WORLD TRADE  
ORGANIZATION  G/SCM/N/123/EEC/Add.7 
26 August 2005 
 
 (05-3592) 
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 Finland
. 
 
_______________ 
 
 G/SCM/N/123/EEC/Add.7 
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 FINLAND 
 
TABLE OF CONTENTS 
 
Page  
I. AID TO SMALL AND MEDIUM-SIZED ENTERPRISES .................................................4  
1. Development Ai d for SMEs......................................................................................................4  
2. State Aid for the Internationalisation of SMEs......................................................................5  
3. Loan Programme for SM Es (Finnvera plc)............................................................................6  
4. Development Loan Programme for SMEs (Finnvera plc) ....................................................7  
5. Entrepreneur Loan (Finnvera plc)..........................................................................................8  
6. Grant for technical consulting and promotion (Åland).........................................................9  
7. Environment loan programme for SMEs (Finnvera plc)......................................................9  
8. Operational conditions aid..................................................................................................... 10 
II. AID FOR RESEARCH AND DEVELOPMENT.................................................................11  
1. Aid for promoting R&D .........................................................................................................1 1 
2. Grant for research and development (Åland) ......................................................................12  
3. GMP manufacturing space for bio-enterprises....................................................................13  
III. REGIONAL AID ................................................................................................................... .14 
1. Investment aid ................................................................................................................. ........14  
2. Regional transport subsidy ....................................................................................................1 5 
3. Accelerated regional depreciation .........................................................................................16  
4. Grant for investments (Åland)...............................................................................................17  
IV. AID IN THE FIELD OF ENERGY ......................................................................................18  
1. Energy grants .................................................................................................................. ........18  
2. Aid measures connected to energy taxation .........................................................................19  
3. Differentiated tax rate for electri city consumed by industry..............................................20  
4. Grants for the promotion of environmental protection.......................................................21  
5. Waste oil management financed by waste oil charges .........................................................22  
V. OTHER SUBSIDIES ..............................................................................................................22  
1. Ice dues classification allowance............................................................................................22  
2. Investment aid for businesses pro cessing agri-based products...........................................23  
3. Aid for development projects in the food industry ..............................................................25  
4. State aid to cinema and other audiovisual production ........................................................26  
5. Tonnage taxation............................................................................................................... ......27  
6. Subsidy to passenger vessels ..................................................................................................2 8 
7. Subsidy to cargo vessels....................................................................................................... ...29  G/SCM/N/123/EEC/Add.7 
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 8. Aid in favour of composing plant in  Åland..........................................................................30  
9. Training aid in Åland .......................................................................................................... ...31 
 
1 EURO = 5,94573 FIM (FINNISH MARKS) G/SCM/N/123/EEC/Add.7 
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 I. AID TO SMALL AND MEDIUM-SIZED ENTERPRISES 
1. Development Aid for SMEs 
1. Title of the subsidy programme
 
  Development aid for SMEs 
 
2. Period covered by the notification
 
  2003-2004  
3. Policy objective and/or purpose of the subsidy
 
  Aid to SMEs  4. Background and authority for the subsidy
 
 
 Development aid can be granted to SMEs for their development projects aimed at improving 
the standard of firm's products or its production management or marketing.  Aid can also be granted to 
have the potential and operating conditions for projected new firm verified.   The firm is a SME with personnel not exceeding 250 employees with either an annual 
turnover not exceeding 40 million euros or a balanc e sheet total not exceeding 27 million euros and 
with not more than a quarter of its shares in the hands of a company exceeding such a limit.  The aid 
is granted by the Ministry of Trade and Indust ry and the Business Departments of the regional 
Employment and Economic Centres (Aid to Business Act 1068/2000).  
5. Form of the subsidy
 
  Grant  6. To whom and how the subsidy is provided
 
 
 See point 4. 
 7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
 
 The amount granted in 2003 was MEUR 7,0. 
 The amount granted in 2004 was MEUR 9,16. The actual payments were MEUR 7,71.     8. Duration of the subsidy and/or any other time limits attached to it
 
  Until 31 December 2006.  
 
9. The trade effects of the subsidy
 
  No effects on international trade.  
  G/SCM/N/123/EEC/Add.7 
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 2. State Aid for the Internationalisation of SMEs 
1. Title of the subsidy programme  
  State aid for the internationalisation of SMEs  
2. Period covered by the notification
 
  2003-2004  3. Policy objective and/or purpose of the subsidy
 
 
 The subsidy is granted to SMEs for deve lopment of their promotion, marketing and 
internationalisation skills.  The purpose of the subs idy is to increase the number of SMEs and the 
growth of the exporting enterprises in Finland.   
4. Background and authority for the subsidy
 
  Subsidy is granted by the Ministry of Trade and Industry and the Business Departments of the 
regional Employment and Economic Cent res (Aid to Business Act 1068/2000). 
  5. Form of the subsidy
 
 
 Grant  6. To whom and how the subsidy is provided
 
 
 The State aid for business internationalisation is  provided to Finnish SMEs on the application 
to the Ministry of Trade and Industry or to the Business Departments of the regional Employment and Economic Centres.  7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
 
 The total amount of grants in 2003 was MEUR 26,5  The total amount of grants in 2004 was MEUR 28    8. Duration of the subsidy and/or any other time limits attached to it
 
 
 There are no time limits attached to this programme.    9. The trade effects of the subsidy
 
  No effects on international trade.  
 
