WORLD TRADE  
ORGANIZATION  G/SCM/Q2/EEC/55 
27 October 2008 
 
 (08-5216) 
Committee on Subsidies and Countervailing Measures Original:   English/ 
 French 
 
 
 
SUBSIDIES  
 
Replies to Questions from the UNITED STATES1 and JAPAN2 Regarding  
the New and Full Notification of the EUROPEAN COMMUNITIES3 
 
  The following communication, dated 3 October 2008, is being circulated at the request of the delegation of the European Communities.  
_______________ 
 
 Replies to questions posed by Japan relating to subsidy programmes of France, Germany, Spain and 
the UK  
 Questions 
 
 Please specify which subsidy programmes are actually applied to the aircraft industry 
among the notified subsidy programmes. 
 
 Please specify the total amount of each such subsidy programme for the aircraft 
industry. 
 
 Please indicate any governmental support  programmes for the aircraft industry, 
including the launch investment, other than those listed in the notification. 
 
 Please specify the total amount of each such support. 
 
Reply
 
  There are no other subsidies and therefore there is no amount to notify. 
 
 
                                                     
 
1 G/SCM/Q2/EEC/54. 
2 G/SCM/Q2/EEC/52. 
3 G/SCM/N/155/EEC & Adds. 1, 2, 6, 9, 21, 24 and 25. G/SCM/Q2/EEC/55 
Page 2  
 
  Replies to questions posed by the United States relating to subsidy programmes of Austria 
(G/SCM/N/155/EEC/Add.1)  
 
Question 
 
Lower Austria Innovation, Technolo gy and R&D Promotion Programme 2005 
Lower Austria Innovation, Technolo gy and R&D Promotion Programme 2006 
 
 For both of the above-listed programmes, please describe the eligibility criteria and the 
types of industry that have benefited from the programme during the reporting period. 
 
Reply  
  The guideline for R & D was notified under the Community Framework for R & D aid.  It is no longer in effect and was replaced in Novemb er 2007 by new guidelines in line with the new 
Community Framework for R & D & I aid. 
  The target groups were companies – commerc e and industry – which developed new products 
or processes.  Most of the companies were SMEs  according to the economic structure of Lower 
Austria's economy.  
 Selection criteria have been and still are:  profound technological development ("technology 
advance") for the company, technological ri sk, new potential market, collaboration with 
RTD institutes, importance for regional deve lopment and positive environmental effects. 
 
Question 
 
Promotion of Market Exploration 
 
While the policy objective is stated to be "investment", the title of the programme seems 
to indicate that the programme is for the develo pment of new markets.  Please clarify the policy 
objective and purpose of this programme. 
 
Reply
 
  This aid scheme is also no longer in eff ect and was replaced in January 2007 by a 
corresponding new guideline.  With this programme, Lower Austria supports the "going international" 
of SMEs. 
  While concentrating on expenses that arise from participation in conferences and fairs, 
necessary promotional material and sheer presentati on of the company in other European markets, 
i.e. in the new Member States, the main goal is of course fostering the Lower Austrian economy.  
Therefore, focus is given to endeavours that direc tly result in further investment in the company's 
local sites. 
  G/SCM/Q2/EEC/55 
 Page 3 
 
 
  Replies to questions posed by the United Stat es relating to subsidy programmes of Belgium 
(G/SCM/N/155/EEC/Add.2)  
 
Question 
 
Order of 13 January 1994 on Promotion of Foreign Trade 
 
 Under this programme, interest-free loans are provided for "prospecting and market 
presence outside of the European Union".  Plea se explain further the eligibility requirements 
for companies to qualify for such incentives.  Pl ease also explain how this programme conforms 
with Article 3 of the Subsidies Agreement.  
Reply
 
 1.1. Eligibility criteria
 
 
 The eligibility criteria set forth in the Decree  of the Government of the Brussels-Capital 
Region of 31 August 2006 Implementing the Orde r of 13 January 1994 on Promotion of Foreign 
Trade of the Brussels-Capital Region are general re quirements and apply to all financial incentives 
provided for in this piece of legislation. 
 
