WORLD TRADE
ORGANIZATIONG/SCM/Q2/EEC/40
24 February 2003
(03-1129)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English/
                French/                Spanish
SUBSIDIES
Replies by the EUROPEAN COMMUNITI ES (Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Irela nd, Italy, Netherlands, Portugal, Spain,
and the United Kingdom) to Questions Posed by the UNITED STATES1
The following communication, dated 31 January 2003, has been received from the Permanent
Delegation of the European Commission.
_______________
AUSTRIA  (G/SCM/N/71/EEC/Add.1)
A. For each programme listed below, please answer the following questions:
- Regional Innovation Programme
- ERP-SME-Technology Programme
- Special ERP-Programme for a Technology Growth Initiative; Part “R&D-Growth
Programme, R& D Cooperation Projects
- Special ERP-Programme for a Technology and Growth Initiative; Part “SME
Technology Growth Programme”
- Guidelines on the Granting of Aid to the Management of Abandoned Polluted Sites
- “K-Plus” Competence Centres’ Programme
- Assistance to Research, Development
- Innovation and Flexible Automation
Q1. What are the eligibility criteria for receiving subsidies under the programme?Q2. If the policy objective includes subjective descriptions of potential aid recipients, please
provide a description of those terms (e.g., “innovative investment projects” “rapidly growingenterprises”).
Reply
The "Regional Innovation Programme" and the aid schema "Assistance to Research,
Development, Innovation and Flexible Automation" have already expired.  This means that no more
subsidy payments are effectuated under these programmes.
                                                     
1 G/SCM/Q2/EEC/38., pertaining to the new and full notifications contained in
G/SCM/N/71/EEC/Adds.1-9, 11-13 and 15.G/SCM/Q2/EEC/40
Page 2
The eligibility criteria for receiving subsidies under the other programmes are those laid down
in the "Community Guidelines on Regional Aid", th e former "Community Framework for State Aid to
small and medium-sized Enterprises", th e "Community Framework for State Aid  for Research and
Development' as well as the "Community Fromenrork  for Environmental Aide.  Interpretation of any
subjective description of potential aid recipients follows the principles set out In the guidelines of theparticular aid scheme.
B. For the two programmes listed below, please answer the following questions:
- ERP-Regional Programme
- ERP-Technology Programme
1. What are eligibility criteria for receiving subsidies under the programme?
2. How many aided projects took place inside “Nationally Regionally Assisted Areas”, and
how many took place outside?
Reply
The eligibility criteria for receiving subsid ies are those laid down in the "Community
Guidelines on Regional Aid" and the "Community Framework for State Aid for Research and
Development".
All projects subsidized  under the "ERP Regional Programme" were carried out inside
"National Assisted Areas".  For projects subsid ized under the "ERP Technology programme” there
was no limitation to such areas.
C. For each programme below, please answer the following questions:
- Guarantees by the Financing and Guaranteeing Company, Ltd. Pursuant to Chapter
1 of the Guarantee Act of 1977
- Guarantees by the “East-West-Fund” pursuant to Chapter 11 of the Guarantee Act
of 1977 within the framework of Co-financing Agreements
- Guarantees by the Financing and Guaranteeing Company, Ltd., within the
framework of the “Technology Financing Programme”
1. Please provide an illustrative list of the types of projects that received aid under the
programme?
2. What are the total amounts of aid awarded under this programme?
3. What are the eligibility criteria for project selection, and how is the subsidy allocated
among the chosen recipients?
4. What types of guarantees are provided?
Reply
The eligibility criteria for project selection under these programmes are those laid down in the
"Community Guidelines on National Regional Aid", the former "Community Framework on State Aid
to small and medium-sized Enterprises", the "Community Framework for State Aid for Research and
Development" as well as the "Commission Notice on the Application of Articles 87 and 88 to State
Aid in the Form of Guarantees".  Usually, deficiency guarantees are provided.G/SCM/Q2/EEC/40
Page 3
D. For each programme listed below, please answer the following questions:
- Grants by the Financing and Guaranteeing Company, Ltd. Pursuant to Chapter 1b
- Section 1 of the Guarantee Act of 1977- Financial Assistance by the Financing and Guaranteeing Company, Ltd., to the
Rescue of Enterprises pursuant to Chapter 1b Section 2 of the Guarantee Act of 1977
- Guarantees by the “East-West-Fund” pursuant to Chapter 11 of the Guarantee Act
of 1977
- Assistance by means of the “Study-Fund ” pursuant to Chapter 1b Section 1 and
Chapter 12 of the Guarantee Act of 1977
- Special Programme for the National Park Region “Hohe Taurn” in Tirol
Guarantees by the Tyrolean Credit Guaranteeing Company
- Special Programme for the Strengthen ing of the Tyrolean Economy (“Impact
Package Tyrol”)
- Regional Planning Assistance Focal Point Programme (RFAFPP) 1996-2000 - Focal
point:  “Regional Planning Relocation Programme”
- Regional Planning Assistance Focal Point Programme (RFAFPP) 1996-2000 - Focal
point:  “Assistance to Initiatives in the Field of Agricultural Marketing
- Austrian Industrial Research Promotion Fund (AIRPF)
- Assistance Measures by the Lower Austrian Border Region Promotion Company,
Ltd.
- Job Premium in Assisted Areas No. 1 of Lower Austria
- Programme to Promote the Establishment of Enterprises
- Regional Investment Programme
- Lower Austrian Innovation, Technology, Research and Development Programme
- Lower Austrian Participation Model- Assistance pursuant to Chapter 27A of the Labour Market Promotion Act (LMPA)
1969 as amended in 1994
- Assistance pursuant to Chapter 35A of the Labour Market Promotion Act (LMPA)
1969 as amended in 1994
- Assistance pursuant to Chapter 51A Sections  3 to 5 of the Labour Market Promotion
Act (LMPA) 1969 as amended in 1994
- Assistance to the Industrial Waste Water Management by means of the Region of
Styria
- Assistance by Non-repayable Cash Grants
- Assistance by Guarantees for Credits and Loans
- Patent Application Assistance Programme
- ITF-Seed Financing Programme- Business Structure Improvement Programme 1997-1999
- Assistance to the Internationalization of Small and Medium-sized Enterprises
- Guideline to Styrian Economic Assistance
- Technology-Impact-Programme (TIP)
- Process-Innovation-Programme (PIP)- Assistance to the Structural Renewal of the Styrian Basis and Finished Products
Industries
- Tyrolean Pub Promotion Programme
- Assistance to Industrial Research and Development Projects
- Assistance within the framework of the Innovation and Technology Fund (ITF)- Assistance to Industrial Competence Centers and Competence Networks
- Assistance to ECO Plus Lower Austrian Regional Development Agency, Ltd. to
Regional Investment Projects in Lower Austria
1. List the types of projects and/or enterp rises that received aid under this programme.G/SCM/Q2/EEC/40
Page 4
2. What are total amounts of aid awarded under this programme? (Breakdown by various
form of subsidy if applicable.)
3. What are the eligibility criteria, and how is the subsidy allocated among the chosen
recipients?
4. Are any conditions imposed on recipients?  If yes, what are they and how do they differ
according to the type of aid given?
Reply
The following aid schemes indicated in the list have already expired:
-  special Programme for the National Park Region 'Hohe Tauern' in Tirol
-  Regional Planning Assistance Focal Point Programme (RFAFpP)1996 - 2000 - Focal
 Point: 'Regional Planning Relocation Programme"
- "Regional Planning Assistance Focal Point Prograrrurie (Rl~A>-T'P) 1996 2000 - Focal
 Point: 'Assistance to initiatives in the Field of Agricultural Marketing
-  Business Structure Improvement Programme 1997 – 1999
-  Assistance to the Internationalisation of small and medium-sized Enterprises
-  Assistance to the structural Renewal of the Styrian Basis and Finished Products Industries-  Assistance to Industrial Research and Development Projects
-  Assistance within the Framework of the Innovation and Technology Fund (ITF)
-  Tyrolean Pub Promotion Programme
No more subsidy payments are effectuated under these schemes.The eligibility criteria were the same as those applied to the programmes indicated in Points
A, B and C.
Any conditions imposed on recipients are stipulated in the guidelines of the pertinent old
schemes.  Usually, such conditions are included in the contract between the aid giving institution and
the beneficiary.  They may refer to the utilisation of a subsidized investment in a specific manner, toan employment safeguard over a certain period or the repayment modalities in case of a failure of the
project assisted..
Concerning the types of projects and/or enterprises having received aid as well as the total
amounts awarded under each of the programmes.
E. Business Structure Improvement Progr amme 1997-1999, Regional Aid Component
1. List the types of project and/or enterprises that received aid under this programme?
2. What is the total amount of aid awarded under this programme?  (Breakdown by
various form of subsidy if applicable.)
3. What are the eligibility criteria, and how is the subsidy allocated among the chosen
recipients?
4. What are the “National regionally assisted Areas”?G/SCM/Q2/EEC/40
Page 5
Reply
The programme used to cover the supplement s to the maximum allowable intensities for
regional aid ("SMF-bonuses"), which was granted to small and medium-sized enterprises in “Assisted
Areas" under the Business Structure Improvemen t Programme 1997 -1899" mentioned in Point D.
Meanwhile, it has already expired.  This means that no more subsidy payments are effectuated.G/SCM/Q2/EEC/40
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BELGIUM  (G/SCM/N/71/EEC/Add.2)
Tax measures to promote investment
Q1. Please explain more fully who is eligible for this subsidy.  Is the programme targeted at
all firms involved in research and develo pment, energy-saving sectors and SMEs?
Reply
The following are eligible for this aid, app licable to tangible fixed assets acquired or
constituted new and to new intangible fixed assets, assigned in Belgium to the pursuit of a business
activity (Art. 68, CIR92):
(a) Natural persons declaring gains or profits subject to personal income tax (Art. 69, §1,
CIR92), i.e:
i. Operators of industrial, commercial or agricultural enterprises.
However, taxpayers taxed at a flat rate for the determination of which a standard depreciation
rate is considered are only entitled to the deduction for investment in respect of energy-saving
investments for which no financial assistance (either capital or interest subsidies) has been provided
by the government to encourage energy savings (Art. 74, CIR92);
ii. Members of the liberal professions;(b) Resident companies and the Belgian offices of non-resident companies, subject to corporation
tax or non-resident (corporation) tax, i.e:
i. Taxpayers covered by the above description and which qualify as SMEs in terms of deduction
for investment, ie. in which over half the stocks or shares, constituting the majority of voting
rights, are held by one or several natural persons, and which are not part of a group with a
recognized coordination centre (Art. 201, §1.1, CIR92);
ii. Taxpayers not covered by the description in (b)i but, as from 27 March 1992, exclusively for
investment in research and development or energy-savings (Art. 201, §1.2, CIR92).
NB: The percentage deduction for investment is  reduced to zero for any other investments.
Q2. What is the rate of deduction for invest ments in the research and development and
energy-savings sectors?
Reply
All taxpayers cited in the reply to the previous  question are, for these kinds of investments,
eligible for a deduction from the taxable base, equal to the increased rate of deduction for investment,
applied to the investment value (Art. 69, §1.2, CIR92).
This increased rate is equal to the basic rate pl us 10% (the basic rate is determined using the
consumer price index plus 1.5%, it being understood that the resulting rate must remain above 3.5%and below 10.5% – Art. 69, §1.1, CIR92).
In the case of recognized innovative firms, pursuant to the law of 31 July 1984, the increased
rate is itself increased by 5% in respect of fixed assets acquired or constituted no later than
31 December of the tenth year after the firm was established.G/SCM/Q2/EEC/40
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Research and development aid
Q1. Who is eligible to receive funding under this programme? Are all businesses in every
industry eligible for aid?
Q2. Can a business receive a Federal State subs idy and a jointly financed subsidy by the
Federal State and the local regions for the same project?
Q3. What is the maximum amount (percentage) of individual research and development
projects financed under this programme?
Q4. Does this programme only cover pre-competitive research?
Reply
1. All businesses established in a Region and conducting economically motivated research and
development projects are eligible to receive funding from that Region.  All industrial sectors are
eligible for consideration.
2. The programme concerns aid that falls within the competence of the Regions.  Pursuant to
CIR 92, the portion of any gains or profits constituted by the subsidy is subject to income tax.
3. In 2000, the maximum amount of research and development projects financed stood at 80%.
That rate will come down to 65% in 2002.
4. The programme covers pre-competitive research, also referred to as the development or
completion of prototypes.
Brussels – capital region aid for economic growth
Q1. Which sectors received aid in the "general investment" category?
Reply
Subsidies in the "general investment" category are granted exclusively to small and medium-
sized enterprises belonging to one of the following sectors:  agriculture, fisheries, mining and
manufacturing industries, construction, trade, hotels and gastronomy, transport, real estate, social
economy.
Subsidies for basic industrial research
Q1. Please provide the background and authority for this programme.
Q2. How are "regional enterprises" defined under this programme? Are subsidies under
this programme limited to certain industrial sectors?
Reply
1. The programme consists of optional subsidies granted by decision of the government.
2. "Regional enterprises" means enterprises based, ie. with operational headquarters, in the
Brussels-Capital region. The subsidies under this programme are applicable to all industrial sectors,
without exception.G/SCM/Q2/EEC/40
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Prototype advances
Q1. Please provide the background and authority for this programme.
Q2. Please explain in greater detail what is meant by "repayable upon marketing". What
percent of funded products are repaid under this programme?
Q3. Have Belgium steel companies benefited from this programme?
Reply
1. The legal basis for the repayable advances was, in 2000, Article 25 of the (Federal) Law of
30.12.1970.  Since 2002, the aid has been granted in accordance with the Ordinance of 21.02.2002
(Implementing Order 18.07.2002).
2. Once the new product reaches the marketing stage, a percentage of turnover is payable to the
Region as repayment for the advance.  In principle, repayment shall take no longer than five years.
The percentage of turnover allocated to repayment is established contractually on the basis of
estimated turnover, the product's anticipated lifespan and the amount of the advance, in order to allow
for the total repayment of the aid within a five-year period.
European programmes
Q1. Please confirm the title of this programme.
Q2. Please provide the background and authority for this programme.
Reply
1. European programmes are programmes administered and financed by the European
Commission.
2. Whenever a project undertaken by an enterprise or research centre based in a given Region
receives (partial) financial support through a "European Programme", the regional authorities may
provide supplementary financial support, which is known as "co-financing".
Aid for promotion of foreign trade
Q1. Please explain in detail the eligibility criteria under this programme. Is the subsidy
contingent upon exportation?
Q2. Please provide the duration of the programme.
Reply
1. Only independent SMEs set up with operational headquarters in the Brussels-Capital Region
are eligible to receive financial incentives desi gned to raise their profile in foreign markets.
An SME is independent if fewer than 25% of its shares are owned by another enterprise that
is not an SME.
Operational headquarters are considered to be based in the territory if at least one third of all
persons employed by the enterprise work in one or more offices in the region.G/SCM/Q2/EEC/40
Page 9
SMEs must be properly registered, possess a VAT number and be in full compliance with
social and taxation laws.
An SME means an enterprise which has fewer than 250 employees, and has either:
• An annual turnover not exceeding 40 million euros, or
• an annual balance sheet total not exceeding 27 million euros.
The subsidies are not designed to facilitate either the development or manufacture of the
product as such.  They are designed to cover expenditure relating to trade fairs, travel, publicity,
administrative processes such as translation, bringing into conformity etc.
Type Maximum subsidy ( €)
Participation in trade fairs 3,750
Production of advertising documents 7,500/3 budget years
Creation of web-si te 7,500/3 budget years
Market surveys 25,000/12 months
Use of a foreign trade consultant 7,500/12 months
Participation in tenders 25,000/12 months
Training in foreign trade 1,250/staff
Supplying of personnel not applicable
2. Duration of subsidies:  the laws and regulations concerning subsidies have no time-limit.
Walloon region-aid to disadvantaged regions
Q1. How many companies benefit from subsidies under this programme?
Q2. What are the principal industry sectors that benefit from this programme?Walloon region-research and technology aid
Q1. How is the repayment period determined?  What is the maximum amount of time over
which a company may repay its loan?  Is the total amount of advances to be repaid for applied
research projects?
Q2. What are the principal industry sectors that benefit from this programme?
Reply
1. The amounts of annual repayments on the repayable advances are calculated on the basis of
estimated turnover over a period of six-seven y ears, with a minimum annual payment, unless the
enterprise declares that it does not intend to exploit the results of the research.
