WORLD TRADE  
ORGANIZATION  G/SCM/N/155/EEC/Add.15
23 November 2007 
 (07-5172) 
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 Communities relates to subsidy 
programmes of Latvia .   
 
_______________ 
 G/SCM/N/155/EEC/Add.15 
Page 2  
 
  LATVIA  
 
TABLE OF CONTENTS 
 
 
Page  
 
INTRODUCTION................................................................................................................... ...............4  
I. POLICY OBJECTIVE:  AID FOR REGIONAL DEVELOPMENT..................................5  
A. ON APPLICATION OF TAXES IN FREE PORTS AND SPECIAL ECONOMIC ZONES ..........................5  
B. JSC  "LATVIJAS FINIERIS " - INVESTMENT AID FOR ENSURING MORE ECONOMICAL 
USE OF LATVIAN WOOD RECOURSES AND FOR CONTRIBUTION IN REDUCTION OF 
UNEMPLOYMENT LEVEL IN SOME REGIONS OF LATVIA .............................................................5  
C. JSC  "LATVIJAS UNIBANKA " - INVESTMENT AID TO DECENTRALIZE OF DECISION 
MAKING PROCEDURES AND OPERATIONS IN THE BANK, ACCORDINGLY 
CONTRIBUTING TO THE DEVELOPMENT OF THE REGIONS OUTSIDE THE CAPITAL AND 
DIMINISHING SOCIO -ECONOMICAL DIFFERENCES BETWEEN DIFFERENT TERRITORIES 
OF LATVIA ............................................................................................................................... ....6 
D. JSC  "KALCEKS " - INVESTMENT AID FOR CONSTRUCTING OF NEW PRODUCTION UNIT 
OF MEDICINE ............................................................................................................................... 7 
E. DIVERSIFICATION OF RURAL ECONOMIC ACTIVITIES PROVIDING ALTERNATIVE 
INCOME ............................................................................................................................... ........7  
F. SUPPORT TO MODERNISATION OF THE BUSINESS INFRASTRUCTURE .........................................8  
II. POLICY OBJECTIVE:  SECTORAL AID ...........................................................................9  
A. INDIVIDUAL REGIONAL AID IN FAVOUR OF JSC  "OLAINFARM ".................................................9  
III. POLICY OBJECTIVE:  AID FOR SMALL AND MEDIUM-SIZED ENTERPRISES....9  
A. AID SCHEME OF LOAN GUARANTEES OF LATVIAN GUARANTEE AGENCY ................................9  
B. CREDITING OF SMES  DEVELOPMENT .......................................................................................10  
C. CREDITING OF SME S DEVELOPMENT (SECOND STAGE ) ..........................................................11  
D. THE REORGANIZATION AND DEVELOPMENT OF RURAL AREAS ...............................................12  
E. DEVELOPMENT OF COMMERCIAL ACTIVITY IN SPECIAL ASSISTED REGIONS ..........................12  
F. SUPPORT TO THE CONSULTANCY SERVICES AND THE PARTICIPATION OF THE 
COMMERCIAL COMPANIES IN INTERNATIONAL EXHIBITIONS AND TRADE MISSIONS .............13  
G. SUPPORT TO THE R&D  PROJECTS FINANCED IN THE FRAMEWORK OF EUREKA 
PROGRAMME .............................................................................................................................14  
H. LOANS (MICROCREDIT INCLUDED ) FOR ESTABLISHING COMMERCE .......................................14  
IV. POLICY OBJECTIVE:  TRAINING AID...........................................................................15  
A. SUPPORT FOR TRAINING , RETRAINING AND RAISING OF QUALIFICATION OF 
EMPLOYED ............................................................................................................................... .15 
V. SUBSIDIES FOR SERVICES OF GE NERAL ECONOMIC INTERESTS.....................16  
A. FINANCING FOR CREATION AND BROADCASTING OF GENERAL INTEREST 
PROGRAMMES ...........................................................................................................................16   G/SCM/N/155/EEC/Add.15 
 Page 3 
 
 
  VI. POLICY OBJECTIVE:  E NVIRONMENTAL AID...........................................................17  
A. SUPPORT TO PRODUCTION OF BIOFUELS ..................................................................................17  
 
