WORLD TRADE  
ORGANIZATION  G/SCM/Q2/EEC/51 
20 October 2006 
 (06-5087) 
Committee on Subsidies 
and Countervailing Measures Original:   English/ 
 French/  Spanish 
 
  
SUBSIDIES 
 
Replies to Questions from the UNITED STATES Regarding the New and Full 
 
Notification of the EUROPEAN COMMUNITIES (European Communities;  
Finland;  France;  Germany;  Greece;  Ireland;  Italy;  Luxembourg;  Portugal;  
Slovenia;  Spain and the United Kingdom )1 
  
 The following communication, dated 25 September 2006, is being circulated at the request of 
the Delegation of the European Commission. 
 
_______________ 
  
EUROPEAN COMMUNITIES
 (G/SCM/N/123/EEC) 
 
Community Framework Programmes in the Field of Research 
  The United States would like to note that several  questions were asked with regard to the 
European Communities’  2003 New and Full Notif ication on the issue the Community Framework 
Programmes in the Field of Research, which have not yet been answered.  We look forward to 
receiving replies to these questions.  
FIFG 
 
 Please explain what happens to fishing v essels after they are de commissioned under this 
programme.  Are the vessels scrapped, sold to ot her countries for the purpose of fishing, sold for 
other purposes, etc.? 
 
Reply
 
 
 According to FIFG rules the permanent ces sation of vessels' fishing activities may be 
achieved by:  -  the scrapping of the vessel;  
-  permanent reassignment of the v essel for purposes other than fishing. 
                                                     
 
1 European Communities (G/SCM/N/123/EEC);  Finland (G/SCM/N/123/EEC/Add.7);  France 
(G/SCM/N/123/EEC/Add.8);  Germ any (G/SCM/N/123/EEC/A dd.9);  Greece (G/SCM/N /123/EEC/Add.10);  
Ireland (G/SCM/N/123/EEC/Add.12);  Ital y (G/SCM/N/123/EEC/Add.13);  Luxembourg 
(G/SCM/N/123/EEC/Add.16);  Portugal (G/SCM/N/123/EEC/Add.20);  Slovenia 
(G/SCM/N/123/EEC/Add.22);  Spain (G/SCM/N/123/EEC/Add.23) and the United Kingdom 
(G/SCM/N/123/EEC/Add.25). G/SCM/Q2/EEC/51 
Page 2  
 
   See Article 7.3 of the EU's COUNCIL REGULATION (EC) No 2792/1999 of 
17 December 1999 laying down the detailed rules a nd arrangements regarding Community structural 
assistance in the fisheries sector as amended by COUNCIL REGULATION (EC) No 2369/2002 of 20 December 2002.  
 
FINLAND
 (G/SCM/N/123/EEC/Add.7) 
 AID FOR PROMOTING RESEARCH AND DEVELOPMENT 
 
1. What are the principal industries that benefit from the above listed programmes? 
 
Reply
 
 
 The aggregate sums and the most important i ndustrial fields are presented in the following 
tables: (MEUR)  
2005    
 Grants Loans  Total 
Electrical and optical equipment 44,6 13,3 57,9 Business services 35,5 21,5 57,0 Machinery and equipments 36,9 7,2 44,1 Chemical industry 17,0 17,2 34,3 
Metals, metal produc ts 10,6 2,0 12,5 
Forest industry 6,0 0,6 6,6 Transport equipments 3,0 2,0 5,0 Food, beverages 3,8 0,7 4,6 Education, health and social services 2,0 1,0 3,0 Construction 2,3 0,5 2,8 
Other industries 16,1 5,7 21,8 
Total 177,9 71,8 249,7     
2004    
 Grants Loans  Total 
Electrical and optical equipment 39,9 11,8 51,7 Business services 34,6 14,0 48,6 Chemical industry 21,8 19,7 41,4 Machinery and equipments 26,7 7,8 34,5 
Metals, metal produc ts 11,2 5,3 16,4 
Forest industry 7,1 2,6 9,7 Transport equipments 4,3 4,2 8,4 Food, beverages 4,8 1,0 5,7 Construction 2,4 0,6 2,9 
Education, health and social services 1,6 0,4 2,0 
Other industries 10,6 4,3 15,0 Total 164,9 71,5 236,4 
  
The tables are based on the commitments made on the years 2004 and 2005.  Payments are made 
retrospectively based on actual incurred costs during the project lifetime.     G/SCM/Q2/EEC/51 
 Page 3 
 
 
  FRANCE  (G/SCM/N/123/EEC/Add.8) 
 
Tax Credit to Promote Research 
 Q1. Please provide information regarding the industries that received incentives under this 
programme during the reporting period.  
Reply
 
  The main sectors to have benefited from th e tax credit to promote research in 2003 are: 
 
 - The electrical and electronic industry (22.37 per cent of registrants);   - Automobile industry (17.47 per cent of registrants);  
 - Advice and assistance to enterprises (13.46 per cent of registrants); 
  - Pharmacy, perfumery and beauty care (7.68 per cent of registrants)  Source
:  Bilan Cir  2003, Ministry of Higher Education and Research.  Internet site. 
 General Questions 
 
Aid to Alstom 
 
Q2. Based on information from public sources, it appears that in July 2004 the European 
Commission approved a rescue scheme for the Fren ch company Alstom, in which the French 
Government financed a debt-for-equity swap pr oviding Alstom €2.2 billion in aid.  Please 
explain how this programme does not qualify as notifiable under Article 25 of the Subsidies 
Agreement.  If it is notifiable, please provide information regarding the aid package provided to 
Alstom, as required under Article 25. 
 Reply
 
  The State was called upon to intervene in 2003-2004 in the Alstom Group's overall financing plan by acquiring a temporary and minority holdi ng in the framework of an operation conducted by 
private investors.  This overall plan was implemen ted in order to prevent this world-class company, 
faced with specific short-term problems, from defaulting.  The disappearance of this group which, in 
2003, provided 110,000 jobs in 70 countries (princ ipally Europe, North America and Asia) would 
have had serious social, economic a nd industrial consequences not only at the national level, but at the 
European and world levels as well.   The arrangements for State intervention (chiefly in the form of a limited guarantee and a 
minority holding) were approved, subject to conditions, by the European Commission in a decision of 
7 July 2004, published in the Official Journal of the European Union.  In connection with this 
decision, the European Commission declared the a rrangement to be compatible with the common 
market subject to substantial commitments and co nditions (sale of assets, structural measures) the 
implementation of which is currently being completed. 
 
 The Alstom Group has now completely recovered, and the State is no longer involved in the group's capital.  G/SCM/Q2/EEC/51 
Page 4  
 
  Aid to Snecma 
 
Q3. Information from public sources indica tes that European Commission has approved 
research and development support in the amount of  €140 million for Snecma in order to develop 
an engine for the Russian Regional Jet (RRJ).   Please explain how this programme does not 
qualify as notifiable under Article 25 of the Agreement on Subsidies and Countervailing 
Measures (Subsidies Agreement). If it is notifi able, please provide the information as required 
under Article 25.  
 
Reply
 
 
 The State provided support for the industria l programme to develop a new engine, the 
SaM 146, designed for regional transport aircraft in the 65 to 95 seat range. 
  As this support is subject to reimbursement , it is not a subsidy under the WTO Subsidies 
Agreement. 
  Moreover, this support was authorized by th e Commission in 2005.  Consequently, it does not 
come under the notification period 2003-2004 covered by these questions. 
 
Regional Aid - Business Tax Exemptions 
 
Q4. Based on publicly available information, France’s Finance Ministry plans to provide 
business tax exemptions up to €100,000 over three years to companies in certain depressed 
regions in France.  Please provide the informatio n regarding the status of this programme.  If 
this programme is already in place, please pr ovide information regarding this programme as 
required under Article 25 of the Subsidies Agreement.  
 
Reply
 
  Attached hereto is an annex providing in formation on the business tax credit for companies 
established in severely distressed employment areas. 
 
Royalty Based Financing  
 Q5. The United States would also like to note  that several questions were asked with regard 
to the France’s 2003 New and Full Notification on the issue of royalty based financing, and in 
particular assistance to the aircraft industry,  which have not yet been answered.  We look 
forward to receiving replies to these questions. 
 
  G/SCM/Q2/EEC/51 
 Page 5 
 
 
  ANNEX 
 
Tax Credit in Favour of Enterprises Establis hed in Severely Distressed Employment Areas 
 
1. Description of the regime 
 
 Enterprises established in an employment area recognized to be severely distressed in terms 
of relocations are eligible for a business tax credit. 
 
 This credit amounts to 1,000 euros per person employed for at least one year at 1 January of the year of assessment, and is met from the sum of  the business tax owed by the enterprise.  If the 
amount of the tax credit exceeds the amount of the business tax, the surplus is returned to the 
enterprise.  
 This tax credit is applied within the lim its and conditions set forth in Regulation 
(EC No. 69/2001 of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to de 
minimis  aid.  Thus, the amount of this aid is added to the other de minimis  aid granted, and the total 
amount of such aid must not exceed 100,000 euros over a period of three years.  2. Employment areas eligible for the business tax credit 
 
 There are two categories of employment areas eligible for the business tax credit.   The first category covers the 20 employment areas with the slowest development of paid 
employment over a period of four years among ar eas which had an unemployment rate 2 per cent 
higher than the national average at 30 September of the year preceding the application of the business 
tax credit, and a paid industrial empl oyment rate of at least 10 per cent. 
  The second category covers all of the employment areas in which industrial restructuring under way during the year preceding the implementation of the business tax credit could seriously 
alter the employment situation. 
 