Total repayments shall be equal to the amount of the aid granted for which no time-limit is
specified, unless the enterprise declares that it does not intend (or no longer intends) to exploit the
results of the research.
2. The main industry sectors benefiting from the programme are biotechnology and the
pharmaceutical industry, aerospace industries, mechanical enterprises and materials sectors.G/SCM/Q2/EEC/40
Page 10
Flemish region-aid to economic growth
Q1. How many companies benefit from subsidies under this programme?
Q2. What are the principal industry sectors that benefit from this programme?
Reply
1. Aid to economic growth is granted to me dium-sized and large companies. Under this
programme 368 companies benefited from subsidies in 2000.
2. The five principal industry sectors which benefit from this programme are:- Textile;
- wood-working industry;
- publishers, printing-offices;
- chemical industry;  and- metal-working industry.
Flemish region-economic adjustment
Q1. Please provide the terms of loans provided.
Q2. Please explain what and how the interest rates are determined.Q3. What are the principal industry sectors that benefit from this programme?
Q4. Does the Belgian steel industry benefit from this programme?
Reply
1. Loans are granted for the following projects:
• Projects of advice;
• education projects;  and
• projects performed by non-employees.
The project costs are to be carried by the firm in question; the maximum amount of yearly
costs allowed is € 625,000. The aid is granted as a loan with no interest rates to be paid;  the loan
covers a maximum of 50% of the total costs.
The loan is granted after a contract between the firm and the Flemish has been signed and 60
days after the firm in question has sent a request to the administration.  The loan is paid in one time.
The loan is to be paid off in three parts of the same amount according to the following plan of
redemption.
- The first part is paid five years after having received the loan;
- the second part is paid six years after having received the loan;  and
- the third part is paid seven years after having received the loan.
2. There are no interests to be paid for the loans granted.  Interests are only to be paid  when the
loans granted are not repaid on time:  the interest rates applied are the legal interest rates.G/SCM/Q2/EEC/40
Page 11
3. The five principal sectors which benefit from this programme are:
publishers, printing-offices;
metal-working industry;
construction industry;wholesale trade, exclusive of trade in cars and motor-cycles;  and
retail trade, exclusive of trade in cars and motor-cycles;  repairs of consumer articles.
4. The steel industry is one of the industry sectors which are not excluded from aid, but for
which approval and advice are asked from the European Commission. Until now there has been no
request for aid under this programme from the steel industry.
Aerospace/commercial aircraft development
Q1. It is our understanding that Belgium provides subsidies and other support to aid the
civil aviation industries, including companies involved in supplying components to Airbus, such
as Belairbus. We kindly request that Belgium please notify any such aid, including programmeswhich provide exchange rate guarantees.
Q2. Could Belgium also provide information concerning any "Launch Aid" or similar types
of support provided to aerospace industries?
Reply
The support provided by the Belgian authorities for the development of various aeronautical
products does not consist of subsidies, but advances, repayable by recipient enterprises upon
marketing of the products.G/SCM/Q2/EEC/40
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DENMARK  (G/SCM/N/71/EEC/Add.3)
I. MINISTRY OF TRANSPORT
Environmental grants to freight transport by railQ1. How do these subsidies achieve the goal to secure a more environmentally sustainable
freight transport?
Reply
By way of introduction it should be noted that the environmental subsidy for railway
conveyance of goods has been suspended since 1 May 2002 as a renewed approval from the EU
Commission is awaited according to the state-supported rules.  Therefore no subsidies are paid out for
the moment.
In general, railway conveyance of goods is less loading on the environment, the exploitation
of the roads and the road safety than lorry tran sport.  An encouragement of railway conveyance of
goods will therefore contribute positively to an aim for a sound conveyance of goods.
Q2. Do subsidies under this programme provid e incentives for enterprises to use rail
transport vis-à-vis other forms of transportation, and if so, how?
Reply
The subsidy is granted directly to buyers of  railway conveyance of goods as a subsidy per
tonkm.  It leaves the railway conveyance of goods – other things being equal – in a better competitionposition with the lorry transport.  The subsidy is limited to max. 4 øre per tonkm.
Q3. What is the duration of this programme?
Reply
As mentioned above the agreement is suspended until further notice after a 3-year permission
from the EU Commission has expired as per 1 May 2002.  The Ministry of Transport has applied the
EU Commission for an extention of the arrangement for a 5-year period.
V. MINISTRY OF FOOD, AGRICULTURE AND FISHERIES
Investments for Improving the Processing and Marketing Conditions for Agricultural and
Forestry Products
Q1. Is the aid being provided for marketing the prod ucts in foreign markets?  If so, is this a
requirement for receipt of aid under this programme?
Reply
It is an investmest scheme under the Danish Rural Development Programme approved by the
EU-Commission.
No subsidy is provided for marketing the products either on foreign or domestic markets.According to Danish National Budget there is no budget for the scheme in 2002-2006.G/SCM/Q2/EEC/40
Page 13
Experimental Fishing and Fish  Processing Development Fishery Innovative Actions etc.
Q1. For each of the above listed programmes,  could Denmark please provide the authority,
background, and the duration of the subsidy?
Reply
Authority:  The Law on Innovation of 16 May 2001. Disbursement is affectued by the
Directorate for Food, Fisheries and Agro Business.
Background:  The objective of the law is to enhance and contribute to the innovation process
within the fishery sector in order to preserve the fishing industry resource foundation and secure theenvironment and animal welfare along with good working conditions.
Duration:  The duration of subsidy is dependent on the project in matter but will typically
have a duration period of 6 months to 2 years.
Q2. With regards to the Experimental Fishing and Fish Processing Development
programme, can Denmark please provide further information regarding this subsidy, including
the eligibility criteria, types of projects and activities funded, duration, and total annual amount
budgeted?
Reply
Eligible applicants are: owners or leaseholders of a Danish commercial fishing vessel, an
industry, a single person, state founded or private founded institutes of research collaborating with
private companies.
Projects and activities founded: Fisheries management, fisheries technology in order to
provide fishing industry technology to ensure sustainable development for the fishing sector.
The annual amount budgeted: 3 million Danish Kroner.Please note, that the said Experimental Fishing programme from January 2003 is expected to
be abolished.
VI. MINISTRY OF BUSINESS AND INDUSTRY
Subsidy notifications 2000/2001Q1. Could Denmark please explain what the eligibility criteria are for assistance under these
programmes and what types of activities are funded?
Reply
To come into consideration under the programme for education and training of maritime
personnel described under I (in the WTO notifications scheme), the vessel must be Danish, and the
presence of the supernumerary officer trainee and the supernumerary ordinary ship’s assistant on
board must be as part of an education programme authorised by the Danish Maritime Authority.G/SCM/Q2/EEC/40
Page 14
Initiatives for SME´s and Entrepreneurs
The initiatives cover general activities concerning information; guidance and counselling
aimed at all persons that intend to become entrepreneurs as well as activities aimed at innovative
entrepreneurs (scholarships, patenting prototyping etc.).  The services regarding innovativeentrepreneurs are granted on the basis of an evaluation of the entrepreneur's product-/business
concept.
Development of Competence and Technology
Most of the funding is aimed at the development and maintenance of a technological
infrastructure.  This infrastructure mainly consists of a network of independent private institutes oftechnology with a recognised competence.  Recognitio n is granted on the basis of an evaluation of the
institute's services, statutes, level of competence, financial strength.  Recognition assures public
funding.  The terms of the funding are specified in a contract/subsidy contract that defines the targets
for the scientific/technological development at the institute. Public funding may not be used for
unintended purposes such as to cut down normal costs at the institute.  The institutes offer theirservices on the market on normal terms.  The institutes are impartial and offer their services to any
customer, that wishes to buy their services.
Some of the funding is aimed at facilitating co-operation between companies and institutes of
technology and research institutes.  The particip ating companies must cover their own expenses,
which should equal at least 50% of the total project activities.  The projects shall target specific
development measures.  Not only the participating company/ies shall benefit of the results of the
project.
Until 2000 the initiatives also covered financing of participation of private companies in
Eureka projects.  Eureka projects have to meet the Eureka criteria.  Danish funding for Eureka
projects have been granted to hi-tech international projects (max. 50% of the cost).
A minor part of the funding has been applied to educational purposes (scholarships to PhDs in
private companies) on the basis of an evaluation of the technological perspectives of the individual
projects.  The companies involved are required to cover at least 50% of the eligible project costs.
Regional Industrial Development
ERDF (European Regional Development Fund) funds to regional industrial development
projects in Denmark are co-financed by national Danish funds.  The criteria for funding is thus mainly
determined by the relevant EU programmes.  In some of the ERDF programme activities privatecompanies cannot participate.
Q2. How many companies received assistance  under the Development of Competence and
Technology Programme?
Reply
2000: 60 companies.
2001: 34 companies.
The figures only cover the companies/institutions receiving state funding directly.  A larger
but unknown number of companies have been affected indirectly.G/SCM/Q2/EEC/40
Page 15
Business Development Finance Act
Q1. Please provide the terms of repayment for the loans.  What is the maximum amount of
time over which a company may repay its loan?
The Business Development Finance loan programme mentioned in the Danish report to WTO
in 2000 has been abandoned.  The operator of the programme, the state-owned Danish Growth Fund,
has reformed its investment strategy by adopting a more market-oriented approach. Instead of
disbursing subsidized loans, the Fund now uses id entical funding instruments to private investors'.
The main instruments are equity, convertible loans, and loans where returns depend on the revenue or
profits created.
As regards loan repayment, the maximum amount of time over which a company may repay
its loan is around 10 years.
Q2. How is the objective to “increase internationalization” under this programme met by
these subsidies?
Reply
The objective to "increase internationalization" is met by funding companies that want to
bring unique technology-based products to market, and that have the capacity to expand business
beyond the Danish market."
VII. MINISTRY OF ENVIRONMENT AND ENERGY, AGENCY FOR NATURAL
FOREST AND NATURE
Product Development Scheme for Forestry and Wood Working IndustryQ1. Is the pulp and paper industry eligible to receive subsidies under this programme?
Reply
It is in principle possible to receive grants from our Product Development Scheme for
Forestry and Wood Working Industry to development of new products or more efficient and
environmentally friendly methods in pulp or pape r production.  But there are not any pulp or paper
industry in Denmark.  The grant scheme dist ributes approximately ½ million EUR annually.
IX. MINISTRY OF ENVIRONMENT AND ENERGY, AGENCY FOR ENERGY
The Possibility to Include Losses Realised on In vestments in Co-Ordinated Activities in the
Price of Electricity (SEAS-Act)
Q1. Please explain how “distressed” enterprises are defined.
Q2. Please explain what the form of this subsidy is.Q3. How many Danish companies received subsidies under this programme?G/SCM/Q2/EEC/40
Page 16
FINLAND  (G/SCM/N/71/EEC/Add.4)
Loan Programme for SME’s (Finnvera plc)
Development Loan Programme for SME’s (Finnvera plc)
Start-Up Loan Programme for Entrepreneurs (Finnvera plc)
Q1. For each of the above programmes, could Finland please indicate what the repayment
terms for the loans are?  What is the maximum amount of time over which a company may
repay its loan?
Reply
Loan programme for SMEs:  Loans shall be paid back  during the loan maturity that is determined in
the loan documents signed by the client (debtor). A 1 – 2 years’ grace period may be allowed at the
beginning of the loan period.  Interest shall be paid from the beginning of the maturity.  Interest ratedepends on the company’s business risk and the collateral risk. Amortization and interest shall be paid
2,4 or 12 times per year.  Maturity of the loans is up to 10 years.
In the case of default of payment Finnvera starts recovery that can lead to a legal process.  In
the case of bankruptcy, insolvency or restructuring of debts credit can turn to credit loss.
Development loan programme for SMEs:  Loans shall be paid back during the loan maturity that is
determined in the loan documents signed by the client (debtor). A 1 – 2 years’ grace period may be
allowed at the beginning of the loan period.  Interest shall be paid from the beginning of the maturity.
Average interest rate of the loan portfolio depends on the company’s business risk and the collateralrisk.  Amortization and interest shall be paid 2,4 or 12 times per year.  Maturity of the loans is up to
7 years.
In the case of default of payment Finnvera starts recovery that can lead to a legal process.  In
the case of bankruptcy, insolvency or restructuring of debts credit can turn to credit loss.
Start-up Loan programme for Entrepreneurs:  Loans sh all be paid back during the loan maturity that is
determined in the loan documents signed by the client (debtor). A 1 – 2 years’ grace period may be
allowed at the beginning of the loan period.  Interest shall be paid from the beginning of the maturity.
Average interest rate of the loan portfolio depends on the company’s business risk and the collateral
risk.  Amortization and interest shall be paid 2,4 or 12 times per year.  Maturity of the loans is up to
10 years.
In the case of default of payment Finnvera starts recovery that can lead to a legal process.  In
the case of bankruptcy, insolvency or restructuring of debts credit can turn to credit loss.
Aid to Business Act (1068/2000)
Q1. As stated in the notification, this prog ramme came into force 1 January 2001 and has
replaced other aid schemes.  Please explain wh y the programme was not fully notified.  Does
Finland intend to notify this programme in its 2001 notification?G/SCM/Q2/EEC/40
Page 17
Reply
The Aid to Business Act (1068/2000) entered into force on 1 January 2001 and replaced the
earlier Act on Business Aid (1136/1993).  The new schemes regulated by Act 1068/2000 are “the
Investment Aid Scheme” and “Development aid for SMEs”.
The Investment Aid Scheme has replaced bo th the Small Business Aid Scheme and the
Regional Investment Aid Scheme.  The new Act also includes provisions on the “Development aid for
SMEs”, which replaced the former “Development Aid Scheme” (referring to Finland's new and full
WTO notification 2001: scheme numbers I.1, I.2. and III.3.).
All the schemes I.1, I.2. and III.3.1 included in the new and full WTO notification 2001 refer
to (note in item h) these new schemes.  The notification also includes an estimate on the amount of the
aid for a new investment aid scheme for the year 2001.  As the material provisions of the new Act
(1068/2000) were exactly identical with the earlier Act (1136/1993), the separate accounts regarding
these new schemes were excluded from the year 2001 notification.  The purpose was to include this
information for the update notification in 2002.
The supplements to Finland’s new and full notification for the year 2001, covering “the
Investment Aid Scheme” and “D evelopment Aid for SMEs” are attached hereto as Annex 1.
Aid for Research and Development
Q1. What are the eligibility criteria to receive assistance under this programme?  Is
assistance under this programme limited by sectors or regions?
Reply
Assistance can be granted to any company or society/community, not to natural persons. An
essential precondition for assistance is that the company/society/community will carry out
precompetitive research and technological development in order to create knowledge for future
internationally competitive products, production methods or services.
Assistance is not limited either by sector or by region. The activities have to take place within
Finland’s territory.
Q2. How is it determined that the aid will be in the form of a grant, soft loan or capital loan?
Reply
If the R&D-project to be assisted can be classifi ed as basic or industrial research, the aid will
be in the form of grant.  In this case the project is not near any market and will not thus have any
harmful effects on competition.
On the other hand, if the R&D-project can be classified as precompetitive development
activity, the aid will be in the form of soft loan or capital loan.
Q3. What are the terms on the l oans offered under this programme?
Reply
Terms of soft loan:  Maximum loan period is te n years.  The rate is three percent below the
ground rate in Finland. At the moment, the rate is 1.0%.  The loan can be free of payment for aG/SCM/Q2/EEC/40
Page 18
maximum period of five years.  The loan can be waived wholly or partly if the project is judged as a
failure either technically or commercially.
Terms of capital loan:  Maximum loan period is eight years.  The rate is one percent under the
ground rate in Finland.  At the moment the rate is 3.0%.  The loan can be free of payment for amaximum period of five years.  The loan can be waived wholly or partly if the project is failed
technically or commercially.
More precise terms of capital loan are stated in the Finnish Companies Act.  One important
feature of capital loan is that in the company’s bookkeeping it can be classified as own capital.  The
payment of loan and its rate depends on the company’s economic situation and, accordingly, the loan
period can be longer than eight years.G/SCM/Q2/EEC/40
Page 19
Annex 1. The Supplement to the New and Full Subsidy Notification 2001
DEVELOPMENT AID FOR SMEs (was launched on 1 January 2001)
1. Title of the subsidy programme
Development aid for SMEs
2. Period covered by the notification
2001
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 their products or production management or marketing, and at improving the business
management and internationalization skills.  Aid can also be granted for verification of the potential and
operating conditions of a projected new firm.
