G/SCM/N/123/EEC/Add.6
Page 1
Organization
G/SCM/N/123/EEC/Add.6
26 August 2005
(05-3591)
Committee on Subsidies
and Countervailing Measures / Original:English
SUBSIDIES
New and Full Notification Pursuant to Article XVI:1
of the GATT 1994and Article 25 of the Agreement
on Subsidies and Countervailing Measures
EUROPEAN COMMUNITIES
Addendum
The following addendum to the notification of the European Community relates to subsidy programmes ofEstonia.
______
ESTONIA
TABLE OF CONTENTS
Page
I.aid for research and development
A.R & D FINANCING PROGRAMME
B.Competence Centres programme
ii.Other horizontal aid
A.Support for the participation of entrepreneurs in trade fairs
B.SUPPORT IN THE FRAMEWORK OF EXPORT PLANNING PROGRAMME
C.training Programme
D.Guarantee scheme for small and medium sized enterprises
E.Consulting programme
F.Start-up Programme
G.Environmental aid (national environmental programme)
H.Export credit insurance
III.Regional Aid
A.Substitution of the pollution charge
B.Business infrastructure development programme
C.Programme of tourism marketing and product development
D.Programme of investment support for development and diversification of alternative economic activities in rural areas
E.Loan guarantees for non-agricultural enterprises in rural areas
F.Testing and Notification of Shale oil Chemicals produced from Oil Shale
IV.Sectoral Aid
Aid for Estonian Audiovisual Industry
V.DOMESTIC SUPPORT IN AGRICULTURE
A.General Services
B.Public Stockholding For Food Security Purposes
C.Domestic food aid - School Milk Support
D.Structural Adjustment Assistance Provided Through Investment Aids
E.Payment Under Environmental Programmes
F.Payment Under Regional Assistance Programmes
F(a)Payments Made on 85 Per Cent or Less of the Base Level of Production before accession to the EU on 01.May 2004
F(b)Payments Made on 85 Per Cent or Less of the Base Level of Production after accession to the EU on 01 MAY 2004
G.Insurance Support
H.Interest Subsidy For Agricultural Loans
I.Support for suckler cow raising
J.Support for young bovine and beef animal raising
I.aid for research and development
A.R & D FINANCING PROGRAMME
1.Period covered by the notification
2003, 2004
2.Policy objective and/or purpose of the subsidy
The programme aims at increasing the competitiveness of companies through the support of R&D projects leading to new technologies, products, processes and services.
3.Background and authority for the subsidy
EnterpriseEstonia (Foundation), which is an implementing agency for the Ministry of Economic Affairs and Communication.
4.Legislation under which subsidy is granted
The Articles of Association of Enterprise Estonia; Programme document specifying the eligible activities, application procedures etc, approved by the board of EnterpriseEstonia.
Regulation of the Minister of Economic Affairs and Communications No 73 of 13th of April2004.
5.Form of the subsidy
Grant, soft loan.
6.To whom and how the subsidy is provided
The subsidies are provided to SMEs, large companies and R&D institutions, which undertake industrial research and pre-competitive development activity projects.
Generally industrial research projects can be supported up to 50% of eligible costs, which may increase up to 75% in special cases (SMEs, cross-border cooperation, wide dissemination of the results etc).
In case of industrial research carried out by public R&D institutions, public support can go up to 100% of the project costs.
Pre-competitive development activity projects can in general be supported up to 25%, which may reach up to 50% in special cases.
Technical feasibility studies preparatory to industrial research activities can be supported up to 75% and technical feasibility studies preparatory to pre-competitive development activities up to 50% of the studies’ costs.
7.Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount budgeted for the subsidy:
Fiscal year 2003 – 57.3 Mio EEK.
Fiscal year 2004 – 56.1 Mio EEK.
8.Duration of a subsidy and/or any other time limits attached to it
No time limits are attached to the programme.
9.Statistical data permitting an assessment of the trade effects of a subsidy
N/A
B.Competence Centres programme
1.Period covered by the notification
2003, 2004
2.Policy objective and/or purpose of the subsidy
To improve the competitiveness of enterprises through strategic cooperation between science and industry sectors. To achieve this aim support is given to the establishment of small R&D consortiums – the competence centres.
