G/SCM/N/123/NOR
Page 1
Organization
G/SCM/N/123/NOR
20 July 2005
(05-3248)
Committee on Subsidies
and Countervailing Measures / Original: English
subsidies
New and Full Notification Pursuant to Article XVI:1 of
the GATT 1994 and Article 25 of the Agreement
on Subsidies and Countervailing Measures
NORWAY
The following communication, dated 14 July 2005, is being circulated at the request of the Delegation of Norway.
______
TABLE OF CONTENTS
Page
1.INTRODUCTION
2.ASSISTANCE TO RESEARCH AND DEVELOPMENT SCHEMES
2.1Industrial R&D Contracts
2.2Public R&D Contracts
2.3Industrial R&D programmes and projects
2.4 Tax Credit for Expenses on R&D
3.ASSISTANCE TO DISADVANTAGED REGIONS
3.1Regional Development Grant (Ch. 2425)
3.2Scheme for Restructuring Regions Dependent on a Single Industry
3.3The Norwegian Corporation for Industrial Estates and Development (SIVA)
3.4National Programmes for Regional Development
3.5 Regional transport aid
3.6 National transport aid
4.ASSISTANCE TO SMALL AND MEDIUM SIZED enterprises
4.1Development Grant scheme
4.2The Public Advisory System
4.3Seed Capital Funds
4.4 Guarantee scheme for loans and credits
5.ASSISTANCE TO ENVIRONMENT
5.1Aid for development and knowledge and information on sustainable production and consumption
5.2The Energy Fund
5.3Norwegian Environmental Fund
6.ASSISTANCE TO EXPORT PROMOTION
6.1Export development programme for SMEs
6.2Export Credit Financing Scheme
6.3 Export Credit Guarantees
7.ASSISTANCE TO SPECIFIC INDUSTRY SECTORS
7.1Contract Related Operating Aid (to Shipbuilding)
7.2Temporary Defensive Mechanism (to Shipbuilding)
7.3Exemption from/reduction of SO2 and CO2 taxes
7.4Press subsidies
7.5 National programmes for the promotion of Norwegian space industry
7.6 International promotion of Norway as a tourist destination
8.Assistance to the Fishery Sector (Actual figures for 2004 and Budget ESTIMATES for 2005)
8.1Transport Support
8.2 Interest Rate Subsidies for Fishing Vessels for Domestic Deliveries
8.3Support to the Modernisation and Capacity Adjustment of the Fishing Fleet; Decommissioning Grant – The Structural Fund
8.4 Grant for Purchase of Vessels to the County of Finnmark and Nord-Troms
8.5 Support to Long-line Baiting Facilities
8.6 Research Fishery
9.ASSISTANCE TO FORESTRY SECTOR
9.1Tax Concessions in Forestry: The Forest Trust Fund and the 5-year Average Tax Assessment
9.2Subsidies for Forest Management Planning
9.3Subsidies for industrial and environmental purposes in forestry
9.4Subsidies for Round Wood Sale and Transport in Forestry
10. THE AGRICULTURAL SECTOR
10.1 Introduction
10.2Information on the subsidy programmes
10.2.1The milk sector
10.2.2 The meat and egg sectors
10.2.3 The grain sector
10.2.4 Potatoes and horticultural products
10.2.5 Headage and Acreage support
10.2.6Vacation and replacement
10.2.7Market regulation
10.3 Expenditures and market structure
1.INTRODUCTION
This report covers state aid programmes and schemes that were in operation in 2004. The amount of subsidies reported, refer to actual payments in the fiscal year 2004.
Through Norway’s participation in the European Economic Area (EEA), Norwegian legislation, under which the funding has been granted, is consistent with the legislation of the European Union (EU) in this field. All subsidy schemes to sectors other than agriculture and fisheries are notified to the EFTA-Surveillance Authority (ESA) for approval before implementation.
The main business support institution is from 1 January 2004 Innovation Norway. Innovation Norway assumed the responsibility of all operations of the Norwegian Industrial and Development Fund, The Norwegian Government’s Consultative Office for Inventors, The Norwegian Trade Council and The Norwegian Tourist Board.
2.ASSISTANCE TO RESEARCH AND DEVELOPMENT SCHEMES
2.1Industrial R&D Contracts
1.The authority responsible for the subsidy
Administered by Innovation Norway on behalf of the Ministry of Trade and Industry.