1 LVL = 0,7028 EUR.   G/SCM/N/155/EEC/Add.15 
Page 4  
 
  INTRODUCTION 
 
 Due to financial constraints and liberal appro ach to economic policies (the policy of minimum 
intervention in business activities), the Republic of La tvia provides very limited financial support to 
its business sector even for internationally accepte d goals of regional deve lopment, environmental 
protection, research and development.  Therefore the possibility of distortion of competition as a 
result of State aid is minimum.     Public expenditures, credit programs or tax measures are included in this survey without 
prejudging whether the subsidy measure is specific or whether it can be qualified as a general policy 
measure.   
  This survey covers all subsidies granted in years 2005 and 2006.   
  G/SCM/N/155/EEC/Add.15 
 Page 5 
 
 
  I. POLICY OBJECTIVE:  AID FOR REGIONAL DEVELOPMENT 
 
A. ON APPLICATION OF TAXES IN FREE PORTS AND SPECIAL ECONOMIC ZONES  
1. Legal basis  
 
 Law "On Application of Taxes in Free Ports and Special Economic Zones".   
 2. Authority for the subsidy
 
  State Revenue Service and the relevant municipalities.   
 
3. Form of the subsidy
 
  Tax relief.    
4. Mechanism
 
  Enterprises in special economic zones (Liep āja and Rēzekne) and Riga and Ventspils free 
ports enjoy favourable tax treatment – a discount of  80 per cent from the en terprise income tax and 
the immovable property tax.    
5. To whom the subsidy is provided
 
  According to the national legislation only the en terprises, that have been signed the agreement 
with The Board of special economic zones and free ports about the realization of business activities and initial investments in the territory of both sp ecial economic zones and free ports, may apply the 
tax rebates.   
 6. The annual amount of the subsidy
 
  In 2005, the total amount of the subsidy c onstituted LVL 3,96 million under this scheme.  
In 2006, the forecasted amount of the subsidy is LVL 3,96 million.
1   
 
7. Duration of the subsidy  
  2002 – 2017.    
B. JSC
 "LATVIJAS FINIERIS " - INVESTMENT AID FOR ENSURING MORE ECONOMICAL USE OF 
LATVIAN WOOD RECOURSES AND FOR CONTRIBUTION IN REDUCTION OF UNEMPLOYMENT 
LEVEL IN SOME REGIONS OF LATVIA  
1. Legal basis  
  Law On Enterprise Income Tax, Section 17.1.   
 
2. Form of the subsidy
 
  Tax relief.   
                                                     
 
1 Provisional figures as final figures of 2006 are not yet available in cases of tax – related forms of aid 
because due to the national legislation the actu al annual figures are obtained in autumn.   G/SCM/N/155/EEC/Add.15 
Page 6  
 
  3. Authority for the subsidy
 
  Ministry of Economics.    4. To whom the subsidy is provided/mechanism
 
 
 Ad hoc aid.  Tax relief in respect of investments made within the scope of supported investment projects is applicable in the amount of 40 per cent of the total invested amount if 
enterprises conform to the certain conditions, for ex ample, total amount of investments made should 
exceed 10 million LVL and the period of investment s hould not exceed 3 years.  Tax relief is applied 
in the taxation period in which the supporte d investment project is completed.   
 5. The annual amount of the subsidy
 
  In 2005, the total amount of the aid grante d constituted LVL 0,975 million.  In 2006, the 
forecasted amount of the subsidy is LVL 0,975 million.
2   
 6. Duration of the subsidy
 
  2004 – 2006.    
C. JSC
 "LATVIJAS UNIBANKA " - INVESTMENT AID TO DECENTRALIZE OF DECISION MAKING 
PROCEDURES AND OPERATIONS IN THE BANK, ACCORDINGLY CONTRIBUTING TO THE 
DEVELOPMENT OF THE REGIONS OUTSIDE THE CAPITAL AND DIMINISHING SOCIO -
ECONOMICAL DIFFERENCES BETWEEN DIFFERENT TERRITORIES OF LATVIA  
1. Legal basis  
 
 Law On Enterprise Income Tax, Section 17.1.    2. Form of the subsidy
 
  Tax relief.   
 