3. Activities eligible for the business tax credit 
 
 The following activities fall within the scope of  the scheme:  industrial activities, scientific 
and technical research activities, study services, engineering services, management services, and 
computer services.  G/SCM/Q2/EEC/51 
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  GERMANY
 (G/SCM/N/123/EEC/Add.9) 
 
Reduction of Rates on Inheritable Land-use Rights (Berlin) 
 Q.1 Please provide information regarding the industries that received incentives under this 
programme during the reporting period.   
Reply
 
 1. Name of the subsidy scheme or ad hoc subsidy
 
 
 Reduction to between 3 and 5 per cent of the rates payable on inheritable land-use rights in the case of projects worthy of special promotion of manufacturing firms depending on the degree of use of the buildings.  
2. Form of the subsidy
 
  Cutting land costs by granting a reduced rate on land-use rights.  3. Subsidy per unit
 
 
 Payments: Euro 42.628,00 in 2005  
 4. Objective and/or purpose of the subsidy
 
  Reducing land acquisition costs for the manuf acturing industry for regional promotion 
purposes. 
 5. Duration of subsidy and other time-limits attached to it
 
  Unlimited.  
6. Statistical data permitting an assessmen t of the trade effects of a subsidy
 
  The effects of the subsidy in accordance with  WTO standards cannot be assessed due to the 
low financial resources.  Consolidation programme of the Land Mecklenburg-Vorpommern  Q2. Germany’s notification states that aid under this programme is provided for "enterprises that are important for a region in Mecklenburg-Vorpommern in terms of 
labour-market policy and structural policy".  Please explain the criteria for determining 
whether an enterprise/industry is important.  Please also provide examples of industries that 
have received incentives under the this programme during the reporting period.  
 
Reply
 
 1. Name of the subsidy scheme or ad hoc subsidy
 
 
 Consolidation programme of the Land Meck lenburg-Vorpommern on the granting of public 
financial aid to small and medium-sized commerc ial and industrial enterprises – special fund to 
support companies  
 The programme expired on 31 May 2005.  G/SCM/Q2/EEC/51 
 Page 7 
 
 
  2. Form of the subsidy  
  Loans of up to 2.5 million Euro at market cond itions. Usually restricted to SMEs within the 
meaning of the Community Framework.  
3. Subsidy per unit
 
  Approved loans in 2003: 1.680 million Euro  Disbursed loans in 2003: 1.656 million Euro  
 Approved loans in 2004: 2.280 million Euro 
 Disbursed loans in 2004: 1.730 million Euro   Approved loans in 2005: 740.000 Euro   Disbursed loans in 2005: 906.000 Euro 
 
4. Objective and/or purpose of the subsidy
 
  Liquidity aid for enterprises that are importa nt for a region in Mecklenburg-Vorpommern in 
terms of labour-market policy and structural policy.  
5. Duration of subsidy and other time-limits attached to it
 
  The loans have a maximum duration of ten years.  6. Statistical data permitting an assessmen t of the trade effects of a subsidy
 
 
 Statistics are not available to assess the trade e ffects of the subsidy.  Most of the assisted 
enterprises operate on regional markets only.  
Q3. Joint Scheme on "Improving the Regional Economic Structure" 
 
 According to Germany’s notification, invest ments are eligible for promotion under this 
programme if the company applying aid "sells th e better part of its products or services on a 
supraregional basis".  Please explain whether incentives under this progr amme are contingent 
upon export.  
 Reply
 
  The goal of regional assistance under the Joint Scheme on "Improving the Regional Economic Structure" is to improve the economic de velopment in structurally weak regions.  The 
objective sought is the direct expansion of demand for the region, thus creating additional jobs and 
additional income in the development region.  Howe ver, the primary effect of the support is felt only 
by companies that are involved in inter-regional co mpetition and can opt for a location either in a 
development area or in a non-development area.  When the assistance for such inter-regionally active 
companies produces the desired additional jobs a nd income, this automatically triggers, as a 
secondary effect, additional demand for lo cal and regional goods and services.  
 
 Undertakings that are active only on the re gional market, such as merchants, crafts, and 
restaurants, for example, thus profit indirec tly from the support for companies with business 
operations that extend beyond the region.   To employ the scarce support funds as effectively as possible, the regional assistance under 
the Joint Scheme on "Improving the Regional Economic Structure"  in Germany is restricted to G/SCM/Q2/EEC/51 
Page 8  
 
  support for companies oriented to activities that cross regional boundaries. Companies fulfil this 
definition if they   
• offer products or services that by nature can be sold across regional borders,  
• can prove that they sell more than half their products and services outside a respective radius 
of 50 km of their location  
• furnish an outlook with sound arguments to indicate that they will be predominantly active on 
an inter-regional basis at latest three years afte r conclusion of the assisted investment project. 
 Regional assistance can also be granted to offset lo cational disadvantages.  Such handicaps, however, 
can only be cited by firms that compete with compani es in other regions.  By contrast, locally oriented 
and regionally oriented companies compete with ente rprises in the same region, thus with companies 
operating in the same locational conditions.  Assis ting such companies would distort competition in 
the region, without creating additional jobs and inco me (zero-sum game) for the region as a whole.  
This, too, thus argues for limiting regional assistance to inter-regionally active firms. 
  According to Germany’s notification, invest ments are eligible for promotion under this 
programme if the company applying aid "sells the better part of its products or services on a 
supraregional basis".  Please explain whether in centives under this programme are contingent upon 
export.   
Corrugated Base Paper Plant (Brandenburg) 
 
Q4. In G/SCM/Q2/EEC/40, Germany indicated that aid from the regional government of 
Brandenburg to Hamburger AG was provided under the Joint Scheme on Improving the 
Regional Economic Structure.  However, th e information provided by Germany in this 
notification indicates that the aid to Hamburger AG is being provided under a different programme.  Could Germany please clarify and pr ovide more information as to the Hamburger 
AG aid programme?  In addition, based on information provided in G/SCM/N/95/EEC/Add.6, 
it appears that the aid to Hamburger AG was granted in 2002.  Could Germany clarify whether 
aid was provided under the same programme to Hamburger AG in 2001 and 2003?  If so, could Germany provide details regarding  this aid programme as well?  
 
Reply
 
 
 The response of the Regional Government of  Brandenburg to the US question relating to 
Corrugated Base Paper Plant (Brandenburg) with in the WTO-document G/SCM/N/123/EEC/Add.9 
reads as follows:   1. The aid from the Regional Government of Brandenburg to Hamburger AG had not 
been provided under another or different programme than the Joint Scheme on 
Improving the Regional Economic Structure as stated in the document G/SCM/Q2/EEC/40. The confusion of the US most likely results from the statement 
given in Germany’s notification to the WTO (document VA5 510824/7) from 23/05/2005 which sets that 
 
  “Grant investment aid under the multisectoral framework on regional aid for 
large Investment projects  to the Hamburger AG…”. 
 
Indeed, the use of the word “under” instead of “in conformity with” or “pursuant to” in this context 
gives rise to the misinterpretation of the proper meaning of this statement.  As to clarify this 
confusion, this sentence must be read and understood in its correct meaning as follows: 
  G/SCM/Q2/EEC/51 
 Page 9 
 
 
    “Grant investment aid in conformity with or pursuant to the multisectoral 
framework on regional aid for large In vestment projects to the Hamburger 
AG…”.  
 
 It must be stated, as for explanatory purposes,  that the “Multisectoral Framework on Regional 
Aid for Large Investment Projects” is not a national st ate aid scheme or programme.  It is a regulatory 
(controlling) aid regime of the European Co mmission which sets the standards for complying 
subsidies and national aid programmes relating to la rge investments in the regions of the European 
Union.  By contrast, the Joint Scheme on Improving  the Regional Economic Structure is the basic and 
fundamental legal framework/instrument foreseen by the German Constitution (Art. 91a Grundgesetz) 
for the providing of state aid in regions/areas which face severe structural problems as e.g. 
underemployment.    Thus, the aid to Hamburger AG was provi ded under the (German) Joint Scheme on 
Improving the Regional Economic Structure and in c onformity with or pursuant to the (European) 
Multisectoral Framework on Regional Aid for Large Investment Projects.  This aid basically aimed at 
the creation of work-opportunities/jobs in the regi on of Brandenburg, which is an area struggling with 
an undisputable high unemployment rate, through incentives for Hamburger AG to set up its entity in 
this region.   2.  The Hamburger AG was not awarded state aid in 2001 and 2002.  The European 
Commission’s decision from 09/04/2002 permitted aid up to 26.25 per cent of aid intensity in favour 
of Hamburger AG. However, the formal decision (Zuwendungsbescheid) on the state aid, which was 
based upon the abovementioned Joint Scheme on Improving the Regional Economic Structure, was 
issued by the competent authority of Brandenburg on 27/02/2004.  It was belated mainly because of a delayed investment beginning.  The following fina ncial contributions were  made upon this formal 
decision:   
 (1)  € 2.444.500,00 on 13/05/2004 (2)  € 2.656.600,00 on 23/07/2004 (3)  € 3.584.200,00 on 02/11/2004.  
 In 2003, the Hamburger AG was awarded a fina ncial contribution of € 1.127.110,28 by the 
local Internal Revenue Service of Cottbus (Finan zamt Cottbus) under the Investment Incentive Law 
from 1999 (Investitionszulagengesetz 1999) due to its inv estments in the region of Brandenburg.  This 
investment aid was also covered by the aforementioned positive decision of the European Commission. 
 
 These above presented aid measures were the onl y ones being granted by the Government of 
Brandenburg to Hamburger AG.”  
General Questions 
 
Q5. The United States would also like to note  that several questions were asked with regard 
to the Germany’s 2003 New and Full Notification on the issue of royalty-based financing, and in particular assistance to the aircraft industry, which have not yet been answered.  We look forward to receiving replies to these questions.  G/SCM/Q2/EEC/51 
Page 10  
 
  GREECE
 (G/SCM/N/123/EEC/Add.10 
 
EFFECTIVE CO-OPERATION IN R&D ACTIVITIES (STATE AID NO. 547/2001) 
 Q1. Could you please explain what is meant by "implementation of a series of 
interventions") 
 
Reply
 
  Implementation of a series of interventions, in this context, means the application (by state 
authorities) of measures amounting to granting financ ial aids (directly or indirectly) to specific 
organizations of the private sector to encourage the undertaking of research activities considered of 
specific importance for the country’s technological a nd / or economic and / or social development.  
Selection of the organizations to be aided is b ased on procedures open to all interested parties and 
application of uniform criteria. 
 