2.Legislation under which the subsidy is granted
- The Annual State Budget approved by the Parliament.
- Specific Guidelines for Public R&D Contracts and Industrial R&D Contracts approved by the Ministry of Trade and Industry
3.Policy objective of the subsidy
The purpose is to stimulate Industrial R&D (Product development) and building business networks.
4.Form of subsidy
Grants.
5.To whom and how the subsidy is granted
Support is granted to a variety of projects and sectors. Projects eligible for support are R&D co-operating projects between enterprises, e.g. a major customer and a lesser subcontractor.
Conditions applying from 1 April 1995
Subsidies are granted to applied research and development projects in accordance with international state aid guidelines.
Costs eligible for aid are: personnel costs, overhead, current costs, consultancy and equivalent services and instrument and equipment. Only costs directly related to the accomplishment of the projects are eligible.
The condition is that the aid is necessary to start up and realise a project.
6.Amount of subsidy
Total payment in 2004 was NOK 63 million.
7.Duration of the subsidy
Starting date: 1 January 1994. Duration has not been specified.
8.Trade effects of the subsidy
Statistical data showing trade effects are not available.
2.2Public R&D Contracts
1.The authority responsible for the subsidy
Administered by Innovation Norway on behalf of the Ministry of Trade and Industry.
2.Legislation under which the subsidy is granted
- The Annual State Budget approved by the Parliament.
- Specific Guidelines for Public R&D Contracts and Industrial R&D Contracts approved by the Ministry of Trade and Industry
3.Policy objective of the subsidy
Stimulate R&D (Product development) and building business networks.
Improve the quality and effectiveness of services supplied by public entities by implementing new and improved technology.
4.Form of subsidy
Grants.
5. To whom and how the subsidy is granted
A Public R&D Contract is an agreement between a Norwegian enterprise and a public authority that asks for the development of a new product or process. The receiver of the subsidy is the producer. The project must represent something substantially new.
The bulk of the projects will typically be within the stage of basic industrial research and/or applied research.
Conditions applying from 1 April 1995
Subsidy is granted to applied research and development projects in accordance with international state aid guidelines.
Costs eligible for aid are: personnel costs, overhead, current costs, consultancy and equivalent services and instrument and equipment. Only costs directly related to the accomplishment of the projects are eligible.
The condition is that the aid is necessary to start up and realise a project.
6.Amount of subsidy
Total payment in 2004 was NOK 24.2 million.
The average subsidy per project of new grants in 2002 was about NOK 1.06 million.
7.Duration of the subsidy
Starting date: 1968. Duration has not been specified.
8.Trade effects of the subsidy
Statistical data indicating trade effects are not available.
2.3Industrial R&D programmes and projects
1.The authority responsible for the subsidy
Administered by the Research Council of Norway (RCN). RCN’s funds come from:
- the Ministry of Trade and Industry
- the Ministry of Petroleum and Energy
- the Ministry of Fisheries and Coastal Affairs
- the Ministry of Agriculture and Food
- the Ministry of Local Government and Regional Development
- the Ministry of Transport and Communications
2.Legislation under which the subsidy is granted
Funds from each ministry come from the State Budget which is approved by the Norwegian Parliament by the end of each year. New programmes have to be approved by the Ministry of Trade and Industry before they can be started. Guidelines for the subsidy programmes as such has been approved by the Ministry of Trade and Industry and subsequently by the EFTA-Surveillance Authority according to the EEA-agreement.
3.Policy objective and/or purpose of the subsidy
Main objective is to promote innovation and wealth creation in business and industry by encouraging and supporting R&D activities leading to:
-international competitiveness and sustainable business and industry based on knowledge, expertise, network and learning.
-industrial R&D efforts emphasising long-term socio-economic dividends
-an increase in the number of enterprises that take a systematic approach to research and development.
-collaboration and networking
4.Form of subsidy
Support is given as grants to individual units to whom RCN has a contract with.
5.To whom and how the subsidy is provided.
Support is granted to a variety of R&D projects, in different sectors. R&D-projects eligible are projects where the project includes co-operation between enterprises (mostly more than one), and where R&D institutes in most cases also are included in this co-operation. Most projects include more than 5 participants. The bulk of the projects are typically mostly within the stage of basic industrial research and applied research. Enterprises all over Norway and from all Norwegian industry participate in projects. SMEs are given priority by RCN. Where private enterprises are contractors, maximum aid intensity are not allowed to exceed 50per cent of the total project cost. Only costs directly related to the accomplishment of the R&D projects are eligible. Costs eligible for aid are:
- Personnel costs
- Current costs
- Consultancy and service costs.
