objective and/or purpose of the subsidy
 
  Lowering the prices of the fuel for fishermen. 
 
4. Authority responsible for the subsidy and legislation under which it is granted
 
  Minister of Agriculture and Rural Development,  Minister of Infrastructure and Minister of 
Finance are responsible for proper conduct of the programme.   
 Until 1May 2004 the sale of fuel in the proce dure of suspended excise duty was introduced by 
the Minister’s of Finance Regulation of 22 Ma rch 2002 concerning excise duty (Journal of Laws 
No 27, item 269 with subsequent changes).  5. Form of the subsidy
 
 
 Excise duty exemption.  6. Amount of subsidy granted
 
 
 In the framework of the programme 21 113 tonne s of fuel was sold to the deep sea fishing 
vessels’ owners in 2003, corresponding with 10 742 tonnes in 2004 (January – April data). Excise 
duty in 1000 liters of fuel amounted to PLN 1 051 in 2003, corresponding with  PLN 1 063 in 2004.  
 
7. Beneficiaries  
 
 Owners of the deep sea vessels (not exceeding 15 meters in lenght). Number of beneficiaries 
covered by the programme amounted up to 1 250 fishing vessels.  G/SCM/N/123/EEC/Add.19 
Page 16  
 
 8. Trade effects of the subsidy  
  The programme does not directly impact the foreign trade.  
X. SPECIAL ECONOMIC ZONES 
- Regional Aid Scheme for the enterprises conduc ting business activity in Special Economic 
Zones under a permit issued after 31 December 2000. 
- Regional Aid Scheme in form of exemption from real estate tax granted to entrepreneurs 
other than small and medium ones conducting business activity in Special Economic Zones under a permit issued before 1 January 2001.  
- Regional Aid Scheme in form of remission of the real estate tax arrears for the 
entrepreneurs other than small and medium ones conducting business activity in Special 
Economic Zones under a permit issued before 1 January 2001 . 
 1. Description of the programme
 
 
 There are fourteen Special Ec onomic Zones (SEZ) in Poland on the area of 6526 ha. (data for 
December 2004). The aid is granted to the entr epreneurs (who might conduct business activity as 
legal or natural persons; the lega l persons are the corporate income tax payers whereas the natural 
persons are the personal income tax payers) w ho obtain the permit to conduct business in the SEZ. 
 
The aid, in form of the tax exemption from the legal or natural persons’ is granted to those 
entrepreneurs who: 
- will carry new investments in SEZ 
- will obtain permit , through adjudication by tende r or announced negotiations in public, to 
conduct activity, which due to the regulation of  the Council of Ministers on establishment of 
special economic zone, may obtain the aid 
- will bear investment’s costs shall amount to 100.000 Euro at least 
- will fulfil the conditions of permit, which in par ticular state the amount and period of carried 
investments and employment 
 
 Entrepreneurs who will fulfil the above conditi ons may exempt the income gained from the 
activity covered by permit to the maximum of 50%- in the case of large entrepreneurs and 65 per cent in case of small and medium enterprises, eligible i nvestment costs or respectively two year cost of 
labour of the new employees. 
2. Duration of the programme and period covered by the notification
 
 The present aid schemes, submitted to European Commission are binding for 2001 – 2006. The 
aid schemes for the following years will be drawn up  altogether with the new legal acts in accordance 
with the new rules of granting the aid. This notifi cation covers subsidies granted in the years 2003.  
3. Policy objective and/or purpose of the subsidy  
 
Supporting initial investment or creating new jobs re lated to an initial investment by entrepreneurs 
conducting economic activity in the special economic zones 
4. Authority responsible for the subsidy and legislation under which it is granted  
 
 Authority responsible for the programme is  the Minister of Economy and Labour.   G/SCM/N/123/EEC/Add.19 
 Page 17 
 
 
 • The subsidy is granted on the basis of the following legal acts: 
• The Law on Special Economic Zones of 20 October 1994 (no 123, item 600, of 1996 no 
106, item 496, of 1997 no 121, item 770, of 1998 No. 106, item 668, of 2000 no 117, item. 
1228, of 2002 no 113, item 984 a nd no 240, item 2055, of 2003 no 188, item 1840, of 2004 
No. 123, item. 1291.), 
 
• The Law of 2 October 2003 on amendment of  the Act on Special Economic Zones and 
some other acts (Journal of Laws  no 188, item 1840 and no 123, item 1291), 
 
• and 14 regulations of the Council of Minist ers on the individual special economic zones 
(Journal of Laws no 215, item 2183 and ite m 2184, no 218, item 2209 and item 2210, no 
219, item 2217, no 222, item 2251, item 2252 and item 2253, no 224, item 2270 and item 2271, no 226, item 2286, no 231, item 2232 and no 257, item 2574). 
 
