WORLD TRADE
ORGANIZATIONG/SCM/N/71/HRV/Suppl.1
G/SCM/N/95/HRV
30 September 2003
(03-5127)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
New and Full Notification Pursuant to Article XVI:1 of the GATT 1994
and Article 25 of the Agreement on Subsidies and
Countervailing Measures
CROATIA
The following communication, dated 25 September 2003, has been received from the
Permanent Mission of Croatia.
_______________
Annual, for year 2001
The notification covers year 2001 and has been drawn up on the basis of the data supplied by
the aid providers. The amount of aid is show n in Croatian Kunas (HRK) and Euros (EUR).
The notification covers economic activities, shipbuilding industry, tourism, transport and
public sector.
The information provided in this report is for transparency purposes and does not in any way
prejudge the legal nature of government assistance programmes.
I. SUPPORT FOR ECONOMIC ACTIVITIES
1. Title of the subsidy
Programme for reconstruction and development of economic activities.
2. Period covered by notification
Year 2001
3. Policy objective and/or purpose of the subsidy
Overall rationale is to increase the competitiv eness of the entrepreneurship through efficiency
growth and reduction of costs.  The programme is aimed at supporting the restructuring of economic
entities and modernisation of production capacities, as for instance purchase of new equipment,
introduction of new technologies, new productions, etc.G/SCM/N/71/HRV/Suppl.1
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It supports projects focused at the removal of direct war damage, if this would help to
successfully resume / continue the business of the economic operators.
Renewal and support of the economic activities is credited on the basis of projects and
estimation of their market and economic justifiability.
4. Background authority for the subsidy
Croatian Bank for Reconstruction and Development (HBOR)
State budget for year 2001, Official  Gazette No. 130/00, 59/01, 95/01
5. Form of the subsidy
Loans
6. To whom and  how the subsidy is provided
To economic operators, beneficiaries of the loans.
7. Subsidy per unit or the total amount or the annual amount budget for subsidy
Total amount for year 2001:  58.676.226,00  HRK
8. Duration of the subsidy
Not specified
9. Statistical data permitting an assessment of the trade effects on the subsidy
Not available.
II. SHIPBUILDING INDUSTRY
1. Title of the subsidy
Support for the shipbuilding industry
2. Period covered by notification
Year 2001
3. Policy objective and/or purpose of the subsidy
Aid aimed at restructuring, modernizing and preparing shipyards for privatization.
4. Background authority for the subsidy
• Ministry of Economy
• State budget for year 2001, Official  Gazette No. 130/00, 59/01, 95/01.G/SCM/N/71/HRV/Suppl.1
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5. Form of the subsidy
Grants
Loan guarantees
6. To whom and  how the subsidy is provided
Croatian shipyards
7. Subsidy per unit or the total amount or the annual amount budget for subsidy
Annual amount for grants for year 2001: 208,499.050,00 HRK
Annual amount for loan guarantees for year 2001: 4.882,648.127,00 HRK
8. Duration of the subsidy
Not specified
9. Statistical data permitting an assessment of the trade effects on the subsidy
Not available
III TOURISM
1. Support Programme for the Participation of the Small and Medium-Sized Enterprises
in the Development of Tourism
1. Title of the subsidy
Financial support through Programme of crediting small family business in tourism.
2. Period covered by notification
Year 2001
3. Policy objective and/or purpose of the subsidy
Support for the development of small and medium sized entrepreneurship in tourism.  The
purpose of the subsidy is self-employment, quality improvement, prolongation of tourist season and
development of more diversified tourist offer. Investments in: hotels, pensions, apartments, camps and
other accommodation facilities, boats, charter fleets, excursion boats and ferries, tourist agencies'
premises, diving centres.
4. Background authority for the subsidy
Ministry of Tourism and Ministry for Crafts, Small and Medium sized Enterprises
State budget for year 2001, Offici al Gazette No.130/00, 59/01, 95/01G/SCM/N/71/HRV/Suppl.1
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5. Form of the subsidy
Non-repayable support to entrepreneurs throug h payment of a part of interest rate (two
percentage points) on investment credits.
6. To whom and  how the subsidy is provided
To entrepreneurs, beneficiaries of credits through banks.
7. Subsidy per unit or the total amount or the annual amount budget for subsidy
Total amount for year 2001:  22.854.340 EUR
8. Duration of the subsidy
The support programme of interest rate subsidy is implemented for three years: 2001, 2002
and 2003.