3. Authority for the subsidy
 
  Ministry of Economics.    
4. To whom the subsidy is provided/mechanism
 
  Ad hoc aid.  Tax relief in respect of investments made within the scope of supported investment projects is applicable in the amount of 40 per cent of the total invested amount if 
enterprises conform to the certain conditions, for ex ample, total amount of investments made should 
exceed 10 million LVL and the period of investment s hould not exceed 3 years.  Tax relief is applied 
in the taxation period in which the supporte d investment project is completed.   
 5. The annual amount of the subsidy
 
  In 2005, there was no aid granted.  In 2006, the forecasted amount of the subsidy is LVL 0.00.   
                                                     
 
2 Provisional figures as final figures of 2006 are not yet available in cases of tax – related forms of aid 
because due to the national legislation the actu al annual figures are obtained in autumn.    G/SCM/N/155/EEC/Add.15 
 Page 7 
 
 
  6. Duration of the subsidy  
  2005 – 2007.    D. JSC
 "KALCEKS " - INVESTMENT AID FOR CONSTRUCTING OF NEW PRODUCTION UNIT OF 
MEDICINE  
1. Legal basis  
  Law On State Budget.    
2. Form of the subsidy
 
  State guarantee.    3. Authority for the subsidy
 
 
 Ministry of Finance.    4. To whom the subsidy is provided/mechanism
 
  Ad hoc aid.  Aid is granted for investment pr oject of JSC "Kalceks", the aim of which is the 
building up of  new factory of medicine in order to ensure the production process in compliance with 
the conditions under Good Manufacturing Practice.  According to the Regulations No. 432 of Cabinet 
of Ministers of Latvia (12 December 2000) only th e companies which will get the certificate of Good 
Manufacturing Practice will be allowed to pr oduce medicaments from 1 January 2003.  The 
investment project was designed to finish the process of restructuring of producing process of the 
company in order to comply with these regulations.  Under the project State issued guarantee covers 
100 per cent of outstanding loan. Commission fee - 0.1 per cent of outstanding loan per year is paid 
by the loan's beneficiary.    5. The annual amount of the subsidy
 
 
 In 2005, the total amount of the aid granted constituted LVL 0,026 million.  In 2006, the aid 
equivalent also was LVL 0.026 million.    6. Duration of the subsidy
 
 
 2002 – 2017.   
 E. D
IVERSIFICATION OF RURAL ECONOMIC ACTIVITIES PROVIDING ALTERNATIVE INCOME  
1. Legal basis  
  The scheme is realized as one of th e measures under the SAPARD Programme for 
Agriculture and Rural Development for Latvia (2000 - 2006), which is financial assistance for 
structural reforms in agriculture and rural development in the candidate countries of the 
European Union.    2. Authority for the subsidy
 
 
 Ministry of Agriculture.   G/SCM/N/155/EEC/Add.15 
Page 8  
 
  3. Form of the subsidy
 
  Grant.    4. To whom the subsidy is provided/mechanism
 
 
 Aid is foreseen for the investments of the enterprises with a design to develop non-
agricultural enterpreneurial activities thus ensuring alte rnative income in rural areas of Latvia.  Under 
the scheme the following sub-measures will be reali zed:  rural tourism;  development of technical 
assistance;  production of alternative heating material and crafts.   
 
5. The annual amount budgeted of the subsidy  
  In 2005, the total amount of public fina ncing granted under the scheme amounted to 
LVL 5,64 million which consisted of LVL 1,41 million financing from th e national budget and 
LVL 4,23 million co-financing from the European Union resources.  In 2006, the total amount of 
financing from the national budge t granted under the scheme amounted to LVL 0,44 million.   
 6. Duration of the subsidy
 
  2000 – 2006.   
 
F. S
UPPORT TO MODERNISATION OF THE BUSINESS INFRASTRUCTURE  
1. Legal basis  
  The realization of the scheme is planned within the scope of Latvia's development 
plan (SPD).   
 2. Authority for the subsidy
 
  Ministry of Economics.    
3. Form of the subsidy
 
  Grant.    4. To whom the subsidy is provided/mechanism
 
 
 Aid is foreseen for the invest ments of the enterprises eligible  for aid under the scheme with a 
design to modernize business infrastructure throughout  the territory of Latvia.  Under the scheme the 
following sub-measures will be realized:  support to i nvestment in private infrastructure in access to 
public networks, support to private infrastructure m odernization to bring it in line with the EU 
standards and support to shared private infrastructure development.   
 