 G/SCM/N/123/EEC/Add.7 
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 3. Loan Programme for SMEs (Finnvera plc) 
1. Title of the subsidy programme
 
  Loan programme for SMEs (Finnvera plc).  So ft loans for investments and working capital. 
 
2. Period covered by the notification
 
  2003-2004  3. Policy objective and/or purpose of the subsidy
 
 
 Aid for SMEs: access to risky loans on a reasonable interest rate level.  4. Background and authority for the subsidy
 
 
 The authorisation to grant these loans is decided annually in the State budget. 
 5. Form of the subsidy
 
  Loans with inadequate collaterals (in compar ison to market terms), interest rate subsidy 
 
6. To whom and how the subsidy is provided
 
  The subsidy is granted to manufacturing a nd service enterprises and tourism industry by 
Finnvera plc (state-owned company that was formed  by merging the activities of Kera Ltd and the 
Finnish Guarantee Board on 1 January 1999).  Subsidy el ement is in availability and in interest rate of 
the loans. 
 7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
  In 2003 the amount of aid was MEUR 8,9  
 In 2004, the amount of aid was MEUR 9,1  
  8. Duration of the subsidy and/or any other time limits attached to it
 
  Indeterminate.  The subsidy is given duri ng years to maturity, which is 5-10 years. 
 
9. The trade effects of the subsidy
 
  No effects on international trade    G/SCM/N/123/EEC/Add.7 
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 4. Development Loan Programme for SMEs (Finnvera plc) 
1. Title of the subsidy programme  
  Development loan programme for SMEs (Finnvera  plc).  Soft loans for product development 
and managerial skills. 
 
2. Period covered by the notification
 
  2003-2004  
3. Policy objective and/or purpose of the subsidy
 
  Aid for SMEs  4. Background and authority for the subsidy
 
 
 The authorisation to grant these loans is decided annually in the State budget.  5. Form of the subsidy
 
  Loans with inadequate collaterals (in compar ison to market terms), interest rate subsidy 
 
6. To whom and how the subsidy is provided
 
  The subsidy is granted to manufacturing a nd service enterprises and tourism industry by 
Finnvera plc (state-owned company that was formed  by merging the activities of Kera Ltd and the 
Finnish Guarantee Board on 1 January 1999).  Subsidy el ement is in availability and in interest rate of 
the loans.  7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
 
 In 2004 the amount of aid was MEUR 3,9 
 8. Duration of the subsidy and/or any other time limits attached to it
 
  Indeterminate.  The subsidy is given a ll the years to maturity, usually 5 years. 
 
9. The trade effects of the subsidy
 
  No effects on international trade   G/SCM/N/123/EEC/Add.7 
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 5. Entrepreneur Loan (Finnvera plc) 
1. Title of the subsidy programme
 
  Start-up loan programme for entrepreneurs (Finnve ra plc).  Soft loans for entrepreneurs when 
establishing an enterprise. 
 
2. Period covered by the notification
 
  2003-2004  
3. Policy objective and/or purpose of the subsidy
 
  Aid to new enterprises (entrepreneurs)  4. Background and authority for the subsidy
 
 
 The authorisation to grant these loans is decided annually in the State budget.  5. Form of the subsidy
 
  Loans with inadequate collaterals (in comparis on to market terms), interest rate subsidy. 
 
6. To whom and how the subsidy is provided
 
  The subsidy is provided to persons who st art a new manufacturing, service or tourism 
enterprise.  It is granted by Finnvera plc (sta te-owned company that was formed by merging the 
activities of Kera Ltd and the Finnish Guarantee Bo ard on 1 January 1999).  Subsidy element is in 
availability and in interest rate of the loans.  7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
  
 In 2004 the amount of aid was MEUR 6,5 
   In 2003, the estimated amount of aid is MEUR 4,5  8. Duration of the subsidy and/or any other time limits attached to it
 
 
 Indeterminate.  The subsidy is given a ll the years to maturity, i.e. 10 years. 
 9. The trade effects of the subsidy
 
  No effects on international trade 
 
  G/SCM/N/123/EEC/Add.7 
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 6. Grant for technical consulting and promotion (Åland) 
1.  Title of the subsidy programme  
  Grant for technical consul ting and promotion (Åland ). 
 
2.  Period covered by the notification
 
  2003-2004  3.  Policy objective and /or purpose of the subsidy
 
 
 Aid to SMEs.  4.  Background and authority for the subsidy
 
 
 The annual budget of the Government of Åland. 
 5.  Form of the subsidy
 
  Grant.  
6.  To whom and how the subsidy is provided
 
  The aid is provided to SMEs, companies.  Th e subsidy is granted by the Government of 
Åland.  
7. The total amount or the annual amount budgeted for the subsidy (indicating if possibly, the 
average subsidy per unit in the previous year ) 
  The annual amount of grants in 2003 was EUR 207,488.75  The annual amount of grants in 2004 was EUR 98,656.25  
8.  Duration of the subsidy and/or any other time limits attached to it
 
  Indeterminate.  9.  Statistical data permitting an assessment of the trade effects of the subsidy
 
 
 No effects on international trade.   
7. Environment loan programme for SMEs (Finnvera plc) 
1.  Title of the subsidy programme
 
 
 Environment loan programme for SMEs (Finnvera plc).  Soft loans for environmental investments.  2.  Period covered by the notification
 
 
 2003-2004  G/SCM/N/123/EEC/Add.7 
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 3. Policy objective and/or purpose of the subsidy
 