9. Statistical data permitting an assessment of the trade effects on the subsidy
Not available.
2. Subsidy for the Project for the Development of Tourism and Tourist Offer
Improvement
1. Title of the subsidy
Support for the Project for the Development of Tourism and Tourist Offer Improvement.
2. Period covered by notification
Year 2001
3. Policy objective and/or purpose of the subsidy
Support for the development of tourism and improved tourist offer in the areas not
sufficiently developed in tourism, especially in rura lly isolated areas.  Support is provided to projects
aiming at reconstruction and protection of the buildings and constructions important for themaintenance of traditional and cultural heritage.  Moreover, aid was aimed at insufficiently developed
tourist areas, as well as at the areas th at suffer from unemployment or depopulation.
4. Background authority for the subsidy
Ministry of Tourism
State budget for year 2001, Offici al Gazette No.130/00, 59/01, 95/01
5. Form of the subsidy
Non-recurring and non-repayable support .G/SCM/N/71/HRV/Suppl.1
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6. To whom and  how the subsidy is provided
To beneficiaries - micro and small entrepreneurs and NGOs.
7. Subsidy per unit or the total amount or the annual amount budget for subsidy
Total amount for year 2001:  263.150 EUR
8. Duration of the subsidy
Non-recurring and non-repayable support granted annually
9. Statistical data permitting an assessment of the trade effects on the subsidy
Not available
3. Support for Organized Tourist Transport
1. Title of the subsidy
Support for organized tourist transport.
2. Period covered by notification
Year 2001
3. Policy objective and/or purpose of the subsidy
Support for tourism industry
4. Background authority for the subsidy
Ministry of Tourism
State budget for year 2001, Offici al Gazette No.130/00, 59/01, 95/01
5. Form of the subsidy
Grants
6. To whom and  how the subsidy is provided
To domestic and foreign tour operators and tourist agencies, as part of transport costs, by
presenting documentation of accomplished transport of tourists.
7. Subsidy per unit or the total amount or the annual amount budget for subsidy
Subsidy per unit for year 2001:
bus transportbus up to 40 seats 2,00 HRK per km
bus 40 to 60 seats 2,50 HRK per km
bus more than 60 seats 4,00 HRK per km
air transportG/SCM/N/71/HRV/Suppl.1
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200,00 HRK per passenger for all regular lines in Croatia and charter flights for airports Pula,
Rijeka i Zagreb
300,00 HRK per passenger for charter flights for airports Zadar, Split, Bra č, Ploče and
Dubrovniksea transport
25% of the ticket paid for ferry or boat transport of buses or passengers from the coast to
islands or for arrivals of tourists from Italy to Croatia.
8. Duration of the subsidy
Not specified
9. Statistical data permitting an assessment of the trade effects on the subsidy
Not available.
IV. TRANSPORT
1. Support for Croatian Railway Company
1. Title of the subsidy
Support for Croatian Railway Company.
2. Period covered by notification
Year 2001
3. Policy objective and/or purpose of the subsidy
Aid for reconstruction and modernization of Croatian Railway Company.
4. Background authority for the subsidy
Ministry of Maritime and Transport
State budget for year 2001, Offici al Gazette No.130/00, 59/01, 95/01
5. Form of the subsidy
• Operational subsidies
• Loans guarantees
• Capital investments
• IBRD/EBRD/EIB  credits
6. To whom and  how the subsidy is provided
To Croatian Railway Company
7. Subsidy per unit or the total amount or the annual amount budget for subsidyG/SCM/N/71/HRV/Suppl.1
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Total amount for year 2001:  1.282.329.980,00  HRK
8. Duration of the subsidy
Not specified
9. Statistical data permitting an assessment of the trade effects on the subsidy
Not available.
2. Reconstruction and Modernization of Croatian Airports
1. Title of the subsidy
Reconstruction and modernization of Croatian airports
2. Period covered by notification
Year 2001
3. Policy objective and/or purpose of the subsidy
Aid for reconstruction and modernization of air transport, as well as aid aimed to more
efficient protection measures on airports.
4. Background authority for the subsidy
Ministry of Maritime and Transport
State budget for year 2001, Official  Gazette No. 130/00, 59/01, 95/01
5. Form of the subsidy
• Support to public sector companies
• Capital donations to public sector companies
• Repayment of credits granted to airports (Zadar, Zagreb, Dubrovnik)
6. To whom and  how the subsidy is provided
To Airports of Dubrovnik, Ri jeka, Zadar, Osijek, Pula, Bra č, Ploče, Lošinj and Zagreb
7. Subsidy per unit or the total amount or the annual amount budget for subsidy
Total amount for year 2001:  62.660.000,00  HRK.