An SME is defined as a firm with personnel not exceeding 250 employees with either an annual
turnover not exceeding 40 million euro or a balance sheet total not exceeding 27 million euro and with
not more than one quarter of its shares in the hands of a company exceeding such a limit.  The aid is
granted by the Ministry of Trade and Industry and the Business Departments of the regional Employmentand Economic Development 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 2001 was 24.4 million euro.  The average subsidy per unit was 27 700
euro in 2001.  The actual payments totaled 16.2 million euro.
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.
INVESTMENT AID (replaced the earlier schemes No. 1. “Small –Business Aid Scheme” and
No. 13 “Regional Investment Aid Scheme” as from 1 January 2001)G/SCM/Q2/EEC/40
Page 20
1. Title of the subsidy programme
Investment aid
2. Period covered by the notification
2001
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 toward 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 Development 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 a regional development area. In other parts of Finland,
investment aid can be granted to small businesses only.
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 2001 amounted to 44.9 million euro.  The actual payments totaled
43.5 million euro.
In 2002 the estimated amount of grants is 40 million euro.
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 tradeG/SCM/Q2/EEC/40
Page 21
FRANCE  (G/SCM/N/71/EEC/Add.5)
SME SCHEMES
Regional employment premium (PRE)
Q1. According to the notification, it is stat ed that the amounts for the subsidy can be
F 10,000, 20,000 or 40,000 for each job that is created. How is it decided which enterprise
receives which amount?
Reply
The amounts are determined according to the geographical area in which the jobs are created.
SME Development Fund (FDPME)
Q1. Could France please identify the form and terms of the subsidy (grant, loan, tax, etc.)
granted under this programme?
Reply
The FDPME scheme provides for subsidies  to be granted to enterprises.
REGIONAL SCHEMES
Tax exemption for new activity
Q1. The notification states that the benefits under this programme are for eight years and
that the scheme closed January 1999.  For clarification purposes, does this mean that benefits
will cease in 2007?
Reply
The scheme closed on 1 January 1999. Thus, since that date, no enterprise may request
assistance under the scheme.
Given the duration of the tax concession (eight years), the 1 January 1999 deadline means that
the measure will no longer apply to profits realized by the enterprises concerned from 1 January 2007
onwards.
R&D SCHEMES
Tax credit to promote research
Q1. What types of research activities does this programme fund?
Reply
All sectors are eligible for this programme.
Q2. What stage of research does this programme fund?G/SCM/Q2/EEC/40
Page 22
Reply
The tax credit is designed to promote both basic and applied research in all sectors.
Industrial Innovation Fund (FII)
Q1. How many firms received subsidies under this programme during the notification
period?
Reply
Approximately 500 enterprises per year benefit from this programme.
Q2. How are "large-scale, strategically or commercially important civilian projects"
defined?  Could France please illustrate the types of industrial sectors represented?
Reply
Large-scale, strategically or commercially important civilian projects are projects involving
several types of partners (large and small enterprises, public or private laboratories) and pertaining to
research of structural relevance to the economy as  a whole, owing to thei r magnitude, capacity for
broad multisectoral application, or the qualitative progress they entail. Military projects are notincluded in the scope of the scheme.
Q3. Does this programme only fund projects aimed at bringing new products to market, or
also existing ones?
Reply
It funds projects that involve new products, new processes or new services.
Q4. How is the repayment period determined? What is the maximum amount of time over
which a company may repay its loan?
Reply
The repayment period is determined by the turnover of the recipient enterprise. The starting
date from which the turnover of the enterprise is taken into account is, in principle, the 1 January
following the end of implementation of the programme, and payments are scheduled over a maximumof six years.
Q5. In the event of the project's failure, is  the company completely relieved of any
repayment obligations?
Reply
In the event of failure, a recipient company is  allowed to repay only part of the advance, to
account for the technological expertise from which it has benefited (a minimum of 10%).
ATOUT-PUMA
Q1. How many firms received subsidies under this programme during the notification
period?G/SCM/Q2/EEC/40
Page 23
Reply
Roughly 200 enterprises benefit from this programme each year.
Q2. What types of industry sectors are involved in the acquisition of "dissemination
technologies"?
Reply
The target markets are public works and construction, automobiles, health, machine tools and
industrial equipment, packaging and leisure.
Aid to research institutions in the civil aviation sector
Q1. What types of research activities are funded under this programme?
Reply
The aid provided to research institutions is to enable them to employ large-scale testing
methods used by them in the framework of their res earch activities (wind tunnels, structural testing
equipment).
Q2. Are these subsidies solely for the purchase of equipment?
Reply
The aid is for the designing and building of facilities, as well as for related engineering.
Q3. Is this aid also available to commercial enterprises?
Reply
This aid is not available to commercial enterprises.
Aid to civil aviation research and development
Q1. What stage of research is funded under this programme?
Reply
The aid is granted for activities relating to basic and industrial research.
Q2. What types of projects are currently being funded under this programme?
Reply
The funding essentially concerned aerodynamics, acoustics, materials, structures, systems,
man-machine interface.
Q3. On average, how many projects are funded under this programme each year?
Reply
In 2000, roughly 100 research projects received a total funding of F 510 million.G/SCM/Q2/EEC/40
Page 24
Q4. Could France please explain what the selection process is for the programme? Do
enterprises have to re-submit a new application every year? What are the criteria that
enterprises must meet in order to rece ive the benefits from the programme?
Reply
The selection process favours individual research projects lasting, in most cases, for over a
year.
All enterprises are eligible to receive public ai d if they are involved in innovative projects
which reflect government priorities such as noise and emissions reduction or security;  the capacity ofrecipients to complete their work is also taken into account.
Aerospace/commercial aircraft development
Q1. It is our understanding that France provides subsidies and other support to aid the civil
aviation industries, including companies involved in supplying components to Airbus. We
kindly request that France please notify any such aid, including programmes which provide
exchange rate guarantees.
Q2. Could France also provide information concerning any "Launch Aid" or similar types
of support provided?
Reply
The support provided by France to aid the development of various aeronautical products
consists of advances repayable by the recipient enterprises. Thus, the support does not constitute
subsidization under the terms of the WTO Agreement on Subsidies and Countervailing Measures.
No other type of support in the form of exchange rate guarantees, loan guarantees, etc., is
provided.G/SCM/Q2/EEC/40
Page 25
GERMANY  (G/SCM/N/71/EEC/Add.6)
 FEDERAL PROGRAMMES
 
 Interest-Rate Grants to Finance Orders  to German Shipyards (Werfthilfen)
Q1. Please identify and explain the criteria us ed to determine eligibility for receipt of
support under this programme?
Reply
Interest-rate grants serve to lessen the cost of loans to clients of shipyards to finance orders to
German shipyards.  The interest reduction is confin ed to a maximum of 2% p.a.  The net interest rate
of 8% is considered as minimum (no undercut).  Duration of subsidy 8.5 years; the repayment period
covers 17  equal half-year instalments starting 6 months after delivery.
Q2. How many companies received aid under this programme in 2000?
Reply
Since the level of the interest rate was below 8%, there were no new commitments of interest-
rate grants in fiscal year 2000.
Q3. Please identify and explain the duration of this programme and other time limits
attached to it.
Reply
Provided there is no early redemption of the loan  contracts, the remaining instalments will be
paid off in 2011.
Competition Aid for German Shipyards (Wettbewerbshilfe)
Q1. Please identify and explain the criteria us ed to determine eligibility for receipt of
support under this programme?
Reply
Competition aid can be granted for orders to construct or to convert high-tech vessels in
Germany, based on orders legally valid up to 31 December 2000.
Q2. How many companies received aid from this programme in 2000?
Reply
Eighteen shipyards
Q3. May companies receiving interest-rate grants under the “Werfthilfen” programme also
receive aid under this programme?G/SCM/Q2/EEC/40
Page 26
Reply
Competition aid is being paid directly to the sh ipyards, interest-rate grants are intended to
reduce the credit costs for ship owners.
Q4. Which Federal Länder participate in this programme?
Reply
Schleswig-Holstein, Niedersachsen, Ha mburg, Bremen, Mecklenburg-Vorpommern
SUB-FEDERAL PROGRAMMES
Bavarian programme in support of commerce and industry
Q1. Please explain what is meant by “assisted investment volume”?
Reply
"Assisted investment volume" stands for real capital investment, e.g. machinery, buildings,
etc.
Q2. How are structurally weak areas defined under this programme?
Reply
"Structurally weak areas" are  areas in Bavaria lagging behind the economic development.
The scope of support is as follows:
- The maximum amount of subsidies for qualifying investment costs in the development areas
of the joint project "Improvement of the regional economic structure" is 18% for large-scaled
enterprises and 28% for small-and medium sized industries
Since 2000 the less developed areas in Bavaria have decreased significantly.
Reduction to Between 3 and 5 per cent of the Rates Payable on Inheritable Land-Use  Rights in
the Case of Projects Worthy of Special Promotion of Manufacturing Firms Depending on the
Degree of Use of the Buildings (Berlin)
Q1. Please identify and explain criteria used to determine eligibility for receipt of support
under this programme?
Reply
Support under this programme is exclusively granted to enterprises intending to establish a
settlement in Berlin.
The measure aims at reducing the disadvantages resulting from lower land acquisition costs in
the surrounding area.
The aid is only given to manufacturing companies eligible for special promotion.This categorisation is based on the evaluation of the structural benefit of the economy in
Berlin.G/SCM/Q2/EEC/40
Page 27
The following criteria are applicable:
- infrastructural advantages of the location
- management with profound knowledge of trade relations- sufficient financial resources
- ecological tolerance
Criteria of adjustment policy:
- large percentage of high-graded jobs
- high percentage of jobs created per unit of surface- technical and economical perspective
- supra-regional sales turnover
Q2. How many companies received aid from this programme in 2000?
Reply
In 2000 sixteen companies received aid from this programme.
Consolidation Programme of the Land Mecklenburg-Western Pomerania of the Granting of
Public Financial Aid to Small and Medium-Sized Commercial and Industrial Enterprises -
Special Fund to Support Companies
Q1. How many companies received aid from this programme in 2000?
Reply
In 2000 four companies received aid from the consolidation programme.
Q2. At what interest rates were the loans made?
Reply
The loans were made at an interest rate of 7% p.a. for the entire duration, payable quarterly.
Q3. Are there any restrictions pla ced on how this money is spent?  Please also explain what
types of activities are funded under this aid programme.
Reply
Consolidation aid (loans) will be granted to enterprises that have an urgent demand for
consolidation and funding of growth, provided they prove fundamental positive possibilities ofdevelopment.
Through this aid the enterprises concerned should be made available secured, long-term
consolidation aid.
The consolidation aid will only be granted to enterprises emphasizing relevance in their
factories regarding labour-market policy and structural policy for a region in Mecklenburg-Western
Pommerania.G/SCM/Q2/EEC/40
Page 28
Joint Scheme on “Improving the Regional Economic Structure”
Q1. How many companies received aid from this programme in 2000?
Reply
In total, 4823 investment projects of commercial enterprises were supported under the "Joint
Scheme" in 2000, of which 3848 were located in the new Federal Länder.
Regional Economic Support Programme (North-Rhine-Westphalia)
Q1. How many companies received aid from this programme in 2000?
Reply
343 companies received aid from this programme in 2000.
Q2. Are there any limitations or specifications  on how this aid is spent when awarded?
Reply
The subsidies granted under this programme are subject to the condition that the recipients
make investments in establishing business creating permanent jobs or securing existing ones.  The
supported jobs have to be filled or offered on the market for at least five years.  The maximum
subsidy for each new job is 50,000 Euro up to 125,000 Euro for each secured job.
Q3. Can the duration of this programme be extended?
Reply
The programme has been approved by the European Commission until 31 December 2006.  In
case of economically weak regions, an extension of the programme could be taken into consideration
after the expiry date.
Regional Aid Programme of Rhineland-Palatinate
Q1. Are there any limitations or specifications  on how this aid is spent when awarded?
Reply
The aid is granted to small and medium-sized commercial enterprises.  The relevant
administrative provision defines small and medium-sized enterprises as companies that have no more
than 250 employees and fulfil at least the following criteria:
- Their average annual turnover of the last 3 fiscal years did not exceed € 40 million, or
- their average balance sheet total of the last  3 fiscal years did not exceed € 27 million.
If larger companies hold more than a 25% interest in the company it no longer qualifies as
medium-sized according to the definition of the administrative provision.
Companies are eligible for aid if they sell the majority of their goods and services - e.g. more
than 50% of their total sales - nation wide (primary effect).G/SCM/Q2/EEC/40
Page 29
Companies involved in agriculture and forestry, mining, energy and water supply,
construction, transport and storage as well as hospitals  and similar institutions are not eligible.  In
addition, there are EU provisions excluding the following industries from the aid programme:  steel,
shipbuilding, man-made fibres and motor vehicles.
The grants are awarded for establishment, expans ion, modernization of tourist enterprises, the
acquisition of companies that have been or risk being closed down and, under certain circumstances,
the relocation of business.
The aid is granted for a maximum period of 36 ca lendar months as from the beginning of the
investment.
Q2. Among what industries was the grant money allocated amongst, and what is the
breakdown including mean, median, and total allocations for 2000?
Reply
In 2000, the aid granted under this programme totaled DM 11.2 million.  More than 60% went
to the hotel and restaurant sector, mechanical engineering, electrical engineering, business services
and wholesaling.  With respect to the measures mentioned under para1, the grants vary between 7,6
and 15% of  investment expenditure.  The amount of aid depends on the kind of investment and the
size of the company, and a minimum total investment applies.
Aerospace/Commercial Aircraft Development
Q1. It is our understanding that Germany provides subsidies and other support to aid the
civil aviation industries, including companies involved in supplying components to Airbus,including EADS.  We kindly request that Germany notify any such aid, including programmes
which provide exchange rate guarantees.
Reply
In Germany, there are no programmes providing exchange rate guarantees in the civil aviation
sector.
Except for the national programme for civil aeronautical research and technology (see below)
and the loan guarantee provided to Fairchild Dornier for developing costs in 2000 (see answer to
question 5), Germany didn’t provide subsidies to the civil aviation industry in 2000.
Q2. Could Germany also provide information concerning any “Launch Aid” or similar types
of support provided?
Q3. Has the Germany government provided any “repayable” loans to EADS for the
development of the A380?
Reply
See answer to question 1.  Besides that, the system of royalty-based advances does not
constitute a subsidy since the Government involved is repaid in full once a certain number of sales ofthe aircraft in question has been achieved.
Q4. Has the regional government of Hambur g provided any aid during the notification
period towards the construction of the A380?G/SCM/Q2/EEC/40
Page 30
Reply
The Free and Hanseatic City of Hamburg did not provide aid towards the construction of the
A 380 in 2000.
Q5. Has the German federal or regional gov ernments provided any loan guarantees to
aircraft manufacturers?
Reply
Germany has provided an individual loan guarantee to Fairchild Dornier (approved by the EU
Commission 10 January 2000):
1. Name of the subsidy scheme or ad hoc subsidy
Individual loan guarantee for the development of a regional-jet-family by Fairchild Dornier
GmbH
2. Form of the subsidy
Loan guarantee to cover 80% of a loan given by German banks of up to USD 350 Mio. for
precompetitive development costs
3. Subsidy per unit
See above.
4. Objective and/or purpose of the subsidy
Development of a regional-jet-family by Fairchild Dornier GmbH
5. Duration of subsidy and other time-limits attached to it
Guarantee until 31.12.2014, ending with full repayment of the loan
6. Statistical data permitting an assessment of the trade effects of a subsidy
The guarantee is based on the EU´s framework for state aid for research and  development.
The assisted project comprises only predevelopement stages.
No other statistical data are available.
Pulp/Paper Industry
Q1. It is our understanding that the regional government of Brandenburg has agreed to
provide assistance to Hamburger AG for the construction of a linerboard mill.  Has any of thisaid been provided during the notification period, and if so, could Germany please notify this
aid?  If not, does Germany intend to notify this aid in the future?G/SCM/Q2/EEC/40
Page 31
Reply
With document G/SCM/N/71/EEC Add.6 dated 18. December 2001 the EU notified its joint
scheme to provide assistance under the multisectoral framework on aid for improving the regional
economic structure.  In this context the Hamburger AG is about to build a new plant for theproduction of corrugated base paper.  The plant will be located in Schwarze Pumpe, Federal Land of
Brandenburg.  The Government of Brandenburg did not provide any subsidies during the notification
period.