Q2. How is it determined which sectors are of "specific interest"?  For this reporting period 
what sectors qualify as "sectors of specific interest"?  
Reply
 
 
 Determination of sectors of specific interest is  based on one or more of the following criteria 
• Overall impact on the national economy (in terms of GDP) 
• Social, cultural or environmental importance 
• Technology- or innovation- based character 
  More particularly, the sectors of specific interest for this reporting period were 
• environment 
• e-learning 
• e-business 
• renewable energy sources 
• culture 
• tourism and athletics 
• food technology 
• aquaculture 
• transportation and experimental  technological applications 
• health 
• pharmacology 
• environmental structures 
• new forms of organizational structure 
• professional training and education 
 
FISHERIES  
 
Q3. The United States appreciates the additi onal information provided by Greece in 
document G/SCM/Q2/EEC/46 regarding subsidies to the fisheries sector under the six Priority 
Pivots programmes.  Could you please confirm whether Greece currently maintains the six 
Priority Pivots programmes?  If so, have any modifications been made to these programmes or 
have other programmes taken their place?   G/SCM/Q2/EEC/51 
 Page 11 
 
 
  Reply  
  Concerning the subsidies provided to the Fish eries sector, which are co-financed by the EU 
under the FIFG (Financial Instrument for Fish eries Guidance) and the ERDF (European Rural 
Development Fund), we would like to inform you that:  
- PRIORITY PIVOT 2 “Building of new vessels” has expired on 31-12-2004. 
 - The remainder PRIORITY PIVOTS continue ex isting without changes, as they have been 
approved with the No E(817)/28-3-01 Decision of the European Commission, in the frame of 
approval of the Member States’ Operational Programmes for Fisheries. 
 
AUTOMOTIVE 
 
Q4. It is our understanding that previously Greece has provided support to its automotive 
industry.  Could you please confirm whether Gre ece still provides support to this industry and 
if so, please provide the required information set forth in Article 25 of the SCM Agreement.  
Reply
 
  Greece is not a major producer when it comes to the automotive industry.  Consequently, aid 
to this sector is not a priority.  According to the latest data provided by the General Secretariat for 
Industry, no such aid has been granted. G/SCM/Q2/EEC/51 
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IRELAND
 (G/SCM/N/123/EEC/Add.12) 
 
AUGHINISH ALUMINA RELIEF 
 
Q1. Do any other companies in Ireland receive relief from payment of excise duty on Heavy 
Fuel Oil?  If so, please provide further details regarding which other types of companies receive 
relief from payment of excise duty. 
 
Reply  
 
 No, although the relief is in respect of a partic ular region, only one such company is eligible 
for the relief.   
SEA FISHING-REPAYMENT OF HYDROCARBON OIL LPG 
EXCISE DUTY IN THE CASE OF SEA FISHING  
Q2. Do operators of commercial fishing ve ssels benefit from this programme?  
 Q3. What criteria must be met in order to receive the excise duty relief?  
 Reply
 
  Mineral oil which is tax-paid in the State a nd is used as fuel for the purpose of commercial 
sea navigation, including sea-fishing, is eligible  for full repayment/relief of Mineral Oil Tax.  
 SCHEME FOR THE DEVELOPMENT  OF THE COMMERCIAL HORTICULTURE SECTOR 
 
Q4. Could you please explain what qualifies as “specialized plant or equipment”? 
 
Reply
 
 
 Specialised plant and equipment can be define d as any equipment which used specifically for 
the growing and production of fruit and vegetables.   G/SCM/Q2/EEC/51 
 Page 13 
 
 
  ITALY  (G/SCM/N/123/EEC/Add.13) 
 
MEASURES FOR INVESTMENT IN THE NAVAL SECTOR 
 
Q1. Italy’s reply in G/SCM/Q2/EEC/46 appea rs to indicate that subsidies under this 
programme were available for ne w shipbuilding contracts only until 31 December 2000.  Could 
Italy clarify whether this means that subsidi es for new shipbuilding under this programme were 
terminated as of 1 January 2001 and that no residual benefits to recipients remain after that 
time? 
 Reply
 
  Italy confirms that, according to EC Counc il Regulation n.1540/98 dated 29 June 1998, the 
subsidies are referred to contracts for new shipbu ilding signed before 31 December 2000.  Therefore, 
no subsidies can be granted for contracts signed af ter the above mentioned date.  The subsidies are 
paid by 24 half-yearly instalments, along a period of 12 years, after 31 December  2000. 
 
SPECIAL FUND FOR APPLIED RESEARCH (FRA) 
 
Q2. Please describe the repayment terms for the soft loans. 
 Reply
 
  According to Law no. 297/99 and Ministeria l Decrees no. 593/2000 and no. 90402/2003, the 
maximum duration of the funding is ten years, starting from the issue date of the Ministerial Decree acknowledging the selected proposals. 
 
 This duration includes pre-amortization and u tilization periods, up to maximum five years. 
  The pre-amortization period, which is divi ded into half-yearly instalments (expiring on 
1 January and 1 July) cannot last more than the me ntioned 5 years and necessarily ends on the first 
half-yearly deadline following the completion of the project. 
 
 The amortization instalments are fixed, postpone d and inclusive of capital and interests; they 
are on a half-yearly basis: the deadlines are 1 January and 1
 July.  The first amortization instalment is 
due on the first half-yearly deadline following the comp letion of the project.  The interest rate applied 
for soft loans is 0.5% annual fixed. 
 
Q3. How is determined that the aid will be in the form of a grant or a soft loan? 
 
Reply  
  Ministerial Decree no. 593/2000, in application of Law no. 297/99, as modified by  
Ministerial Decree no. 90402/2003, provides for modalities and forms of the public funding of 
eligible costs of industrial research activ ities and precompetitive development activities. 
  All subsidies allocations respect the maxi mum aid intensities allowed (i.e. 50% ESL for 
industrial research activities and 25% ESL for precomp etitive development activities), as laid down in 
the Community framework for State aid for Research and Development. 
  In accordance with the mentioned laws, the pub lic intervention combines two main forms of 
funding: grants and soft loans.  The form and the limits of the intervention depend on the areas where 
the activities are carried out.  
 G/SCM/Q2/EEC/51 
Page 14  
 
   For projects whose activities are implemente d for at least 75% in Abruzzo, Molise, 
Campania, Puglia, Basilicata, Calabria, Sicily and Sardinia (i.e. Objective 1 and Phasing out Regions) 
the aid is granted as  follows:  -  for industrial research activities:    25% of eligible costs  in the form  of grant; 
   75% of eligible costs  in the form of soft loan. 
 -  for precompetitive development activities:    10% of eligible costs  in the form of grant;    70% of eligible costs  in the form of soft loan.  
 For projects whose activities are implemented in other areas of the national territory, the aid is 
granted as  follows:  -  for industrial research activities:    20% of eligible costs in the form  of grant;    75% of eligible costs in the form of soft loan. 
 -  for precompetitive development activities: 
   10% of eligible costs in the form of grant;    70% of eligible costs in the form of soft loan.   For projects submitted by a private proponent  in partnership with a public institution 
(Universities, public research establishments) or with a a non-profit-making Consortium with a public 
ownership above 50%, the aid to the public institution is paid exclusively in the form of a grant for: 
 50% of the eligible costs fo r industrial research activities 
 25% of the eligible costs for pr ecompetitive development activities. 
  In case of cofinancing between national funds and EU structural funds dedicated to the least 
developped areas, if the proponent applies exclusivel y for a grant, the following percentages apply: 
 - 50 % of eligible costs for activities of industrial research;  - 25% of eligible costs for activities of  precompetitive development.   On the contrary, if the proponent applies for a combined financing, the following percentages 
apply: 
 -  for industrial research activities: 
   20% of eligible costs in the form  of grant;    75% of eligible costs in the form of soft loan.  -  for precompetitive development activities:    10% of eligible costs in the form of grant; 
   70% of eligible costs in the form of soft loan. 
  A further concession, in the form of grant, can be  allocated up to 25% of the aid.  In this case, 
there is a correspondent reduction of the soft lo an component.  These further concessions are as 
follows:  - 10% for research activities carried out in Re gions admissible to the derogation set out in 
art. 87, par. 3, lett. a) of the EC Treaty; 
 - 5% for research activities carried out in Regions admissible to the derogation set out in 
art. 87, par. 3, lett. c) of the EC Treaty; 
 - 10% for research projects submitted by SMEs, as definied by the EU rules on State Aid;  - 10% for projects which either involve at least 10% of activities carried out by one or 
more partners of other EU Member States or by Universities and/or public research 
establishments. 
  G/SCM/Q2/EEC/51 
 Page 15 
 
 
  INCENTIVES TO MANUFACTURING AND EXTRACTIVE ENTERPRISES IN DISADVANTAGED 
AREAS   FISCAL MEASURES IN FAVOUR OF INNOVATION OF INDUSTRIAL ENTERPRISES (MAP 4)  
 
Q4. For the above programmes, please further ex plain exactly what types of tax concessions 
are being provided to companies. 
 
Reply
 
 
 In both cases, the tax concessions provided are tax credits in the form of a fiscal bonus.  The 
tax credit allows the beneficiaries to deduct from th eir fiscal debts a certain part of the investment 
expenses already borne, either limited to the income tax or extended to all types of taxes.  The fiscal 
bonus is a particular type of  tax credit, in the form of a rebate th at can be directly deducted from those 
tax payments due to the Public Administration, as a fo rm of either partial or total compensation.  It 
can be used in several situations. 
  The procedure thus provides for an automatic gr anting of the fiscal concession, after clearance 
of the claim and depending on available funds.   
Q5. What are the principal industries that  benefit from each of these programmes? 
 