3.Background and authority for the subsidy
EnterpriseEstonia (Foundation)
4.Legislation under which subsidy is granted
The Articles of Association of Enterprise Estonia; Programming document of the programme approved both by the government and the board of EnterpriseEstonia.
5.Form of the subsidy
Grant
6.To whom and how the subsidy is provided
Support is given to competence centres, which carry out fundamental, industrial research or pre-competitive development activities.
Competence centres are small R&D institutions established and operated together by number of companies and universities. Main characteristic of such centres is strong focus on industrial research, which is needed for the product development of the founders of these centres.
Fundamental research projects can be supported up to 100 %.
Industrial research projects can be supported up to 50% of eligible costs, which may increase up to 75% in special cases (SMEs, cross-border cooperation, wide dissemination of the results etc).
Pre-competitive development activity projects can in general be supported up to 25%, which may reach up to 50% in special cases.
Technical feasibility studies preparatory to industrial research can be supported up to 75% and technical feasibility studies preparatory to pre-competitive development activities up to 50% of the studies’ costs.
7.Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount budgeted for the subsidy
Fiscal year 2003 – 2.4 Mio EEK
Fiscal year 2004 – 5.3 Mio EEK
8.Duration of a subsidy and/or any other time limits attached to it
No time limits are attached to the programme
9.Statistical data permitting an assessment of the trade effects of a subsidy
N/A
ii.Other horizontal aid
A.Support for the participation of entrepreneurs in trade fairs
1.Period covered by the notification
2003, 2004
2.Policy objective and/or purpose of the subsidy
To organise and support the participation of entrepreneurs in international and local tradeshows.
3.Background and authority for the subsidy
EnterpriseEstonia (Foundation)
4.Legislation under which subsidy is granted
The Articles of Association of Enterprise Estonia; the Procedure of the Foundation Enterprise Estonia on organisation of participation in state-supported foreign exhibitions; the Procedure on applying for support for participation in local trade fairs.
5.Form of the subsidy
Grant
6.To whom and how the subsidy is provided
In case of international fairs, the subsidy is paid to the fair operators/fair organisers, as a payment for stand rental. The subsidy cannot cover more than 50% of the cost of the stand.
In case of support for participation in local fairs, the subsidy is provided to companies and sole proprietors. Maximum aid award per applicant is 9000 EEK per year, not more than 50% of the participation costs are covered.
7.Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount budgeted for the subsidy
Fiscal year 2003 – 5.6 Mio EEK
Fiscal year 2004 – 8.1 Mio EEK
8.Duration of a subsidy and/or any other time limits attached to it
No time limits are attached to it.
9.Statistical data permitting an assessment of the trade effects of a subsidy
N/A
B.SUPPORT IN THE FRAMEWORK OF EXPORT PLANNING PROGRAMME
1.Period covered by the notification
2003, 2004
2.Policy objective and/or purpose of the subsidy
To support the drafting of companies' long-term export plans and financing their implementation.
3.Background and authority for the subsidy
EnterpriseEstonia (Foundation)
4.Legislation under which subsidy is granted
The Articles of Association of EnterpriseEstonia; the Procedure of Export Planning Programme of EnterpriseEstonia; the Regulation of the Minister of Economic Affairs and Communications No 145 of 7 June 2004
5.Form of the subsidy
Grant
6.To whom and how the subsidy is provided
The subsidy is provided to the company for drafting of a long-term plan of export strategy and for its implementation by offering appropriate training and consultation services. The compilation of an export plan is supported with a maximum of 75,000 EEK towards covering the consultation costs.
The execution of different marketing activities (participation at trade shows, visits to foreign markets, consultation services, promotional materials, participation in the contact events, etc.) is supported up to 1,000,000 EEK.
The self-financing rate for both drafting of export strategy plan and marketing activities is not less than 50 percent of the eligible costs.
7.Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount budgeted for the subsidy:
Fiscal year 2003 – 20.6 Mio EEK.
Fiscal year 2004 – 47.4 Mio EEK
8.Duration of a subsidy and/or any other time limits attached to it
The execution period of a long-term export plan can be up to 3 years.
