WORLD TRADE  
ORGANIZATION  G/SCM/N/123/EEC/Add.3 
26 August 2005 
 
 (05-3588) 
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 Cyprus
. 
 
_______________ 
 
 
 
  The following notification covers the 2003/2004 fi nancial year (FY), and has been drawn up on 
the basis of the data supplied by the delivery ministries / agencies. The amount of assistance is given in 
Cyprus Pounds (C£).  Τhe average exchange rate between the C yprus Pound (CY£ ) and the Euro (€), 
in 2003 was:C£1=1.7069€  and in 2004 was C£1=1.7138€. G/SCM/N/123/EEC/Add.3 
Page 2  
 
  
CYPRUS 
 
TABLE OF CONTENTS 
Page  
 
I. DEVELOPMENT PROGRAMME FOR THE MANUFACTURING SECTOR 
IN RURAL  AREAS ................................................................................................................. .3 
II. ASSISTANCE TO MANUFACTURING INDUSTRIES TO ESTABLISH 
POLLUTION CONTROL SYSTEMS....................................................................................3  
III. PROMOTION OF HANDICRAFTS ......................................................................................4  
IV. SCHEME FOR TECHNOLOGICAL UPGRADING OF THE 
MANUFACTURING SECTOR ..............................................................................................5  
V. SUBSIDISATION OF LOAN INTEREST FOR TECHNOLOGICAL 
UPGRADING OF THE MANUF ACTURING INDUSTRY.................................................6  
VI. SCHEME FOR THE RELOCATION OF SMALL ENTERPRISES IN 
APPROVED AREAS................................................................................................................7  
VII. PROGRAMME FOR THE CREATION AND OPERATION OF BUSINESS INCUBATORS..................................................................................................................... .....8
 
VIII.  PROGRAMME FOR THE CREATION OF NEW ENTERPRISES OF HIGH 
TECHNOLOGY AND INNOVATION THROUGH THE INSTITUTION OF 
BUSINESS INCUBATORS......................................................................................................9  
IX. GRANT FOR THE IMPLEMENTATION OF THE ΗΑCCP SYSTEM IN THE 
FOOD AND DRINK INDUSTRY .........................................................................................11  
X. INCENTIVES PROVIDED TO CYPRIOT COMPANIES PARTICIPATING IN 
TRADE FAIRS, ORGANIZED BY THE MINISTRY OF COMMERCE, 
INDUSTRY AND TOURISM, ABROAD.............................................................................12  
XI. INCENTIVES PROVIDED TO CYPRIOT COMPANIES PARTICIPATING IN TRADE FAIRS ABROAD, ON THEIR OWN EXPENSES...............................................13
 
  G/SCM/N/123/EEC/Add.3 
 Page 3 
 
 
 I. DEVELOPMENT PROGRAMME FOR THE MANUFACTURING SECTOR IN 
RURAL AREAS 
1. Title of subsidy  
 
 A scheme to encourage the establishment or e xpansion of manufacturing industries in rural 
areas. 
 
2. Period covered by the notification  
 
 Years 2003-2004 
 
3. Policy objectives  
  To encourage the establishment or expansion of manufacturing industries in rural areas. 
 
4. Authority of subsidy
 
  Ministry of Commerce, Industry and Touris m.  Approved by the Council of Ministers 
Decisions (Nos. 35.265 dated 21 May 1991 and 38.776 dated 28 January 1993). 
 5. Form of subsidy
 
 
 Grant.  6. To whom and how the subsidy is paid
 
 
 To existing and newly established manufacturi ng industries in certain specified rural areas. 
 
7. Amount of subsidy  
 
 Total payment in 2003: C£326.550      2004: C£326.258 
 
8. Duration of subsidy
 
 
 The scheme was terminated at 31/12/03 and th erefore payments for year 2004 refer to 
previous commitments.  
 