 Applicants are required to meet the following criteria:   (1) Enterprises must be SMEs with a maximum of 250 employees, which have turnover 
not exceeding €40 million or a balance sheet total not exceeding €27 million, and 
which meet the independence requirement (not  more than 25 per cent of equity held 
by a large enterprise). 
  (2) The operational headquarters or head offi ce of the enterprise must be located in the 
Brussels-Capital Region and must employ at least a third of the applicant's 
employees. 
  (3) The following entities will be treated as eligible enterprises, provided that points 1 
and 2 are observed: 
 
(a) Independent enterprises established in the Brussels-Capital Region which 
carry out export activities; 
 
(b) non–profit–making associations with at least one full-time equivalent 
remunerated activity which directly or indirectly generates economic returns 
benefiting the foreign trade or economy in the broad sense of the 
Brussels-Capital Region; 
 
(c) enterprises with no production activity, the main business of which is to 
market abroad goods or equipment produced by third parties.  Subsidies are granted to this final category of applicant on the basis of a maximum of 
25 per cent of authorized expenses. 
  (4) Applicants may not request a further s ubsidy from another international, federal, 
regional, community or local authority to cover the same expenses. 
 G/SCM/Q2/EEC/55 
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  1.2. Consistency with Article 3 of the Ag reement on Subsidies and Countervailing Measures
: 
  These subsidies seek to facilitate individual or collective measures designed to enable 
enterprises to find or develop mark ets outside the European Union. 
 
 The target market(s) must be new or in decline.   A market is considered to be new when the 
enterprise's sales do not exceed 10 per cent of its tota l turnover, and in declin e when the enterprise's 
sales have declined for two consecutive years and by  at least 20 per cent over the last two years. 
 THE FOLLOWING EXPENSES MAY BE TAKEN INTO CONSIDERATION
: 
 
 - Expenses related to business trips undertak en for market prospecting, selection of 
importers or middlemen, and contacts with foreign agents or buyers. 
  - expenses incurred in relation to partic ipation in joint missions, congresses, contact 
days or seminars likely to have a positive impact on the applicant's export activities. 
  - if the enterprise is active in the audi ovisual or publishing sector, no subsidies are 
granted for foreign travel in the framework of the actual production of its films or books. 
 
 - the cost of registration, accreditation and certification on foreign markets for the 
purpose of marketing goods or services. 
 
Such subsidies are not, therefore, under an y circumstances directly linked to export 
performance, nor are they contingent upon  the use of domestic over imported goods . 
 
 These subsidies are therefore in strict co mpliance with Article 3 of the Agreement on 
Subsidies and Countervailing Measures . 
 
Question 
 
 Please describe what is meant by the term "documentation subsidy". 
 
Reply  
  Information aids means multimedia promotional material specifically presenting the 
activities, references, goods or services of the enterprise, such as: 
 
• Written material (brochures, pamphlets, catalogues, etc.); 
 
• audiovisual material (web sites, CD–ROMs, DVDs, etc.). 
  Costs related to samples, business cards in common trading languages, invitations and posters 
cannot therefore be taken into consideration. 
  If the enterprise is active in the audiovisual or publishing sector, no subsidies are granted for 
the actual production of its films or books.   Web sites which are not promotional, but whic h constitute services offered by the enterprise 
are excluded.  G/SCM/Q2/EEC/55 
 Page 5 
 
 
  Aid to the Fisheries and Aquaculture Sector 
 
 Does this programme take into considera tion over–capacity prior to providing 
assistance? 
 Reply
 
  FIVA (Instrument for the financing of the Flemish fisheries and aquaculture sector) was 
established to provide co-financing for the implementation of the EU structural funds.  Concerning fisheries and aquaculture, the FIOV fund (Instrumen t for the financing of the orientation of the 
fisheries sector) was established for the financing of  the goals of the Common Policy in the Fisheries 
sector.   The EU imposes on every member state reference levels concerning the fisheries fleet (expressed as the sum of the kW. of all fisheries ves sels).  As long as the Belgian fisheries fleet stays 
below this reference level, there is no over–capacity and aid can be attributed according to the rules of 
the structure funds (FIOV).   Replies to questions posed by the United Stat es relating to subsidy programmes of Denmark
 
(G/SCM/N/155/EEC/Add.6)  
 
Question 
 
 Do these programmes take into considera tion over–capacity prior to providing 
assistance? 
 
Reply  
 
Fishing from the Coast (hauling up vessels) 
 
 This is a very small and almost symbolic assistance to fishermen who fish directly from the 
coast.  The money, approx DKr 130,000 (US$25,000) is  helping to maintain wi nches used for hauling 
vessels on shore and into the sea.  It covers f our traditional landing places on the North Sea coast. 
 
Construction of Vessels 
  This scheme is no longer active.  It was closed  in 2004 but some payments have not yet been 
closed.  When the scheme was working, it was a cond ition for the aid that a tonnage of the same size 
as the new vessel plus 35 per cent was taken out of fisheries.  
Modernization of Fishing Vessels 
  The aid cannot be used for capacity increases.  Aid for the replacement of main engines in 
vessels longer than 12 m. is only given on the conditi on that engine power is reduced by 20 per cent. 
 