Q2. It is our understanding that regional government of Saxony-Anhalt has agreed to
provide assistance to Zellstoff Stendal GmbH to  build a pulp mill.  Has any of this aid been
provided during the notification period, and if so, could Germany please notify this aid?  If not,
does Germany intend to notify this aid in the future?
Reply
See first sentence of answer to 1. The Federal State of Saxony – Anhalt did not allocate any
aid to Zellstoff Stendal GmbH during the notification period.G/SCM/Q2/EEC/40
Page 32
GREECE (G/SCM/N/71/EEC/Add.7)
Subsidies to Private Investment for the Economic and Regional Development of the State
Q1. To what extent do Greek authorities take in to account local content, import substitution,
export orientation, and technology transfers in ev aluating applications for investment incentives
under this programme?
Reply
There is not any domestic preference, import substitution, export promotion, transfer of
technology or any other criterion to support domestic  production in the selection process, according to
the provisions of the development act 2601/98.
Q2. Are any additional incentives provided under Law 2687/53?  If so, are any of these
incentives contingent upon export performance or the use of domestic over imported goods?
Reply
In the sector of capital incentives, L.2687/53 does not put any preference  criteria for granting
incentives depended on export capacity or preferential use of domestic product in relation to the
relevant imported product and generally does not put any criterion for support for domesticproduction in selecting capable investments.
FISHERIES
Q1. Does Greece maintain any subsidy programme s for the fisheries sector, administered by
either the central or sub-national governments?  For example, does Greece maintain any of the
following possible types of subsidies to fisheries and fisheries-related sectors:
(a) Payments to promote the scrapping of existing  fishing vessels, or the sale or assignment
to other uses of those vessels.
(b) Payments that directly or indirectly promote the construction of new vessels.
(c) Payments to maintain or improve existing vessel capacity (e.g., fitting new engines,
improving safety and working conditions on board vessels, introducing more productive
fishing technology, other investments).
(d) Payments targeting the construction of new,  or the extension of existing, fishing port
facilities.
(e) Payments that directly or indirectly promote new fish-processing capacity, or the
maintenance/modernization of existing processing capacity.
(f) Payments to fish marketing or promotio nal campaigns, or for market studies and
consumer surveys.
(g) Any other payments to the fisheries sector to support other measures (e.g., pilot
projects, technical assistance, compensation measures for fisherman).G/SCM/Q2/EEC/40
Page 33
Reply
Subsidies provided to the fisheries sector ar e co-financed by the EU and laid down in the
2000-2006 Fisheries Operational Programme, (F.O.P.) , which is included in the Community Support
Frame, for the community structural interventions, of the 3rd CSF sectoral programme, concerning
Fisheries.  The 2000-2006 F.O.P. is mainly based on Reg. (EC) No. 2792/1999, on the provision of
detailed rules and regulations about the Community structural aid for the fisheries sector and it has
been approved by the E (817)/28-3-2001 Decision of the European Commission.
The F.O.P. total cost  is € 499,29 mil.
- Public Expenditure  is € 320,07 mil.
divided to:  Community share € 236,60 mil.
              National share €   83,48 mil.
- and Private Funds  mobilization € 179,22 mil.
This Operational Programme is structured to  six (6) Priority Pivots and eighteen (18)
Measures, mentioned below:
PIVOT 1 – MEASURE 1.1: Fishing vessels demolitions.  This measure requires 90-95% of the
Public Expenditure of Pivot 1.
A compensation is foreseen, by public expenditure, for the fishing vessels’ owners, so that
they completely cease to exercise fishing activities, by demolishing the vessels.
This measure is based on the Multiannual Fisheries Orientation Program, in the frames of the
general structural policy for the sector, so that a balance might be achieved between fishing resources
and their exploitation.
MEASURE 1.2:  Transfer to Third Country / Other Adjustment
Actions 1, 2, 3:  Definite transfer of fishing vessels to a third country, definite use for
purposes after than fisheries, definite inclusion in sectors such as historical heritage preservation,
fishing research of training and fishing activities control.
Financial allocation:  The measure requires 1-3 % of Public Expenditure for Pivot 1.
MEASURE 1.3:  Joint Ventures
Financial allocation:  The measure requires 4-7 % of Public Expenditure for Pivot 1.
A compensation is foreseen for the fishing vessels’ owners, by public expenditure, so that
they definitely strike their fishing vessels off the Greek shipping registers, and transfer ownership to a
joint commercial fishing company, to be founded in a Third Country (non-candidate for accession),
with one or more Third Country partners.
PIVOT 2 – MEASURE 2.1 (common action): Building of new vessels.
Financial allocation:  The measure requires 48-60 % of Public Expenditure for Pivot 2.
A fishing fleet modernization system appli cation, through replacing old vessels by new,
reliable ones, constructed according to the requirements of technological progress, so that regulations
and directives are met, concerning hygiene, safety, as well as the community provisions on
measurement and control of fishing activities.G/SCM/Q2/EEC/40
Page 34
Fishing capacity of the new vessels will be equal to that of the old ones, which will definitely
cease any type of fishing activity, even amateur fisheries, without any financial aid.
MEASURE 2.2 Modernization of existing fishing vessels.
Financial allocation:  The measure requires 40-52 % of Public Expenditure for Pivot 2.
A fishing fleet modernization system application, through modernization of the existing,
working fishing vessels, in order to be adjusted to the requirements of technological progress and
improve: the workers’ hygiene conditions, selection of fishing gears and techniques, more friendly to
the environment, hygiene and conservation of catches.
PIVOT 3 – MEASURE 3.1:  Protection and Conservation of Fishing Resources.
Financial allocation:  The measure requires 1-3 % of Public Expenditure for Pivot 3.
Construction of stable or transferable elements for the fishing resources protection and
development is included in the measure.  Each construction must be scientifically monitored for at
least five years, mainly concerning assessment  and evaluation of the fishing resources in the
respective marine zone.
MEASURE 3.2:  Aquaculture
Financial allocation:  The measure requires 38-48 % of Public Expenditure for Pivot 3.
Capacity growth and modernization of aqua cultu ral units.  Aquacultural growth will continue
based on fish species production development, as well as modernization and re-installation of existing
companies, including actions such as:
Sanitary conditions improvement and quality upgrade of the products.Organizational improvement of the sector’s business companies, introducing novel
technologies and re-planning of their organizational and administrative structure.
Re-adjustment of management methods, applying  equipment systems of modern technologies
etc.
MEASURE 3.3:  Fisheries Ports Equipment
Financial allocation:  The measure requires 4-8 % of Public Expenditure for Pivot 3.
This measure contributes to improve the marketing infrastructure network and includes all
actions related to:
Creation or/and improvement of support infrastructures and fishing vessels equipment.  As well
as computerized systems to control catches movement and to monitor production.
Improvement of safety conditions for fishermen. Improved conditions during unloading,
conservation and movement of catches.
MEASURE 3.4:  Processing and Marketing
Financial allocation:  The measure requires 40-52 % of Public Expenditure for Pivot 3.G/SCM/Q2/EEC/40
Page 35
This measure will include actions concerning:
Creation of new units of fisheries products processing and marketing, extension of existing
ones or re-installation of units in order to safeguard hygiene and protection of the environment.
Re-organization and modernization of business companies, in order to achieve automatic
administrative, economic, operational production procedures.
Completion and improvements of infrastructures for catches reception, standardization,
packaging and management and improvement of quality, hygiene and commercial presentation of
fisheries products.
Improvement of quality of products, sanitary of production conditions and environmental
production.
Improvement of organization and administration systems of the business companies,
development of co-operation networks and information systems.
Market research, in the country and abroad, on processed products, aiming at new products
production.
MEASURE 3.5:  Inland Waters Fisheries (Repla cement and modernization of fishing vessels)
Financial allocation:  The measure requires 0,5-3 % of Public Expenditure for Pivot 3.
Construction of inland waters fisheries fishing vessels, as well as modernization of old ones,
in order to fulfill minimum navigation standards and acquirement of technology and new equipment.
Improvement of working and safety conditions, and in the same time, application of
responsible fisheries practices.
PIVOT 4 – MEASURE 4.1:  Small-scale inshore fisheries
Financial allocation:  The measure requires 1-3 % of Public Expenditure for Pivot 4.
Improvement of working conditions for the workers of the small-scale inshore fisheries
sector.
Maintaining the occupation of people in areas where small-scale inshore fisheries is practiced,
without negatively affecting preservation of inshore waters stocks.
Maintaining fishermen income, development of local economy and up-grading the marine
character of local populations.
MEASURE 4.2:  Socio-economic Measures
Financial allocation:  The measure requires 42-55 % of Public Expenditure for Pivot 4.
Fishermen early retirement, individual lump sum premiums, premiums for vocational re-
guidance or diversification of fishing activities, pr emiums to young fishermen, in order to buy fishing
vessels.G/SCM/Q2/EEC/40
Page 36
MEASURE 4.3:  Promotion
Financial allocation:  The measure requires 26-35 % of Public Expenditure for Pivot 4.
The measure includes several activities, concerning:Promotion campaigns, researches on consumption and markets.Participation in exhibitions, drawing-up of st udies, in order to obtain knowledge on the
factors affecting marketing of fishing products.
Certification of quality, labeling of products etc. and offering of advice and services to
wholesale and retail traders.
MEASURE 4.4:  Activities enforced by profession als (Strengthening of P.O. and other actions)
Financial allocation:  The measure requires 8-15 % of Public Expenditure for Pivot 4.
The measure includes a set of actions, of  co-operative interest for professionals of the
Fisheries sector, as laid down, in detail,  in Art. 15 of Reg (EU) No. 2792/99.
MEASURE 4.5:  Provisional suspension of ac tivities and other financial compensations
Financial allocation:  The measure requires 1-8 % of Public Expenditure for Pivot 4.
Provisional suspension due to unpredictable facts, not renewed or suspended fisheries
agreement, to restore a fisheries resource, financial compensation due to technical banning.
MEASURE 4.6:  Innovative Measures
Financial allocation:  The measure requires 8-14 % of Public Expenditure for Pivot 4.
Studies, Pilot Plans, Demonstration Plans, Exchange of experiences, Training measures.
The above actions will be applied in combination, aiming at planning and implementing, in
conditions similar to the actual production conditions (for every branch of the sector), innovative
technologies, concerning their technical credibility and financial viability.  This action will be
completed with an exhibition and a training course for producers, on the innovative technologies
tested.  Since this is a plan of experimental fisheries, a test for more selective fisheries methods, itmust be inter-related with the fisheries resources preservation target.
PIVOT 5 – MEASURE 5.1:  Technical Assistance (S tudies, Exchange of experiences, Publicity,
Other actions)
Financial allocation:  The measure requires 100 % of Public Expenditure for Pivot 5.
The tasks to be integrated, will be included in the following categories:
- Studies, including ones of general interest, concerning activities by the FIFG.
- Information to all agents involved, also relating with training, meaning the potential final
beneficiaries of vocational organizations, economic and social partners, organizations
promoting equality between men and women, NGOs and the public opinion.
- Publication of the Fisheries Operational Programme for the period 2000-2006 and awareness
of beneficiaries.G/SCM/Q2/EEC/40
Page 37
- Preparation for actions-tasks to be integrated in the 2000-2006 F.O.P., with studies etc.
- Improvement of evaluation methods (int ermediate and final) for the 2000-2006 F.O.P.
- Proper implementation, management, control of the 2000-2006 F.O.P.
- High materialization rate of the 2000-2006 F.O.P.
- Exchange of experiences with other Operational Programmes of the Country or other
members of the European Union.
- Faster processing of supporting documents and faster payments to final beneficiaries.
- Implementation of an integrated information and management system for the 2000-2006
F.O.P.
- Installation, operation and interface of management, monitoring and evaluation computer
systems.
- Achievement of the most accurate possible information, covering the whole 2000-2006 F.O.P.
period of application.
- Provision of up-to-date information and feed-back ensuring during the whole 2000-2006
F.O.P. period of application.
- Effective use of Public Expenditure (Community and National Aid).
PIVOT 6 – MEASURE 6.1:  Financial Activities by E.R.O.F
Financial allocation:  The measure requires 100 % of Public Expenditure for Pivot 6.
The tasks to be integrated will be included in the following categories:
- Construction – finishing – extension and improvement of fishing shelters, especially in
remote island groups and areas directly depended on fisheries.
- Improvement – hydraulic work in lagoons-lakes.
- Improvement works for lagoons, salt-pans and other water formations.- Management – development or protection activities for lagoons, especially in areas presenting
great volume of production and consist ecosystems of special ecological interest.
- Construction of new fish-piers.
- Construction and improvement of harbour infrastructure facilities, in existing and new fish-
piers
- Modernization and improvement of infrastructure and equipment in State Fish-Culture
Stations.
- Continuation of a Water quality Programme in areas where aquatic species live and breed.
- Fisheries Sector Applied Research Programme.
See the following pages for analytical fina ncial table for the 2000-2006 F.O.P., presenting
allocation per measure.G/SCM/Q2/EEC/40
Page 38Table 1.a: 2000-2006 Fisheries Operational Programme – Financial Table – Allocation per measure
In € mil.
Fisheries
development
pivotTotal cost Total of
public
expenditureCommunity
participationNational
participationPrivate
participation
Total FIFG ERDF
1=2+8 2=3+6 3=4+5 4 5 6=7 7 8
PIORITY PIVOT 1
Adaptation of fishing efforts65,112000 65,112000 48,834000 48,834000 0 16,278000 16,278000 0
MEASURE 1.1
Demolition60,233024 60,233024 45,174768 45,174768 0 15,058256 15,058256 0
MEASURE 1.2
Transfer to a Third Country1,083788 1,083788 0,812841 0,812841 0 0,270947 0,270947 0
MEASURE 1.3
Joint Ventures3,795188 3,795188 2,846391 2,846391 0 0,948797 0,948797 0
PRIORITY PIVOT 2
Renewal and Modernization of Fishing Fleet92,252210 36,900883 32,288273 32,288273 0 4,612610 4,612610 55,351327
MEASURE 2.1
Building of new fish vessels48,837050 19,534820 17,092968 17,092968 0 2,441852 2,441852 29,302230
MEASURE 2.2
Modernization of fish vessels43,415160 17,366063 15,195305 15,195305 0 2,170758 2,170758 26,049097
PRIORITY PIVOT 3
Protection and Development of Water
Resources, Aquaculture, Fisheries Ports
Equipment, Processing and Marketing,Inland Waters Fisheries244,028038 123,423091 84,793727 84,793727 0 38,629364 38,629364 120,604947
MEASURE 3.1
Fish Resources2,834580 2,834580 2,125935 2,125935 0 0,708645 0,708645 0
MEASURE 3.2
Aquaculture115,173072 53,670652 36,737874 36,737874 0 16,932778 16,932778 61,502420
MEASURE 3.3
Fish-Piers Equipment9,092264 8,264868 6,155463 6,155463 0 2,109405 2,109405 0,827396
MEASURE 3.4
Processing and Marketing115,038836 57,519418 39,113204 39,113204 0 18,406214 18,406214 57,519418
MEASURE 3.5
Inland Waters Fisheries1,889286 1,133573 0,661251 0,661251 0 0,472322 0,472322 0,755713G/SCM/Q2/EEC/40
Page 39Table 1.b: 2000-2006 Fisheries Operational Programme – Financial Table – Allocation per measure
In € mil.