Reply
 
  In the first case (Law n. 341/95), beneficiaries belong to manufacturing, building and mining industry, to production and delivery of electri city, steam and hot water, to services and 
telecommunications based or operating in Objective 1 Regions or least developed areas of the national 
territory.   For the second measure (Law n. 140/97), bene ficiaries are involved in R&D activities on the 
national territory in general.  Q6. Please explain what is a “fiscal bonus in tax payment”?  
Reply
 
  As already explained in answer no. 4, the fiscal  bonus is a particular type of tax credit, in the 
form of a rebate that can be directly subtracted from tax payments due to the public administration by 
the company, as a form of either partial or total co mpensation. It can be used in several situations. 
 
URGENT MEASURES FOR THE ECONOMY – AUTOMATIC INCENTIVES  
 Q7. In G/SCM/Q2/EEC/46, Italy states that “the  granting of concessions is not automatic” 
and that “eligible projects are recorded in a list according to which, within the funds available, 
contributions are subsequently granted.”  Given this information, could Italy clarify why it 
refers to these subsidies as “automatic incentives”?  Moreover, could Italy further explain how projects from the list are selected for funding? 
 Reply
 
  The provision introduces a mechanism of fiscal incentives for investments by SMEs aimed at 
modernizing, improving and renewing their production equipments.  For each undertaken 
expenditure, the company obtains a claim it notifies to the local tax collector. 
 G/SCM/Q2/EEC/51 
Page 16  
 
   To apply for the bonus, the SME has to submit a claim to the Public Administration, which 
has to assess its admissibility.  The company obtains the fiscal bonus only after having concluded the 
investment.  The company can use this bonus by show ing it to the local tax collector as a partial or 
total compensation of all types of taxes due.   G/SCM/Q2/EEC/51 
 Page 17 
 
 
  LUXEMBOURG  (G/SCM/N/123/EEC/Add.16) 
 
SYSTEM OF AID TO SMALL AND MEDIUM ENTERPRISES AND INDUSTRIES 
 SYSTEM OF REGIONAL AID IN FORCE UNTIL 31.12.1999 
 
SYSTEM OF REGIONAL AID IN FORCE SINCE 28.12.2000  SYSTEM OF AID FOR R&D 
 
Q1. What are the principal industries that benefit from each of the above listed programmes? 
 
Reply
 
 
 The instruments implemented by the above men tioned aid schemes are a pplied horizontally to 
all kind of sectors.  Most of the sectors targeted are in the manufacturing area.  The scheme of regional aid in force until 31.12.1 999 is not applied any longer. G/SCM/Q2/EEC/51 
Page 18  
 
  PORTUGAL
 (G/SCM/N/123/EEC/Add.20) 
 
PRIME – INCENTIVE PROGRAMME FOR THE MODERNISATION OF ECONOMIC ACTIVITIES 
 
Q1.  Under the PRIME programme, do the incentives vary between exporting and non-
exporting companies? If so please provide further details:  
Reply
 
  No.  In the framework of PRIME incentives gi ven to the companies do not change according 
to their exporting activities. 
  
Q2.  What are the principal industries that benefit from this programme? 
 Reply
 
  In the framework of PRIME there are no priority sectors.  The selection of projects for direct 
company support is based on an evaluation of the merit of the project itself (impact upon the company, the economy, risk assessment etc.)  Q3.  Please explain what type of aid qualify as a "reimbursement subsidy" 
 
Reply
 
  This is a subsidy which is repaid by the beneficiary within a certain period of time. 
 Q4.  Portugal states in document G/SCM/ Q2/EEC/46 that refundable incentives may be 
converted into bonuses or non-refundable incentiv es.  Could you please explain under what 
circumstances this might occur? 
 
Reply
 
 
 In the framework of PRIME some  incentives are given in the fo rm of refundable subsidies, 
with the possibility, in specific cases, that the latter are converted into non-refundable subsidies.  This 
conversion is a reward granted according to the ach ievement of the projects goals.  It should be 
stressed, however, that it is always ensured that  the maximum support given to a project (under the 
assumption that it would not be reimbursed) st ays within the limits imposed by the EU. 
 
Q5.  Please describe the repayment terms for the loans. 
 
Reply  
 
 The repayment terms for the refundable loans vary according to the measures (in terms of 
grace period for principal and interest, and repaymen t period).  However, the EU limits in terms of 
subsidy equivalent are always respected.  
Q6.  Portugal states in document G/SCM/ Q2EEC/46 that PROPESCA scheme will be 
notified in the next notification under Art. 25.   However, we note that the PROPESCA scheme 
has not been notified in G/SCM/123/EEC/Add.20.  Could Portugal please explain why this scheme has not been notified for this reporting period? 
  G/SCM/Q2/EEC/51 
 Page 19 
 
 
  Reply  
  The PROPESCA scheme is now called "POP" (Operational fishery programme) and it was 
notified within the common EU notification. G/SCM/N/123/EEC, 26 August 2005   
- VII.  Other programmes 
C and D 
 G/SCM/Q2/EEC/51 
Page 20  
 
  SLOVENIA
 (G/SCM/N/123/EEC/Add.22) 
 
PROGRAMME OF ADJUSTMENT OF LEATHER AND FOOTWEAR INDUSTRY TO THE EU 
INTERNAL MARKET CONDITIONS   
PROGRAMME OF ADJUSTMENT OF TEXTILE INDUSTRY TO THE EU INTERNAL MARKET 
CONDITIONS   Q1. For each of the programmes listed ab ove, please answer the following questions: 
 
• Please provide further explanation of the purposes of the programmes.  In particular, 
please explain how the aid granted under the programmes will achieve the policy objectives described in your notification. 
 
• Please provide additional information concerning the eligibility criteria for the 
programmes.  Please also indicate how many  companies benefit from the programmes. 
 
• Please explain how the aid intensity is determined for individual recipients under the 
programmes.  
 
Reply
 
  Programme of Adjustment of Leather and Footwear Industry to the EU Internal Market 
Conditions and Programme of Adjustment of Textile  Industry to the EU Internal Market Conditions 
were terminated at the end of 2003.   The adjustment programmes included three sub-programmes of measures: 
 
Sub-programme 1: Promoting pro duct and market reorientation
 
 
 Within this sub-programme support was provi ded to companies or groups of companies 
within the sector for more successful marketing performance.  Co-funding was provided for activities 
directed towards increasing the internal capabilities of companies for marketing under changed 
business conditions, the development and establishmen t of brands and interconnection at home and 
abroad (joint presence on international markets, join t brand promotion) within the framework of the 
product and market reorientation of companies’ measure.   The measure was directed towards the following areas:  - promoting the development and establishment of  brands  - enhanced marketing activities on existing and new markets 
 - employment and training of employees in  planning and implementation of marketing 
activities  
 - encouraging activities for adjustment to the requirements of the EU single market. 
  The aid instrument was in form of grants. 
 
 The level of co-funding was up to 40% of the value of all justified costs of a complete integrated project for market and product reorie ntation which contains the incentive instruments 
presented above.   Incentives were only to be provided to co mpanies or groups of companies submitting 
complete integrated projects for product and market  reorientation and providi ng justification for the 
following:   G/SCM/Q2/EEC/51 
 Page 21 
 
 
   - conformity with the strategic orientations of the company 
 - absorption capacity of target markets  - agreement between companies in the case of groups of companies  - business justification and transparency of the project   - envisaged organisational structure for the implementation of the project or selection of 
contractor. 
 
Sub-programme 2: Promoting technol ogical modernisation of companies
 
 
 The aim of the sub-programme was to increase investment in research and development and 
the technological modernisation of companies, so  that they could gradually achieve a level of 
technology which increased their competitiveness in international markets.  The operational goals 
were:   - increasing the internal capacities of compani es to implement technological modernisation 
 - increasing investments in technological improvements and the introduction of new 
technologies. 
  The measure included the co-funding of technological modernisation projects in companies to improve their competitiveness through increased investment.  
 The aid instrument was in form of grants. 
  The level of co-funding was up to 40% of the value of all justified costs of a complete integrated project for technological modernisation which contains the incentive instruments presented 
above. 
 
 Incentives were only to be provided to co mpanies or groups of companies submitting 
complete integrated projects for the technological modernisation of companies and providing justification for the following:   - conformity with the strategic orientations of the company 
 - business justification and transparency of the project 
 - readiness and capacity for implementation of the investment part of the project 
 - envisaged organisational structure and le vel of training for the implementation of 
investment part of the project or selection of contractor. 
 Sub-programme 3: Modernisation of work and human resources restructuring
 
 
 The purpose of the sub-programme was to en courage companies to prepare and implement 
complete integrated projects for the introduction of a modern organisation of work and flexible forms 
of work, human resources restructuring and system atic implementation of activities in the area of 
training employees for the strengthening of the co mpany’s internal capabilities and the increasing of 
productivity. 
  The aid instrument was in form of grants.   The level of co-funding was up to 40% of the value of all justified costs of a complete 
integrated project for modernisation of work an d human resources restructuring which contains the 
incentive instruments presented above.   Incentives were only to be provided to co mpanies or groups of companies submitting 
complete integrated projects for the introduction of modern organisation and flexible forms of work 
and human resources restructuring and providing justification for the following: G/SCM/Q2/EEC/51 
Page 22  
 
   
 - conformity with the strategic orientations of the company  - previous activities and investments in the area of human resources restructuring   - substantive and financial structure of the project.   
Number of supported projects:
 
 
 Textile industry Leather and footwear 
industry 
2000 297* 142* 
2001 115 38 
2002 109 37 
2003 34 7 
* smaller projects 
 
DEVELOPMENT OF ENTERPRISES 
 
Q2. Please provide further explanation regar ding the purposes of the programmes.  In 
particular, explain how the aid granted unde r the programmes will achieve “productivity 
growth, competitiveness and internationalism”  as mentioned in the description of the 
programme. 
 