  Aid to SMEs: to promote environment protection,  energy saving, circulation of raw materials 
etc.  
4. Background and authority for the subsidy
 
  The authorisation to grant these loans is decided annually in the State budget.  5. Form of the subsidy
 
 
 Loans with inadequate collaterals (in compar ison to market terms), interest rate subsidy 
 6. To whom and how the subsidy is provided
 
 
 The subsidy is granted to manufacturing a nd service enterprises and tourism industry by 
Finnvera plc (state-owned company that was formed  by merging the activities of Kera Ltd and the 
Finnish Guarantee Board on 1 January 1999).  Subsidy element is in availability of the loans and in 
interest rates.  7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
  In 2004 the amount of aid was MEUR 2,8    In 2003, the estimated amount of aid is MEUR 2,7 
 
8. Duration of the subsidy and/or any other time limits attached to it
 
  Indeterminate.  The subsidy is given all the years to maturity, usually 5-10 years. 
 9. The trade effects of the subsidy
 
 
 
8. Operational conditions aid 
1.  Title of the subsidy programme  
 
 Operational conditions aid 
 2.  Period covered by the notification
 
  2003-2004  
3. Policy objective and/or purpose of the subsidy
 
  Aid to SMEs: to develop enterprise suppor t services for starting and existing SME:s. 
 4. Background and authority for the subsidy
 
 
 The aid is granted by the Ministry of Trade and Industry and the Business Departments of the regional Employment and Economic Developmen t Centres (Aid to Business Act 1068/2000). 
  G/SCM/N/123/EEC/Add.7 
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 5. Form of the subsidy  
  Grant  6. To whom and how the subsidy is provided
 
  
 Aid can be granted to public institutions, f oundations, private persons and enterprises.  To 
qualify for aid, a project should create new service activities in the region and should be of essential significance for the regions SMEs.  Mainly, aid may be granted for projects associated with 
counselling, research, quality management, marke ting, product development and design services. 
 
 In exceptional cases aid can be granted to privat e enterprises.  Aid to investments for small 
enterprises is limited to 15% (gross) and 7, 5% (gross) for medium-sized companies. 
 7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
  In 2003, the amount was MEUR 7,2.  The amount granted in 2004 was MEUR 13,2. The payments were MEUR 10,2.     8. Duration of the subsidy and/or any other time limits attached to it
 
 
 Indeterminate  9. The trade effects of the subsidy
 
  
 No effects on international trade 
  
II. AID FOR RESEARCH AND DEVELOPMENT 
1. Aid for promoting R&D 
1. Title of the subsidy programme
 
 
 Aid for promoting R&D  2. Period covered by the notification
 
 
 2003-2004 
 3. Policy objective and/or purpose of the subsidy
 
  Aid for research and development  
4. Background and authority for the subsidy
 
  Legal basis: Council of State decision on 17 J une 1998 on general terms of grants and soft 
loans for R&D  
5. Form of the subsidy
 
  Grant, soft loan and capital loan G/SCM/N/123/EEC/Add.7 
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6. To whom and how the subsidy is provided.
 
  The subsidy is provided for enterprises on th e basis of applications.  The normal maximum 
aid intensity is 50 % for industrial research and 25 % for pre-competitive development activity.  These 
maximum levels can be raised up to 75 % in indu strial research and up to 50 % in pre-competitive 
development activity.    The subsidy is granted by the National Technology Agency (TEKES).  
7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
  In 2003, the paid amount of grants was MEUR 131, for loans MEUR 37 and for capital loans MEUR 33.  
 
 In 2004 the paid amount of grants was MEUR 135, for loans MEUR 31 and for capital loans MEUR 30.  8. Duration of the subsidy and/or any other time limits attached to it
 
 
 The subsidy programme will be  in force till 31 August 2008. 
 9. The trade effects of the subsidy
 
   No effects on international trade. 
 
 
2. Grant for research and development (Åland) 
1.  Title of the subsidy programme
 
  Grant for research and development (Åland ). 
 
2.  Period covered by the notification
 
  2003-2004  
3.  Policy objective and /or purpose of the subsidy
 
  Aid to SMEs for research and development.  4.  Background and authority for the subsidy
 
 
 The annual budget of the Government of Åland. 
 5.  Form of the subsidy
 
  Grant. 
  G/SCM/N/123/EEC/Add.7 
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 6.  To whom and how the subsidy is provided  
  The aid is provided to companies and orga nizations.  The subsidy is granted by the 
Government of Åland.  
7. The total amount or the annual amount budgeted for the subsidy (indicating if possibly, the 
average subsidy per unit in the previous year ) 
  The annual amount of grants in 2003 was EUR. 113,512.90.  
 The annual amount of grants in 2004 was EUR 37,705.71. 
 8.  Duration of the subsidy and/or any other time limits attached to it
 
  Indeterminate. 
 
9.  Statistical data permitting an assessment of the trade effects of the subsidy
 
  No effects on international trade.   3. GMP manufacturing space for bio-enterprises 
1. Title of the subsidy programme
 
  GMP (Good Manufacturing Practise) manufacturing space for bio-enterprises  
2. Period covered by the notification
 
  2003-2004   3. Policy objective and/or purpose of the subsidy
 
  
 The promotion of SMEs' pilot production.  The purpose of the project is to create operational 
conditions in the region of Oulu for enterpri ses (“bio-enterprises”) manufacturing bio-technology 
products of well-being and health.   4. Background and authority for the subsidy
 
  
 The GMP- operational environment will be rent ed for payment to SMEs' pilot production.   
  Authority: City of Oulu.  5. Form of the subsidy
 
 
 Rent support   6. To whom and how the subsidy is provided
 
 
 The rent support will be provided to the ente rprises using the GMP- operational environment. 
 G/SCM/N/123/EEC/Add.7 
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 7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
  The amount granted in 200 was MEUR 0,4  
 The amount granted in 2004 was approximately MEUR 0,5 
  In 2005, the estimated amount of grants is MEUR 0,5   8. Duration of the subsidy and/or any other time limits attached to it
 
  
 Until 30 April 2007    9. The trade effects of the subsidy
 
 
 No effects on international trade. 
  