Fisheries
development
pivotTotal cost Total of
public
expenditureCommunity
participationNational
participationPrivate
participation
Total FIFG ERDF
1=2+8 2=3+6 3=4+5 4 5 6=7 7 8
PRIORITY PIVOT 4
Other Measures55,774336 52,510000 39,085000 39,085000 0 13,425000 13,425000 3,264336
MEASURE 4.1
Small-Scale Inshore Fisheries0,615400 0,615400 0,461550 0,461550 0 0,153850 0,153850 0
MEASURE 4.2
Socio-Economic Measures24,564200 24,564200 18,423150 18,423150 0 6,141050 6,141050 0
MEASURE 4.3
Promotion16,523169 15,118700 10,756492 10,756492 0 4,362208 4,362208 1,404469
MEASURE 4.4
Activities enforced by professionals6,774667 5,664800 3,971133 3,971133 0 1,693667 1,693667 1,109867
MEASURE 4.5
Provisional suspension of activities and otherfinancial compensations0,858100 0,858100 0,643575 0,643575 0 0,214525 0,214525 0
MEASURE 4.6
Innovative Measures6,438800 5,688800 4,829100 4,829100 0 0,859700 0,859700 0,750000
PRIORITY PIVOT 5
Technical Assistance8,132000 8,132000 6,099000 6,099000 0 2,033000 2,033000 0
MEASURE 5.1
Technical Assistance8,132000 8,132000 6,099000 6,099000 0 2,033000 2,033000 0
PRIORITY PIVOT 6
Financial Activities by Other Structural
Funds33,994336 33,994336 25,495752 0 25,495752 8,498584 8,498584 0
MEASURE 6.1
Financial Activities by ERDF33,994336 33,994336 25,495752 0 25,495752 8,498584 8,498584 0
TOTAL 499,292920 320,072310 236,595752 211,100000 25,495752 83,476558 83,476558 179,220610G/SCM/Q2/EEC/40
Page 40
IRELAND  (G/SCM/N/71/EEC/Add.8)
Aughinish Alumina Relief
Q1. Is Aughinish Alumina the sole aluminum pr oducer in Ireland?  Do any other companies
in Ireland receive relief from payment of excise duty on Heavy Fuel Oil?
Reply
Yes
Sea Fishing-Repayment of Hydrocarbon Oil LPG Excise Duty in the Case of Sea Fishing
Q1. Are the fishermen required to use the funds for specific purposes?
Reply
No.
Q2. Are there any plans to phase-out this programme?
Reply
There are no current plans to phase out the programme.G/SCM/Q2/EEC/40
Page 41
ITALY  (G/SCM/N/71/EEC/Add.9)
Production Aid to Shipyards
Q1. Please explain how assistance under this programme has “bridged the gap between the
most competitive EU shipyard and the market prices.”
Reply
The purpose of the yard’ s subsidy - according to EU Directives and Regulations —is to fill
the gap between the costs for new buildings and fo r ship conversion of the most competitive EU
shipyards and the prices of the international most important price leaders competitors.
The grants, filling the mentioned price gap, are aimed to overcome the dumping put into
practice by the yards of Far East in order to ensure a better position for the Italian shipyards on the
market.
The subsidies are those provided by the Seventh Directive n.90/684/CEE and by the
Regulation n. 1540/98  dated 29 June 1998 and the mechanism is homogeneous in all EU Member
Countries.
Any clarification about the aim of these aids can, consequently, also be required directly to
the European Commission.
Soft Loans to Companies to Favour a Long -Lasting Penetration in Non-EU Countries
Soft Loans For Italian Enterprises to Cover Expenses Concerning the Participation in
International Tenders Held in Non-EU Countries
Q1. For each of the above programmes, please indicate whether there is a specified rate at
which the loans are provided under the programme.  If not, how is the interest rate determined?
Reply
For the above programmes, the interest rate is calculated as 40% of the reference rate, which
is equated to the market rate.  Low interest rate loans are provided and funded according to Laws
394/81 and 304/90.
Q2. For each of the above programmes, please  indicate what the repayment terms are for
the loans provided.  What is the maximum amount of time over which a company may repay its
loan?
Reply
Under the programme established under Law n. 394 of 1981, enterprises are granted a soft
Ioan to be paid back in 7 years. The programme requires a bank guarantee from the borrower for an
amount equal of the loan.  At the end of the programme the Government controls the actual stage of
realization of the permanent structure.  In case of failed or incomplete realization the sanction consists
in calculating the interest on the loan at the reference rate (market interest rate).
According to the programme under Law n. 304/90, the company must repay the loan in 4
years.G/SCM/Q2/EEC/40
Page 42
Q3. With regards to the Soft Loans to Compan ies to Favour a Long-Lasting Penetration in
Non-EU Countries Programme, are all enterprises in all industries eligible for funds under this
programme?
Reply
With regards fo the soft loans under 1.394/81, all enterprises in all industries can apply to the
programme and are eligible for funds.
Q4. Please explain what types of activities are funded under these programmes.
Reply
Law 394/81 provides low-interest rate loans (40% of the reference rate) to finance up to 85%
of programmes by Italian companies to create permanent business structures (offices, stores, show-
rooms etc.) and promotion activities such as advertising, demos and market surveys.
Law 304/90 covers expenses met in drafting and submitting the proposal to tender.
Aid Scheme for the Promotion of Youth Enterprises in Italy
Q1. How is it determined that the aid will be in the form of a grant, interest subsidy or
management contribution?  Is the criteria and ap plication process the same for each?  If not,
please provide further details.
Reply
Decreto Legislativo n. 185/2000
The Legislative Decree 21 April  2000 n.185 introduces a series of  instruments of active
policy related to the labour market in order to prom ote the revaluation of the entrepreneurial activity
through  the increasing of the number of employees and, at the same time, the creation of new job
opportunities.  Particularly, the Title I of the Legislative Decree  21 April  2000 n. 185 provides
incentives for “Self-entrepreneurship” in order to facilitate the setting-up of new enterprises
composed mostly of young people.
The article no.3 provides the following financial benefits:
(a) grants and subsidize loans for the investments in respect of the EU legislation;
(b) grants in management account in respect of the EU legislation.
It is important to stress that it is necessary the presentation of a business-plan in order to take
advantage of the incentives at issues.  The business-plan has to describe:
(1) the idea;
(2) the planning of strategic and operational choices;
(3) the assessment of the technical-economic-financial viability of the enterprise.
Every single project is assessed on the basis of  that documentation.Furthermore, the assessment of each project has autonomous and peculiar criteria:
localization, activity sector, corporate structure, tim e plan of investments, fiscal system in force,G/SCM/Q2/EEC/40
Page 43
discount rate, interest rate in force and  concessionary interest rate, tax rate, loan length, percentage of
incidence of every single investment on total investment and the length of investment.
The financial benefits indicated at a) -eligible for documented purchase of investment assets-
are handed out through a mixed combination of grant and interest subsidy so that ES of grant + ES ofinterest subsidy can be lower than maximum rates provided by EU Regulations in terms of ESN (Net
Grant Equivalent) or  ESL  (Gross Grant Equivalent) concerning the different kind of aids and
according to the different level of development of each region.
Otherwise, the financial benefits at issue can be given on the basis of “ de minimis” rule
according to the EU Regulation no. 69/2001, except for the transport and production sector,
processing or trade of agricultural products listed in Annex I to the EC Treaty.
The financial benefits indicated at b) are handed out for management expenses related to the
start-up of  the new enterprises according to the “ de minimis” rule, except for the transport and
production sector, processing or trade of agricultural products listed in Annex I to the EC Treaty.  In
this event, grants and subsidize loans for the invest ments contribute to hit the limit related to the “ de
minimis” rule .
Extraordinary Intervention in the South of Italy
Q1. Please provide further clarification on what activities are funded under this programme.
Reply
The activity sectors and the eligible companies funded under this programme are:
• “industry”: mining, manufacturing, energy, building and services;
• “tourism”: hotels and other hospitality structures, travel agents, tour operators and other activities
indicated by Regional authorities;
• “commerce”: commerce and distribution companies, e-commerce, advisory services for
commerce
Q2. How are “entrepreneurial activities” defined?
Reply
The entrepreneurial activities are those registered at the enrolled enterprises register.
Q3. For the activities that are funded under this programme, please explain how the level of
funding is determined.  What types of limi ts are attached to the level of funding?
Reply
Grant amounts are calculated within ceilings fixed by EU regional State Aid regulations,
expressed in Net Grant Equivalent (NGE) a nd Gross Grant Equivalent (GGE) and depend on
investments location and applicant firm size.
Technological Innovation Fund (FIT)
Q1. What sectors are included in the “main sectors requirements mentioned in the legal
framework” for “big firms”?G/SCM/Q2/EEC/40
Page 44
Reply
The activities concerning the process’ innovation and product’s innovation included in this
sectors are:
- automotive and manufacturing related
- electronics
- steel
- aeronautic
- fine chemicals
- agricultural industries- environment
Since 1 February 2001 (according to the 16 January 2001 Ministry of Productive Activities
directive dated 16 January 2001) any sector is eligible for big firms.
Q2. What types of activities are eligible to receive tax concessions under this programme?
Reply
There are no tax concessions under this programme.
Incentives to Manufacturing and Extractive Enterprises in Disadvantage Regions
Q1. Could you please provide further details as  to what kind of tax concessions are granted
to the enterprises under this programme?
Reply
The tax bonus depends on the investment amounts, calculated within ceilings fixed by EU
State Aid regulation and depend on investments location and applicant firm size.
Urgent Measures for the Economy- Automatic Incentives
Q1. Can you please provide further details as to what kind of tax concessions are being
granted to the enterprises?
Reply
The incentives under Law 266/97 are the same of Law 341/95 , extended on the whole country
only for SMEs.
Q2. What types of activities are eligible to receive tax concessions under this programme?
Reply
FISHERIES
Q1. Does Italy maintain any subsidy programmes  for the fisheries sector, administered by
either the central or sub-national governments?  For example, does Italy maintain any of the
following possible types of subsidies to fisheries and fisheries-related sectors:G/SCM/Q2/EEC/40
Page 45
(a) Payments to promote the scrapping of existing  fishing vessels, or the sale or assignment
to other uses of those vessels.
(b) Payments that directly or indirectly promote the construction of new vessels.
(c) Payments to maintain or improve existing vessel capacity (e.g., fitting new engines,
improving safety and working conditions on board vessels, introducing more productive
fishing technology, other investments).
(d) Payments targeting the construction of new, or the extension of existing, fishing port
facilities.
(e) Payments that directly or indirectly promote new fish-processing capacity, or the
maintenance/modernization of existing processing capacity.
(f) Payments to fish marketing or promotio nal campaigns, or for market studies and
consumer surveys.
(g) Any other payments to the fisheries sector to support other measures (e.g., pilot
projects, technical assistance, compensation measures for fisherman).
Reply
In regard to fisheries all expenses for the period of 2000 to 2006 are financed by the SFOP
(Finance Instrument for Orientation of Fisheries) according to 3 programmes:
The DOCUP 2000/2006, the PON Pesca and the POR for the Regions.The DOCUP regulates the competences between the central and local authorities according to
the following pattern:  The central authorities are responsible for the managing of measures in regard
to restructuring of the fishing capacity, the renovation and modernisation of the fleet, social –
economic measures  and measures connected with the temporary stopping of fishing activities.
Regional authorities are exclusively responsible for actions taken to protect and develop
aquatic resources, aquaculture, equipment of fishing ports, fishing in internal waters and smaller
coastal fishing activities.  There is a joint respon sibility for transformation and promotion measures,
actions by the operators of the sector, innovation measures and technical assistance.
The programming and managing of financial contributions of the SFOP fund are only
attributed to administrations responsible for operative programmes.
The legal basis of the SFOP can be found in:
Regulation (CE) 366 of 22.February 2001
Regulation (CE) 438 of 2. March 2001G/SCM/Q2/EEC/40
Page 46
NETHERLANDS  (G/SCM/N/7 1/EEC/Add.11)
T.O.K
Q1. Has this programme been terminated?  If so, what is the termination date and has
another programme replaced it?
Reply
This programme was terminated in May 2001.  This programme was replaced by Decision
Technical Development Projects.
Test Programme Reference Projects Environmental Technology
Q1. The notification states the programme’s duration was extended through 2001.  Was this
programme extended beyond 2001?
Reply
This programme has been extended until 31 December 2002.  After this date there will be no
budget any more for this programme so that new requests cannot be awarded.  The programme
however formally still exists.
Decision Order-Related Subsidies for Shipbuilding
Q1. Has this programme been terminated?  If so, what is the termination date and has
another programme replaced it?
Reply
Yes, this programme was terminated on 31 December 2000.  No programme replaced it.
Q2. How is the goal to “reduce the effects of competition distortion of other subsidies
provided by other shipbuilding countries” met under this programme?  To which othercountries does this refer?
Reply
The subsidy was given to Dutch shipyards as a grant related to contracts of seagoing civil
merchant ships in order to reduce the effect of competition distortion of other subsidies provided by
other shipbuilding countries.  This programme referred to all countries that provide subsidies for
shipbuilding with a distorting effect on the competition.
CVO
Q1. How is it determined that the subsidy will be in the form of a grant or repayable credit?
Reply
The CVO Civil Aircraft Development support regulation distinguishes between two
categories of support:G/SCM/Q2/EEC/40
Page 47
(a) Industrial aeronautical research: to gain  new knowledge with the purpose to use this
knowledge in later developments of new products, processes or services or to improve
considerable existing products, processes or services. The subsidy of industrial research is a
grant.
(b) Pre-competitive aeronautical development: to tu rn results of industrial research into plans,
outlines or designs of new or considerable im proved products, processes or services.  The
subsidy is always a repayable loan.
Q2. How is the repayment period determined?  What is the maximum amount of time over
which a company may repay its loan?
Reply
The repayment period and the actual repayments are determined conform the Agreement
concerning the application of the GATT agreem ent on trade in civil aircraft (92/496/EEG) of
13 July 1992.  According this agreement the repayment of the loan, including interest, has to be paidback within 17 years after the start of the development, which is related to aircraft’s with capacity of
more then 100 seats. In practice the repayment period for a CVO-loan varies between 13 and 16 years.
Q3. Do subsidies under this programme benefit companies supplying components to Airbus
Industries (EADS)?
Reply
Yes.  The CVO contributes to pre-competitive development of structural components for the
Airbus A340-500/600 and A380. Further more for components for the GP 7000 engine.
Q4. How many companies benefit from this programme?
Reply
Industrial research: 15 companies and 2 Knowledge institutes.  For pre-competitive
development: 4 industries.
Q5. What percent of credits for pre-competitive development are repaid under this
programme?
Reply
The loan amounts 33% of the costs of the pre-competitive development for structural aircraft
components for aircraft with a seat capacity above 100.  For the engine components the loan amounts
to 40%.
Q6. Please indicate whether there are any other programmes under which incentives are
provided to firms in the Netherlands that supply components to Airbus Industries.
Reply
There are no other subsidy regulations under which incentives are provided for the production
of commercial aircraft in the Netherlands.G/SCM/Q2/EEC/40
Page 48
Q7. Does the Netherlands provide any “Launch Aid” for aerospace related companies for
the production of commercial aircraft?
Reply
No.
Report 1999 Eureka Project COMMEND
Q1. Has this programme been extended beyond the end of 2000?
Reply
No, this programme has not been extended beyond the end of 2000.
Q2. How many companies benefited from this programme?
Reply
Only one Dutch company has benefited from this programme.
Q3. Are subsidies under this programme for pre-competitive R&D only?
Reply
Yes, the subsidies under this programme were for pre-competitive R&D only.
Eureka Programme MEDEA
Q1. Has this programme been extended beyond the end of 2000?
Reply
No, the MEDEA programme was terminated at the end of 2000.  However a new EUREKA
collaborative R&D programme called MEDEA+ started 1 January 2001.  This programme will run for
8 years, with a mid-term assessment after four years.
Q2. How many companies benefited from this programme?
Reply
Six Dutch companies received funding for their participation in MEDEA collaborative
projects over the period 1997-2000.
Q3. Are subsidies under this programme for pre-competitive R&D only?
Reply
Yes.  The funding was in accordance with the European Union rules for state aid.G/SCM/Q2/EEC/40
Page 49
Regulatory Energy Tax
Q1. Who is eligible to receive funding under th is programme?  To whom has this subsidy
been provided?
Reply
The regulatory energy tax is a taxation of energy products and electricity, based on the energy
content and CO2 content of these products.  Electricity produced from renewable energy sources is
exempted from taxation.  In addition there is a tax credit (payment discount) for producers of
electricity from renewable energy.
Eligible for the arrangements are the energy di stribution companies in the Netherlands, since
they are subject to taxation.  For applying the tax exemption a specific contract with an end-user is
necessary.  Every end-user is eligible. For applying the tax credit a certificate of production is
necessary and a declaration that the electricity has been feed in to the national grid.  All producers of
electricity from renewable energy sources are eligible if the electricity will be supplied on the nationalgrid.
Q2. Please provide the rates of payment di scounts.  How are the rates determined?
Reply
The rates are based on the energy content and CO2 content of energy products and electricity.
In 2000 the rates for consumption of electricity less than 10.000 kWh was € 0,0327 per kWh.  The tax
exemption therefore has a value of the same amount.  The tax credit in 2000 was € 0,01606.