8. Duration of the subsidy
Not specifiedG/SCM/N/71/HRV/Suppl.1
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9. Statistical data permitting an assessment of the trade effects on the subsidy
Not available.
3. Reconstruction and Modernization of Croatian  Ports
1. Title of the subsidy
Reconstruction and modernization of Croatian ports.
2. Period covered by notification
Year 2001
3. Policy objective and/or purpose of the subsidy
Aid to Croatian ports for the reconstruction, modernization and repayment of debts and
covering of losses.
4. Background authority for the subsidy
Ministry of Maritime and Transport
State budget for year 2001, Official  Gazette No. 130/00, 59/01, 95/01
5. Form of the subsidy
Grants
6. To whom and  how the subsidy is provided
Transfer of funds to port authorities of Rijeka, Zadar, Split, Plo če and Dubrovnik as well as to
ports of Rijeka, Zadar, Split, Plo če, Dubrovnik and county ports.
7. Subsidy per unit or the total amount or the annual amount budget for subsidy
Total amount for year 2001:  88.272.520,00  HRK
8. Duration of the subsidy
Not specified.
9. Statistical data permitting an assessment of the trade effects on the subsidy
Not available.G/SCM/N/71/HRV/Suppl.1
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V. PUBLIC SECTOR
1.  Electricity Grid Reconstruction Project
1. Title of the subsidy
Support for the HEP Electricity Grid Reconstruction Project.
2. Period covered by notification
Year 2001
3. Policy objective and/or purpose of the subsidy
Support to the public sector for the electricity grid reconstruction.
4. Background authority for the subsidy
Ministry of  Finance
State budget for year 2001, Offici al Gazette No.130/00, 59/01, 95/01
5. Form of the subsidy
• Interest rate subsidy
• Capital funds subsidy
6. To whom and  how the subsidy is provided
Public sector company –HEP (single provider in Croatia).
7. Subsidy per unit or the total amount or the annual amount budget for subsidy
Total amount for year 2001- interest rate subsidy: 14.301,13 HRK
Total amount for year 2001-capital funds subsidy:  315.596,06  HRK
8. Duration of the subsidy
Not specified
9. Statistical data permitting an assessment of the trade effects on the subsidy
Not available.G/SCM/N/71/HRV/Suppl.1
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Annual, for year 2002
The notification covers year 2002 and has been drawn up on the basis of the data supplied by
the aid providers.  The amount of aid is s hown in Croatian Kunas (HRK) and Euros (EUR).
The notification covers economic activities, shipbuilding industry, tourism, transport and
public sector.
The information provided in this report is for transparency purposes and does not in any way
prejudge the legal nature of government assistance programmes.
I. SUPPORT FOR ECONOMIC ACTIVITIES
1. Title of the subsidy
Programme for reconstruction and development of economic activities.
2. Period covered by notification
Year 2002
3. Policy objective and/or purpose of the subsidy
Overall rationale is to increase the competitiveness of the Croatian economy through
efficiency growth and reduction of costs.  The programme is aimed at supporting the restructuring of
economic entities and modernisation of production capacities, as for instance purchase of new
equipment, introduction of new technologies, new productions, etc.
It supports projects focused at the removal of direct war damage, if this would help to
successfully resume / continue the business of the economic operators.
Renewal and support of the economic activities is credited on the basis of projects and
estimation of their market and economic justifiability.
4. Background authority for the subsidy
Croatian Bank for Reconstruction and Development (HBOR)
State budget for year 2002, Official Gazette No. 116/01, 139/02
5. Form of the subsidy
Loans
6. To whom and  how the subsidy is provided
To economic operators, beneficiaries of the loans.
7. Subsidy per unit or the total amount or the annual amount budget for subsidy
Total amount for year 2002:  60.856.606,00  HRKG/SCM/N/71/HRV/Suppl.1
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8. Duration of the subsidy
Not specified.
9. Statistical data permitting an assessment of the trade effects on the subsidy
Not available.
II. SHIPBUILDING INDUSTRY
1. Title of the subsidy
Support for the shipbuilding industry.