III. REGIONAL AID 
1. Investment aid 
1. Title of the subsidy programme
 
 
 Investment aid  2. Period covered by the notification
 
 
 2003-2004 
 3. Policy objective and/or purpose of the subsidy
 
  Regional aid  
4. Background and authority for the subsidy
 
  Investment aid can be granted to firms towa rd fixed assets needed for business operations and 
for making alterations or improvements to such fixed assets.  
 The aid is granted by the Ministry of Trade and Industry and the Business Departments of the 
regional Employment and Economic Developmen t Centres (Aid to Business Act 1068/2000). 
 5. Form of the subsidy
 
  Grant 
 
6. To whom and how the subsidy is provided
 
  Investment aid can be granted to firms in the regional development area.  In other parts of 
Finland, investment aid can be  granted only to small businesses. 
  G/SCM/N/123/EEC/Add.7 
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 7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
  The amount granted in 2003 was 34,17 MEUR.  
 The amount granted in 2004 was 72,1 MEUR. 
  8. Duration of the subsidy and/or any other time limits attached to it
 
  Until 31 December 2006.   
 
9. The trade effects of the subsidy
 
  No effects on international trade  
 
2. Regional transport subsidy 
1. Title of the subsidy programme
 
  Regional transport subsidy  
2. Period covered by the notification
 
  2003-2004  3. Policy objective and/or purpose of the subsidy
 
 
 Regional aid (SMEs)  4. Background and authority for the subsidy
 
  Transport of goods in Finland, which start from regions, which have less than 12,5 inhabitants 
per km2: Lapland, Ostrobothnia, Kainuu, North Kare lia and South Savo, are eligible for subsidy (Act 
954/1981 as changed by Act 613/1996).   Ministry of Trade and Industry (Industries Department) grants the aid.  
5. Form of the subsidy
 
  Grant paid semi-annually on basis of applications and evidence.  6. To whom and how the subsidy is provided
 
 
 The subsidy can be granted for transports starting from the place of processing of products, 
which have been processed by small or medium-s ized companies within Lapland, Ostrobothnia, 
Kainuu, North Karelia and South Savo.  Transpor t subsidy can be granted for carriage of the 
following products: Food and drinks, earths and stone, wood and wood pro ducts, products of the 
paper industry, products of the me tal industry, machinery and appara tus and products of the chemical 
industry. 
 G/SCM/N/123/EEC/Add.7 
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 7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
  The actual payments in 2004 were MEUR 3,60  
 The actual payments in 2004 were MEUR 4,08  
 8. Duration of the subsidy and/or any other time limits attached to it
 
  Until 31 December 2003. 
 
9.  The trade effects of the subsidy
 
  No effects on international trade  
 
3. Accelerated regional depreciation 
1. Title of the subsidy programme
 
  Depreciation allowance in development areas for SMEs  
2. Period covered by the notification
 
  2003-2004  3. Policy objective and/or purpose of the subsidy
 
 
 Regional aid for SMEs  4. Background and authority for the subsidy
 
  Legal basis: Act 1262/1993 as amended by acts 1736/1995, 32/1998, 1215/1998, 964/2000 
and 901/2001.  he responsible authority is the Ministry of Finance. 
 5. Form of the subsidy
 
  Tax benefit (accelerated depreciation). 
 
6. To whom and how the subsidy is provided
 
  The subsidy is granted in the national developm ent areas I and II. Eligible sectors for this aid 
are manufacturing, hotel and lodging services for their investments in buildings and machinery.  From 
1998 onwards this aid has been granted only to small and medium sized enterprises and sensitive 
sectors of agriculture, synthetic fibres, the automob ile industry, steel and shipbuilding has not been 
included.  The maximum depreciation rate is in creased by 50 per cent (for machinery from 25% to 
37,5% and for industrial buildings from 7% to 10,5%).    G/SCM/N/123/EEC/Add.7 
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 7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
  The amount granted in 2003 was MEUR 1,0  
 In 2004 was MEUR 1,0 
  Maximum possible aid intensity that, accordi ng to the rules and conditions on which the 
subsidy is granted, can be obtained in favour of any one project is 2 per cent. 
 
8. Duration of the subsidy and/or any other time limits attached to it
 
  The subsidy applies to investments made during 2003 at the latest.   9. The trade effects of the subsidy
 
 
 No effects on international trade.   
4. Grant for investments (Åland) 
1. Title of the subsidy programme
 
 
 Grant for investments (Åland).  2.  Period covered by the notification
 
 
 2003-2004 
 3.  Policy objective and /or purpose of the subsidy
 
  Regional aid (investments in equipment and buildings).  
4.  Background and authority for the subsidy
 
  Company aid act of Åland (ÅFS 46/89).  5.  Form of the subsidy
 
 
 Grant.  6.  To whom and how the subsidy is provided
 
  The aid is provided to SMEs.  The subsid y is granted by the Government of Åland. 
 