5. Form of the subsidy
 
  It is granted in the form of the tax exemption from the legal persons’ or  natural persons’ income 
tax as well as the tax exemption from real estate tax .  
6. Amount of subsidy granted
 
 In 2003 the total aid amounted to 554,3 mln zl. The data for the year 2004 is still not available 
due to its form (tax exemption) – it will be  submitted in the second half of this year.  
7. Beneficiaries  
 The aid is granted to the following groups of the entrepreneurs: (a) The entrepreneurs who obtained th e permit before 31 December 2001: 
 
– the small and the medium ones are entitled to to tal tax exemption for the first ten years of 
conducting business activity in the special economic zones and to 50 per cent of tax exemption for the following years – the small ones up till 31 December 2011, the medium ones till 31. December 2010. 
 
– the large entrepreneurs who obtained the pe rmit before 31 December 1999 are entitled to 
tax exemption that amounts to 75 per cent of the investment costs borne till the end of 
2006 whereas those who obtained the permit in year 2000 – 50 per cent of the said costs. The entrepreneurs from the motor vehicle are entitled to tax exemption that amounts to 30 
per cent of the investment costs. 
 
(b) The entrepreneurs who obtained the permit af ter 1 January 2001 are entitled to tax exemptions 
that amount to:  
- For the large entrepreneurs - 50 per cent of  the investment costs or 2 year costs of 
creating new jobs, 
- For the small and medium entrepreneurs – 65 per cent of the abovementioned costs. 
 In Cracow and Wroclaw these indexes amount accordingly to 40 per cent and 55 per cent. 
8. Trade effect of the subsidy
 
 There are no trade effects of the subsidies granted in the SEZ. G/SCM/N/123/EEC/Add.19 
Page 18  
 
 XI. THE RESTRUCTURING AND DEVELOPMENT PROGRAMME OF IRON AND 
STEEL INDUSTRY TILL 2006 
1. Description of the programme  
 
 The document "The Restructuring and Developmen t of Polish Iron and Steel Industry till  2006" 
was agreed in the course of (accession) negotiations  with the European Commission and adopted by 
the Council of Ministers on 25 March 2003. It consti tutes, together with individual business plans of 
some steel mills, the annex to the Protocol 8 to the Poland's Accession Treaty. All the public aid 
allowed to be granted to the selected steel mills has been specified and quantified in these documents. 
 
2. Duration of the programme and pe riod covered by the notification   
 
 The programme is in force till 31 December 2006.  The notification covers the years 2003-2004. 
 
3. Policy objective and/or purpose of the subsidy  
 
Support of restructuring process of the iron and steel industry. 
 
4. Authority responsible for the subsidy and legislation under which it is granted  
 Authority responsible for the programme is  the Minister of Economy and Labour.  
 The subsidy is granted on the basis of the legal acts stated in point no 11.1  
5. Form of the subsidy  
 
 Different kinds of subsidies were included to the programme depending on the needs and 
problems of particular steel mills.  There were gr ants but only for employment restructuring, debt 
reduction and write-off of tax, insurance premium an d civil liabilities to the public and/or state owned 
institutions and enterprises, and stat e guarantees for commercial credits. 
 
6. Amount of subsidy granted  
 
 In 2003 the total value of public aid granted in  a period of consideration as converted into an 
equivalent of net subsidy [EDN ] amounted to 2 136 320.23 PLN.  There was no support under this 
programme in 2004. 
 
7. Beneficiaries  
 
 The table lists values of public aid granted to all entitled (in Protocol no.8 – Annex of 
EU Accession Treaty) steel mills. 
 
 Public aid granted to steel mills in a period from 1 January 2003 – to 31 December 2003 
 
Steel Mill  A value of public aid 
as converted into EDN 
[000’s  PLN] 
Huta Bankowa Sp. z o.o.  3 226.3 
Huta LW Sp. z o.o.  197 767.1 
Huta Łabędy S.A.  51.2 
Huta Pokój S.A.  9 004.5 
Technologie Buczek S. A.  2 004.93 
Polskie Huty Stali S.A. 1 924 266.2 
TOTAL 2 136 320.23  G/SCM/N/123/EEC/Add.19 
 Page 19 
 
 
 7. Trade effect of the subsidy  
 There are no trade effects of the subsidies granted under this programme. 
XII. RESTRUCTURING PROGRAMME FOR MINING INDUSTRY 
1. Description of the programme  
 