2. Period covered by notification
Year 2002
3. Policy objective and/or purpose of the subsidy
Aid aimed at restructuring, modernizing and preparing shipyards for privatization.
4. Background authority for the subsidy
Ministry of Economy
State budget for year 2002, Official Gazette No. 116/01, 139/02
5. Form of the subsidy
• Grants
• Loan guarantees
6. To whom and  how the subsidy is provided
Croatian shipyards
7. Subsidy per unit or the total amount or the annual amount budget for subsidy
Annual amount for grants for year 2002: 351,900.000,00 HRK
Annual amount for loan guarantees for year 2002:  4.830.141.190,00 HRK
8. Duration of the subsidy
Not specified
9. Statistical data permitting an assessment of the trade effects on the subsidy
Not available.G/SCM/N/71/HRV/Suppl.1
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III. TOURISM
1. Support Programme for the Participation of the Small and Medium-Sized Enterprises
in the Development of Tourism
1. Title of the subsidy
Financial support through Program of crediting small family business in tourism.
2. Period covered by notification
Year 2002
3. Policy objective and/or purpose of the subsidy
Support for the development of small and medium sized entrepreneurship in tourism.  The
purpose of the subsidy is self-employment, quality improvement, prolongation of tourist season and
development of more diversified tourist offer. Investments in: hotels, pensions, apartments, camps and
other accommodation facilities, boats, charter fleets, excursion boats and ferries, tourist agencies'
premises, diving centres.
4. Background authority for the subsidy
Ministry of Tourism and Ministry for Crafts, Small and Medium sized Enterprises, State
budget for year 2002, Official Gazette No. 116/01, 139/02
5. Form of the subsidy
Non-repayable support to entrepreneurs throug h payment of a part of interest rate (two
percentage points) on investment credits.
6. To whom and  how the subsidy is provided
To entrepreneurs beneficiaries of credits through banks.
7. Subsidy per unit or the total amount or the annual amount budget for subsidy
Total amount for year 2002: 56.268.550 EUR
8. Duration of the subsidy
The support programme of interest rate subsidy is implemented for three years:  2001, 2002
and 2003.
9. Statistical data permitting an assessment of the trade effects on the subsidy
Not availableG/SCM/N/71/HRV/Suppl.1
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2. Subsidy for the Project for the Development of Tourism and Tourist Offer
Improvement
1. Title of the subsidy
Support for the Project for the Development of Tourism and Tourist Offer Improvement.
2. Period covered by notification
Year 2002
3. Policy objective and/or purpose of the subsidy
Support for the development of tourism and improved tourist offer in the areas not
sufficiently developed in tourism, especially in ru rally isolated areas. Support is provided to projects
aiming at reconstruction and protection of the buildings and constructions important for themaintenance of traditional and cultural heritage.  Moreover, aid was aimed at insufficiently developed
tourist areas, as well as at the areas th at suffer from unemployment or depopulation.
4. Background authority for the subsidy
Ministry of Tourism
State budget for year 2002, Of ficial Gazette No.116/01, 139/0
5. Form of the subsidy
Non-recurring and non-repayable support
6. To whom and  how the subsidy is provided
To beneficiaries - micro and small entrepreneurs and NGOs
7. Subsidy per unit or the total amount or the annual amount budget for subsidy
Total amount for year 2002: 315.790 EUR
8. Duration of the subsidy
Non-recurring and non-repayable support granted annually.
9. Statistical data permitting an assessment of the trade effects on the subsidy
Not available.G/SCM/N/71/HRV/Suppl.1
G/SCM/N/95/HRV
Page 14
3. Support for Organized Tourist Transport
1. Title of the subsidy
Support for organized tourist transport
2. Period covered by notification
Year 2002
3. Policy objective and/or purpose of the subsidy
Support for tourism industry.
4. Background authority for the subsidy
Ministry of Tourism
State budget for year 2002, Official Gazette No. 116/01, 139/02
5. Form of the subsidy
Grants
6. To whom and  how the subsidy is provided
To domestic and foreign tour operators and tourist agencies, as part of transport costs, by
presenting documentation of accomplished transport of tourists.
7. Subsidy per unit or the total amount or the annual amount budget for subsidy
Subsidy per unit for year 2002:
bus transportbus up to 40 seats 2,50 HRK per km
bus from 40 to 60 seats 3,50 HRK per km
bus more than 60 seats 5,00 HRK per km
air transport
250,00 HRK per passenger for all regular lines and charter flights for entire Croatia seatransport
25% of the ticket paid for ferry or boat transport of buses or passengers from the coast to
islands or for arrivals of tourists.