Q3. Is the “zero-rate green electricity” an inte rest free loan, non-repayable loan or grant?
Reply
The “zero-rate green electricity” is a tax concession in the form of a tax exemption.
CO2 Reduction Scheme
Q1. Do the different levels of the tenders have to  meet the same eligibility criteria to receive
the grant?
Reply
Yes all levels of the tenders have to meet the same eligibility criteria to receive the grant.
Q2. Are all businesses in every industry eligible to receive funding under this programme?
Reply
Yes, all businesses in every industry are eligible to receive funding under this programme.
Q3. Do the automobile or coal industries receive funding from this programme?  If so, what
tender do they come under?G/SCM/Q2/EEC/40
Page 50
Reply
No, neither the automobile nor the coal industries receive funding under this programme.
Subsidy Regulation for Regional Investment Projects 2000
Q1. Which industry sectors benefited from this programme?
Reply
All industries could benefit from this programme.
Q2. How is the level of benefits under this programme determined?
Reply
The success of this programme is determined first of all by the number of requests.  Secondly
and more importantly, the success is determined by new investments made and employment created
as a result of this program.  Programme evaluation scrutinizes the effect on the region’s economic
structure.G/SCM/Q2/EEC/40
Page 51
PORTUGAL  (G/SCM/N/71/EEC/Add.12)
Energy Programme
Q1. Please explain by whom this programme is financed, i.e., by regional governments, the
national government of Portugal, or by some combination of both.
Reply
The programme was financed both by the Portuguese Government and Community structural
funds.
Q2. How many enterprises received assistan ce under this programme?  Is the assistance
provided only to enterprises involved in developing renewable energy resources or also by other
enterprises that use and implement these resources?
Reply
Assistance was provided to 258 enterprises involved in developing renewable energy
resources or using and implementing those resources.
Initiative for the Modernization of the Textile Industry (IMIT)
Q1. In your notification, you stated that the initiative would remain available until 1999.
Has this programme been terminated?  If so, what is the termination date?
Reply
The IMIT Programme was closed by the end of 1999. A last global report is attended by the
end of 2002.
Q2. Has another programme replaced this one?  If so, please provide the appropriate
notification information.
Reply
This programme was not replaced.
Q3. What is the source of “Community funds”?  Is this from the EC budget?
Reply
The IMIT Programme was financed by the Specific Community Budget linked to the EU
Commission Strict Budget, so without other financing source.
Strategic Programme for the Revitalization and Modernization of Portugese Industry
(PEDIP II)
Q1. What are the eligibility criteria for receiving subsidies under this programme and to
whom is this subsidy provided, i.e., which industry sectors.G/SCM/Q2/EEC/40
Page 52
Reply
The eligibility criteria requested were the viability of the candidates, therefore demonstrating
conformity and respect for environmental rules, rationalization of energy consumes and enough
skilled human and material resources to implement those goals.
The selection of the candidates were settled according to CAE – Rev. 2, the Portuguese
Economic Activities Aggregation, activities from division 10 to 37.
The main productive or industrial firms considered to reach benefits were those concerning
furniture, electric, electronic, optical, clinic an d medical instruments, automobile parts, paper
industries and chemical and plastic product industries.
Q2. Are subsidies under this programme provided entirely in the form of grants, or are
there other vehicles for providing assistance?
Reply
The incentives provided by this scheme took a form of non-repayable subsidies (grants and
loans with substantial interest rate reduction) and loans with zero interest rate.
Trade Modernization Support (PROCOM)
Q1. What are the eligibility criteria for receiving subsidies under this programme and to
whom is this subsidy provided, i.e., which industry sectors.
Reply
Recipients of subsidies granted should;
- demonstrate technical and management capacity to fulfill investments;
- good economic ratios;
However, closed obligations would be followed:
- demonstrate adequate human resources to the project or the commitment into professional
training;
- demonstrate updated tax payments and organized account system.
The candidate companies under this programme would respect divisions 50, 51 and 52 of the
CAE. Rev. 2 - Portuguese Economic Activities A ggregation, including mainly general retailing or
grossist commerce of goods or services and commercial and repairing automobile and motorcycle
vehicles companies.
Q2. Are companies that receive assistance under this programme required to export?
Reply
No, the main purpose of this programme was to modernize local or regional commercial firms
and the commerce in general.
Q3. How are subsidies under this programme provided, i.e., grants, loans, etc?G/SCM/Q2/EEC/40
Page 53
Reply
The benefits were given on a non-discriminatory basis to any Portuguese company who meets
the programme requirements and were provided to investors at reduced interest rate loans or by
grants.
RETEX Operational Programme
Q1. Are subsidies under this programme provided solely to the textiles and clothing sector?
Reply
The RETEX Operational Programme was a scheme including measures providing benefits to
modernizing or internationalizing some productive sectors.
The eligible projects considered by this ope rational programme shows the following partition:
44% textile, clothing and shoes, 22% mechanical and engineering projects; 14% wood and
cork projects; 7% food and wine industrial projects; 7% extractive industry and 3% ceramics.
Q2. To which regions in Portugal is this assistance granted?
Reply
The eligible zones of this operational programme were the Centro region as a whole and other
sub-regions in Lisboa e Vale do Tejo (Médio Tejo and Lezíria do Tejo), in Alentejo  (Alto Alentejo)
and in Norte region (Grande Porto, Entre Douro e Vouga, Cávado, Ave, Tâmega and Minho-Lima)
FISHERIES
Q1. Does Portugal maintain any subsidy programmes for the fisheries sector, administered
by either the central or sub-national governments?   For example, does Portugal maintain any of
the following possible types of subsidies to fisheries and fisheries-related sectors:
(a) Payments to promote the scrapping of existing  fishing vessels, or the sale or assignment
to other uses of those vessels.
(b) Payments that directly or indirectly promote the construction of new vessels.
(c) Payments to maintain or improve existing vessel capacity (e.g., fitting new engines,
improving safety and working conditions on board vessels, introducing more productive
fishing technology, other investments).
(d) Payments targeting the construction of new,  or the extension of existing, fishing port
facilities.
(e) Payments that directly or indirectly promote new fish-processing capacity, or the
maintenance/modernization of existing processing capacity.
(f) Payments to fish marketing or promotio nal campaigns, or for market studies and
consumer surveys.G/SCM/Q2/EEC/40
Page 54
(g) Any other payments to the fisheries sector to support other measures (e.g., pilot
projects, technical assistance, compensation measures for fisherman).
Reply
Portuguese incentive measures for fisheries se ctor in 1999 were promoted with PROPESCA -
Programa para o Desenvolvimento Económico do  Sector das Pescas (Economic Development
Programme for the Fisheries Sector) and ICPESCA - - Iniciativa Comunitária da Pesca (Fisheries
Commmunity Initiative).
1. PROPESCA was promoted to the renewal and modernizing of fishing vessels and fishing
river production, increasing production and improving competition in those sectors. Severalmeasures were taken in order to increase technological and scientific capacity of the whole
fishing sectors.
2. ICPESCA aimed the improvement of commerci al distribution, the quality of the fishing
products, upgrade the SME’s organization and management, as well as social benefits.
3. Both PROPESCA and ICPESCA were subject to the strict execution of Council Regulation
(CE/nº 3699/93) and other common rules on European Union State Aids.G/SCM/Q2/EEC/40
Page 55
SPAIN  (G/SCM/N/71/EEC/Add.13)
FISHERIES
General
Q1. For each of the Fisheries programmes notified as part of the 1998 budget, could Spain
please provide the additional information req uired under Article 25 of the SCM Agreements,
and as notified for Spain's other programmes?
Reply
The requested additional information is provided below:
INDIVIDUAL COMPENSATORY PREMIUMS (FOR DEFINITIVE STOPPAGE OF
FISHING)
1. Title of the programme
Individual compensatory premiums (for definitive stoppage of fishing)
2. Period covered by the notification
1998
3. Policy objective and/or purpose of the subsidy
To introduce socioeconomic measures to assist fishermen affected by changes in fishing
capacity and who fulfil certain criteria.
4. Authority
Royal Decree 312/1996 of 23 February, introducing socio-economic measures in the fisheries
sector.
5. Form of the subsidy
Non-repayable subsidy covering a percentage of  the request.  Crew members receive a fixed
amount under their unemployment benefit entitlements, in keeping with social security arrangements
for marine workers.
6. To whom and how the subsidy is provided
Workers in the fisheries sector (roughly 800).
7. Subsidy per unit or total amount of the subsidy
2 million pesetas were transferred to the Autonomous Communities. 750,000 pesetas were
paid directly to individual fishermen.
Fixed amount.
Number of recipients:  331 workers.G/SCM/Q2/EEC/40
Page 56
8. Duration of the subsidy
The duration of assistance programmes varies according to the period of effectiveness of
Community regulations, in this case EEC Council Regulation 3699/93 of 21 December, setting out the
criteria and conditions for Community structural aid to fisheries, aquaculture and the processing andmarketing of fish products, which remains in force until December 1999.  Paid annually, 1994-99.
9. Statistical data permitting an assessment of the trade effect of the subsidy
This subsidy does not have any negative trade effect, since its objective is to provide
assistance to workers in the sector.
SUBSIDIES FOR THE IMPROVEMENT OF FISHING
1. Title of the programme
Subsidies for the improvement of fishing
2. Period covered by the notification
1998
3. Policy objective and/or purpose of the subsidy
To train workers in the nautical or fisheries sector.
4. Authority
Royal Decree 798/1995 of 19 May, setting out the criteria and conditions for structural aid to
fisheries, aquaculture and the processing, marketing and promotion of fish products.
5. Form of the subsidy
Up to 100% of costs connected with the purpose of the subsidy, 75% of which may be
reimbursed by the European Social Fund for activities carried out in Objective 1 Regions.
6. Beneficiaries
Associations (eg. associations of shipowners, fishermen's guilds or unions) or national bodies.
Conditions:  providing training in the nautical and fisheries sector on a not-for-profit basis.
7. Subsidy per unit or total amount of the subsidy
Total amount:  93.81 million pesetas.
Variable quantity.  Number of beneficiaries:  7 national associations.
8. Duration of the subsidy
1994-1999G/SCM/Q2/EEC/40
Page 57
9. Statistical data permitting an assessment of the trade effect of the subsidy
The subsidy does not have any negative trade effect, since it is designed to assist the training
of workers.
PROMOTION OF AQUACULTURE
1. Title of the programme
Promotion of aquaculture
2. Period covered by the notification
1998
3. Policy objective and/or purpose of the subsidy
Promotion and development of tangible investment in marine and inland aquaculture.
4. Authority
Royal Decree 798/1995 of 19 May, setting out the criteria and conditions for structural aid to
fisheries, aquaculture and the marketing, processing and promotion of fish products.
5. Form of the subsidy
Direct aid.
6. Beneficiaries
Enterprises in the aquaculture sector
7. Subsidy per unit or total amount of the subsidy
185.34 million pesetas were transferred to the Autonomous Communities
Variable quantity.
Number of beneficiaries:  163.
8. Duration of the subsidy
1994-1999
9. Statistical data permitting an assessment of the trade effect of the subsidy
The promotion of aquaculture is designed to reduce pressure on fisheries resources. It can
have no negative trade effect.
MARINE CULTIVATION PLANS
1. Title of the programme
Marine cultivation plansG/SCM/Q2/EEC/40
Page 58
2. Period covered by the notification
1998
3. Policy objective and/or purpose of the subsidy
Development of sectoral plans for the promotion of tangible investment in marine and inland
aquaculture.
4. Authority
Royal Decree 798/1995 of 19 May, setting out the criteria and conditions for structural aid to
fisheries, aquaculture and the marketing, processing and promotion of fish products.
5. Form of the subsidy
Direct aid to cover eligible costs arising from these activities, 47.4% of which are financed by
FIFG, 24.36% by the Member State and 28.2% by the beneficiary.
6. Beneficiaries:  to whom and how the subsidy is provided
Producers' organizations and associations of marine cultivators.
7. Subsidy per unit or total amount of the subsidy
109.98 million pesetas were transferred to the Autonomous Communities
Variable quantity.  Number of beneficiaries:  10 Autonomous Communities.
8. Duration of the subsidy
1994-1999
9. Statistical data permitting an assessment of the trade effect of the subsidy
As in the previous case, the aid is designed to reduce pressure on marine resources. It can
have no negative trade effect.
REORGANIZATION AND RENOVATION OF THE FISHING FLEET
1. Title of the programme
Reorganization and renovation of the fishing fleet
2. Period covered by the notification
1998
3. Policy objective and/or purpose of the subsidy
Promotion of investment in the renovation and modernization of the fishing fleet with a view
to improving safety and working conditions in the fisheries sector.G/SCM/Q2/EEC/40
Page 59
4. Authority
Royal Decree 798/1995 of 19 May, setting out the criteria and conditions for structural aid to
fisheries, aquaculture and the marketing, processing and promotion of fish products.
5. Form of the subsidy
Non-repayable subsidies.
The subsidies are intended for capital investments in shipbuilding, and may contribute
towards a deduction of 1 or more percentage points from the interest payable by a shipowner to a
financial institution that has granted him a loan to build a new vessel.
Under no circumstances does the Administration grant loans directly to the beneficiaries,
pursuant to Article 18 of Royal Decree 798/1995 of 19 May setting out the criteria and conditions for
structural aid to fisheries, aquaculture, and the marketing, processing and promotion of fish products,
as amended by Royal Decree 290/1997 of 28 February, which states:
"Part of the FIFG subsidy, up to a maximum of 50%, may be used to reduce the interest on
loans granted to the owners of new fishing vessels by the various lending institutions."
To that end, the following conditions are established:
1. Amount of the loan:  up to 40% of the investment;
2. Repayment period:  up to 12 years, with capital repayments waived over the first two years.
3. Interest rate:  the interest rate agreed between the shipowner and the lending institution shall
be reduced by up to 3 percentage points.  The resulting interest rate shall be no less than 3%.The minimum rate may be altered in accordance with the provisions governing
implementation of this Royal Decree".
6. Beneficiaries
The owners of new fishing vessels.  Shipowners in the fisheries sector.
7. Subsidy per unit or total amount of the subsidy
Building and modernization:  4,400 million pesetas.
Definitive stoppage:  3,424.70 million pesetas.
Temporary stoppage:  1,394 million pesetas.
The amount varies according to the loan re quested by the shipowner from the lending
institution.  1,000 subsidies have been granted.
8. Duration of the subsidy
1994-1999
9. Statistical data permitting an assessment of the trade effect of the subsidy
The subsidies for temporary and definitive stoppage, as well as those for shipbuilding and
modernization, reflect a reduction in the gross regist ered tonnage (GRT) of the Spanish fishing fleet.
Therefore they cannot have any negative trade effects.G/SCM/Q2/EEC/40
Page 60
CONVERSION OF THE FISHING FLEET
(JOINT VENTURE AND TEMPORARY ASSOCIATION SCHEMES)
1. Title of the programme
Conversion of the fishing fleet
2. Period covered by the notification
1998
3. Policy objective and/or purpose of the subsidy
Aid for the creation of joint ventures and temporary associations of enterprises with a view to
the conversion and reorganization of the fisheries sector.
4. Authority
Royal Decree 798/1995 of 19 May, setting out the criteria and conditions for structural aid to
fisheries, aquaculture, and the marketing, processing and promotion of fish products.
5. Form of the subsidy
Non-repayable subsidy.
6. Beneficiaries: to whom and how the subsidy is provided
Shipowners in the fisheries sector.
7. Subsidy per unit or total amount of the subsidy
Average subsidy for joint venture schemes:  160 million pesetas.
Average subsidy for temporary association schemes:  80.70 million pesetas.
8. Duration of the subsidy
1994-1999
9. Statistical data permitting an assessment of the trade effect of the subsidy
The subsidies are intended for the creation of joint ventures with other countries as well as
temporary associations of enterprises. Therefore they have a positive impact on the fisheries trade
balance of third countries.
COMPENSATORY EARLY RETIREMENT
1. Title of the programme
Compensatory early retirement
2. Period covered by the notification
1998G/SCM/Q2/EEC/40
Page 61
3. Policy objective and/or purpose of the subsidy
To set up early retirement schemes for fishermen affected by structural changes to the fishing
fleet and who fulfil certain criteria.
4. Authority
Royal Decree 312/1996 of 23 February, introducing socio-economic measures in the fisheries
sector.