 The programme of restructuring of the mining sector currently in force: “Hard coal mining 
industry restructurisation 2004 – 2006 and the stra tegy for the sector for 2007 – 2010” was accepted 
formally by the Council of Ministers 27 April 2004.   The programme aims at financial recovery of the hard coal mining enterprises and creation the 
conditions for stable economic growth of the sector. The following issues have been regulated in the 
programme: 
 
• rules and propcedures for mining enerprises’ restructurisation including the procedures of 
writing off debts of those enterprises, 
• rules of adjusting of production capacity to the market demand, 
• rules for the change of employment patterns in the sector, 
• special rights of municipalities within mining industry. 
  The programme set the rules for finiancing above  mentioned reforms. State aid constitutes the 
main part of the financial resourses aimed at hard coal mining industry restructuring. The programme 
was worked out in compliance with Council Regulation No 1407 from 23 July 2002 concerning the 
state aid for hard coal mining industry. 
 
Following results of the reforms have been noted to date (1998 – 2004): 
 
• 15 mines have been closed down and 10 mines have been partially liqidated, 
• hard coal production has been reduced by 49.2 million tonnes, 
• number of people employed decreased by 107.800 workers, 
• according to the provisional results the net fina ncial profit in the sector increased in 2004 and 
amounted to PLN 2.7 billion. 
 
2. Duration of the programme and period covered by the notification
 
 
 The programme will last till 2006.  The notification covers period 2003 – 2004.  
 
3. Policy objective and/or purpose of the subsidy  
 
• Adjusting the industry operators from the coal mining sector to the market economy 
conditions, 
• satisfing Polish domestic needs for hard coal s upply by 2010 with due regard to environment 
protection and work safety. 
 
4. Authority responsible for the subsidy and legislation under which it is granted  
 
 Ministry of Economy and Labour is responsib le for the propoer conduct of the programme. 
  Legal basis for the aid constituted Law of 26 November 1998 on adjustment of hard coal 
mining to the market economy and special rights of municipalities within mining industry (Journal of 
Laws No 162, item 1112, with subsequent changes). G/SCM/N/123/EEC/Add.19 
Page 20  
 
  
 Starting from 2003 the Law of 28 November 2003 concerning restructuring of the hard coal mining enterprises in the period of 2003 – 2006 (Journal of Laws No 210, item 2037) along with 
executive provisions have been the legal basis for the aid. 
 
 The executive provisions include: 
 
• The ordinance of Minister of Economy, Labour and Social Policy of 16 January 2004 
concerning the list of municipalities with a mining industry (M.P. No 5, item 97), 
• Regulation of the Minister of Economy, La bour and Social Policy of 28 January 2004 
concerning the use of grants aimed at financ ing physical liquidation of the coal mines 
(Journal of Laws No 18, item 171), 
• Regulation of the Minister of Economy, Labour  and Social Policy of 11 February 2004 
concerning the use of grants addressed to th e coal mines enterprises’ employees aimed at 
undertaking entrepreneurial activity (J ournal of Laws No 25, item 222), 
• Regulation of the Minister of Economy, Labour  and Social Policy of 11 February 2004 
concerning the restructurisation of the coal mine industry in a field of human resources 
(Journal of Laws No 25, item 223), 
• Regulation of the Minister of Finance of 9 April 2004 concerning the preferential loans for 
municipialities with a mining industry for investments aiming at jobs creation (Journal of 
Laws No 84, item 778). 
 5. Form of the subsidy
 
 
 Grants, tax exemptions or deferred payments.  
6. Amount of subsidy granted
 
 
Granted subsidy in 2003 amounted to PLN 19.04 9 billion. Granted subsidy in 2004 amounted 
to PLN 5.837 billion. 
 
2003 was a special year as regards the amount of granted subsidy. During that year the 
amount of written off debts of the enterprises operati ng within the sector equaled to PLN 18.1 billion. 
Other liabilities amounting to PLN 2.6 billion were arranged for installment payments. In 2003 PLN 
949.4 million from the state budged were transferred in  order to finance the programme. Starting from 
2004 the aid has decreased and has been granted according to the Council Regulation No 1407/2002. 
 
7. Beneficiaries  
  The major part of the aid was designed for natural persons (remuneration in cash for dismissed workers).  Moreover the group of beneficiaries c onsisted of: coal mines and coal mine holdings, 
companies restructuring the coal mines and mine works enterprises. 
 8. Trade effects of the subsidy
 
 
The subsidy does not effect the foreign trade. 
 
 
__________