Subsidies in the Form of Reduction/Cancellation of Stamp Duty 
  This exemption was only used when taking up lo ans in the Fisheries Bank.  The Bank is being 
closed. G/SCM/Q2/EEC/55 
Page 6  
 
  Question 
 
Laying up of Fishing Vessels 
 
 The purpose of this measure is "compensatio n for lost fishing possibilities due to an 
extraordinary closure of the fisheries in the Baltic ".  Please explain how it is determined who is 
eligible for compensation, how the level of compensation is determined and whether the 
recipients will return to fishing. 
 
Reply
 
 
 This scheme is not active.  It was used in 200 3 for fishermen for whom the fishery was closed 
with short notice.  The closure was an emergency conservation measure undertaken to protect juvenile 
fish.  The size of the compensation was based on the lo ss of earnings.  After the closure the recipients 
could continue fishing.  The eligible  period was from 15 March to 31 May 2003. 
 
Question 
 
Rescuing and Restructuring of Distressed Enterprises 
 
 Please explain further the industries that  have benefited from this programme. 
 
Reply  
  Within the last five years the programme has been used twice:  once in the case of a semi–
public TV station and once in a very recent case of the collapse of a provincial bank due to the 
ongoing international financial crises. 
 
Question 
 
 Please provide further information regarding  the eligibility criteria for companies to 
receive benefits under this programme. 
 
Reply
 
  Eligibility criteria are the standard EU criteria.  Question 
 
Grant scheme for Reimbursement  of CO2–Tax Expenses to Enterprises with a High Energy 
Consumption 
 
 Please provide information regarding which industries have received benefits under this 
programme during the reporting period.  
Reply
 
  The reimbursements are granted on a process basis and not on an industry basis.  
Consequently, it is not possible to trace the industries involved.  Furthermore, it is not possible to 
track which companies have received reimbursements.   G/SCM/Q2/EEC/55 
 Page 7 
 
 
  Replies to questions posed by the United Stat es relating to subsidy programmes of France 
(G/SCM/N/155/EEC/Add.9)  
 
Question 
 
Industrial Development Company (SODIE) 
 
 Please explain the nature of the subsidy. 
 
Reply  
 
 The subsidy takes the form of unsecured soft loans, which are conditi onal upon job creation.  
Such loans constitute aid because no collateral is re quired thereon and the applied interest rate is 
lower than the market rate.  Question 
 
 The statement that "The loans may not be cancelled" is not clear.  Is the subsidy in the 
form of a loan? 
 
Reply
 
 
 This means that the loans must always be re paid.  They cannot be written off or converted 
into subsidies.   As stated above, these loans constitute aid b ecause no security thereon is required of the 
borrower and the applied interest rate  is lower than the market rate. 
 
Question 
 
Industrial Innovation Fund (FII) (Currently the Fund for Enterprise Competitiveness) 
 
 What are the specific eligibility criteria for receiving benefits under this programme? 
 
Reply
 
  There are two distinct criteria for eligibility: 
 
 - Collaborative research and development projects designed to overcome technological 
barriers, which are selected on the basis of  a call for projects through competitiveness 
clusters or Eureka clusters; 
  - in exceptional cases, strategic and structuring research and development projects, 
which are selected without a call for projects procedure. 
 G/SCM/Q2/EEC/55 
Page 8  
 
  Question 
 
 As to the form of the subsidy, please el aborate on what is specifically meant by 
"subsidies". 
 Reply
 
  Only subsidies are granted.  
Question 
 
 Please describe the types of industry that have received benefits under this programme.  
 
Reply
 
 
 These include large enterprises, SMEs, a ssociative structures and laboratories. 
 
Question 
 
National Agency for the Promotion of Research (ANVAR) 
 
 Please describe the types of industry that have received benefits under this programme. 
 
Reply  
  SMEs are the main beneficiaries of OSEO (formerly ANVAR) aid.  However, to a much 
lesser extent and within the framework of coopera tive programmes, laboratories and large enterprises 
which are partners of SMEs can receive a proportion of the aid.   Replies to questions posed by the United Stat es relating to subsidy programmes of Romania 
(G/SCM/N/155/EEC/Add.21)  
 
Question 
 
The National Multiannual Programme to S upport the SMEs to develop the Export 
for 2002-2006 
 
 What is the policy objective of this programme? 
 
Reply  
  The programme aims at: 
 
 (a) Promoting products and services of SMEs in foreign markets;   (b) promoting communication and partnership in business;  
 (c) teaching entrepreneurs to use techniques in order to promote exports; 
  (d) improving access of SMEs to consultancy services.  G/SCM/Q2/EEC/55 
 Page 9 
 
 
   These policy objectives are achieved th rough financial contribution to: 
  (a) Participation in international fair s and exhibitions held in the country; 
  (b) build a site on the Internet, to present the work and the products of the applicant 
promoted in the Romanian language a nd at least one international language; 
  (c) participation in training courses in the country and/or abroad in order to study 
techniques for promoting exports; 
 
 (d) contract with consultancy services in or der to develop export plans adapted to the 
economic and financial situation of the applicant company. 
 