Reply  
  The Programme of measures to promote en trepreneurship and competitiveness  2002-2006 
has been a plan of operations for implementing th e development policy for the entrepreneurial sector 
and for increasing competitiveness through suppleme ntary financial incentives (state aid) to 
enterprises in line with the set objectives of the development policy.   It included 3 programmes:  
1. PROGRAMME: Knowledge for development
 
 
 It had two sub-programmes with the following measures:  
1.1 Improving the flow of knowledge from e ducational and research institutions into the 
economy 
 
Measures: - Junior researchers – the purpose has been to promote the movement of research and 
development personnel into the economy 
- Promoting the development of common educational and developmental research 
infrastructure – the purpose has been to  promote cooperation between “knowledge 
institutions” and enterprises 
- The development of business incubators at uni versities – the purpose has been to promote the 
establishment and start-up of business incuba tors within university faculties and public 
research institutes. 
  G/SCM/Q2/EEC/51 
 Page 23 
 
 
  1.2  Strengthening international R&D coop eration and increasing researcher mobility 
 
Measures: - Cooperation in the EUREKA programme – the purpo se has been to facilitate the inclusion of 
enterprises in projects from the European EUREKA programme 
- Cooperation in EU programmes 
 The aid instrument was in form of grants.  
PROGRAMME:  Improving enterprises competitive capacity
 
 
 The programme has been aimed at strengthening the key factors that create competitive advantages for enterprises operating under c onditions of increased global competition. 
  It had four sub-programmes with the following measures: 
 
2.1 Promoting enterprise investment in technological development and innovation 
 
Measures: - Industrial research and pre-competitive devel opment activities in enterprises- to encourage 
enterprises to increase investment in industrial research and development. 
- Investments in new technologies – to promot e investment in new products, new technologies 
and the transfer of research and deve lopment results into commercial use. 
 
2.2 Promoting the internationalisation of enterprises 
 
Measures: 
- Promoting the internationalisation of SMEs  – the support of small in medium sized 
enterprises in introducing and strengthening their position in the internal market. 
- Promoting foreign direct investments – to increase the attractiveness of Slovenia to foreign 
direct investment by reducing investor entry costs. 
- Promoting outward investments by Slovenian  enterprises – to support in planning and 
implementing investments in other countri es and at the same time strengthening 
developmental work in enterprises in Slovenia. 
 
2.3 Introducing strategies to increase productivity 
 Measure: 
- Promoting the introduction of methods to in crease productivity – to support systematic 
transfer of knowledge and the introduction of  methods and tools to increase productivity.  
 
2.4 Linking enterprises and cluster development  
Measures: 
- Promoting the linking of enterprises and specia lisations in production chains – to promote 
vertical linking of enterprises into production/supplier chains. 
- Promoting the development of clusters – to promote the link-up of enterprises according to 
the cluster concept and thus to facilitate  investment in knowledge and technological 
investment. 
- Technology centres – to promote link-up of enterprises within the framework of technology 
centres. G/SCM/Q2/EEC/51 
Page 24  
 
  - Promoting the development of technological netw orks – to provide targeted investment in a 
narrow technological field. 
 The aid instrument was in form of grants.  3. PROGRAMME: Promoting entrepreneurship and utilising entrepreneurial 
opportunities  
 
 The objective of the programme has been to f acilitate the trend of setting up new enterprises 
through the creation of an environment that is business-friendly and supportive to new investments 
 
 It had three sub-programmes with the following measures:  
3.1 Promoting entrepreneurship and development of supportive environment 
 Measures: 
- Dual education system – to promote professional education. - Voucher system for consulta ncy and training services – to pr ovide ease of access to quality 
consultancy services for the start up and development of activities. 
- Promoting an increase in building land availabl e for industry – to increase the availability of 
land for industry and crafts and fac ilitate industrial pa rk construction. 
- Incentives for SMEs via incubators and tec hnological parks – to creation of dynamic new 
enterprises within incubators and technological parks. 
- Promoting the creation of local clusters of micro-and small sized enterprises – the set up of 
local clusters particularly for micro-and small –sized enterprises. 
 3.2 Promoting the creation and development of SMEs and promoting investments 
 
Measures: - Promoting the creation and growth of innovative enterprises – to create a higher number of 
innovative and high technology enterprises. 
- Promoting investments in the development of SMEs – to promote investments in SMEs with 
favourable credit featuring lower than  market level interest rates. 
- Promoting new domestic investments in regi ons that are less developed and have higher 
levels of unemployment. 
 
3.3. Promoting the development of tourism 
 Measures: 
- Promoting the development of new and comple mentary tourism related products and services  
- Promoting the development of a common tourism infrastructure.   Instruments of aid were grants, favourable loans or loan guarantees. 
 
Q3. What are the eligibility criteria to receive  benefits under this programme?  Are any of 
the incentives contingent upon exportation or th e use of domestic over imported goods? If so, 
please provide details. 
 Eligibility criteria are: 
- project conformity with the strategic orientations of the company - business justification and transparency of the project - readiness and sufficient capacity fo r implementation  of the project 
- envisaged organisational structure for the implementation of the project. 
  G/SCM/Q2/EEC/51 
 Page 25 
 
 
  Q4. How is it determined what type of aid (g rants, favourable loans or loan guarantees) will 
be provided to the recipient?  
 Ministry of Economy and its implementing in stitutions provide grants, favourable loans, 
micro credits and guarantees.  All these state aid in struments are provided through different measures 
to support entrepreneurship in line with the “Progr amme of measures to promote entrepreneurship and 
competitiveness for the period 2002 – 2006”.   
Q5. Please describe the repayment terms for the loans.  
  Slovene Enterprise Fund (SEF), as implemen ting institution of Ministry of Economy, 
provides among other instruments also favourable loans for SMEs.  All the conditions and also 
repayment terms for the loans are determined in p ublic tenders and the loan contract between SEF and 
enterprise.  More information can  be found on SEF internet site:  
http://www.podjetniskisklad.si/Activity.htm 
 
PROGRAMME ON FINANCING AND CO-FINANCING THE DEVELOPMENT OF FRESHWATER 
AND MARINE FISHERIES FOR 2003 AND 2004  Q6. What are the eligibility criteria to receive  the benefits under this programme?  Please 
explain exactly who receives the benefits under this programme?  Are the grants provided 
directly to fishermen, fishing ports, op erators or manufactures of fishing vessels? 
 
 Grants are provided directly to eligible parties. 
  Other details are grouped by 2003 and 2004 measures. 
 
1.  Freshwater fisheries in 2003 
 1.1 Measure: Freshwater fish selection programme  
(a)  Eligible party - recipient:  - University of Ljubljana, Biotechnical Faculty, Zootechnical Department, Domžale. 
(b)  Eligibility criteria:  - Submission of an annual programme on professional work, approved by minister of 
agriculture, forestry and food. 
 - Necessary infrastructure, equipment and human resources for freshwater fisheries 
selection work. 
 
1.2 Measure:  Development of freshwa ter aquaculture and fish processing 
 
(a)  Eligible parties - recipients: 
 - Legal and natural persons, e ngaged in freshwater fishery, living / registered in the 
Republic of Slovenia. 
(b)  Eligibility criteria:  - Project building documentation approved al so by Slovenian Veterinary administration  
 - Submission of investment programme and a valid building permit.  - Submission of proofs (original bills) of work completed  / proofs of equipment purchased 
up to the amount foreseen by investment programme   
 G/SCM/Q2/EEC/51 
Page 26  
 
  2.  Marine fisheries in 2003 
 
2.1  Measure: Modernization and technical accommodation of fishing fleet 
 
(a)  Eligible parties - recipients: 
 - Legal and natural persons, registered for fi sheries activity in the Republic of Slovenia. 
(b)  Eligibility criteria:  - Submission of programme of modernization and technical accommodation of fishing 
fleet, approved by minister of agriculture, forestry and food. 
 - At least one fishing vessel over 100 BRT a nd over 550 KW with the technology of a boat 
dredge. 
 - Submission of proofs (original bills) on work completed  / proofs of equipment 
purchased up to the amount foreseen by investment programme   
 - Submission of proofs on financial capability to  cover their own share of expenses of the 
programme. 
 
2.2 Measure: Compensation instrument (compens ation for loss of income due to the border 
situation with The Republic of Croatia)  
 
(a)  Eligible parties - recipients:  - Legal and natural persons , engaged in fisheries activity as their main and single 
occupation with the valid fishing license. 
(b)  Eligibility criteria:  - Submission of complete application.  
3.  Freshwater fisheries in 2004 
 
 There were no measures of financing and co-financing the development of freshwater 
fisheries for 2004.  
4.   Marine fisheries in 2004 
 4.1 Measure: Compensation instrument  (compensation for loss of income due to the massive 
appearance of jellyfish)  (a)  Eligible parties:  - Legal and natural persons , engaged in fisheries activity as their main and single 
occupation with the valid fishing license. 
(b)  Eligibility criteria:  - Submission of complete application.  G/SCM/Q2/EEC/51 
 Page 27 
 
 
  SPAIN (G/SCM/N/123/EEC/Add.23) 
  We note that the United States posed questions to Spain in the context of their 2003 new and 
full subsidies notification regarding assistance to the ai rcraft industry.  Several of these questions have 
not yet been answered and we look forward to receiving Spain’s responses.  
 
RENOVATION AND REORGANIZATION OF FISHING VESSELS 
 Q1. Please clarify whether this programme is intended to renovate and modernize existing 
fishing vessels or to build new ones? 
 
Reply
 
  Construction and modernization of fishing vessel s.  The cut-off date for aid to construction 
was 31 December 2004.  However, moderni zation of existing vessels will continue. 
 
Q2. Do the subsidy payments under this pr ogramme directly or indirectly promote the 
instructions of new vessels?   
 
Reply
 
 
 Renovation of the fleet with the building of ne w fishing vessels is associ ated with a policy of 
decommissioning.  In other words, for every new uni t built, an equivalent unit must be destroyed. 
 
DEFINITIVE STOPPAGE OF FISHING 
 
Q3. Please indicate what happens to the deco mmissioned fishing vessel s.  Are they sold, 
scrapped or bought back by the Spa nish government for other purposes? 
 
