WORLD TRADE  
ORGANIZATION  G/SCM/N/123/EEC/Add.15 
26 August 2005 
 
 (05-3600) 
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 Lithuania
. 
 
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 G/SCM/N/123/EEC/Add.15 
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 LITHUANIA 
 
TABLE OF CONTENTS 
 
Page  
I. FINANCIAL SUPPORT TO COMPANIES ..........................................................................3  
II. AID TO “ALYTAUS TEKSTILE” STOCK COMPANY ....................................................4  
III. SUPPORT FOR KLAIPEDA FR EE ECONOMIC ZONE...................................................5  
IV. SUPPORT FOR AQUACULTURE ........................................................................................7  
V. SUPPORT FOR ORGANI C AQUACULTURE....................................................................8  
 
   
1 EURO = 3,4528 LTL (Lithuanian Litas) 
  G/SCM/N/123/EEC/Add.15 
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 I. FINANCIAL SUPPORT TO COMPANIES  
1.  Title of the programme  
  Restoring the paying capacity of the companies, which are indebted to the Government, in order to avoid negative economical and social outcomes.  
 
2. Brief description of the programme
 
  The main objective of the program is to rest ore the paying capacity of the companies which 
are in financial difficulties or temporary are not able to fulfil their obligations under the loan 
agreements with the Government or under the agre ements with other creditors when the Government 
had issued sovereign guaranties to the above me ntioned creditors on the loans extended to the 
companies (Agreements concluded between 1993-1997) . Providing support to the companies under 
this programme, the Government is planning to re deem the debt or a part of the debt from the 
companies in the future as well, as to avoid ne gative economical, financial and social outcomes, 
which could arise during the recovery of debt w ithout litigation from the comp anies.  The companies 
are mainly active in the following types of activities: heavy and light industry, electronics industry, etc.  3. Period covered by notification
 
 
The years 2003 and 2004 
 
4.  Policy objective and/or purpose of the subsidy  
 
• Restoring the paying capacity of the companies; 
• Attracting significant investment; 
• Increasing the number of vacancies and solving unemployment problems; 
• Reforming the companies work;  
• Enhancing competitiveness of the companies. 
 
5. Background and authority for the programme  
 Ministry of Finance 
 6.  Legislation under which it is granted
 
 
 The Law of the Republic of Lithuania on th e National Debt, 22 August 1996 Nr. I-1508, last 
amendment 18 December 2003 Nr. IX-1917;   The Law of the Republic of Lithuania on the Restructuring of Companies, 20 March 2001 
Nr. IX-218, last amendment 2 November 2004 Nr. IX-2524 (not in all cases); 
  The Law of the Republic of Lithuania on the Bankruptcy of Companies, 20 March 2001 Nr. IX-216, last amendment November 2, 2004 Nr. IX-2523 (not in all cases). 
 7.  Form off assistance granted
 
 
• Write-off of penalties; 
• Capitalization of Government granted loans; G/SCM/N/123/EEC/Add.15 
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 • Suspension of a part or all Government granted loans, when a company is proceeding with the 
restructuring under the Law on the Restructuring of Companies or a company is implementing the provisions laid down in the Reconciliation Agreement with the Government 
under the Law on the Bankruptcy of Companies. 
• The reduction of the annual interest rate; 
• More favourable repayment conditions  of Government granted loans. 
 
8. To whom and how the subsidy is provided
 
  To commercial companies which are indebted to  the Government. Individual subsidies for the 
companies, which fulfil the provisions laid down in  the Law on the National Debt, in some cases in 
the Law on the Restructuring of Companies or in the Law on the Bankruptcy of Companies.  
 
9.  Total expenditure under the programme
 
 
 2003 2004 
TOTAL 14,46 million LTL 12,21 million LTL 
 
10. Duration of the programme  
 1 January 2003–31 December 2004 
 11.  Procedure for gaining the subsidy
 
 
 Individual subsidies for the companies, whic h fulfil the provisions laid down in the Law on 
the National Debt, in some cases in the Law on the Restructuring of Companies or in the Law on the 
Bankruptcy of Companies.   II. AID TO “ALYTAUS TEKSTILE” STOCK COMPANY 
1.  Title of the programme
 
  The notification relates to an individual aid.   The individual recipient of aid  – “Alytaus Tekstile” Stock Company.  
 