8. Duration of the subsidy
Not specified
9. Statistical data permitting an assessment of the trade effects on the subsidy
Not available.G/SCM/N/71/HRV/Suppl.1
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4. Support Programme of Crediting Small Family Business in Tourism
1. Title of the subsidy
Support programme of crediting small family business in tourism.
2. Period covered by notification
Year 2002
3. Policy objective and/or purpose of the subsidy
Promotion of small family business in tourism for self-employment, construction of small
facilities for accommodation: hotels, pensions, apartments and camps with the maximum capacity of
25 rooms or 15 apartments or 50 camp units.
4. Background authority for the subsidy
Ministry of Tourism
State budget for year 2002, Official Gazette No. 116/01, 139/02
5. Form of the subsidy
Financing of a part of interest rate on investment credits for small businesses.
6. To whom and  how the subsidy is provided
To small family businesses.
7. Subsidy per unit or the total amount or the annual amount budget for subsidy
Total amount for year 2002:  2.880.500  EUR
8. Duration of the subsidy
The programme will be implemented from 1. October 2002. until 1. October 2005.
9. Statistical data permitting an assessment of the trade effects on the subsidy
Not available.
IV. TRANSPORT
1.  Support for Croatian Railway Company1. Title of the subsidy
Support for Croatian Railway Company.G/SCM/N/71/HRV/Suppl.1
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2. Period covered by notification
Year 2002
3. Policy objective and/or purpose of the subsidy
Aid for reconstruction and modernization of Croatian Railway Company.
4. Background authority for the subsidy
Ministry of Maritime and Transport
State budget for year 2002, Of ficial Gazette No.116/01, 139/02
5. Form of the subsidy
• Operational subsidies
• Loans guarantees
• Capital investments
• IBRD/EBRD/EIB  credits
6. To whom and  how the subsidy is provided
To Croatian Railway Company.
7. Subsidy per unit or the total amount or the annual amount budget for subsidy
Total amount for year 2002:  1.248.520.005,00   HRK
8. Duration of the subsidy
Not specified
9. Statistical data permitting an assessment of the trade effects on the subsidy
Not available.
2.  Reconstruction and Modernization of Croatian Airports
1. Title of the subsidy
Reconstruction and modernization of Croatian airports.
2. Period covered by notification
Year 2002
3. Policy objective and/or purpose of the subsidy
Aid for reconstruction and modernization of air transport, as well as aid aimed to  more
efficient protection measures on airports.G/SCM/N/71/HRV/Suppl.1
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4. Background authority for the subsidy
Ministry of Maritime and Transport
State budget for year 2002, Of ficial Gazette No.116/01, 139/02
5. Form of the subsidy
• Subsidies to public sector companies
• Capital donations to public sector companies
• Repayment of credits granted to airports (Zadar, Zagreb, Dubrovnik)
6. To whom and  how the subsidy is provided
To Airports of Dubrovnik, Ri jeka, Zadar, Osijek, Pula, Bra č, Ploče, Lošinj and Zagreb.
7. Subsidy per unit or the total amount or the annual amount budget for subsidy
Total amount for year 2002:   47.200.000,00  HRK
8. Duration of the subsidy
Not specified
9. Statistical data permitting an assessment of the trade effects on the subsidy
Not available.
3. Reconstruction and Modernization of Croatian  Ports
1. Title of the subsidy
Reconstruction and modernization of Croatian ports.
2. Period covered by notification
Year 2002
3. Policy objective and/or purpose of the subsidy
Assistance to Croatian ports for the reconstruction, modernization and repayment of debts and
covering of losses.
4. Background authority for the subsidy
Ministry of Maritime and Transport
State budget for year 2002, Of ficial Gazette No.116/01, 139/02G/SCM/N/71/HRV/Suppl.1
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5. Form of the subsidy
Grants
6. To whom and  how the subsidy is provided
Transfer of funds to port authorities of  Rijeka, Zadar, Split, Plo če and Dubrovnik, as well as
to ports of Rijeka, Zadar, Split, Plo če, Dubrovnik and county ports.
7. Subsidy per unit or the total amount or the annual amount budget for subsidy
Total amount for year 2002:   65.813.976,00   HRK
8. Duration of the subsidy
Not specified.
9. Statistical data permitting an assessment of the trade effects on the subsidy
Not available.
__________