5. Form of the subsidy
Non-repayable subsidy covering a percentage of the request.
6. Beneficiaries:  to whom and how the subsidy is provided
Workers in the fisheries sector.
7. Subsidy per unit or total amount of the subsidy
2 million pesetas were transferred to the Autonomous Communities.
Fixed amount.
Number of beneficiaries: 12 workers.
8. Duration of the subsidy.
1994-1999
9. Statistical data permitting an assessment of the trade effect of the subsidy
The subsidies do not have any negative trade effects, since they are intended for workers in
the sector.
Aid to shipowners affected by the stoppage of fishing
Q1. For duration of the subsidy, Spain responded  that the subsidy was for the year 2000.  In
G/SCM/Q2/EEC/35, however, Spain stated that  the programme ceased in April 1999 without
any possibility of renewal.  Was the programme, therefore, extended for another year?
Reply
Regardless of the initial reply by the European Union, and for the sole purpose of assisting in
the conversion of the affected fishing fleet and alleviating the socio-economic effects of thenon-renewal of the Fisheries Agreement between the European Union and Morocco, Community
Regulations 1227/2201 of 18 June and 2561/2001 of  17 December 2001 were adopted by the Council,
extending the subsidies until 31 December 2001. The Regulations were incorporated into Spanish law
through Royal Decree 137/2002 of 1 February 2002.
Q2. Could Spain please explain further the form of the subsidy, in particular what is meant
by "non-repayable subsidies"? Are these subsidies provided in th e form of grants, loans, tax
concessions, etc.?G/SCM/Q2/EEC/40
Page 62
Reply
Non-repayable subsidies do not have to be paid back by the beneficiaries, and involve a
variable percentage of the investment to be made by the interested party, taking various parameters
into account:  in the case of shipowners, the vessel's tonnage and age and, in the case of workers, thenumber of years of social security contributions and the amount of time spent working aboard fishing
vessels.
MINING
Mining (other than energy)
Q1. Could Spain please explain further the form of the subsidy, in particular what is meant
by "non-repayable subsidies"?  A re these subsidies provided in th e form of grants, loans, tax
concessions, etc.?
Reply
The mining subsidy consists of a loan.  In principle, the loan is repayable within a specific
period of time (repayable advance).  However, if the result of mining is negative, or rather, if mining
fails to produce results, the loan no longer has to be repaid, and becomes a non-repayable subsidy.
Q2. Was this programme terminated on 31 December 2001? If so, has another similar
programme replaced it?
Reply
Yes, the programme was terminated.  It was replaced by a new programme on 3 September.
Q3. Which regions within Spain are eligible to receive this aid?
Reply
Under the new programme, all regions of Spain are eligible, although the extent (maximum
permissible percentage) of the subsidy varies from region to region. There are three categories:  the
general regime, the regime applicable to regions included in Article 87.3, exception (a) of the EC
Treaty and, lastly, the regime applicable to regions included in Article 87.3, exception (c) of the
Treaty.
INDUSTRY
Promotion of the economic and social sectors of the agri-food industry
Q1. What is the duration of this subsidy?
Reply
Annual.
Q2. What are the eligibility requirements under this programme?G/SCM/Q2/EEC/40
Page 63
Reply
The submission of concrete plans by the beneficiaries, corresponding to one of the following
objectives:
(a) Promoting innovation in the agri-food sector;
(b) achieving productivity gains and improved hygiene or sanitary conditions;
(c) facilitating access to SMEs in the areas of technology and management;
(d) opening up new possibilities for farming and fishing under-utilized resources;
(e) enabling staff to acquire vocational skills;
(f) offsetting structural deficiencies affecting production;
(g) helping SMEs to take advantage of solidarity in financial operations.
The proposed plans must focus on specific objectives with an immediate impact on
technological, management or marketing processes, with a view to achieving targets in the short and
medium term within an established time-frame.
Aid to shipbuilding
Q1. How has this programme "ensured that th e shipbuilding sector remains competitive on
the world market"?  We note that you have indicated that these subsidies have not increased the
European Union's share of the global shipbuilding market.
Reply
This programme has enhanced the efficiency of shipbuilders by making productivity gains
and prevented any further loss of market share that would otherwise have occurred.
Q2. In G/SCM/Q2/EEC/35, you described the two types of restructuring aid for the
shipbuilding sector.  Under "closure aid", to what extent does this aid assume existing liabilities
of companies towards their workers, includ ing benefits for unemployment, retirement,
healthcare, etc.?
Reply
When shipyards close down, workers may be laid off in one of either two ways:  by accepting
a pay-off or taking early retirement.
In the case of a pay-off, workers accept an amount of money to leave the firm.  In the case of
early retirement, the firm pays part of the worker's wages while the social security system pays the
rest, as well as providing for health care. When th e worker reaches the regulatory retirement age, he
or she receives a pension in addition to health care benefits from the social security system.
Q3. How is it guaranteed that investment aid under this programme does not lead to an
increase in capacity of recipient companies?
Reply
Companies that benefit from this type of aid are selected by the authorities on the basis of
specific, approved programmes. The authorities set maximum limits on the capacity of recipient
companies when they approve such programmes.G/SCM/Q2/EEC/40
Page 64
Interest subsidy for shipbuilding loans
Q1. Please explain what this aid can be used for.   Do the restrictions with respect to "Aid to
Shipbuilding" (investment and closure aid) apply to this programme as well?
Reply
The subsidized shipbuilding loans are only  granted to shipbuilders with approved
restructuring programmes.
Q2. What is the duration of this programme?
Reply
The programme will continue to operate, in principle, for as long as the OECD Understanding
on Export Credits for Ships, which permits interest ra te subsidies, remains in force, and the European
Commission considers it compatible with European Union legislation.
Q3. What are the eligibility criteria shipbuilders must meet in order to receive the subsidy?
Reply
As stated in the reply to question 1, the su bsidized shipbuilding loans are only granted to
shipbuilders with approved restructuring programmes.
The subsidy applies to the interest rate granted by the bank for the building of each individual
ship.
Technical Research Development Programme (PROFIT)
Q1. Under this programme, please indicate the magnitude of the interest subsidy.  Does the
interest subsidy vary by aid recipient, and if so, on what basis?
Reply
Loans are granted at an interest rate of 0%.  T hus, the interest subsidy varies according to the
market rate (EURIBOR).
Q2. Please indicate what the repayment terms a re for the preferential loans.  Do the loans
have a maximum term?
Reply
The loans are calculated according to the budgetary requirements of the project (a percentage
of the subsidizable budget, determined by the technological significance of the project). The
maximum repayment period is 15 years, consistent with the maximum limit set for the equivalent
subsidy under EU regulations (Comm unity framework for State aid for research and development) for
State aid for research and development.
Q3. Can an entity receive a non-repayable subs idy and a loan within the same year or for
the same project?G/SCM/Q2/EEC/40
Page 65
Reply
Yes, provided it conforms to the maximum limit under the EU regulations referred to above.
Q4. Are there any plans to extend this programme beyond the year 2003?
Reply
Not at the moment.
REGIONAL SUBSIDIES
Regional economic incentives scheme
Q1. How were the eligible activities for th is programme, as listed in G/SCM/Q2/EEC/35,
selected?
Reply
The activities for this scheme were selected on the basis of guidelines and criteria set by the
Government, with a view to selecting thos e that best promote regional development.
Q2. For the period notified, has aid under this programme been provided to Spanish
companies in the steel, shipbuilding, synthetic fibres or automobile sectors?
Reply
During the financial year 1999, only an investment project in the automobile sector benefited
from the subsidy, once the relevant authorization from the European Commission had been granted.
No aid was provided to investments in the st eel, shipbuilding or synthetic fibres sectors.
AEROSPACE/AERONAUTICAL SECTOR
Q1. In previous notifications, Spain notified subsidies to this sector.  Does Spain maintain
any subsidy programmes for this sector or has all such aid been terminated?
Reply
Spain is maintaining the National Aeronautical Programme, contained in the Technical
Research Development Programme (PROFIT), in force until 2003, in order to support research,
development and innovation projects carried out by enterprises in the aeronautical sector, universities
and technological centres.
Q2. Could Spain please provide information concerning any repayable "Launch Aid" or
similar types of support provided to aerospace industries?
Reply
The system of repayable advances does not constitute subsidization, since the advances
provided by the government are repayable by enterprises once a certain number of sales have been
made.  Consequently, Spain will not provide information on arrangements for such advances.G/SCM/Q2/EEC/40
Page 66
Q3. Does Spain provide any research and develo pment subsidies, or loan guarantees to
companies in this sector?
Reply
Spain provides research and development subsidies to aeronautical programmes under the
PROFIT scheme (National Aeronautical Programme). It does not provide loan guarantees to
companies in this sector.G/SCM/Q2/EEC/40
Page 67
UNITED KINGDOM  (G/SCM/N/71/EEC/Add.15)
Civil Aircraft Research and Demonstration Programme (CARAD)
Q1. You have stated that CARAD does not form part of the Airbus programme.  Do
companies that receive subsidies under CARAD supply Airbus with parts and components?
Any company receiving CARAD grant funding is potentially a supplier to Airbus and to US
civil aircraft manufacturers.  This is because CARAD exists to support research ultimately of benefit
to large civil aircraft manufacturing, including propulsion systems.
Q2. How is the aid level (up to 50 percent of eligible costs) determined under this
programme?  What research  costs are co vered by CARAD?
Reply
Aid level
In all cases, grant offered should be the minimum  necessary to allow the activity to go ahead
in a timely manner.  Of prime importance is the need to seek best value for money from DTI support.
Research costs
Eligible costs for CARAD support are set out  in the guidance note to the CARAD grant
application form, pgs 3 – to 5, Qu 23. (This is attached)
Q3. You have stated in G/SCM/Q2/EEC/33 that near-market research is not supported
under CARAD.  Please explain in more detail how “near market research” is defined and the
stages of research that are supported under CARAD.
Reply
‘Near market research’
This is research that is near to the market place at the end of the project period, against the
test of whether the results of the research are swiftly convertible to marketable products, see guidance
note, pg 1, Qu 12a.
Stages of research supported
All stages are supported up to and including technology demonstration.  The latter is defined
as consisting of ‘the research and validation necessary for integrating individual component-level
research into the technology sub-system level.  The aim is to ensure that advanced technologies are
fully analysed in a representative environment befo re they become available for use in the design of
prototypes and products’ (guidance note, pg 1, Qu 10, para. 5).  Thus, CARAD support excludes
going as far as supporting the creation of initial prototypes that could not be used commercially, and
also excludes support for routine or periodic changes made to products, processes or other operations
in progress, see guidance note, pg 1, Qu 10 para.4.
Compete Programme (NI)
Q1. Please explain what is funded under this programme, i.e., new investments, existing and
ongoing operations, research, etc.G/SCM/Q2/EEC/40
Page 68
Reply
The Compete Programme provides support for market-led product and process development
in Northern Ireland.  The programme comprises of two elements:
Project Definition Phase - planning and defining the development project attracts assistance
of up to 50% of eligible costs, up to a maximum grant of £15,000.  This phase is not compulsory but
badly planned projects will not receive funding.  Larger companies may be expected to carry out
planning without any assistance.  Eligible costs include salaries, overheads, consultancy, travel and
subsistence.  This phase usually takes no more than three months.
Project Development Phase - main development phase attracts assistance of up to 40% of
eligible costs, to a maximum grant of £250,000 (£250,000 less phase one assistance).  Invest NI
ensures there is some evidence of innovation in the product to be developed.  For process
development Invest NI looks for evidence of innov ation or a degree of technological development.
Other factors to be considered include the development being market-led, technical and financial
viability, and consistency with business strategy.  In all cases Invest NI looks for evidence that publicmoney is needed to make the project proceed.
The programme is open to businesses involved or about to become involved in
manufacturing.
Launch Aid
Q1. On average, what percent of Launch Aid assistance is repaid to the government?
Q2. Is the full amount of Launch Aid reimbursable once products are brought to market?Q3. Is the amount budgeted for the fiscal year 2000/01?Q4. What research and development costs are covered by this assistance?Q5. What stages of R&D does Launch Aid cover?
Q6. To what extent do recipients of assistance under this programme supply components of
commercial aircraft to Airbus?
Link Initiative
Q1. What are the eligible costs funded under this programme and what stages of R&D are
covered by this aid?
Reply
LINK is the UK Government's principal mechanism for promoting partnership in pre-
commercial research between industry and the resear ch base.  It aims to stimulate innovation, wealth
creation and improve the quality of life.
LINK currently supports only industrial research projects with an aid intensity of 50% carried
out in collaboration between industry, universities and research centres in key areas of science,
technology and engineering.G/SCM/Q2/EEC/40
Page 69
A review of LINK is currently being undertaken and is due to report October 2002.  To
ensure that whatever recommendations made by the independent review panel can be acted upon
quickly, wider EC State Aid notification for LINK was applied for and approved (27 May 2002).  It is
likely however, that following the review of LINK, not all the stages will be used.
The stages covered by the notification approved on 27 May 2002 are:
- fundamental research
- carried out in collaboration between research base organisations,
- and carried out by firms in collaboration between research base organisations,
- or in collaboration with research base organisations on behalf of firms.
The proposed aid intensity amounts to 100%.  In accordance with the Community framework
for State aid for research and development, the scheme  stipulates that, in the latter case, assistance to
firms is only possible if this type of research is not linked to any industrial or commercial objectives
of a particular enterprise, and a wide dissemination of the results of the research is guaranteed;
- technical feasibility studies preparatory to industrial research, with an aid intensity of up to
75%;
- industrial research carried out in collaboration between firms and research institutes, with an
aid intensity of up to 50%;
- industrial research carried out in collaboration between firms, with an aid intensity of up to
50%;
- technical feasibility studies preparatory to pre-competitive development activity, with a
maximum aid intensity of 50%; and
- pre-competitive development activities carried out in collaboration between firms and
research institutes, with a maximum aid intensity of 25%.
The above-mentioned intensities, with the exception of the maximum aid intensity of 50% in
favour of technical feasibility studies, will be exceeded by 10% where the R&D project is carried out
by an SME.
The eligible costs for both the way LINK currently operates and for the new notification are
the same and are as follows:
1. salaries of personnel working directly on the project;2. materials consumed in the course of the project;
3. capital equipment purchased or constructed for the project, less its estimated value to the
business at the end of the project;
4. licensing fees paid to third parties for acquiring new technology;
5. sub-contract charges and consultancy fees and cost of equivalent services used exclusively for
the research activity, brought from outside sources;G/SCM/Q2/EEC/40
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6. project management costs, such as travel, office space etc. that are additional to those
normally involved;
7. costs of patenting where this would otherwise fall on small firms in compliance with the
Commission definition, and
8. an allowance for overheads.
Regional Selective Assistance in Great Britain
Q1. On average, how many projects are funded under this programme in a given year?
Reply
Since the changes of January 2000 came into effect, on average, there have been 542 projects
in GB funded by the RSA scheme.
Q2. Which project costs are covered under this programme?
Reply
Capital costs are covered by the RSA scheme .
Q3. What is the maximum level of a project that can be funded under this assistance?
Reply
There is no maximum level of project that can be funded by RSA.
Scottish Enterprise
Q1. Could you please describe the “sectoral rules” you identified in G/SCM/Q2/EEC/33?
Reply
Scottish Enterprise’s sectoral rules are those stated in EU Competition Policy.
Q2. Could you please explain further the form of the subsidy, defined as “consultancy and
practical assistance” in your notification?  Specifically, what types of activities are funded under
this programme and what are the eligibility criteria for this funding?
Reply
The scheme referred to relates to the range of economic development activities implemented
by the Scottish Enterprise Network.  These include support for capital investment, property support,
SME support, Small Business Loan Scheme, SME Business Advisory Services and training.
“Consultancy and practical assistance” incorporates the range of powers/assistance as set out in the
Scottish Enterprise Network Management Statement and Manual of Project and Programme rules.Examples include: business development consultancy support whereby the Scottish Enterprise
Network will work with a range of companies providing grant assistance in areas such as management
development, business and financial planningG/SCM/Q2/EEC/40
Page 71
WDA Equity Investment
Q1. When was this programme terminated?
Q2. If the programme is terminated, does the WDA still hold equity in the companies in
which it invested under this programme?  If so, isn’t the programme still on-going?