5. The annual amount budgeted of the subsidy  
  In 2005, the total amount of financing fro m the national budget granted under the scheme 
amounted LVL 5,73 million and in  2006 - LVL 6,32 million.    G/SCM/N/155/EEC/Add.15 
 Page 9 
 
 
  6. Duration of the subsidy  
  2004 – 2006, the financial recourses might be used till the 31 December 2008 according to the 
EU Structural funds procedures.    
 
II. POLICY OBJECTIVE:  SECTORAL AID  
 
A. I
NDIVIDUAL REGIONAL AID IN FAVOUR OF JSC  "OLAINFARM " 
1. Legal basis  
 
 Law On State Budget.    2. Form of the subsidy
 
 
 Prolongation of tax payment debts and write -off of punitive fees related to prolonged tax 
payment debts.    3. Authority for the subsidy
 
  Ministry of Economics.   
 
4. To whom the subsidy is provided/mechanism
 
  Ad hoc aid.  Aid is granted to JSC "Olainfarm",  the aim of which is to support the enterprise 
to modernise the process of production thus ensuring  the possibility for more  than 1200 workers of 
region Olaine to maintain their job place.   
 5. The annual amount of the subsidy
 
  In 2005, the total amount of the aid gr anted constituted LVL 0,591million from which 
LVL 0,031 million was aid resulted from prolongation of  tax payment debts and the rest of the aid– 
LVL 0,56 million constituted write-off of punitive fe es related to prolonged tax payment debts.  
In 2006, the aid was granted only in a form of pr olongation of tax payment debts and the total amount 
of the aid was LVL 0,024.    6. Duration of the subsidy
 
 
 2005 - 2011.     
III. POLICY OBJECTIVE:  AID FOR SMALL AND MEDIUM-SIZED ENTERPRISES  
 A. A
ID SCHEME OF LOAN GUARANTEES OF LATVIAN GUARANTEE AGENCY  
1. Legal basis  
  Protocol No.21 of the Board of the Latvian Guarantee Agency dated by 29/05/2003;  Latvia's Development Plan approved by the Cabinet of Mi nisters on 18 March 2003;  Concept of 2002 for the 
development of Latvian SMEs.   G/SCM/N/155/EEC/Add.15 
Page 10  
 
  2. Authority for the subsidy
 
  The Guarantee Agency of Latvia.    3. Form of the subsidy
 
 
 Guarantee.    4. To whom the subsidy is provided
 
 
 LGA provides the support to SMEs.  The aid is prohibited to activities linked to the 
production, processing or marketing of products lis ted in Annex I to the Treaty, purely trade 
operations as well as to export-related activities, name ly aid directly linked to the quantities exported, 
to the establishment and operation of a distribution ne twork or to the other current expenditure linked 
to the export activity.  Also aid contingent upon the use of domestic over imported goods is 
prohibited.   
 5. Mechanism
 
  If commercial banks refuse to provide loans to SMEs aimed to the realization of initial 
investment projects because of too high risk invol ved then the LGA would provide the possibility for 
SMEs to sign guarantee agreements.  The scheme foresees the granting of guarantees for long and 
medium term loans issued to SMEs for inv estment in tangible and intangible assets.   
 6. The annual amount of the subsidy
 
 
 In 2005, the aid element of the guarantees is sued by the LGA constituted LVL 0,004 million 
and in 2006 – to LVL 0.0035 million.    7. Duration of the subsidy
 
  18 June 2003 – 31 December 2008.   
 
B. C
REDITING OF SMES  DEVELOPMENT  
1. Legal basis  
  The Concept of project on "Crediting of SM E's development", accepted by the Cabinet of 
Ministers, 15 November 1999.   
 2. Authority for the subsidy
 
  The Mortgage and Land Bank of Latvia.    
3. Purpose of the subsidy
 
  As the successful operations of SMEs ensure social stability and promote long-term economic 
growth, an important condition for SME developmen t is the availability of loans.  However, 
commercial banks and other financia l institutions are often uninterested in issuing loans to SMEs 
because many SMEs do not have sufficient collateral or  an adequate credit history to receive loans as 
well as the cost of servicing SME loans is also comparatively high.  The main purpose of this programme is to improve the ability of SMEs to r eceive loans so as to promote the modernisation and 
diversification of the Latvian economy and to en sure the development and improvement of SMEs 
operations.    G/SCM/N/155/EEC/Add.15 
 Page 11 
 