Question 
 
Government Emergency Ordinance No. 26/2005 on Repealing the Legal Provisions Regarding Fiscal Facilities for Certain Outstanding Budgetary Debts 
 
 Please describe the industrial sectors th at have benefit from this programme. 
 
Reply
 
 
 The industrial sectors that have benefited from this programme are:  agriculture, pisciculture/fishery, construction, trade, transpor tation, tourism, education, other manufacturing 
sectors, services.  Question  
 
Government Ordinance No. 65/2001 on Establis hing and Functioning of the Industrial Parks 
 
 It appears that one of the eligibility criteri a for this programme is to increase exports.  
Please explain how this is consistent wi th Article 3 of the Subsidies Agreement. 
 
Reply
 
  There seems to be a misunders tanding concerning the scope of this Ordinance.  It establishes 
the conditions to be met by a legal person willing to be involved in the establishing and functioning of 
an industrial park, not in the economic activity within  that park.  There is no eligibility criteria related 
to the increase of exports.   Replies to questions posed by the United St ates relating to subsidy programmes of Spain 
(G/SCM/N/155/EEC/Add.24)  
 
Question 
 
Fisheries 
 
 It is our understanding that in 2005 Spain offered fuel subsidies to its fisherman in order 
to offset the increased cost of diesel fuel.  Could Spain further clarify if it is currently providing 
a fuel subsidy to its fisherman?  If so, please explain why this programme does not qualify as notifiable under Article 25 of the SCM Agreement.   If the programme is notifiable, please G/SCM/Q2/EEC/55 
Page 10  
 
  provide all relevant information as stipulated  under Article 25 (i.e., eligibility, amount of 
subsidy, objective). 
 
Reply
 
 
 Subsidies offered by Spain to its fishermen in or der to offset the increased cost of fuel in the 
period 2005-2006 have their legal basis in Order APA/4149/2004 of 17 December 2004 and 
Order APA/3378/2005 of 28 October 2005.   These orders are based in Commission Regulation (EC) No 1860/2004 of 6 October 2004 on 
the application of Articles 87 and 88 of the EC Treaty to de minimis  aid in the agriculture and 
fisheries sectors.   According to Article 3 of this Regulation, ai d measures shall be deemed not to meet all the 
criteria of Article 87(1) of the Treaty if the total aid granted to any one enterprise does not 
exceed €3,000 over any period of three years. 
  In accordance with the orders mentioned above , the maximum amount of aid offered by Spain 
to its fisheries sector in order to offset the increased cost of fuel during the period 2005-2006 could not exceed €3,000 per beneficiary.  Question 
 
Technical Research and Development Programme 
 
 Spain's notification states that, "the comp etitive application process is open to anyone 
who wishes to carry out research and developm ent projects or activities in the various 
technological areas already defined as of int erest by the programme".  Please explain which 
"technological areas" are defined as being of interest by the programme. 
 
Reply
 
 
 According to the relevant regulation regardi ng the National Scientific Research, Development 
and Technological Innovation Plan 2004-2007 (Order PRE/690/2005 of 18 March 2005 and 
Order PRE/402/2006 of 16 February 2006), the technological areas of interest are: 
  - Life Sciences 
 
 - Energy   - Chemistry, Materials and Engineering Design and Manufacturing   - Information Society Technologies 
 
 - Transportation and Construction   - Security and Defence  
 - Strategic Action (tourism, nanoscience and nanotechnology) 
  - Horizontal programmes on equipment and in frastructure:  support for the Technology 
Centres, and Science and Technology Parks. 
  G/SCM/Q2/EEC/55 
 Page 11 
 
 
  Replies to questions posed by the United Stat es relating to subsidy programmes of Sweden 
(G/SCM/N/155/EEC/Add.25)  
 
Question 
 
CO2 Tax Relief for the Manufacturing Sector (0,8 Rule) 
 
 Please provide further information on whic h industries primarily benefit from this 
programme. 
 Reply
 
  The tax reduction applies to fossil fuels used  by energy-intensive companies within the 
manufacturing industry fulfilling certain specific crit eria.  The EU minimum tax levels are always 
respected.  The estimated number of beneficiaries is presently around 20 companies and the tax 
reduction given annually to these companies th rough this aid scheme amounts to approx. 
SKr 15 million ( = ca. US$2 million). 
  The industries that primarily presently benefit from this programme are found within the following sectors (NACE codes):  
   C10 - Manufacture of food products; 
   C13 - Manufacture of textiles;    C17 - Manufacture of paper and paper products; 
   C23 - Manufacture of refractory products.  
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