9. The trade effects of the subsidy  
 
 No effects on international trade 
 
II. ASSISTANCE TO MANUFACTURING INDU STRIES TO ESTABLISH POLLUTION 
CONTROL SYSTEMS 
1. Title of Subsidy  
 
 Investment assistance to existing manufacturing industries, for the installation of pollution control systems. 
 G/SCM/N/123/EEC/Add.3 
Page 4  
 
 2. Period covered by notification
 
 
 2003-2004  3. Policy Objective
 
 
 To assist financially existing manufacturing industries in order to comply with legal requirements of air and water protection legislation  4. Authority of subsidy
 
 
 Ministry of Commerce, Industry and Tourism.(Council of Ministers Decisions No. 38.933 of 18.2.1993, No. 39.633 of 7.7.1993, No. 40.706 of 9. 3.1994, No.44.448 of 27.6.1996 and No.48.230 of 
7.8.1998).  
5. Form of subsidy
 
  Grant – 30% of investment cost up to £250.0 00, 15% of investment cost exceeding £250.000. 
 6. To whom and how the subsidy is paid
 
 
 Beneficiaries are manufacturing industries that  began their operations before 1.1.1993.  
Eligible investments are those made after 1.1.1993.   The grant is paid after the installation and 
satisfactory operation of the system.  7. Amount of subsidy
 
 
 Total payment in 2003: £305.000 
Total payment in 2004 (for investments that were initiated before 30.4.2003):  £732.400 
 8. Duration of Subsidy
 
 
 The scheme was introduced in 1993 for a five-y ear period and was extended for five more 
years in 1998.  This scheme has been abolished si nce 30.4.2003.  It has been replaced by a similar 
scheme compatible with the European Union state aid guidelines, which has accepted applications but 
has not reimbursed any funds during 2004.  
9. The trade effects of the subsidy
 
  No effects on international trade 
 
III. PROMOTION OF HANDICRAFTS 
1. Title of subsidy
 
 
 Promotion of Handicrafts. 
 
2. Period covered by notification  
 
 2003-2004 
  G/SCM/N/123/EEC/Add.3 
 Page 5 
 
 
 3. Policy objective  
 
 Promotion of Cypriot cultural inheritance through popular art. 
 
4. Authority of subsidy  
 
 Ministry of Commerce, Industry and Touris m. Funds annually approved by the Council of 
Ministers through the Government Budget.  5. Form of subsidy
 
 
 Training of local craftsmen and promotion of items made by them. 
 6. To whom and how the subsidy is paid
 
 
 Local craftsmen (in the form of services). 
 7. Amount of subsidy
 
  Total payment in 2003: £345.000.  Total payment in 2004: £450.000. 
 
8. Duration of subsidy
  
  The scheme will be in existence until 31/12/200 6.  On that date it will be re-examined 
whether it will continue. 
 
9. The trade effects of the subsidy
 
  No effects on international trade  
IV. SCHEME FOR TECHNOLOGICAL UPGRADING OF THE MANUFACTURING 
SECTOR 
1. Title of subsidy
 
  Grant for technological upgrading of the manufacturing sector.  
2. Period covered by notification
  
  2003-2004  3. Policy objectives
 
 
 The objective of the scheme is to encourage i nvestments in modern technology with the aim 
of improving both productivity and quality of locally produced goods.  4. Authority of subsidy
 
 
Ministry of Commerce, Industry and Tourism.  Approved by the Council of Ministers decision 
no.44.177 dated 17.4.1996.   G/SCM/N/123/EEC/Add.3 
Page 6  
 
 5. Form of subsidy
 
 
 The grant as a percentage of the eligible i nvestment ranges from 15 to 30 per cent of the 
investment in new machinery and equipment.  Th e amount of grant is limited to a maximum of 
£C100.000 per applicant for the duration of the scheme. 
 