 
  4. Form of the subsidy  
  Soft loan.    5. To whom the subsidy is provided
 
 
 Under this support programme the aid is gi ven to SMEs, which do not have sufficient 
collateral or an adequate credit history to receive lo ans, which are owned by women or located in less 
developed regions of the country.  These SMEs  have a good chance for rapid development as the 
result of business ideas, contacts, knowledge, etc., but with respect to which commercial banks or 
other financial institutions are not in terested in providing financing.   
 6. Mechanism
 
  In 2001, the government in collaboration with  the Latvian Mortgage and Land bank initiated 
to establish the support programme "Crediting of SME' s development".  Aid under the auspices of this 
programme will be granted mainly for initial investments.    7. The annual amount of the subsidy
 
  In 2005, the aid equivalent for the soft loan s serviced by the Latvia n Mortgage and Land bank 
was LVL 0,064 million and in 2006, it amounted to LVL 0,00012 million.   
 8. Duration of the subsidy
 
  20 July 2001 – 31 December 2010.   
 
C. C
REDITING OF SME S DEVELOPMENT (SECOND STAGE ) 
1. Legal basis  
  Order No. 649 of the Cabinet of Minister s from 7 November 2002 "On Crediting of SMEs 
development" (second stage).   
 
2. Authority for the subsidy
 
  The Mortgage and Land Bank of Latvia.    
3. Purpose of the subsidy
 
  As the successful operations of SMEs ensure social stability and promote long-term economic 
growth, an important condition for SME developmen t is the availability of loans.  However, 
commercial banks and other financia l institutions are often uninterested in issuing loans to SMEs 
because many SMEs do not have sufficient collateral or  an adequate credit history to receive loans as 
well as the cost of servicing SME loans is also co mparatively high.  The successful experience with 
the scheme's first stage initiated to continue assistan ce of SMEs thus helping them to develop their 
operations.    4. Form of the subsidy
 
 
 Soft loan.   G/SCM/N/155/EEC/Add.15 
Page 12  
 
  5. To whom the subsidy is provide/ mechanism
 
  Under this support programme the aid is given to  SMEs.  It is the aid scheme managed by the 
Latvian Mortgage and Land bank which was initia ted in collaboration with the government.  Aid 
under the auspices of this programme will be granted only for initial investments.   
 
6. The annual amount of the subsidy
 
  In 2005, the aid equivalent for the soft loan s serviced by the Latvia n Mortgage and Land bank 
was LVL 0,455 million.  In 2006, the aid e quivalent amounted to LVL 0,018 million.   
 
7. Duration of the subsidy
 
  2003 - 2013.    
D. T
HE REORGANIZATION AND DEVELOPMENT OF RURAL AREAS  
1. Legal basis  
  Latvia's Development Plan (SPD) 2004-2006.    2. Authority for the subsidy
 
 
 Rural Support Service.    3. Form of the subsidy
 
 
 Grant.   
 4. To whom the subsidy is provided/ mechanism
 
  In accordance with Commission Regulation (EC) No 70/2001 of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to  State aid to small and medium-sized enterprises 
aid in a form of grants will be provided for initial investment.  The sectors supported include the 
development of tourism and craft activities, the de velopment agricultural activities with a design to 
provide alternative income sources and other diffe rent services for rural economics and population.   
 5. The annual amount budgeted for the subsidy
 
 
 In 2005, the total amount of public fina ncing granted under the scheme amounted to 
LVL 7,37 million which consisted of LVL 2,21 million financing from th e national budget and 
LVL 5,16 million co-financing from the European Union resources.  In 2006, the aid amounted to LVL 2,6 million from the national budget.    
6. Duration of the subsidy
 
  30 April 2004 – 31 December 2008.    E. D
EVELOPMENT OF COMMERCIAL ACTIVITY IN SPECIAL ASSISTED REGIONS  
1. Legal basis  
  Rules No. 637 of the Cabinet or Ministers from 11 November  2003.  Rules No. 103 of the Cabinet or Ministers from 7 February 2006 and Latvia's Development Plan (SPD).    G/SCM/N/155/EEC/Add.15 
 Page 13 
 