Reply  
  Decommissioned fishing vessels that are deleted from the Third List of the Shipping Register 
and the official fishing fleet records may be hande d over to a joint enterprise in a third country, or 
scrapped or sunk.  
CONVERSION OF THE FISHING FLEET: JOINT VENTURE PROJECTS 
 
Q4. Do the subsidy payments under this pr ogramme directly or indirectly promote the 
constructions of new vessels? 
 
Reply
 
  There is no aid for the financing of new vessel s to be handed over to a joint enterprise in a 
third country. 
 
SUPPORT FOR THE CAPITALIZATION OF TECHNOLOGY-BASED ENTERPRISES 
 Q5. Can you please explain what qualifies as “certain financial entities”? 
 
Reply
 
  According to item 2 of Order CTE/349/2004 of 10 February announcing aid for the support 
for capitalization of technology-based  enterprises, potential beneficiaries of the loans are financial 
entities established in the European Economic Ar ea whose corporate purpose is to participate G/SCM/Q2/EEC/51 
Page 28  
 
  temporarily in the capital of non-financial enterp rises, when providing capital to technology-based 
enterprises.   Those set forth in item 13 of the above-mentioned order.  COUNCIL REGULATION (EC) No. 2369/2002 of 20 December 2002, L358/49, §5.  ROYAL DECREE 1048/2003, Article 17. 
 
Q6. What are the eligibility criteria to receive benefits under this programme?  Please 
explain exactly who receives the benefits under this programme? 
 
Reply
 
 
Assessment criteria.  1. The Commission carries out an assessment of  the investing entity and of the projects 
submitted by that entity.  As regards the entit y itself, the following criteria are considered: 
 
 (a) Experience and suitability for the proposed investment projects;   (b) effective span of operation of the tech nology-based enterprises in  which the investing 
entity invests, with priority  being given to investment in enterprises with a shorter 
span of operation; 
 
 (c) degree of involvement of the investment entity in the project of the technology-based 
enterprise. 
 2. As regards each one of the projects, the assessment focuses on: 
 
 (a) Compatibility of the company projects with the objectives and guidelines of the 
National Scientific Investigation, Deve lopment, and Technological Innovation Plan 
(2004-2007); 
  (b) level and innovative content of the technological development proposed; 
 
 (c) technical, economic and financial viability;   (d) market-oriented plan for exploiting the resu lts of the project, in particular with respect 
to the international market. 
 
TECHNICAL RESEARCH DEVELOPMENT FOR TEXTILE/CLOTHING SECTOR 
 Q7. It is stated that the policy objective of this programme is to increase the sector’s 
competitiveness and promote integration into the world market.  Is this programme contingent 
upon exportation? 
 
Reply
 
  The basic objectives of these measures are:  to encourage any industrial research and 
technological development programme that enhances the technological capacity of enterprises;  to 
extend the culture of cooperation in research and development among enterprises and between the 
enterprises and other research entities;  and to disseminate the results and accomplishments of 
research and development.   According to Order ITC/217/2006 of 4 February establishing the regulatory basis for the aid 
scheme and the management of the Technical  Research Development Programme for the  G/SCM/Q2/EEC/51 
 Page 29 
 
 
  Textiles/Clothing Sector (2005-2007), the aid for SM Es "shall not apply to export-related activities, 
particularly aid that is directly linked to th e quantities exported, aid for the establishment and 
operation of a distribution network, or aid for ot her current expenditures linked to export activities, 
nor will there be any aid that depends on the use of domestic product s over imported products." 
 Q8. Please provide the exact types of subs idies being provided under this programme. 
 
Reply
 
  Under the Order establishing the regulatory basis,  aid for the financing of projects takes the 
following forms: 
  (1) Subsidies;   (2) repayable loans covering up to 75 per cent of the cost of the projects, within the aid 
intensity limits established under European regulations, with a maximum maturity 
date of 12 years, which can be determined  in the relevant decision on granting the 
loan according to the nature and characteristics of the project, including a maximum grace period of two years, and with an annua l applied interest rate of zero per cent. 
 
FINANCING OF RESEARCH, DEVELOPMENT AND INNOVATION PROJECTS CONDUCTED BY 
ENTERPRISES 
 Q9. Spain notes that the beneficiaries of this programme, must be enterprises formed as “trading companies”.  Could you please explain what qualifies as a “trading company”? 
 Reply
 
  The use of “trading company” is a translation mistake.  “Trading company” is an unfortunate literal translation for “sociedad me rcantil”, the Spanish denomination for any kind of company, being 
either a limited or a public limited company.  Q10. Please explain what targets must be met in order for the beneficiaries to receive the 
loans.  Are the interest-free loans under th is programme contingent upon exportation?  
 
Reply
 
 
 Any projects seeking the support of the CDTI mu st feature a technical or innovative advance, 
and enterprises must prove that the project is innovative.    CDTI’s support is only dependi ng on the technical success of the project, and unlinked to any 
export activity whatsoever.  G/SCM/Q2/EEC/51 
Page 30  
 
  UNITED KINGDOM
 (G/SCM/N/123/EEC/Add.25) 
 
12. Competitiveness in the Oil and Gas Supplies Sector (COGSS) Aid Scheme  
 
Q1. According to the United Kingdom’s notifica tion, the objective of this programme is to 
market goods and services to oil and gas companies, either in th e UK or for export.  Please 
explain whether this programme is contingent up on export or whether companies that export 
receive additional benefits under this programme. 
 
Reply  
 
• The COGSS grant scheme is now closed. 
• This COGSS scheme is not contingent on export. 
• If the applicants did export their goods and services there is no additional benefit for them. 
 
19. Excise Duty to Bio Ethanol Used as Road Fuel 
 
Q2. Please provide additional information regar ding the beneficiaries under this programme 
and the criteria for companies to receive those benefits.  
Reply
 
  Essentially the UK Government has created  a duty differential between conventional 
hydrocarbon (petrol) duty rates and that for bioethan ol of 20 pence per litre.  The differential has been 
given for a number of reasons e.g. to meet some of the extra costs of production for bioethanol relative to petrol and to recognise its relative enviro nmental benefits compared with other road fuels 
(The UK government now use a framework in decidi ng what duty rates to set for new road fuels 
based on environmental and social benefits of these fuels.  
 The beneficiary of the differential is the pe rson who pays the reduced duty.  This happens 
when the fuel is either released for consumption as a road fuel or when it is imported into the UK for 
use as a road fuel.  The beneficiary is therefore not  necessarily the manufacturer of bioethanol e.g. a 
manufacturer could sell bioethanol on to an oil refi ner who would then mix the fuel with petrol and 
release for consumption.  At that point he woul d benefit from only having to pay 27.1pence per litre 
for that amount of fuel that was bioethanol  as opposed to 47.10 pence per litre for petrol.  
 
32.   LINK Collaborative Research Scheme 
 
Q3. Please provide information regarding the industries that received incentives under the 
above-listed programmes during the reporting period.   
 
Reply
 
  During the 2004/2005 period there were project s still underway with relation to the following 
industries: 
 
• Food and Agriculture 
• Oil and Gas 
• Communications 
• Medical Research 
• Transport 
  G/SCM/Q2/EEC/51 
 Page 31 
 
 
  48.   NI:  Technology Fund (NITECH) 
 Q4. Please provide information regarding the industries that received incentives under the 
above-listed programmes during the reporting period.   
 Reply
 
  Research has shown that market failure exists  in the private equity market in NI.  These 
‘equity gaps’ are considered to be most pronoun ced for early stage, technology businesses, which are 
usually high risk and not sufficiently develope d to attract mainstream venture capital funding. 
 
 On the demand side, there is evidence of a shortage of ‘investor ready’ technology projects.  There is an expectation gap between the quality of  proposals made for funding and the requirements 
of private and public sector funding providers.  
 NITECH (‘the Fund’) was established as a pilot venture fund through the R&D Challenge 
Fund, operating from 2003-2007.  Its main priority is  the provision of support by way of equity to 
assist in bringing research discoveries in early st age technologies to the point where they can be 
translated into viable businesses.   NITECH is a £3m venture capital fund focusing on the commercialization of research and 
development within our universities and early stage SMEs.  The NITECH fund is 100% government 
funded.  Staged investments range between £20, 000 and £200,000 with a maximum total investment 
of £250,000 being provided to any one company.  To date the fund has invested upwards of £2 million in the priority sectors of  ICT, Creative I ndustries, Bio and pharma sectors.  The fund is on 
track to be fully invested by 2007 and is currently  being evaluated to assess the impact of the fund. 
 
 See attachment  - NITECH Investments Summary.  
56.   Reduced Rate of Excise Duty on Biodiesel (N804/01) 
 
Q5. Please provide information regarding the industries that received incentives under the 
above-listed programmes during the reporting period.    
Reply
 
  As with bioethanol, the beneficiary of this duty differential for biodiesel (again a differential 
of 20 pence per litre relative to the equivalent road fuel which is diesel e.g. 27.1pence per litre rather 
than 47.10pence per litre) is the person who releases biodiesel for consumption as a road fuel.  Whilst 
the costs of manufacturing bioethanol means that there are relatively view manufacturers (under 10) 
in the UK and they produce large volumes of fu el, with biodiesel the case is very different.  
Production is relatively less complex therefore ther e are approximately 200 producers although almost 
all of them are very small scale producers with many often manufacturing for their own use only. 
 
58.   R&D Tax Credit 
 Q6. Please provide information regarding the industries that received incentives under the 
above-listed programmes during the reporting period.   
 