6. To whom and how the subsidy is paid  
  To existing and newly established manufacturing units.   
7. Amount of subsidy
  
  Total payment in 2003:  £C2.062.726  Total payment in 2004:  £C2.609.111  
8. Duration of subsidy
 
  The scheme was introduced in 1 996 and is still in existence. 
 9. The trade effects of the subsidy
 
 
 No effects on international trade 
 
V. SUBSIDISATION OF LOAN INTEREST FOR TECHNOLOGICAL UPGRADING OF 
THE MANUFACTURING INDUSTRY 
1. Title of subsidy  
 
 Subsidisation of loan interest for technological upgrading of the manufacturing industry.  2. Period covered by notification
 
  2003-2004 
 
3. Policy objective
 
  The objective of the scheme is to encourage i nvestments in modern technology with the aim 
of improving both productivity and quality of locally produced goods. 
 
4. Authority of subsidy
 
  Ministry of Commerce, Industry and Tourism.  Approved by the Council of Ministers decision 
no.44.177 dated 17.4.1996.   
5. Form of subsidy
 
  The subsidy as a percentage of the eligible i nvestment is the difference between 5% and the 
current interest rate with the maximum subsidy bein g 3.5 percentage points.  The amount of grant is 
limited to C£150,000 per applicant for the duration of the scheme. 
 
6. To whom and how the subsidy is paid
 
  To existing and newly established manufacturing units.  G/SCM/N/123/EEC/Add.3 
 Page 7 
 
 
  
7. Amount of subsidy  
 
 Total payment in 2003:  C£163.521  
 Total payment in 2004:  C£78.209  
 
8. Duration of subsidy  
 
 The scheme was introduced in 1996 and ended in 1998. 
 
9. The trade effects of the subsidy  
 
 No effects on international trade 
  
VI. SCHEME FOR THE RELOCATION OF SM ALL ENTERPRISES IN APPROVED 
AREAS  
1. Title of subsidy  
 
 Programme for the relocation of small enterprises to authorized areas 
 
2. Period covered by notification  
 
 2003-2004 
 
3. Policy objectives  
 
 The aim of the programme is to encourage already existing small enterprises engaged in 
manufacturing or specific service activities, to move from residential areas to other authorized areas.   4. Authority of subsidy
 
  Ministry of Commerce, Industry and Tourism.  Approved by the Council of Ministers decision 
no. 54.862 dated 9.1.2002 
  5. Form of subsidy
 
  The amount, which will be granted if and when the application is approved, is calculated as 
follow: 
  (a) For the small enterprises a grant of 7, 5% on the eligible costs (cost of land and 
buildings) with maximum amount C£15.000. 
  (b) For very small-enterprises a grant of 15% on the eligible costs with maximum amount 
of C£10.000 
 6. To whom and how the subsidy is paid
 
  To existing enterprises only. 
 G/SCM/N/123/EEC/Add.3 
Page 8  
 
 7. Amount of subsidy 
 
 
 Total payment in:   2003: £C204.963 
 2004: £C315.275 
 8. Duration of subsidy
 
  The scheme was introduced in 2 002 and is still in existence. 
 
9. The trade effects of the subsidy
 
  No effects on international trade.  VII. PROGRAMME FOR THE CREATION AND OPERATION OF BUSINESS 
INCUBATORS 
1. Title of subsidy
    
 
 Program for the creation and operation of Business Incubators. 
 
2. Period covered by Notification  
  2003-2004  3. Policy objective
 
 
 To help new inventors in the early stages in order to materialise, develop and trade their innovative ideas and thus create new high technology enterprises.  4. Authority of subsidy
  
 
 Ministry of Commerce, Industry and Tourism. Approved by the Council of Ministers 
Decisions No 52.310 of 30.8.2000 and 54.599 of 28.11.2001.  5. Form of subsidy
  
 
 The following grants are provided:   
  (a) Grant towards operating expenses and purchase of equipment (This grant can not 
exceed the ceiling of  £57.000 over a period of three years.) 
  (b) Grant for small and medium enterprises – Investment aid (15% for small companies 
and 7% for medium companies. 
 6. To whom and how the subsidy is paid
 