 
  2. Authority for the subsidy  
  State Agency of Regional Development.    3. Form of the subsidy
 
 
 Grant.    4. To whom the subsidy is provided/ mechanism
 
 
 The scheme is foreseen for supporting SMEs  eligible for aid under the scheme by co-
financing their investment projects in order to promote the development of specially assisted regions.  In the result of the realization of the scheme, the disparities of development between different regions 
of Latvia will be diminished.    
5. The annual amount budgeted for the subsidy
 
  In 2005, the total amount of public fina ncing granted under the scheme amounted to 
LVL 1,716 million which consiste d of LVL 0,858 million financing from the national budget and 
LVL 0,858 million co-financing from the European Union resources.  In 2006, the aid amounted to LVL 0.98 million from the national budget.   
 
6. Duration of the subsidy
 
  01 January 2004 – 30 June 2007, the fi nancial resources might be used till the 
31 August 2008 according to the EU Structural funds procedures.  
 
F. S
UPPORT TO THE CONSULTANCY SERVICES AND THE PARTICIPATION OF THE COMMERCIAL 
COMPANIES IN INTERNATIONAL EXHIBITIONS AND TRADE MISSIONS  
1. Legal basis  
  The realization of the scheme is planned within the scope of Latvia's development 
plan (SPD).   
 2. Authority for the subsidy
 
  Ministry of Economics.   
 
3. Form of the subsidy
 
  Grant.    4. To whom the subsidy is provided/mechanism
 
 
 The scheme is foreseen to support consultanc y services to help SME's eligible for aid under 
the scheme in the following areas:  to attract priv ate capital for innovative business ideas, to make 
new market research, to comply with the obligator y and voluntary quality standards etc. as well as to 
support commercial company's first participation in  particular international exhibition and trade 
mission.   G/SCM/N/155/EEC/Add.15 
Page 14  
 
  5. The annual amount budgeted of the subsidy
 
  In 2005, the total amount of public fina ncing granted under the scheme amounted to 
LVL 0,472 million which consiste d of LVL 0,139 million financing from the national budget and 
LVL 0,333 million co-financing from the European Union resources.  In 2006, the aid amounted to 
LVL 0.33 million from the national budget.   
 6. Duration of the subsidy
 
  2004 – 2006, the financial resources might be used till the 31 December 2008 according to the 
EU Structural funds procedures.   
 G. S
UPPORT TO THE R&D  PROJECTS FINANCED IN THE FRAMEWORK OF EUREKA PROGRAMME  
1. Legal basis  
 
 Rules No. 479 of the Cabinet of Ministers from 13 June 2006.   
 2. Authority for the subsidy
 
  Ministry of Education and Science.    
3. Form of the subsidy
 
  Grant.    4. To whom the subsidy is provided/ mechanism
 
 
 The scheme is foreseen for supporting SMEs  eligible for aid under the scheme by co-
financing their projects in order to promote invest ments in R&D activities, such as industrial research, 
experimental development and technical feasibility studies.    5. The annual amount budgeted for the subsidy
 
 
 In 2006, the aid amounted to LVL 0. 022 million from the national budget.   
 6. Duration of the subsidy
 
 
 2006 - 2011.   
 H. L
OANS (MICROCREDIT INCLUDED ) FOR ESTABLISHING COMMERCE  
1. Legal basis  
  Latvia's Development Plan (SPD), Concep t for the development of Latvian SMEs (2004-
2006), State aid programme XS 69/2005.   
 2. Authority for the subsidy
 
  The Mortgage and Land Bank of Latvia.    G/SCM/N/155/EEC/Add.15 
 Page 15 
 
 
  3. Purpose of the subsidy  
  The main purpose of this programme is to impr ove the ability of SMEs to receive loans so as 
to promote the modernisation and diversifica tion of the Latvian economy and to ensure the 
development and improvement  of SMEs operations.   
 
4. Form of the subsidy
 
  Soft loan.    
5. To whom the subsidy is provided/Mechanism
 
  Under this support programme the aid is given to SMEs (which are registered in Commerce 
Register less than 5 years before receiving the soft loan), which do not have su fficient collateral or an 
adequate credit history to receive loans.  Aid under the auspices of this programme will be granted for 
initial investments.   
 6. The annual amount of the subsidy
 
  In 2005, there was no aid granted.  In 2006, the aid equivalent for the soft loans serviced by the Latvian Mortgage and Land bank was LVL 0,001 million.   
 