2.  Brief description of the programme
 
  To provide the company „Alytaus tekstil ė” with other payment terms that those stipulated in 
the existing legislation on taxation with reference to social insu rance contributions and personal 
income tax, as well as to release the said company from repayment of the non-repaid loan share and 
interests, thus allowing to improve its financial stat us.  This is aimed to prevent city of Alytus from 
negative social, economic and unemployment outcomes.  3.  Period covered by notification
 
 
 29 January 2004-31 December 2004 
 4.  Policy Objectives and/or purposes of the subsidy
 
  The aid objective is to prevent possible unemployment and social problems in the city of Alytus resulting from the worsening economic situ ation of the company „Alytaus Tekstile“.  The  G/SCM/N/123/EEC/Add.15 
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 subsidy provided for supporting of the optimisation of the company’s strategic projects, enhancing 
competitiveness by reorganization of production pro cesses, creating new product ranges, marketing 
patterns improvement, investment into new t echnologies and human resources development.  
 5.  Background and authority for the programme
 
 
 Ministry of the Economy  6.  Legislation under which it is granted
 
 
 Law of the Republic of Lithuania on Recovery of Activities of  “Alytaus Tekstile” Stock 
Company, 29 January 2004, Nr. IX-1991 (OG “Valstyb ės Žinios”, 2004, Nr. 25-759).  
 7.  Form of assistance granted
 
 
 Acquisition of the shares, definition of a di fferent tax payment terms, writing-off default 
interest.  8.  To whom and how the subsidy is provided
 
  “Alytaus Tekstile” Stock Company 
 
9. Total expenditure under the programme
 
 
Action Expenditure, 2004 
Acquisition of the shares 
1) instead of loan repayment 13 201 668 LTL 
13 201 668 LTL 
Write-off of default interest 265 194 LTL 
Definition of a different tax payment term  9 218 328 LTL 
Total 22 685 190 LTL 
 
10. Duration of the programme  
 
 29 January 2004–1 May 2007  11. Procedure for gaining the subsidy
 
 
 As described in the Law on Recovery of Activities of  “Alytaus Tekstile” Stock Company, 
29 January 2004, Nr. IX-1991, (OG “Valstyb ės Žinios 2004, Nr. 25-759).   
  
III. SUPPORT FOR KLAIPEDA FREE ECONOMIC ZONE 
1.  Title of the programme
 
 Investments promotion in Klai peda Free Economic Zone  
 2. Brief description of the programme
  
 
 Investment promotion scheme in Klaipeda Free Economic zone is based on tax concessions.  
According to the national legislation only the FEZ enterprises may apply the tax incentives.  The G/SCM/N/123/EEC/Add.15 
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 decision concerning the issuing of a licence for th e economic entity’s activities in the free economic 
zone shall be taken by the zone management  company.  Companies established in FEZ enjoy favourable tax treatment: 
• Real estate tax exemption; 
• Road tax exemption; 
• 6 years exemption from corporate income tax according to the date of investment and 50% 
discount for the following 10 years - for companies that have invested more than € 1 million. 
 3. Period covered by notification
 
  The years 2003 and 2004  
4. Policy objective and /or purpose of the subsidy
 
  To create in the FEZ favourable taxation, lega l and other preferential conditions of economic-
commercial activities for the establishment within them by foreign and local economic entities of 
enterprises, which develop and introduce technical-sci entific progress, as well as to stimulate foreign 
investments and create new jobs. 
 5. Background and authority for the programme
 
  Ministry of Economy  
 
6.  Legislation under which is granted
 
  Law of the Republic of Lithuania on th e Fundamentals of Free Economic Zones, 
2 April 1996, Nr. I-976.  Last amendment of 11 November 2004, Nr. IX-2565  
 Law of the Republic of Lithuania on Klai peda  Free Economic Z one, 12 September 1996, 
Nr. I-1516. Last amendment of 12 February 2004, Nr. IX-2015.  7. Form of assistance granted
 
 
 Tax exemption 
 8 To whom and how the subsidy is provided
 
  In 2004 the assistance was granted to 3 entities (the first company - 14,57 million LTL, the second company - 0,31 million LTL and the third co mpany 0,04 million LTL), in 2003 – to 2 entities 
(the first company - 10,48 million LTL and the second company  - 0,07 million LTL).   
 9. Total expenditure under the programme
 