Reply
The Agency’s established equity investment programme was terminated at
31 December 1999.  The Agency initiated this programme specifically to address a market failure in
the availability in venture capital to support new and growing businesses in Wales.  As alternativesources of that capital became available, so the Agency’s programme was steadily reduced.  Indeed in
the later years there were very low levels of investment activity.  The Agency is under a duty imposed
by National Assembly for Wales that it “… should seek to dispose of shares which it holds at the
earliest practical time consistent with its statutory obligations, but balanced against the need to seek to
achieve the best practicable return on its invest ments.  In practice this means that all equity
investments are managed against an exit strategy designed specifically to realise value from the
individual holding.
As a consequence of our exit policy, the Agency has investments remaining in just 9
companies.  Our continuation as a shareholder does not convey any benefit upon the company inwhich shares are held, as all shares carry normal commercial dividend provisions, and indeed in some
cases the Agency’s dividend is protected by our shar eholding being in the form of preference shares.
The exit strategies of these investments are aimed at achieving a share disposal, either as a
consequence of floatation of the business, sale of the unlisted securities or redemption of the shares by
the company.  There is no benefit to a company by virtue of a shareholder being a public sector bodyas opposed to a commercial, private sector, investor.
WDA Technology Growth Fund
Q1. You note that the key feature of the programme is that the “timing of capital
repayments, interest, royalties and capital profit s match the investee company’s ability to pay”.
Please explain under what circumstances an in vestee company is not required to repay the
subsidy.
Reply
The Technology Growth Fund was created in orde r to provide loans for the development and
subsequent manufacture of high technology products. The loan and interest is repaid by a royalty.
This is variously against either the sales of the specific product or on the whole of the company’s
turnover, depending on the makeup of the company when the loan was negotiated.  Payment of this
royalty is secured by a legal charge over the intellectual property rights (IPR) associated with the
product.
The terms of the Agency’s TGF loan agreemen ts require repayment within 5 working days
from the provision of audited figures.  Where there is a default of payment the Agency pursues all
normal commercial debt recovery practices.  This recovery action has included exercising our legal
charge over the IPR and forcing a sale of the IPR to offset debt.  Where there is insufficient recoveryfrom the security the Agency is, in common with any other creditor, able to pursue a petition for the
winding up or insolvency of the company.G/SCM/Q2/EEC/40
Page 72
In circumstances where the product or the company was not sufficiently successful for
royalties to become payable, or where the company has otherwise failed, the Agency will pursue its
position as a secured creditor.  Any outstanding balance remaining the Agency does rigorously pursue
as a creditor.
It should also be noted that the terms of TGF loans are such that if the loan recipient business
changes ownership, either wholly or in part, or if there is a licensing of the product then the loan
immediately becomes re-payable in full.
As with any commercial lending, there have been product and company failures which have
resulted in the Agency not recovering the full amount of the original advance.  However this can be
contrasted with other instances where the success co nsiderably outstripped expectations and in these
cases the terms of the loans are such that the Agency was able to enjoy a return at a much higher level
than the commercial loan rates.
Industrial Development Board - Selective Financial Assistance
Q1. Could you please explain further the form of the subsidy?  Specifically, what types of
activities are funded under this programme a nd what are the eligibility criteria for this
funding?
Reply
SECTORAL ELIGIBILITY FOR SFA
SFA is available to companies in the manufacturing and international traded services sectors,
but European Commission restrictions  apply to the following industries:
- shipbuilding
- coal and steel
- synthetic fibres
- vehicles
- textiles and clothing
- agriculture and food processing.
It is general policy not to assist those companies which cater purely for a Northern Ireland
market if it is already well served.  This would give it an advantage over its competitors with adverse
consequences on the competitor’s business and employment.
The following product/process areas are particularly sensitive and due consideration should
be given before proposing selective financial assistance to related projects:
Slaughtering
Bread productionBottling (especially soft drinks)
Plastics
Trailers
Coach building
Structural steel/claddingConcrete products
Sub-contract engineering
Kitchen furniture.G/SCM/Q2/EEC/40
Page 73
It will be for the company to clearly demonstrate in its business plan that there is a market
which is inadequately served from local sources.  The development of export markets by local
companies is to be encouraged.
ELEMENTS OF PROJECT COST
Definition of “Project Cost”
“Project Cost is a capital, revenue, or working capital item which in cash terms is incremental
to the present costs of the company.”
Revenue costs will only be recognised to the extent:-
(1) they are necessarily incurred in support of the identified Key Success Factors (KSF);  or(2) they are Project Related Exceptional Items.
Fixed Assets
Fixed asset additions comprise simply the buildings, plant, machinery, office equipment, etc
necessary to implement the project.
Companies will often incur capital expenditure which does not form part of the project cost,
in which case expenditure is separated in the funds flow statement into “Non Project” capital
expenditure, typical example being the purchase of motor vehicles for administration purposes.
Revenue Costs
There are two basic rules for the inclusion of revenue costs.  They must be:-
(i) Incremental to the present cost base of the company;  and(ii) Directly and solely related to the enhan cement of the identified Key Success Factors.
The critical element of this definition is that the revenue costs must be in addition to those
which the company presently incurs.  For exampl e, an apportionment of management time would
always be excluded since management is already employed by the company.  There is not, therefore,
any additional cash outlay involved.  The objective is  not to subsidise running costs (ie operating aid),
but to help meet the initial costs of taking the necessary action to improve competitiveness.
As a general guideline, revenue costs may be included up to the period covered by the project
plan, unless there is evidence that the activity in question is likely to become self sustaining at an
earlier stage, in which case the costs to be incurred after this point should be excluded.
Exceptional Items
There are two basic rules for inclusion of Exceptional Items in Project Cost.
(i) They must be necessarily directly and solely related to the project;  and(ii) Non recurring in nature.G/SCM/Q2/EEC/40
Page 74
The non-recurring nature of Exceptional Costs is to be stressed.  Costs which recur, tend to be
related to the ongoing operations of the business which, in normal circumstances, will be covered by
income, and cannot constitute the cost of a project.
FISHERIES
Q. Your notification did not include informat ion concerning fisheries subsidies.  These
were extensively notified in your updating notification from June 2001 (G/SCM/N/60/EEC/
Add.15).  Do you intend to provide a new a nd full notification of these subsidies?
Reply
I. NOTIFICATION OF FISHERIES SUBSIDIES 2000/01
1. Grants Towards the Acquisition of Freshwater Fishing Vessels and Engines
(Northern Ireland)
1. Name of subsidy
Grants Towards the Acquisition of Freshwater Fishing Vessels and Engines
(Northern Ireland).
2. Form of subsidy
Grants.
3. Amount of subsidy
Grant of 25 per cent of approved expenditure incurred in providing a freshwater fishing vessel
the overall length of which does not exceed  7.924 metres (26ft.) or in providing a new engine for
such.
Total Cost per Budget Year:
See Financial Table.
5. Purpose of subsidy
To encourage the modernisation of the freshwate r fishing fleet and to sustain the local boat
building industry.
6. Duration of subsidy
Indefinite.
7. Trade effects
Unavailable.G/SCM/Q2/EEC/40
Page 75
2. Aid to Highlands and Islands Fish Farmers and Processors
1. Name of subsidy
Aid to Highlands and Islands Fish Farmers and Processors.
2. Form of subsidy
Grants and Loans under Section 8 of the Enterprise and New Towns (Scotland) Act 1990.
3. Amount of subsidy
Variable dependent on the viability of the project.  Projects of up to £60,000 costs may be
assisted by grants of up to 50 per cent and larger projects by grants of up to 20 per cent.  Buildings
can be assisted by grants of up to 35 per cent .  Loans at variable concessionary rates of interest can be
given on their own or in conjunction with grants normally up to 50 per cent of total project costs.  For
smaller projects in fragile areas and in exceptional circumstances assistance can be given of up to70 per cent of total project costs.
Total Cost per Budget Year:
See Financial Table.
4. Purpose of subsidy
To maintain and increase employment and incomes in fragile areas.
5. Duration of subsidy
Indefinite.
6. Trade effects
Unavailable.
3. Highland Prospect Limited: Fish Processing and Fish Farming Loans.
1. Name of subsidy
Highland Prospect Limited: Fish Processing and Fish Farming Loans.
2. Form of subsidy
Discretionary reduced interest loans linked to free technical and business advice.
3. Amount of subsidy
Interest rate set on a case by case basis, normally at a minimum of 5.5 per cent or at no more
than 2 per cent below usual commercial interest rates available on the open market at any one time.
Loans vary from £31,000 up to £500,000 in any one investment, repayable over three or up to tenyears.  Public sector investment no more than 50 per cent of the total value of the investment.G/SCM/Q2/EEC/40
Page 76
Total Cost per Budget Year:
Anticipated annual loan provision is limited to £500,000 per year.
4. Purpose of subsidy
To assist the limited financial capacity of SMEs trading as fish processing and fish farms,
thereby supporting sustainable regional development opportunities and related employment,
particularly  in peripheral locations.
5. Duration of subsidy
Indefinite, Subject to available funds.
6. Trade effects
Unavailable.
4. Highland Opportunity Limited: Fishing Vessel, Fish Processing and Fish Farming
Loans.
1. Name of subsidy
Highland Opportunity Limited: Fishing Vessel,  Fish Processing and Fish Farming Loans.
2. Form of subsidy
Discretionary reduced interest loans linked to free technical and business advice.
3. Amount of subsidy
Interest rate normally 5 per cent p.a. or at around 4 per cent p.a. below usual commercial
interest rates.  For young people aged 18-25 rate is normally 4 per cent p.a. or at around 5 per cent p.a.
below usual commercial interest rates.  Except in certain circumstances loans generally unsecured.
Amounts vary from £1,000 to £30,000 normally repayable over three to seven years.
Total Cost per Budget Year:
Anticipated annual loan provision is £45,000 for fishing vessels, £25,000 for fish processing
and £10,000 for fish farms (total £80,000 per year ).  The grant equivalent of this loan provision isthought to be some £2,240 per year.
1995/96 actual £25,000 (2 low interest loans ).
1996/97 £17,900 (3 low interest loans ).
1997/98 actual £49,300 (4 low interest loans).1998/99 actual £71,000 (5 low interest loans).
1999/00 actual £40,000 (3 low interest loans).
2000/01 actual £19,500 (4 low interest loans).G/SCM/Q2/EEC/40
Page 77
4. Purpose of subsidy
To assist the limited financial capacity of SMEs trading as fishing vessels, fish processing and
fish farms, thereby supporting sustainable regional development opportunities and related
employment, particularly  in peripheral locations.
5. Duration of subsidy
Indefinite, subject to available funds and annual reviews.
6. Trade effects
Unavailable.
5. Aid to Highlands and Islands Fishermen.
1. Name of subsidy
Aid to Highlands and Islands Fishermen.
2. Form of subsidy
Grants and Loans under Section 8 of the Enterprise and New Towns (Scotland) Act 1990.
3. Amount of subsidy
Variable dependent on the viability of the project under the following headings:
New vessels over 12 metres
Grants of up to 20 per cent where SFIA assistance was not available.  Otherwise variable
concessionary rate loans effectively up to £500,000 (our maximum discretionary limit).  No vessel
would be assisted without aggregation of existing pressure stock licences.
New vessels under 12 metres
Grant and loan based on a minimum private contribution of 30 per cent from the applicant.
Grant level being 20 per cent and loan the remainde r over a period of up to 15 years at concessionary
rates of interest.
Second-hand vessels
Concessionary loans of up to 50 per cent of the cost within a ceiling of £500,000.  Loans
normally to be repaid within 10 years.  All assist ance for second-hand vessels is subject to a condition
that the vessel will not normally be greater than 10 years of age.
Port infrastructure
Assistance to small piers, harbours and fish markets with grant aid of up to 30 per cent.
Total Cost per Budget Year:
See Financial TableG/SCM/Q2/EEC/40
Page 78
4. Purpose of subsidy
To maintain and increase employment and incomes in fragile areas.
5. Duration of subsidy
Indefinite.
6. Trade effects-Unavailable.
6. Safety Improvements on Fishing Vessels
1. Name of subsidy
Safety Improvements on Fishing Vessels.
2. Form of subsidy
Grants.
3. Amount of subsidy
Vessels between 12 - 33 metres in length        30 per cent
Vessels  over 33 metres in length                    10 per cent
Total Cost per Budget Year:
1993/94              £1,713,778
1994/95              £2,245,317
1995/96              £2,297,136
1996/97                 £791,007
1997/98                 £395,853
1998/99                 £304,789
1999/2000          £229,9082000/2001             £110,461
£52,488.79 of the above expenditure was paid under the 1987 fishing vessel grant schemes in
respect of a new vessel.  The rest was payable under the 1993 and 1995 fishing vessel safety
improvement grant schemes.
4. Purpose of subsidy
To enable applicants to make essential safety improvements in order to obtain Department of
Transport Safety Certificate.
5. Duration of subsidy
1 January 1992 - 31 December 1999.
6. Trade effects
Unavailable.G/SCM/Q2/EEC/40
Page 79
7. The Fish Producer’s Organization (Formation Grants) Scheme.
1. Name of subsidy
The Fish Producer’s Organization (Formation Grants) Scheme.
2. Form of subsidy
Grant (50 per cent recoverable from FEOGA).
3. Amount of subsidy
The annual aid granted cannot exceed the lesser of 3 per cent, 2 per cent and 1 per cent
respectively of the value of the Organization’s mark eted production over a previous three year period
or of 60 per cent, 40 per cent and 20 per cent of its administrative expenses in the first, second and
third year respectively.
Total Cost per Budget Year:
See Financial Table.
4. Purpose of subsidy
To encourage the development of recognised Fish Producers’ organizations in the UK and
facilitate their operation in the early years.
5. Duration of subsidy
First three years following recognition.
6. Trade effects
Unavailable.
8. Relief from Excise Duty on Mineral Oil used on Commercial Marine Voyages.
1. Name of subsidy
Relief from Excise Duty on Mineral Oil used on Commercial Marine Voyages.
2. Form of subsidy
Heavy Oil may be shipped duty-free direct from  warehouse to entitled vessel OR repayment
of excise duty may be claimed on all mineral oil used as fuel on board entitled vessel.G/SCM/Q2/EEC/40
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3. Amount of subsidy
Duty rates in pence per litre are:
(21/3/00-7/3/01) (7/3/ 01-14/6/01) (15/6/01)
3.13 Gas oil 3.13
2.74 Heavy fuel oil 2.74
54.68 Leaded petrol 54.68
48.82 Unleaded petrol 46.82 48.82
47.82 Ultra-low sulphur petrol (ULSP) 45.82
(All figures are in pence per litre and are unchanged from 14/06/01, bar the unleaded rate which has been displayed).
Total Cost per Budget Year:
Figures no longer available.
4. Purpose of subsidy
To implement Directive 92/81/EC.
5. Duration of subsidy
Subject to EC review.
6. Trade effects
Unavailable.
9. Fisheries & Aquaculture (Wales).
1. Name of subsidy
Fisheries & Aquaculture (Wales).
2. Form of subsidy
Grants.
3. Amount of subsidy
Up to 5 per cent of approved expenditure.
Total Cost per Budget Year:
See financial Table.
4. Purpose of subsidy
To provide matching finance for FIFG aided fishery products.
5.. Duration of subsidy
Until 31 December 1999. (Programme closed-payment still ongoing)G/SCM/Q2/EEC/40
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6. Trade effects
Unavailable.
10. Small Firms Loan Guarantee Scheme(SFLGS).
1. Name of subsidy
Small Firms Loan Guarantee Scheme(SFLGS).
2. Form of subsidy
Government Loan  Guarantee.
Total Cost per Budget Year:
No specific budget for the sector.
3. Amount of subsidy
Guarantees on loans between £5,000 and £100,000 for businesses trading less than two years,
and up to £250,000 for businesses trading two years or  more.  Repayment terms between two and ten
years.  The Department charges a premium of 0.5 per cent on fixed interest rate loans, and 1.5 per cent
on variable interest rate loans.  Interest rates are decided by the lender, who also usually charge an
arrangement fee.
4. Purpose of subsidy
To provide an additional source of finance to small firms with viable business proposals,
where conventional loans are not available, due to a lack of security or business track record.  By
providing a government guarantee of 70 per cent (or 85 per cent for businesses which have been
trading for 2 years or more) to banks and other fina ncial institutions against default by the borrower,
the Scheme encourages them to lend.
5. Duration of subsidy
Indefinite.
6. Trade effects
Unavailable.
__________