Reply
 
  Data was not available for the industries th at received incentives unde r the R&D tax credit 
programme for the period, January 2003 to Dece mber 2004, which was covered by our previous 
report to the WTO.  The following table answers th is query using more recent data, with R&D tax G/SCM/Q2/EEC/51 
Page 32  
 
  credit claims recorded on a financial year basis fo r 2003-04, to provide an indication of the industry 
distribution of claims under the R&D tax credit pr ogramme over the reporting period.  Consistent 
with the previous report to the WTO, the followi ng table only considers claims made under the small 
and medium-sized enterprises (SME) R&D tax credit scheme.   
 The information used to answer this query ( see attached table) is from company tax returns 
which provide data on the number of companies cl aiming R&D tax credits and the amount of support 
that is claimed, either as enha nced deductions or as a payable credit.  This data does not include 
industry sector.  To overcome this the R&D tax cred it claims data has been matched to the Inter-
Departmental Business Register which includes information on additional variables such as the 
standard industrial classification (SIC) used to answer this query. 
  The matching process was carried out towards the end of 2005.  The tax data comprised all claims for R&D tax credits made by companies in  tax returns received by 15 October 2005.  The 
Inter-Departmental Business Register comprised data  for January 2005 and only contains information 
on companies’ standard industrial codes correct at th is date.  The standard industrial codes available 
in the Inter-Departmental Busin ess Register use the 2003 classifications; the full list of codes is 
published on the ONS website.    The R&D tax credit claims data used in the matching process contains a greater number of claims than the data originally used to supply information to WTO.  This is because the R&D tax 
credit claims data used for the matching is more recent and more companies may have retrospectively 
filed claims for 2003 and 2004 since the original repo rt was submitted.  Also, in the matched data 
claims information is held on a financial year basi s, dependant on when the accounting period of the 
company ends.  Previously information was supplie d on a calendar year basis.  For these reasons, the 
amount claimed under the SME R&D tax credit progra mme for the financial year 2003-04 as recorded 
in the matched data does not correspond to the orig inal figures provided to the WTO that was for the 
calendar years 2003 and 2004.  As these figures do not correspond providing the amount claimed by 
industry sector for the financial year 2003-04 would be uninformative.  Instead, the proportions of 
total claims made by each industry sector are listed in  table below to give an indication of how claims 
under the SME scheme are distributed by industry sector.  
 The table shows the distribution of claims by SIC group.  For the two SIC groups with the 
majority of the claims, manufacturing (group D) and real estate, renting and business activities (group 
K) a further breakdown for the most populated indivi dual SIC codes is given.  In the more detailed 
additional breakdown, the percentages shown reflect th e proportion of the total cl aims rather than the 
proportion of claims in that SIC group.  The matc hing process did not achieve a 100% match rate and 
as such a proportion of the claims in the table below are attributed to an ‘Unknown’ industry 
classification.  
69.   The Britech Fund 
 Q7. Please provide information regarding the industries that received incentives under the 
above-listed programmes during the reporting period.    
Reply
 
  From 1999 to 2004, 25 projects had been appr oved.  £9.786 million of the funds had been 
committed and the average grant was just under £ 400K per project.  The projects covered a wide 
spread of sectors, which clo sely reflected the primary technological synergies between the two 
countries, i.e.  Software and IT (29%) Engineering (20%), Electronics (17%) Telecoms (15%), Biotechnology (14%) and Medical (5%).  Up to 2004, 9 of the projects have been completed and their 
results are being commercialized.  One project  has begun to return royalty income (£30k). 
  G/SCM/Q2/EEC/51 
 Page 33 
 
 
   
38.   Aggregates Levy - Extended Relief for A ggregate Commercially Exploited in NI 
 Q8. The United Kingdom’s notification st ates that one of the incentives under this 
programme is that "exports of virgin aggregate from the UK are eligible for 100% relief from 
the levy."   Please explain how this programme is  consistent with Article 3 of the Subsidies 
Agreement.  
 
Reply
 
 
 We think the question has arisen because of the way in which the UK described the 
Aggregates Levy (AL) NI subsidy scheme in our notification.    The notification describes the form of the subsidy for NI at paragraph 4 and lists the details of 
the relief scheme.  One of these details is stated to  be "exports of virgin aggregates from the UK are 
eligible for 100% relief from the le vy".  However, this is not actua lly a detail of the subsidy for NI 
(the relief scheme) but a general point which a pplies to the operation of the levy in the UK. 
   The reference makes it seem as if the relief scheme contains a subs idy relating to exports 
(100% relief) when this is not in fact the case.  Th e NI relief scheme does not contain any export relief 
- the export relief which exists is general to AL a nd is not affected by the relief scheme - the relief 
scheme has no impact on it and it has no impact on the relief scheme. 
   This reference was included at the time as we wanted to point out that there is a general 
export relief but the way we have done  this appears to have led to so me confusion on the part of the 
Americans. 
  
 Therefore, the subsidy does not fall foul of ar ticle 3 of the Subsidies Agreement.  The NI 
relief scheme is an internal relief scheme which ope rates in NI and that the subsidy provided for does 
not affect the treatment of exports of aggregate form the UK in any way.  The detail relating to 
exports was included in the list at paragraph 4 in error as it is a ge neral requirement for AL which has 
nothing to do with the relief scheme as such. 
 
41.   NI: Complete Programme Round Three (2003-2008) 
 Q9. Please provide information regarding the industries that received incentives under this 
programme during the reporting period.  In addition, the United Kingdom’s notification states 
that incentives are provided under this programme to "improve the national and international 
competitiveness of the business".  It also states th at all awards are discretionary.  Please explain 
whether companies that export receive greater benefits under this programme? 
 
Reply
 
 
 The attached spreadsheet reco rds all the companies that have accepted Compete assistance 
since the start of 2003.   In relation to the 'export' issue, Compete assist ance is only available to Invest NI clients and 
businesses can only become an Invest NI client if they  are engaged in or about to engage in significant 
export activity out of Northern Ireland.  The minimum cr iteria required to be satisfied by an Invest NI 
client company are:  G/SCM/Q2/EEC/51 
Page 34  
 
  External Sales potential of >25% and Total Sales > £100k in 3 years time 
or  External Sales > £250k in 3 years time.   (An external sale is defined as being outside Northern Ireland). 
 
42.   NI: Restructuring Aid 
 Q10. This programme appears to provide equity /loans to "manufacturing and internationally 
traded companies in Northern Ireland who are experiencing trading difficulties".  Please 
explain whether this programme is contingent upon exports.  
Reply
 
  Restructuring Aid, in common with other Invest  NI programmes can only be paid to Invest NI 
clients.  To qualify as a client, a company must be  an exporter or have potential to export. Our scheme 
also only relates to SME’s.  
General Questions
 
 The Waste and Resources Action Programme (WRAP) 
 
Q11. The Waste and Resources Action Programme (WRAP), is a UK Government body responsible for encouraging recycling activities.  It is our understanding, based on publicly 
available information, that this programme provides aid to paper mills in the form of grants in 
order to increase printing and writing (P&W) pa per production capacity and to stimulate the 
demand for collection of waste paper from offi ces.  Specifically, WRAP tenders grants among 
paper mills to co-finance capaci ty increases for the manufacturing of P&W paper using waste 
P&W paper. The budget of the scheme is between  £6 and £20 million (€8.7 and €29.2 million).  
Please explain why this programme does not qualify as notifiable under Article 25 of the SCM Agreement.  If the programme does qualify as notifiable, please provide the information 
required under Article 25. 
 
Reply
 
  WRAP’s printings and writings scheme is curr ently merely a proposal and has not yet been 
implemented.  It was notified to the Europ ean Commission on the 22July 2005 in accordance with 
Article 88(3) of the EC Treaty.  On 8 Dece mber 2005, the European Commission informed the 
United Kingdom that it had decided to initiate the procedure laid down in Article 88(2) of the EC 
Treaty.  Since then, the European Commission has not  reached a final decision on the compatibility of 
the proposed scheme with EC law.  Accordingly, the scheme has not been implemented and it is not 
yet known whether it will gain clearance so that it may be implemented or, in the event that a 
clearance decision is made by the Commission, whether the Commission will clear the proposal 
subject to changes to the scheme.  Accordingly,  this scheme does not, at this stage, qualify as 
notifiable under Article 25 of the SCM Agreement.  
Royalty-based financing 
  
Q12. The United States would also like to note  that several questions were asked with regard 
to the United Kingdom’s 2003 New and Full Notificati on on the issue of royalty based financing, 
and in particular assistance to the airline industr y, which have not yet been answered.  We look 
forward to receiving replies to these questions.   
   G/SCM/Q2/EEC/51
 Page 35 CUMULATIVE SUMMARY OF INVESTMENTS & GRANTS - For Nitech scheme 
      
Date Company Financial Instrument % Owned by Fund Cost £ Valuation £
22/10/2003 Gazer Technologies Ltd Repayable / Convertible Grant 0 20,000 0
07/11/2003 Datactics Ltd Ordinary Shares 10.51 200,000 200,000
21/11/2003 TraceAssured Ltd Repayable / Convertible Grant 0 20,000 0
23/12/2003 Serpico Software Ltd Ordinary Shares 8.6 120,000 120,000
27/04/2004 Arca Technologies Ltd Ordinary Shares 19.9 250,000 0
11/06/2004 TraceAssured Ltd Ordinary Shares 13.2 150,000 170,000
22/10/2004 Fusion Antibodies Ordinary Shares 3.78 125,000 125,000
15/11/2004 FBBT (UK) Ltd Ordinary Shares 11.4 115,000 115,000
21/12/2004 Exus Energy Ltd Ordinary Shares 13.8 225,000 62,558
10/01/2005 Banjax Studios Ltd Repaya ble / Convertible Grant 0 20,000 0
            
09/06/2005 ED Medical Ltd Repaya ble/Convertible Grant 0 10,000 0
End of Sept 05 FBBT (UK) Ltd 2nd Tranche    34,000   
End of Jan 06 FBBT (UK) Ltd Final Tranche   51,000   
Mid Jan 06 Axis 3     150,000   
            
03/02/2006 Datactics Ltd     75,000   
End of QTR 4 Trace Assured     100,000   
End of QTR 4 Fusion Antibodies     150,000   
            
Possibly April 06 end of 
QTR 4 Exus Energy     75,000   
Possibly April 06 end of QTR 4 Torc Studies     75,000   
Possibly April 06 end of QTR 4 FBBT (UK) Ltd     50,000   G/SCM/Q2/EEC/51 
Page 36  
 