  To individuals or legal entities or partnerships  engaged with a contract with the Government 
of the Republic of Cyprus after a publicly announced selection procedure.  The Ministry of 
Commerce, Industry and Tourism received ten applica tions which were evaluated using the following 
criteria:   G/SCM/N/123/EEC/Add.3 
 Page 9 
 
 
  a) Experience of applicant in industrial issues and/or creation/operation of business 
incubators and/or similar projects (dur ation of experience, number and size of 
projects)  
    b) Organisational Structure of Private Company/Organisation (type, range of activities, 
size, organisation, composition of firm, image)  
    c) Qualifications and experience of the pe rsonnel that will be involved in the project 
    d) Installations of Private Company/Orga nisation (building facilities and equipment) 
   
 e) Implementation plan of the project (area of specialisation and the possible benefits for 
the local economy will be considered) 
    f) Financial health / ability to finance the program/project 
 
 Only the applications that secured the minimum acceptable score for the above criteria, were 
further evaluated on the basis of the economic criteria and as a result four were selected. 
 
7. Amount of subsidy  
  Total payment in 2003:  £CY 28.996 
 Total payment in 2004:  £CY 73.219 
 8. Duration of subsidy
 
  Started in the first semester of 2002 and it will last for four years 
 
9.  The trade effects of the subsidy
 
  No effects on international trade.  
VIII.  PROGRAMME FOR THE CREATION OF NEW ENTERPRISES OF HIGH 
TECHNOLOGY AND INNOVATION THROUGH THE INSTITUTION OF 
BUSINESS INCUBATORS 
1. Title of subsidy
    
 
 Program for the Creation of New Enterprises of High Technology and Innovation Through the Institution of Business Incubators  
 2. Period covered by Notification
 
  2003-2004 
 
3. Policy objective
 
  To promote the development of high technology enterprises  G/SCM/N/123/EEC/Add.3 
Page 10  
 
 4. Authority of subsidy
  
 
 Ministry of Commerce, Industry and Tourism. Approved by the Council of Ministers 
Decisions No 52.310 of 30.8.2000 and 54.599 of 28.11.2001.  5. Form of subsidy
  
 
 The following grants are provided:     (c) Grant towards operating expenses and purchase of equipment. This grant cannot 
exceed the ceiling of  £57.000 over a period of three years. 
 
 (d) Grant for research and technological development (for industrial research 50% and 
for pre-competitive development 25%.  These figures can be increased by 10% for aid given to small and medium enterprises. 
 
 (e) Grant for small and medium enterprises – Investment aid (15% for small companies 
and 7% for medium companies. 
  The total amount of grant will not exceed the sum of CY£120.000.     6. To whom and how the subsidy is paid
 
 
 Individuals or small groups of individuals are entitled to participate in the Programme by submitting a business plan meeting the selection criteria specified herebelow.  Applications that are 
submitted by groups of individuals that include no n-Cypriots inventors shall also be considered. 
 
• Innovation 
• Technological viability 
• Marketability of the idea 
• The possibility to develop the idea within  the budget and time framework described 
in the project proposal 
• The suitability and adequacy of the team w ith regard to the scientific and business 
requirements of the project 
7. Amount of subsidy
 
  Total payment in 2003:  £CY 39.769 
 Total payment in 2004:  £CY 258.159 
 8. Duration of subsidy
 
  Started at then end of 2001 and it will last for four years 
 
9.  The trade effects of the subsidy
 
   No effects on international trade.   G/SCM/N/123/EEC/Add.3 
 Page 11 
 
 
 IX. GRANT FOR THE IMPLEMENTATION OF THE ΗΑCCP SYSTEM IN THE FOOD 
AND DRINK INDUSTRY   
1. Title of Subsidy  
   Hazard Analysis, Critical Control Points (HA CCP) System, for the food and drink industry.   
  