7. Duration of the subsidy
 
  01 July 2005 – 31 December 2019.    
 
IV. POLICY OBJECTIVE:  TRAINING AID 
 
A. S
UPPORT FOR TRAINING , RETRAINING AND RAISING OF QUALIFICATION OF EMPLOYED  
1. Legal basis  
 
 The realization of the scheme is planned within the scope of Latvia's development 
plan (SPD).    2. Authority for the subsidy
 
 
 Ministry of Economics.   
 3. Form of the subsidy
 
  Grant.    
4. To whom the subsidy is provided/mechanism
 
  As there is a low efficiency of work and limited usage of labors, lack of knowledge and 
professional abilities in Latvia there is a necessity  for the training aid scheme according to which 
enterprises will receive a special assistance and motivation for impr ovement of skills and working 
quality of its employees.  Scheme foresees aid to companies eligible for aid under the scheme for both 
tip of training activities - general and specific training.   G/SCM/N/155/EEC/Add.15 
Page 16  
 
  5. The annual amount budgeted of the subsidy
 
  In 2005, the total amount of public fina ncing granted under the scheme amounted to 
LVL 0,019 million which consiste d of LVL 0,011 million financing from the national budget and 
LVL 0,008 million co-financing from the European Un ion resources.  In 2006, the aid amounted to 
LVL 0.19 million from the national budget.  
 6. Duration of the subsidy
 
  2004 – 2006, the financial resources might be used till the 31 December 2008 according to the 
EU Structural funds procedures.   
  
V. SUBSIDIES FOR SERVICES OF GENERAL ECONOMIC INTERESTS 
 A. F
INANCING FOR CREATION AND BROADCASTING OF GENERAL INTEREST PROGRAMMES  
1. Policy objective  
  To ensure the fulfilment of the obligation im posed by the law to provide service of general 
economic interest.    
2. Legal basis
 
  Law on Radio and Television.    3. Authority for the subsidy
 
 
 National Council of Radio and Television.    4. Form of the subsidy
 
  Grant.   
 
5. To whom the subsidy is provided/ mechanism
 
  The compensation from the State budget to the State non profit Ltd. "Latvijas Telev īzija" for 
fulfilment of the obligation to provide service of  general economic interest - broadcasting.   
 
6. The annual amount budgeted for the subsidy
 
  In 2005, subsidy amounted to LVL 5,34 m illion and in 2006 – to LVL 6.52 million.   
 7. Duration of the subsidy
 
 
 2002 - till the Law on Radio and Television is in force.     G/SCM/N/155/EEC/Add.15 
 Page 17 
 
 
  VI. POLICY OBJECTIVE:  ENVIRONMENTAL AID 
 
A. SUPPORT TO PRODUCTION OF BIOFUELS  
1. Legal basis  
 
 Law on biofuel, the Law on excise tax and the Regulation N. 712 of the cabinet of Ministers 
of the Republic of Latvia of 13 September 2005:  Procedure for allocation of the national support to 
production of the annual necessary minimum of biofue l and for determination of quotas for financial 
support to biofuel.    
2. Authority for the subsidy
 
  Rural Support Service.    3. Form of the subsidy
 
 
 Aid is granted in the form of quota based di rect aid and generally applicable excise tax 
reductions for biofuel.    4. To whom the subsidy is provided/ mechanism
 
 
 The beneficiaries of the measure are manufacturers of biofuel of any size.  The number of 
beneficiaries of direct grant is less than 10.     The diminished rate of excise tax to biofuel and to the mix of biofuel with fossil fuel is 
calculated and paid off by the taxpayers, consideri ng conditions, that all crite ria are made accordingly 
to the circulation of this product, which are nece ssary to ensure the payment of import duties.   
  The direct grant is given directly to biofuel producers, whom is allocated annual support quota proportionally to their production capacities.  Th e overall quota of biofuel subject to the direct 
grant will be recalculated annually by the Ministry of Agriculture.    
5. The annual amount budgeted for the subsidy
 
  In 2006, the total amount of direct grant amounted to LVL 1,42 million.  For the excise tax reduction, the budget is estimated  to LVL 6 million in 2006.   
 
6. Duration of the subsidy
 
  2006 - 2010.      
__________