- In some projects instruments and equipment may also be included.
The condition for RCN aid is that the R&D-contractors prove that they can put in other funds than the funds from RCN (in form of funds from other sources or in form of own fund or as input of own man-hours). The individual R&D-contractors may participate in more than one R&D project, both as contractor and as sub-contractors (participants).
6.Amount of subsidy
Total payment for the year 2004 was 400.5 million NOK. The average subsidy per project of new grants for 2004 (in all 263 projects) was 570,000 NOK, i.e. 150 million NOK in total. For the total project period and for all projects together the amount of subsidy amounts to approximately 420 million NOK.
7.Duration of the subsidy
Duration for RCN’s the current R&D-programme is 8 to 10 years. There is no specific duration of the actual aid scheme.
8.Trade effects of the subsidy
Statistical data indicating trade effects are not available.
2.4 Tax Credit for Expenses on R&D
1. The authority responsible for the subsidy
The Ministry of Finance through the Research Council of Norway.
2. Legislation under which the subsidy is granted
Tax legislation, Ot.prp. No. 1 (2002- 2003)
3. Policy objective and/or purpose of the subsidy
Stimulate the business sector to increase its R&D activities.
4. Form of the subsidy
Tax concession (tax credit).
5. To whom and how the subsidy is provided
All sectors and regions, there is no discrimination between sectors or regions. The Scheme provides tax credits for industrial and commercial enterprises on their R&D expenses. The aid scheme supports internal R&D projects as well as purchases from approved universities, institutes and laboratories. The tax credit is set at 20 per cent of R&D expenses (18 per cent for large companies), up to expenses per company of NOK 4 million for internal R&D, and up to NOK 8million for external purchases. The total basis per company should not exceed NOK 8 million. Projects have to be approved as R&D ex ante by the Research Council of Norway, and the project expenditure certified ex post by an auditor. Companies in a non-taxpaying position are paid the excess amount as part of the yearly tax settlement.
6.Amount of subsidy
2003: NOK 696.4 million
2004: NOK 1,300 million (estimate)
2005: NOK 1,600 million (estimated)
7. Duration of the subsidy
No time limit
8.Statistical data permitting an assessment of the trade effects of the subsidy
Statistical data indicating trade effects are not available.
3.ASSISTANCE TO DISADVANTAGED REGIONS
3.1Regional Development Grant (Ch. 2425)
1. The authority responsible for the subsidy
The Ministry of Local Government and Regional Development through the Norwegian Industrial and Regional Development Fund (SND) (From 1 January 2004 Innovation Norway has taken over the responsibilities of SND and 16 county municipalities.
2. The legislation under which it is granted
Act no. 130 of 19 December 2003.
Guidelines of January 2005 on "Use and administration of chapter 551 post 60 Grants to County Municipalities for Regional Development".
Regulation of May 2003 on Investment aid and geographical delimitation of areas eligible for regional aid.
The AnnualState budget
3. Policy objective of the subsidy
Regional aid; job creation, contribute to develop permanent and profitable business in areas with special employment problems or a low level of economic activity.
4. Form of subsidy
Grants and loans.
5. To whom and how the subsidy is granted
Enterprises situated in the assisted areas. SMEs are given priority.
The scheme is available for enterprises in all sector except primary production in agriculture, forestry and fishery which receives current state aid, insurance, bank and finance, oil and gas exploration, public administration and public commercial enterprises.
Grant is provided to tangible investments. The grant covers costs eligible under the notion "soft aid" (costs must meet one-off requirements for up-to-date knowledge in various fields or be related to establishing network co-operation etc. and not to tangible investment) and R&D-projects.
The assisted area is divided in three zones. In zone A the general aid intensity is maximum 25per cent of the investment costs and SMEs may obtain in addition 5 percentage points. In zone B the general aid intensity is maximum 20 per cent of the investment costs and SMEs may obtain in addition 5 percentage points. In zone C the general aid intensity is 10 per cent and SMEs may obtain in addition 10 percentage points.
Grant falling under the notion "soft aid" must not exceed 50 per cent of the eligible costs in all zones and is confined to SME (max. 250 employees is one of three criteria). Grant to R&D-projects is in general limited to 30 per cent of the investment in zone A, B and C. SME may obtain in addition a grant of 10 percentage points.