2. Period covered by Notification
 
   2003-2004  
3. Policy Objective
 
   Promotion of the implementation of the HACCP system(preventing measure for the hygienic quality of food and drink products).    
4.  Authority of subsidy
 
   Ministry of Commerce, Industry and Touris m. Approved by the Council of Ministers ( 
Decision No. 59.762 dated 7/4/2004)   5. Form of subsidy
 
 
 The subsidy as a percentage of the eligible inv estment is 30 percent of the investment in new 
equipment used for the monitoring (chemical, physical, microbiological control points) of Critical Control Points ( C. C. Ps). The amount of grant is limited to £50.000 per applicant.   
6. To whom and how the subsidy is paid
 
   To existing and newly established manufactur ing units (food and drink industry)which are 
implementing the HACCP system and are regi stered with the appropriate authorities. 
  7. Amount of subsidy
 
 
 Payments under this scheme have not yet been made.   The following amounts have been given under the previous scheme which was in force between June 1999 and April 2004. 
 
 Total payment in 2003:  NIL  Total payment in 2004:  £167. 451   8. Duration of subsidy
 
  
 The scheme was initially introduced in 1999.   The modified scheme was introduced on 
7th April 2004 and is valid until the 31st December 2006. 
  9. The trade effects of the subsidy
 
 
 No effects on international trade 
 G/SCM/N/123/EEC/Add.3 
Page 12  
 
 X. INCENTIVES PROVIDED TO CYPRIOT COMPANIES PARTICIPATING IN 
TRADE FAIRS, ORGANIZED BY THE MINISTRY OF COMMERCE, INDUSTRY AND TOURISM, ABROAD. 
1. Title of subsidy
 
  
 Promotion of industrial products by providing financial incentives to the Cypriot companies, 
participating in Trade Fairs orga nized by the Ministry abroad. 
  2. Period covered by notification
 
 
 2003-2004 
 3. Policy objective
 
   To promote Cyprus industrial products exhibited in Trade Fairs organized by the Ministry 
abroad. 
  4. Authority of subsidy
 
   Ministry of Commerce, Industry and Tourism. Annually approved by the Council of Ministers through the Government Budget. 
 
  5. Form of subsidy
   
   The Ministry bears the transportation costs of th e exhibits, the rental costs of the exhibition 
area and the construction expenses of the stand of th e Cypriot companies participating in the National 
pavilion.   6. To whom the subsidy is paid
 
  This incentive is provided to Cypriot companies participating in trade fairs organized by the 
Ministry abroad. 
  7. Duration of subsidy
 
   The scheme is provided every year and is still in existence. 
  
8. Amount budgeted for 2003
:  CYP 1 350 000 
   Amount budgeted for 2004
:  CYP1 060 000 
  Amount spent in 2003
:  CYP 871 000 
  
 Amount spent in 2004 :  CYP 956 000  
 9. The trade effects of the subsidy
 
 
 No effects on international trade 
  G/SCM/N/123/EEC/Add.3 
 Page 13 
 
 
 XI. INCENTIVES PROVIDED TO CYPRIOT COMPANIES PARTICIPATING IN 
TRADE FAIRS ABROAD, ON THEIR OWN EXPENSES 
1. Title of subsidy  
   Promotion of industrial products by providing financial incentives to the Cypriot companies, 
participating in Trade Fairs abroad, on their own expenses. 
  2. Period covered by notification
 
  2003-2004 
 
3. Policy objective
 
   To promote Cyprus industrial products exhibited in Trade Fairs abroad.   
4. Authority of subsidy
 
   Ministry of Commerce, Industry and Tour ism.  Annually approved by the Council of 
Ministers through the Government Budget.  5. Form of subsidy
   
  
 The Ministry covers 70 percent of the rental and construction costs of the stand etc up to a maximum of CYP 2500 for non spacious exhibits  and up to CYP 4000 for spacious exhibits. 
  6. To whom the subsidy is paid
    
  
 This incentive is provided to Cypriot companie s participating in trade fairs abroad, on their 
own expenses.   7. Duration of subsidy
 
  
 The scheme is provided every year and is still in existence. 
  8. Amount budgeted for 2003
 :  CYP 400.000 
   Amount budgeted for 2004
:  CYP 430 000 
  
 Amount spent in 2003 :  CYP 163 000 
   Amount spent in 2004
:  CYP 180.000 
 9. The trade effects of the subsidy
 
 
 No effects on international trade  
__________