  Compete Programme Round 3 - List of Companies 
 
8OVER8 LIMITED 
A J POWER LTD 
ACHESON & GLOVER LTD 
ADAMSEZ (NI) LTD 
ADRIA LTD 
AEPONA LTD 
AETOPIA LTD 
AISLING DESIGN SERVICES LIMITED 
ALTA SYSTEMS (NI) LIMITED 
AMACIS LIMITED 
AMPHION SEMICONDUCTOR LTD 
ANEX 6 LTD 
ANTRIM CONTRACT CARPETS LTD 
ARCA TECHNOLOGIES LTD 
ASIDUA LTD 
AUDIO PROCESSING TECHNOLOGY LTD 
AXIS THREE LIMITED 
B A KITCHEN COMPONENTS LTD 
B W F (N I) LTD 
BALLYMONEY FOODS LIMITED 
BIG RIVER LIMITED 
BILLY WARKE 
BLUESCOPE MEDICAL TECHNOLOGIES LTD 
BUSINESS MEDIA GROUP LTD 
BYTEL LIMITED 
C N C COMPONENTS (UK) LTD 
CDE IRELAND LIMITED 
CELERITEK UK LTD 
CEVA LIMITED 
CHIEFTAIN TRAILERS LIMITED 
CLEAN TECHNOLOGIES SOLUTIONS LIMITED 
CLEARPOWER TECHNOLOGY LTD 
CLINICAL TRIAL SERVICES LTD 
CONCRETE FLOORING SYSTEMS LTD 
CONSILIUM TECHNOLOGIES LIMITED 
CONTROLLED ELECTRONIC MANAGEMENT SYSTEMS LTD 
COPELAND LTD 
COPPER INDUSTRIES (IRELAND) LIMITED 
CORE SYSTEMS (NI) LTD 
CREATIVE COMPOSITES LIMITED 
CROSS REFRIGERATION (NI) LTD 
CROSSBOWS OPTICAL LTD 
DAEWOO ELECTRONICS UK LTD 
DAIRY PRODUCE PACKERS LTD 
DELTA PRINT & PACKAGING LTD 
DEREK CROSSEN T/A CROSSEN ENGINEERING 
DERNASEER ENGINEERING LTD 
DIMEX  (NI) LIMITED 
E & I ENGINEERING LTD 
EG. INFORMATION CONSULTING LTD  G/SCM/Q2/EEC/51 
 Page 37 
 
 
  ENDOSIM LTD 
EPS ENVIRONMENTAL LTD 
EVENT MAP LIMITED 
EVRON FOODS LTD 
EXTEC SCREENS AND CRUSHERS (NI) LTD 
EYESPYFX LTD 
EZ-DSP LTD 
FERN COMPUTER SERVICES LTD 
FIGHTING BULL BROADCAST TECHNOLOGIES 
LIMITED 
FINISCO LIMITED 
FINLAY HYDRASCREENS (OMAGH) LTD 
FINTEC CRUSHING AND SCREENING LTD 
FIRST DERIVATIVES PLC 
FORTRESS DOORS (NI) LTD 
FREEZA MEATS LTD 
GILTSPUR SCIENTIFIC LTD 
GLENTRONICS LIMITED 
GRADEALL INTERNATIONAL LTD 
GREEN CIRCLE (EU) LTD 
GREER  MURPHY 
HATHAWAY SYSTEMS 
HAWK PROTECTION LTD 
HEARTSINE TECHNOLOGIES LTD 
HERBST MACHINERY 
HUCO LIGHTRONIC N I LTD 
HUMAX ELECTRONICS CO LTD 
HUNTER APPAREL SOLUTIONS LIMITED 
I C S COMPUTING LIMITED 
INNOVATION TECHNOLOGIES (IRELAND) LTD 
INTELLIDEN LIMITED 
J THOMPSON SOLUTIONS LIMITED 
JAMES LECKEY DESIGN LTD 
JAMES MACKLE LTD 
JOHN A FRAZER - ETHICAL ENERGY LTD 
K HUGHES & CO LTD 
KEVIN HUGHES AND BRIAN DONAGHY 
KEYSTONE LINTELS LTD 
KILCO CHEMICALS LTD 
KMC ENGINEERING (NI) LTD 
LAGAN TECHNOLOGIES LTD 
LARSEN MANUFACTURING LTD 
LATENS SYSTEMS LTD 
LEADHORSE 
LECTRONJOULES LTD 
LYNN'S COUNTRY FOODS LIMITED 
M F S FUEL SUPPLIES LTD 
MACRETE IRELAND LTD 
MAGMA HEAT LTD 
MALLAGHAN ENGINEERING LTD 
MALLON TECHNOLOGY NI LTD 
MAYDOWN PRECISION ENGINEERING LTD 
MCCAULEY TRAILERS LTD G/SCM/Q2/EEC/51 
Page 38  
 
  MCCLOSKEY INTERNATIONAL LTD 
MCMULLEN ARCHITECTURAL SYSTEMS LTD 
MEDIACOM (IRELAND) LTD 
MERIDIO LIMITED 
MERLIN INTERACTIVE LTD 
METSO MINERALS (CAPPAGH) LIMITED 
MICROGEN DERIVATIVES LTD 
MINDREADY SOLUTIONS (NI) LIMITED 
MO TEAM LIMITED 
MOBILE COHESION LIMITED 
MOBILITY DATA SYSTEMS LIMITED 
MOFFETT & SONS LTD 
MOORE CONCRETE PRODUCTS LIMITED 
MOY PARK LIMITED 
N C ENGINEERING (HAMILTONSBAWN) LIMITED 
NIROX LTD 
NORBROOK LABORATORIES LIMITED 
NORTHERN HYDRAULICS LTD 
NU-MAC WASTE SYSTEMS LTD 
OPT 2 VOTE LTD 
PAUL MC QUAID 
PAUL, JAMES & REUBEN BRUCE T/A BRUCE ENGINEERING 
POLLOCK LIFTS LIMITED 
POWERSCREEN INTERNATIO NAL DISTRIBUTION LTD 
POWERSHIELD DOORS LTD 
PRECISION PROCESSING SERVICES LIMITED 
QUADRIGA CONSULTING 
QUINNS SPRING WATER LTD 
R F INTEGRATION LIMITED 
RAPID INTERNATIONAL LTD 
REDROCK ENGINEERING LTD 
RENEWABLE TECHNOLOGY SOLUTIONS LTD 
RETAIL SYSTEMS TECHNOLOGY LTD 
RFD BEAUFORT LTD 
RGM 
ROCKTEC INTERNATIONAL LTD 
ROLL FORMED FABRICATIONS LTD 
RONNIE STEVENSON 
RUBBER AND PLASTIC PRODUCTS (NI) LTD 
RYE VALLEY FOODS 
S B CHEMICALS LTD 
SCHRADER ELECTRONICS LTD 
SEAGOE TECHNOLOGIES LTD 
SEPHA LIMITED 
SHIRAZ MEDICAL LTD 
SINGULARITY LTD 
SMART LIGHT DEVICES IRELAND LTD 
SMILEY MONROE LTD 
SOLVED NI LTD 
SPECIALIST JOINERY FITTINGS LTD 
SPRINGFARM ARCHITECTURAL MOULDINGS LTD 
STIRK, LAMONT & ASSOCIATES LIMITED  G/SCM/Q2/EEC/51 
 Page 39 
 
 
  SWAN LABS LIMITED 
SYCADEX LTD 
TARGET DRY LIMITED 
TELESTACK LTD 
THE BELLEEK POTTERY LTD 
THE INTERNET BUSINESS LTD 
THE MCAVOY GROUP LTD 
THERMOMAX LTD 
TOMCAT SYSTEMS LTD 
TOUGHGLASS LTD 
TREAT 'N' TRAIN LTD 
TRUCORP LIMITED 
TURKINGTON LIVESTOCK SYSTEMS LTD 
TYRONE CRYSTAL LTD 
TYRONE FABRICATIONS LTD 
ULSTER CARPET MILLS (HOLDINGS) LTD 
UNICORN SELF SERVE LIMITED 
VALPAR INDUSTRIAL LTD 
VISTEON UK LTD 
WESTLAND HORTICULTURE LIMITED 
WILLIAM GALLERY 
WINDELL LTD 
WISE SYSTEMS & SOLUTIONS LTD 
WOODMARQUE ARCHITECTURAL JOINERY LTD 
XENOSENSE LTD 
XFLAM LTD  
  G/SCM/Q2/EEC/51 
Page 40 
Table 1: Distribution of claims under the SME sch eme by industry for the financial year 2003-04 
SIC group SIC group description 
- SIC code & description Distribution of R&D claims by SIC Group 
- By SIC code distribution 
A Agriculture, Hunting and Forestry * 
C Mining and Quarrying * 
D Manufacturing (Total) 18% 
 - 33: Manufacturing Medical 5% 
 - 24: Manufacturing Chemicals 3% 
 - 32: Manufacturing Radio TV 2% 
 - 31: Manufacturing Electrical and optical not elsewhere 2% 
 - 29: Manufacturing Machinery and equipment 2% 
 - 36: Manufacturing Not Elsewhere 1% 
 - 30: Manufacturing Electrical and optical 1% 
 - 28: Manufacturing Fabricated Metal 1% 
 - All Other manufacturing Sectors 2% 
E Electricity, Gas and Water Supply * 
F Construction * 
G Wholesale and Retail trade 3% 
H Hotels and Restaurants * 
I Transport, storage and communication 2% 
J Financial Intermediation 3% 
K Real Estate, Renting and Business activities (Total) 66% 
 - 72: computer and related services 37% 
 - 73: research and development 19% 
 - 74: other business activities 9% 
 - All Other Real Estate, Renting and Business Activities Sectors * 
M Education * 
N Health and Social Work * 
O Other Community, Social and Personal Service Activities 2% 
 Unknown Industry Sector 5% 
* denotes less than 0. 
 
__________