6. Amount of subsidy
Total payment in 2004: NOK 552.7 million
7. Duration of the subsidy
Starting date: 1987. Duration has not been specified.
8. Trade effects of the subsidy
Information on trade effects is not available.
3.2Scheme for Restructuring Regions Dependent on a Single Industry
1. Authority responsible for the subsidy
The Ministry of Local Government and Regional Development. The scheme is administered by local municipalities and the Norwegian Industrial and Regional development fund (SND) (From 1.1.2004 Innovation Norway took over the responsibilities of SND).
2. Legislation under which it is granted
The AnnualState budget (Ministry of local government and regional development) chapter551 post 60 and chapter 552 post 72,
Guidelines of January 2005 on "Use and administration of chapter 551 post 60 Grants to County Municipalities for Regional Development",
Guidelines of January 2005 on “Use and administration of chapter 552 post 72 National Schemes for regional development”.
3. Policy objective
Restructuring and job creation in municipalities and regions who are dependent on a single industry experiencing drastic structural and financial difficulties.
4. Form of the subsidy
Grants.
5. To whom and how the subsidy is paid
Available to enterprises in regions eligible for restructuring aid according to the existing guidelines for the scheme. The subsidy covers eligible costs under the notion of ‘soft aid’.
6. The amount of subsidy
Payments in NOK 121.3 million in 2004
7. Duration of the subsidy
Starting date 1987. Duration has not been specified.
8. Trade effects of the subsidy
Statistical data showing trade effects are not available.
3.3The Norwegian Corporation for Industrial Estates and Development (SIVA)
1. Authority responsible for the subsidy
The Ministry of Local Government and Regional Development
2. Legislation under which it is granted
The State Budget (Ministry of Local Government and Regional Development, Ch.552.72).
Regulation on SIVA of 27.11.92.
3. Policy objective
Primary objective:
SIVA provides infrastructural support by offering industrial real estate locations to small and medium-sized enterprises.
Secondary objective:
Increase knowledge-based entrepreneurship through co-operation, network building and consulting.
4. Form of the subsidy
No direct grants to the enterprises.
5. To whom and how the subsidy is paid
Support is granted to a variety of projects and sectors. Most recipients are SMEs according to the relevant EEA-definitions. Primarily to manufacturing industry located in assisted areas.
Grants cover costs eligible under the notion of «soft aid» (costs must meet one-off requirements for up-to-date knowledge in various fields or be related to establishing of network co-operation etc; no physical investments or operating aid).
6. The amount of subsidy
Budgeted to SIVA in 2004: NOK 65.95 million.
Number of projects assisted: 70
7. Duration of the subsidy
Starting date: 1992.
Duration has not been specified.
8. Trade effects of the subsidy
Statistical data showing trade effects are not available.
3.4National Programmes for Regional Development
1. Authority responsible
Ministry of Local Government and Regional Development in most of the cases through the Norwegian Research Council and the Norwegian Industrial and Regional Development Fund (SND) (From 1.1.2004, Innovation Norway has taken over the responsibilities of SND).
2. Legislation under which it is granted
- Guidelines of January 2005 on “Use and administration of chapter 552 post 72 National Schemes for regional development”.
- The yearly State budget
3. Policy objective of the subsidy:
Regional. An important objective is to create new structures and ways of collaboration between R&D centres and private SMEs. The overall aim is to stimulate industrial innovation.
4. Form of the subsidy
Grants.
5. To whom and how the subsidy is paid
Mainly SME (max. 250 employees is one out of three criteria) in private sector located in assisted areas. Most of the funds available are used to support R&D - infrastructure. Single enterprises may not receive support from this scheme unless they are involved in a cooperation pluriannual programme of broader national interest.
Other criteria for the subsidy to enterprises are as for «Regional Grants for the Development of Business and Industry» administered by The Norwegian Industrial and Regional Development Fund (from 2004 Innovation Norway) and the country municipalities.
6. Amount of subsidy
Payment in 2004: NOK 131.4 million. (The major part to research institutes/centres located in assisted areas, as well as regional development agencies for use in assisted areas.)
7. Duration of the subsidy
Starting date: 1986. Duration has not been specified.
8. Trade effects of the subsidy
Statistical data showing trade effects are not available.
3.5 Regional transport aid
1. Authority responsible
The Ministry of Local Government and Regional Development, The CountyMunicipalities of