9.Statistical data permitting an assessment of the trade effects of a subsidy
N/A
C.training Programme
1.Period covered by the notification
2003, 2004
2.Policy objective and/or purpose of the subsidy
In 2003: to support the in-service training and retraining of entrepreneurs and the persons working in the companies for maintaining or increasing the competitiveness of employees at the labour market and to support SME-s to participate in local fairs in order to make business contacts.
The objective of the grant available since July 2004 is to support the training of persons employed in enterprises in order to improve and maintain employability, develop entrepreneurship, to promote the conditions facilitating job creation, as well as to boost human potential in research, science and technology.
3.Background and authority for the subsidy
EnterpriseEstonia (Foundation)
4.Legislation under which subsidy is granted
2003: The articles of Association of EnterpriseEstonia; the procedure of applying the grant;
Since July 2004: The Regulation of the Minister of Economic Affairs and Communications No 154 of 15 June 2004.
5.Form of the subsidy
Grant
6.To whom and how the subsidy is provided
The subsidy, available since July 2004 is provided to companies and sole proprietors whose training project is related to the acquisition or raising of the professional qualification of employees. No support shall be provided for training intended to raise the general level of education. The subsidy can cover up to 70% of eligible costs of SMEs and up to 50% of big enterprises.
7.Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount budgeted for the subsidy
In 2003 – 6.8 Mio EEK
In 2004 – 7.8 Mio EEK
8.Duration of a subsidy and/or any other time limits attached to it
No time limits are attached to it.
Statistical data permitting an assessment of the trade effects of a subsidy
N/A
D.Guarantee scheme for small and medium sized enterprises
1.Period covered by the notification
2003, 2004
2.Policy objective and/or purpose of the subsidy
To promote small and medium sized enterprises by supporting their access to capital.
3.Background and authority for the subsidy
Credit and Export Guarantee Foundation – KredEx
4.Legislation under which subsidy is granted
The Articles of Association of Credit and Export Guarantee Foundation (KredEx); Support of Enterprise and State Loan Guarantees Act.
5.Form of the subsidy
Loan and leasing guarantees
6.To whom and how the subsidy is provided
Loan guarantees are provided to give additional guarantee for the bank in case a company has not enough warranties of its own.
Loan guarantees are provided to SMEs (loans issued to agricultural, real estate development or state-owned companies excluded), i.e. to companies with less than 250 employees and turnover less than 625 million EEK.
Loan guarantees are not provided to companies in economic difficulties, having tax liabilities or unrealistic business plans.
Guarantee covers up to 75% of the loan, the maximum amount for one entrepreneur or a connected company is 7 million EEK. The leasing guarantee covers up to 40% of the principal amount outstanding.
The guarantee fee ranges from 1,5% to 3% of the guarantee value per year depending on rate of risk of the project.
7.Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount budgeted for the subsidy
In 2003 – guarantee amount 183.2 Mio EEK
In 2004 - guarantee amount 212.5 Mio EEK
8.Duration of a subsidy and/or any other time limits attached to it
No time limits are attached to the programme.
9.Statistical data permitting an assessment of the trade effects of a subsidy
N/A
E.Consulting programme
1.Period covered by the notification
2003, 2004
2.Policy objective and/or purpose of the subsidy
To enable SMEs and sole proprietors to purchase business consultations from professional consultants on favourable conditions.
3.Background and authority for the subsidy
EnterpriseEstonia (Foundation)
4.Legislation under which subsidy is granted
The Articles of Association of Enterprise Estonia; the procedure on applying for business consultancy grant; the Regulation of the Minister of Economic Affairs and Communications No 74 of
13 April 2004
5.Form of the subsidy
Grant
6.To whom and how the subsidy is provided
The subsidy is provided to SMEs or sole proprietors. The amount of the support per applicant is up to 200 000 EEK per year and may cover up to 50% of the advisory services costs.
7.Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount budgeted for the subsidy
In 2003 - grant was not available
In 2004 - 6.7 Mio EEK
8.Duration of a subsidy and/or any other time limits attached to it
No time limits are attached to it.
9.Statistical data permitting an assessment of the trade effects of a subsidy
N/A
F.Start-up Programme
1.Period covered by the notification
2003, 2004
2.Policy objective and/or purpose of the subsidy
To provide individuals with the incentive to start business and create new jobs. Likewise, the programme intends to increase the survival ratio of new enterprises.
