Authorisation of State aid pursuant to Article 61 of the EEA Agreement and Article 1(3) in Part I of Protocol 3 to the Surveillance and Court Agreement — EFTA Surveillance Authority decision not to raise objections
Date: 2006-01-12
Institutions: EFTA Surveillance Authority
Subjects: Iceland, State aid, aluminium, control of State aid, iron and steel industry, tax relief

C 7/6

EN

Official Journal of the European Union

12.1.2006

Authorisation of State aid pursuant to Article 61 of the EEA Agreement and Article 1(3) in Part I
of Protocol 3 to the Surveillance and Court Agreement

EFTA Surveillance Authority decision not to raise objections

(2006/C 7/06)

Date of adoption: 20.7.2005

EFTA State: Iceland

Aid No: Case 55362

Title: Tax and fee concessions in favour of the aluminium
smelter Norðurál hf. at Grundartangi, Iceland

Objective: The objective of the aid granted by means of (i)
amendments to a previous scheme on tax and fee concessions;
and (ii) certain non-notified tax and fee concesisions (forming
part of the scheme)
is to enhance the attractivenes of the
Vesturland region for investment purposes.

Legal basis: The previously existing legal instruments of

(i) Act No. 62/27 May 1997 on Enablement to Enter into
agreements on an Aluminium Smelter at Grundartangi
(hereinafter the ‘Grundartangi Act’); and

(ii) the Investment Agreement of 7 August 1997 between the
sole shareholder of Norðurál hf., Columbia Ventures
Corporation, and the Government of Iceland (hereinafter
referred to as the ‘Investment Agreement’) were changed by

(i) the signature on 9 February 2005 of the ‘Second Amend-
to the Investment Agreement’ by the Icelandic

ment
Government and Century Aluminum; and

(ii) Act No. 85/2003 (passed on 13 March 2003 by the
Althingi) which amends the Grundartangi Act in a similar
manner as the Investment Agreement.

Budget/Duration: EUR 88,3 million and 10,7 % aid intensity.
The scheme has been permitted to be valid until 31 October
2018.

Form of the aid: Tax and fee concessions

Decision:

1. The EFTA Surveillance Authority does not raise objections
to the grant of aid in favour of Norðurál hf. by means of
the following (i) non-notified aid measures forming part of a
previously approved aid scheme; and (ii) amendments made
to such aid scheme:

— the maximum corporate income tax of 18 %;

— the accelerated depreciation of assets;

— the minimum time span of nine years for deducting

operating losses;

— the exemption from customs and excise duties on
imports or domestic purchase of materials used for the
construction of Norðurál hf.;

— deferral from the payment of VAT on imports;

— the exemption from excise customs duties on material

for the operation of Norðurál hf.;

— the tax deferral

funds allocated into a
special account and accelerate depreciation of assets
purchased for such funds;

in respect of

— the exemption from payment of fees for safety controls

of electricity production;

— the difference between the statutory amount to be paid

for zoning fee and the amount actually paid; and

— the non-payment of rent for the increased size of land

between 5 February 2005 and 1 January 2006.

2. The state aid involved in the abovementioned measures
must be counted towards ceiling fixed in the Appropriate
Measure Decision and respect all the conditions set forth
herein,
including the maximum aid amount of EUR 88,3
million and maximum aid intensity of 10,7 % and the
expiry of the application of the Grundartangi Aid Scheme
on 8 July 2018.

3. Iceland is requested to submit annual reports regarding the
implementation of the aid in accordance with Article 21 in
Part II of Protocol 3 to the Surveillance and Court Agree-
ment in conjunction with Articles 5 and 6 of the Authority's
decision 195/04/COL.

4. This Decision is addressed to the Republic of Iceland

The authentic text of the decision, from which all confidential
information has been removed, can be found at:

http://www.eftasurv.int/fieldsofwork/fieldstateaid/stateaidreg-
istry