 
 2003 2004 
TOTAL 10,5 million LTL 14,9  million LTL 
 
10.  Duration of the programme  
  Unlimited    G/SCM/N/123/EEC/Add.15 
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 11. Procedure for the gaining of subsidy  
  As described in the Law on the Fundamentals of Free Economic Zones    IV. SUPPORT FOR AQUACULTURE 
1.  Title the programme 
 
  Support for aquaculture    
 
2.  Brief description of the programme
 
   Programme is intended to support: the breeding of valuable fish and crayfish juveniles for the 
waters of national importance; the implementa tion of piscine diseases prophylaxis programme in 
fisheries ponds; aquaculture enterprises for electric energy consumption.  
 
3. Period covered by notification
 
  1 January 2003-31 December 2004  4.  Policy objectives and/or purposes of the subsidy
 
 
• Promote breeding of valuable fish and cray fish for the waters of national importance 
• Improve sanitary and health conditions of fish breeding 
• Promote producing of qualitative fish production  
• Reduce fish morbidity, eliminate some piscine diseases and pests  
• Strengthen competitiveness of aquaculture enterprises 
 5.  Background and authority for the programme. 
 
  Ministry of Agriculture 
 
6. Legislation under which it is granted
 
 
• Law of the Republic of Lithuania on Agricu ltural and Rural Development, 25 June 2002 
Nr. IX-987  (OG “Valstyb ės Žinios”, 2002, No. 72-3009); 
 
• Order of the Minister of Agriculture of the Republic of Lithuania on the Support for Fisheries 
from the Rural Development Programme (OG “Valstyb ės Žinios”, 2003, No. 32-1343); 
 
• Order of the Minister of Agriculture of the Republic of Lithuania on the Support for 
Aquaculture from the Rural Development Programme (OG “Valstyb ės Žinios”, 2004, No. 41-
1352). 
 
7.  Form of the subsidy  
  Grants and contribution towards eligible costs   8.  To whom and how the subsidy is provided
  
 
 Producers (enterprises and farmers, engaged in aquaculture)  G/SCM/N/123/EEC/Add.15 
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9.  Total expenditure under the programme
 
 
  2003 2004 
Breeding of valuable fish and crayfish juveniles 667 500 LTL 791 500 LTL 
Piscine diseases prophylaxis programme 886 900 LTL 797 400 LTL 
Electric energy consumption – 139 000 LTL 
TOTAL  1 554 400 LTL 1 727 900 LTL 
 
10. Duration of the programme  
  2003–2010 
 
11.   Procedure for gaining the subsidy
 
  Application by individual eligible persons   V. SUPPORT FOR ORGANIC AQUACULTURE 
1.  Title of the programme
 
  Support for organic aquaculture  
2. Brief description of the programme
 
   The programme is intended to promot e organic aquaculture in fisheries ponds. 
 3.  Period covered by notification
 
 
 1 January 2003-31 December 2004  4.  Policy Objectives and/or purposes of the subsidy
 
 
• Orientate aquaculture enterprises/farmers towards ecological farming  
• Promote production of organic products  
 
5.  Background and authority for the programme  
  Ministry of Agriculture  6. Legislation under which it is granted
 
 
• Law of the Republic of Lithuania on Agricu ltural and Rural Development, 25 June 2002 
Nr. IX-987 (OG “Valstyb ės Žinios”, 2002, No. 72-3009); 
 
• Order of the Minister of Agriculture of the Republic of Lithuania on the Rules of Support to 
Development of Ecologic Agriculture (OG “Valstyb ės Žinios”, 2003, 33-1385); 
 
• Order of the Minister of Agriculture of the Republic of Lithuania on the Rules of Support to 
the Development of Ecological Farming in Aquaculture Enterprises (OG “Valstyb ės Žinios”, 
2004, 108-4053)  G/SCM/N/123/EEC/Add.15 
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7.  Form of the subsidy  
  Grants  
8.  To whom and how the subsidy is provided
 
  Producers (legal and physical persons, engaged in organic aquaculture)    9.  Total expenditure under the programme
 
 
 2003 2004 
TOTAL  296 000 LTL 739 800  LTL 
 
10.  Duration of the programme  
 
 2003–2010  11. Procedure for gaining the subsidy
 
  Application by individual eligible persons 
 
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