7. The total amount or the annual amount budgeted for the subsidy (indicating if possibly, the 
average subsidy per unit in the previous year ). 
  The annual amount of grants in 2003 was EUR 90,689.23, of which all were approved before 
1.1.2003. 
  The annual amount of grants in 2004 was EUR 0. EUR 1,966,000 (1,875,000 + 91,000) were budgeted for the national co-financing of  Åland’s Objective 2-programme.  G/SCM/N/123/EEC/Add.7 
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8.  Duration of the subsidy and/or any other time limits attached to it
 
  31.12.2006.  
9.  Statistical data permitting an assesment of the trade effects of the subsidy
 
  No effects on international trade.   IV. AID IN THE FIELD OF ENERGY 
1. Energy grants 
1. Title of the subsidy programme
 
  Energy grants 
 
2. Period covered by the notification
 
  2003-2004  3. Policy objective and/or purpose of the subsidy
 
 
 Promotion of energy conservation, energy efficiency and the use of renewable energy; reduction of negative environmental impacts asso ciated with energy production and usage and 
contribution to energy security and diversity of energy supply.  
4. Background and authority for the subsidy
 
  Legal basis: Decision of the Council of Stat e on the general conditions for awarding energy 
grants (29/1999) and since year 2002 Decree of th e Council of State on the general conditions for 
awarding energy grants (625/2002)  
5. Form of the subsidy
 
  Grant  6. To whom and how the subsidy is provided
 
 
 Subsidies can be granted to enterprises and communities on a case-by-case consideration. 
Subsidies are granted by the Ministry of Trade and Industry (Energy Department) on application and 
they are paid according to the progress of the project.  7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
  In 2003 was MEUR 32,54   In 2004 was MEUR 33,53  
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 8. Duration of the subsidy and/or any other time limits attached to it  
  The duration of the subsidy programme is five  years (valid to the end of year 2007).  The 
programme commenced in its present form in 1999.   
9. The trade effects of the subsidy
 
  No effects on international trade   2. Aid measures connected to energy taxation 
1. Title of the subsidy programme
 
  Aid measures connected to energy taxation  
2. Period covered by the notification
 
  2003-2004  3. Policy objective and/or purpose of the subsidy
 
 
 The general aim of the programme is environmenta l.  The purpose is i.e. to promote the use of 
renewable energy.  4. Background and authority for the subsidy
 
 
 Legal basis: Act 1260/1996. 
 5. Form of the subsidy
 
  Grant  
6. To whom and how the subsidy is provided
 
  The aid is granted for plants producing electri city from wood and wood-based fuels, for small 
power plants, for wind power as well as for electricity produced from the waste gas of metallurgic processes.  The aid is equal to the electric ity tax (EUR 0,0069 per kWh for wind power and 
EUR 0.0042 per kWh for others). 
 7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
  The amount of aid in 2003 was MEUR 54,93 
 
 The amount of aid in 2004 was MEUR 48,82   G/SCM/N/123/EEC/Add.7 
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 8. Duration of the subsidy and/or any other time limits attached to it
 
  Indeterminate  9. The trade effects of the subsidy
 
 
 No effects on international trade   
3. Differentiated tax rate for electricity consumed by industry   
1.  Title of the subsidy programme
 
  Differentiated tax rate for elect ricity consumed by industry   
 2.  Period covered by the notification
 
 
 2003-2004  3. Policy objective and/or purpose of the subsidy
 
  Subsidy to industry: to improve competitiveness of the industry when tax on electricity is 
levied in order to reach environmental and energy policy coals. 
 4. Background and authority for the subsidy
 
  The aid is granted by the district customs offices. 
 
5. Form of the subsidy
 
  Differentiated tax rate.   6. To whom and how the subsidy is provided
 
 
 Electricity is taxed on the basis of category II (i ndustry) if it is used in  the mining of minerals, 
industrial manufacturing and processing of goods or  professional glasshouse cultivation.  All other 
cases fall under category I.    
 Electricity tax rate:  cent/kWh  
  - category I 0.743   - category II 0.453  7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
 
 The amount granted in 2003 was MEUR 123,9 and in 2004 MEUR 127,8.     8. Duration of the subsidy and/or any other time limits attached to it
 
 
 2001-2011 
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 9. The trade effects of the subsidy  
   No effects on international trade   4. Grants for the promotion of environmental protection 
1. Title of the subsidy programme
 
  Grants for the promotion of environmental protection  
2. Period covered by the notification
 
  2003-2004  3. Policy objective and/or purpose of the subsidy
 
 
 Environmental protection  4. Background and authority for the subsidy
 
  The regional Environmental Centre takes decisions on grants within its allocated 
appropriation and taking into account  its budget.  The Ministry of the Environment may decide on 
grants if these are of national importance or for other special reason.  5. Form of the subsidy
 
 
 Grant 
 6. To whom and how the subsidy is provided
 
  The subsidy can be provided to enterprises, lo cal authorities, joint municipal boards and other 
corporations for development, experimenta tion and investment projects, which promote 
environmental protection. 
 7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
 
 The amount of the commitments of grants for the promotion of environmental protection was 
MEUR 1,7 in 2003.    In 2004 was MEUR 2,48   8. Duration of the subsidy and/or any other time limits attached to it
 