3.Background and authority for the subsidy
For the city of Tallinn – City Enterprise Department
For other parts of Estonia - EnterpriseEstonia (Foundation)
4.Legislation under which subsidy is granted
The Articles of Association of Enterprise Estonia; the Procedure on applying for start-up support; the Regulation of the Minister of Economic Affairs and Communications No 75 of 13April2004.
Regulation of Tallinn City Council No 4 (09.01.2003)
Regulation of Tallinn City Council No 48 (09.10.2004)
5.Form of the subsidy
Grant
6.To whom and how the subsidy is provided
Subsidy is provided to applicants who have not been registered in the Register of Companies longer than 24 months, shareholders of applicant must be individuals, no business enterprises or public sector institutions allowed.
Thegrant is up to 160 000 EEK per applicant. The grant amount will not exceed 75% of the eligible costs, self-financing is at least 25%.
7.Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount budgeted for the subsidy
In 2003 – 21.7 Mio EEK
In 2004 – 30.8 Mio EEK
8.Duration of a subsidy and/or any other time limits attached to it
A project must be completed within 12 months.
9.Statistical data permitting an assessment of the trade effects of a subsidy
N/A
G.Environmental aid (national environmental programme)
1.Period covered by the notification
2003, 2004
2.Policy objective and/or purpose of the subsidy
To restore the stability of environment.
3.Background and authority for the subsidy
Environmental Investment Centre (Foundation).
4.Legislation under which subsidy is granted
The Articles of Association of Environmental Investment Centre.
5.Form of the subsidy
Grant
6.To whom and how the subsidy is provided
Subsidy is provided to applicant’s projects, which meet the criteria of national environmental programme.
7.Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount budgeted for the subsidy
In 2003 – 0.8 Mio EEK.
In 2004 – 1.0 Mio EEK.
8.Duration of a subsidy and/or any other time limits attached to it
No time limits are attached to it.
9.Statistical data permitting an assessment of the trade effects of a subsidy
N/A
H.Export credit insurance
1.Period covered by the notification
2003, 2004
2.Policy objective and/or purpose of the subsidy
Protecting Estonian companies against any potential loss arising from export transactions through the grant of state export guarantees.
3.Background and authority for the subsidy
The Estonian Credit and Export Guarantee Fund KredEx founded by the Ministry of Economic Affairs and Communications.
4.Legislation under which subsidy is granted
State Export Guarantees Act; decisions and communications of the EU on export credit insurance (including OECD Arrangement).
5.Form of the subsidy
Beneficiaries under this scheme are provided with export credit insurance.
6.To whom and how the subsidy is provided
Export credit insurance is provided by the Estonian Credit and Export Guarantee Fund KredEx. KredEx is founded by the Ministry of Economic Affairs and Communications and is a private body (foundation).
Export credit insurance could be given to undertakings that directly or indirectly take risks related to the export transactions being guaranteed.
The total amount of guarantees issued per one debtor shall not exceed 10 per cent of the total guarantee limit provided for in State Export Guarantees Act. The total guarantee limit in the period covered by the notification was 19.17 million Euros.
Premiums have to cover the costs relating to the grant of a guarantee by KredEx and any possible losses during a longer period, as well as correspond to the risks covered, the guarantee amount arising from the guarantee contract and the extent of the excess of the guarantee holder.
7.Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount budgeted for the subsidy
Since the scheme is meant to be self-sufficient, there are no annual allocations for the activities. The total volume of export sales insured by KredEx in 2003 was 10.67 million Euros; the number for 2004 was 38.92 million Euros.
8.Duration of a subsidy and/or any other time limits attached to it
Part of the scheme is conducted under the EC permission that was given to the period until January 31st, 2005. There is no time limit for the rest of the scheme.
9.Statistical data permitting an assessment of the trade effects of a subsidy
N/A; considering the small volume of the cover it could be assumed that the subsidy has got negligible effect on international trade.
III.Regional Aid
A.Substitution of the pollution charge
1.Period covered by the notification
2003, 2004
2.Policy objective and/or purpose of the subsidy
The programme aims at decreasing pollution by encouraging voluntary environmental protection investments.
3.Background and authority for the subsidy
The Ministry of Environment
4.Legislation under which subsidy is granted