 
 The scheme expired in 2004.  9. The trade effects of the subsidy
 
 
 No effects on international trade 
  G/SCM/N/123/EEC/Add.7 
Page 22  
 
 5. Waste oil management finan ced by waste oil charges 
1. Title of the subsidy programme
 
  Waste oil management financed by waste oil charges  
2. Period covered by the notification
 
  2003-2004  3. Policy objective and/or purpose of the subsidy
 
 
 Environmental protection  4. Background and authority for the subsidy
 
 
 The Ministry of the Environment is the responsible authority. 
 5. Form of the subsidy
 
  Grant  
6. To whom and how the subsidy is provided
 
  The subsidy can be provided to enterprises,  which have made a contract on waste oil 
management with The Ministry of Environment.  
7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
  The amount of aid in 2003 was MEUR 2,52    In 2004 it was MEUR 3,34  
 
8. Duration of the subsidy and/or any other time limits attached to it
 
  Indeterminate  
9. The trade effects of the subsidy
 
  No effects on international trade   
V. OTHER SUBSIDIES 
1. Ice dues classification allowance 
1. Title of the subsidy programme
 
  Ice dues classification allowance.   G/SCM/N/123/EEC/Add.7 
 Page 23 
 
 
 2. Period covered by the notification  
  2003-2004  3. Policy objective and/or purpose of the subsidy
 
 
 To support the necessary transport capacity fo r foreign trade taking into account the Finnish 
climate and other natural circumstances.  4. Background and authority for the subsidy
 
 
 Legal basis: Act 433/1981, section 6 as amended by acts 1543/1992, 1258/1996 and 
1060/1999.  The responsible authority is the Ministry of Finance.  5. Form of the subsidy
 
 
 Tax allowance.  6. To whom and how the subsidy is provided
 
  The subsidy applies to ship orders made dur ing 1994-2000.  The ship-owner can deduct 3 per 
cent of the acquisition costs of the ship from the taxa ble income.  The allowance is granted in the tax 
year when the ship has been taken into use and in the following year.  
 7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
 
 The amount granted in 2003 was MEUR 3,7    In 2004 was MEUR 0,04    8. Duration of the subsidy and/or any other time limits attached to it
 
 
 The scheme expires in 2005   9. The trade effects of the subsidy
 
 
 No effects on international trade. 
  
2. Investment aid for businesses processing agri-based products 
1. Title of the subsidy programme
 
 
 Investment aid programme related to processi ng and marketing agricultural products (Aid No. 
N 59/2000).  2. Period covered by the notification
 
 
 2003-2004 
 G/SCM/N/123/EEC/Add.7 
Page 24  
 
 3. Policy objective and/or purpose of the subsidy
 
  The aim of the investment aid for processing and marketing of agricultural products is to improve the long-term competitiveness of SMEs in particular and to promote their internationalisation.  The aid is granted fo r projects of enterprises concerning processing and 
marketing of agricultural products lis ted in Annex I to the EC Treaty, in which the aid is expected to 
have a considerable impact on  (1) improvement of the enterprise’s competitiveness e.g. regarding the technical standard of its 
products and production, 
(2)  raising of the level of productivity, or 
(3)  promotion of the enterprise’s internationalisation.  4. Background and authority for the subsidy (inc luding identification of the legislation under 
which it is granted ) 
 
 In the Budget, national funds are annually allocated for the Aid Programme concerning 
processing and marketing agricultural products (which  includes both investment aid and development 
aid, N 59/2000).  The aid is based on the Aid to  Business Act (1068/2000) of 15 December 2000 and 
on the Government Decree on investment aid and development aid for the processing and marketing 
of agricultural products (1201/2000) of 21 December 2000.  The aid is granted by the Ministry of 
Trade and Industry and the regional T&E Centres. 
 5. Form of the subsidy
 
  Grant. 
 
6. To whom and how the subsidy is provided
 
  Investment aid for processing and marketing of agricultural products shall be granted to 
enterprises as stated in point 3 above.  
 The basis for investment aid may be expend iture incurred by construction, acquisition and 
improvement of premise as well as by purchases of new machinery and equipment.   The aid granted may be no more than 10% to 40% of the eligible expenditure, depending on 
the assisted area and the size of  the enterprise concerned. 
 
7. The total amount or the annual amount budgeted for the subsidy
 
  Investment aid granted in 2003 was MEUR 3,6   Investment aid granted in 2004 was 2 400 000 EU R.  The average subsidy per unit in 2004 
was 85 000 EUR. 
 8. Duration of the subsidy and/or any other time limits attached to it, including date of 
inception/commencement  
 
 The programme entered into force on 1 January 2001, and will be in force till 
31 December 2006.   G/SCM/N/123/EEC/Add.7 
 Page 25 
 
 
 9. The trade effects of the subsidy  
  No effect on international trade.   3. Aid for development projects in the food industry 
1. Title of the subsidy programme
 
  Development aid programme for SMEs related to processing and marketing of agricultural products (Aid No. N 59/2000). 
 
2. Period covered by the notification
 
   2003-2004  
3. Policy objective and/or purpose of the subsidy
 
  The aim of the development aid for processing and marketing of agricultural products is to 
improve the long-term competitiveness of SMEs and to  promote their internationalisation.  The aid is 
granted for projects of SMEs concerning processing a nd marketing of agricultural products listed in 
Annex I to the EC Treaty, which are expected to improve the standard of the products and production 
methods of enterprises and their business manageme nt and marketing skills, thereby promoting their 
internationalisation.  Besides these, development aid may be granted for examining the conditions for 
establishment and operation of enterprises.   A small and medium-sized enterprise refers to an SME that has fewer than 250 employees 
and a maximum annual turnover of € 40 million, or a balance sheet total of € 27 million and no more 
than one quarter of the SME’s shares are owne d by a company larger than the SME itself. 
 4. Background and authority for the subsidy (inc luding identification of the legislation under 
which it is granted ) 
 
 In the Budget, national funds are annually allocated for the Aid Programme concerning 
processing and marketing agricultural products (which  includes both investment aid and development 
aid, N 59/2000).  The aid is based on the Aid to  Business Act (1068/2000) of 15 December 2000 and 
on the Government Decree on investment aid and development aid for the processing and marketing 
of agricultural products (1201/2000) of 21 December 2000.  The aid is granted by the Ministry of 
Trade and Industry and the regional T&E Centres.  
 5. Form of the subsidy
 
  Grant.  
6. To whom and how the subsidy is provided
 
   Development aid for processing and marketing of  agricultural products shall be granted to 
enterprises as stated in point 3 above.  
 The basis for development aid may be expenditure  incurred by the use of external experts and 
services, machinery and equipment needed for de velopment of products and production processes, 
raw material and participation in an exhibition organised abroad. In projects developing products and G/SCM/N/123/EEC/Add.7 
Page 26  
 
 production processes, the aid granted may be no more  35% to 45% and in other development projects 
no more than 50% of th e eligible expenditure. 
  7.  The total amount or the annual amount budgeted for the subsidy
 
  
 Development aid granted in 2003 was MEUR 0,21 
  Development aid granted in 2004 was MEUR 0,37   8. Duration of the subsidy and/or any other time limits attached to it, including date of 
inception/commencement  
   The programme entered into force on 1 Ja nuary 2001, and will be in force until 
31 December 2006.  
9. The trade effects of the subsidy
 
  The development aid has no effect on international trade.   
4. State aid to cinema and other audiovisual production  
1.  Title of the subsidy programme
 
  State aid to cinema and other audiovisual production.   2.  Period covered by the notification
 
 
 2003-2004.  3.  Policy objective and/or purpose of the subsidy
 
  To promote diversity, the quality of films and audiovisual culture in Finland and to develop 
the infrastructure of production companies. 
 4.  Background and authority for the subsidy
 
  State aid is governed by the Film Promotion Act (28/2000) and the Film Promotion Decree.  
The Act determines the general principles underlying st ate aid to cinema.  According to the Act, the 
Ministry of Education and Culture can allocate funds from the state budget for the production and distribution of films and other audiovisual pr ogrammes, and for the promotion of culture.  
  The Act provides that the aid is allocated by the Finnish Film Foundation and the National 
Council for Cinema.  These institutions have devised  guidelines for the purpose.  According to the 
guidelines for film production support, no kind of suppor t can be granted (1) to television companies 
or to companies in which a television company holds a stake of 15% or more; (2) to a state, municipal 
or church authority or institution; (3) to a company in which the State has a majority holding; or (4) to any organisation or institution comparable to the a bove.  Nor can support be granted for a production 
that is intended for the marketing of a product,  a range of products or services, or anything 
comparable to these. 
  G/SCM/N/123/EEC/Add.7 
 Page 27 
 
 
 5.  Form of the subsidy  
  Grant.  6.  To whom and how the subsidy is provided
 
 
 The main target groups are production companies,  but also organisations and individuals may 
apply.  There are no specifications as to the nationalit y of the persons or companies that can apply for 
support.  Production companies holding rights to a film in Finland are eligible for support.  The recipient has to apply for the support according to the support guidelines (see point 4). 
 
7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
  The amount granted in 2003 was MEUR 12,56 
 
 The amount granted in 2004 was MEUR 14,66    8.  Duration of the subsidy and/or any other time limits attached to it
 
   Until 31 December 2004. 
 
9.  The trade effects of the subsidy
 
  No effects on international trade.  
 
5. Tonnage taxation 
1. Title of the subsidy programme
 
  Tonnage Taxation  
2. Period covered by the notification
 
  2003-2004  3. Policy objective and/or purpose of the subsidy
 
 
 The purpose of the scheme is to ensure th e competitiveness of Finnish shipping companies 
and to discourage outflagging of Finnish ships.  4. Background and authority for the subsidy
 
 
 A company fulfilling the requirements (qualifyi ng company) may opt fo r tonnage taxation for 
a tonnage tax period of 10 years.  The income de rived from activities falling within the scope of the 
aid (qualifying activities) is not subject to income taxation.   Instead of income tax the company is charge d a low tonnage tax based on the net tonnage of 
its vessels on a yearly basis.  Tonnage taxation is carried out annually concurrently with income 
taxation.   G/SCM/N/123/EEC/Add.7 
Page 28  
 
  Normal income tax is imposed in respect of  income derived from business activities of the 
company other than those subject to the tonnage tax (non-qualifying activities).  Expenses related to 
income derived from qualifying activities are not deductible in income taxation.  
  The tax subsidy only concerns non-distributed profits.  When the company distributes profits 
the "avoir fiscal" system is applied to ensure that  distributed profits are subject to taxation in 
accordance with the normal rate fo r company taxation, i.e. 29 %. 
  Tonnage taxation is administered by the Tax Office for Major Corporations. 
 
 The legal basis for the scheme is the Tonnage Tax Act.  The tax regime has been approved by 
the commission as a state aid on 16 October 2002.  The Tonnage Tax Act entered into force on 
20 November 2002.     5. Form of the subsidy
 
 
 Tax relief  6. To whom and how the subsidy is provided
 
  Upon application, the scheme would be applie d to resident limited companies, which are 
factually managed from Finland, which are engage d in the transport of cargo or passengers with 
vessels subject to tonnage tax (qualifying ships), which conduct their business from Finland, and 
which are liable to tax in Finland for their business.   There are special requirements concerning the 
minimum share of qualifying ships owned by the company itself and the maximum share of vessels 
chartered in with crew included. 
 
 How the subsidy is provided: see point 4.   7. The total amount or the annual amount budgeted for the subsidy
 
  In 2003 the amount was 0,005 MEUR 
 
 In 2004 the amount was 0,005 MEUR   8. Duration of the subsidy and/or any other time limits attached to it
 
 
 Unlimited.  Opting to pay tax on tonnage will be effective for a period of ten years.  On 
expiry of this period it will be possible to opt for a new period of ten years.   9. The trade effects of the subsidy
 
  No effects on international trade. 
 
 
6. Subsidy to passenger vessels 
1. Title of the subsidy programme
 
 
 Subsidy to passenger vessels 
  G/SCM/N/123/EEC/Add.7 
 Page 29 
 
 
 2. Period covered by the notification  
  2003-2004  3. Policy objective and/or purpose of the subsidy
 
 
 To safeguard the competitiveness of the Finni sh passenger vessels in international trade. 
 4. Background and authority for the subsidy
 
 
 Ministry of Transport and Communications Finland / Finnish Maritime Administration. 
 5. Form of the subsidy
 
  Grant  
 
6. To whom and how the subsidy is provided
 
  The Finnish ship-owner shall be supported by the state by  97 % to the tax on the marine work income of Finnish seafarers working on board Finnish passenger vessels. 
 
 Law (1707/1991) 
 7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
 
 The amount granted in 2003 was MEUR 26,6. 
  The amount granted in 2004 was MEUR 23,640.  The average subsidy per unit in year 2004 was EUR 6548 / seafarer.  8. Duration of the subsidy and/or any other time limits attached to it
 
 
 Indefinite  9. The trade effects of the subsidy
 
 
 No effects on international trade. 
  
7. Subsidy to cargo vessels 
1. Title of the subsidy programme
 
 
 Act on the List of Merchant Vessels in International Trade. 
  Law /1707/1991)  2. Period covered by the notification
 
 
 2003-2004  G/SCM/N/123/EEC/Add.7 
Page 30  
 
 3. Policy objective and/or purpose of the subsidy
 
  To safeguard the competitiveness of the Fi nnish Cargo vessels in international trade. 
 4. Background and authority for the subsidy
 
 
 Ministry of Transport and Communications Finland / Finnish Maritime Administration.  5. Form of the subsidy
 
 
 Grant  
 6. To whom and how the subsidy is provided
 
  The Finnish ship-owner shall be supported by the State by an amount corresponding to the tax 
withheld, the social security and other mandatory in surance contribution paid by the employer on the 
seaman's income.   Law (1707/1991)  7. The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
  The amount granted in 2003 was MEUR 40,307.  The average subsidy per unit in year 2003 was EUR 18321/seafarer   
 The amount granted in 2003 was MEUR 40,3 
  In 2004 was MEUR 39,132 The average subsidy per unit in year 2004 was EUR 16511/seafarer. 
  8. Duration of the subsidy and/or any other time limits attached to it
 
 
 Indefinite 
 9. The trade effects of the subsidy
 
  No effects on international trade. 
 
 
8. Aid in favour of composing plant in  Åland 
1.  Title of the subsidy programme
 
  Aid for composting plants on the Aland Islands. 
  
2. Period covered by the notification
 
  2003-2004.  
3.  Policy objective and/or purpose of the subsidy
 
  Environmental objectives.    G/SCM/N/123/EEC/Add.7 
 Page 31 
 
 
 4.  Background and authority for the subsidy  
  The annual budget of the Government of the Aland Island.   5.  Form of the subsidy
 
 
 Grant.  6.  To whom and how the subsidy is provided
 
 
7. The total amount or the annual amount budgeted for the subsidy (including, if possible, the 
average subsidy per unit during the previous year ) 
  The amount granted in 2003 was EUR 0  
 The average amount granted in 2004 was EUR 0.  
 8.  Duration of the subsidy and/or other time limits attached to it
 
  The subsidy is limited in time to the building of a composting plant.   
9.  The trade effects of the subsidy
 
  No effects on international trade.    9. Training aid in Åland 
 
1.  Title of the subsidy programme
 
  Training aid in Åland  
2.  Period covered by the notification
 
  2003-2004  3.  Policy objective and/or purpose of the subsidy
 
 
 Main objective is to increase the training of employees.   4.  Background and authority for the subsidy
 
  The annual budget of the Government of  Åland. 
 
5. Form of the subsidy.
 
  Grant.   
6.  To whom and how the subsidy is provided
 
  Granted to specific companies applying for a grant.   G/SCM/N/123/EEC/Add.7 
Page 32  
 
 7.  The total amount or the annual amount budgeted for the subsidy (indicating, if possible, the 
average subsidy per unit in the previous year ) 
  The amount granted in 2003 was MEUR 0,22   
 In 2004, it was EUR 29.496,30  
 8.  Duration of the subsidy and/or any other time limits attached to it
 
  2006 
 
9.  The trade effects of the subsidy
 
  No effects on international trade.  
__________