RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q2/NOR/12
5 September 2001
(01-4230)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Replies to Questions from the UNITED STATES1
Regarding the Updating Notification of NORWAY2
The following communication, dated 28 August 2001, has been received from the Permanent
Mission of Norway.
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Aid for Development and Diffusion of Cleaner Technologies
Q1. It is stated that this programme was cl osed in 1997 and that expenditures in 1999 were
from previous commitments.  Please indicate for what period of time expenditures will continue
to be made.
Reply
1999 was the last year with expenditures under this programme.
The Strategy Programme and the Programme for Export Development in SME
Q1. Please explain the consistency of this programme with Norway’s obligations under
Article 3 of the Agreement.
Reply
Two errors occur in the notification in relation to these programmes.  Firstly, "The Strategy
Programme" should not have been mentioned in th e notification as the programme was terminated in
1998 and there were no expenditures under this programme in 1999.  Secondly, the notified amountfor "The Programme for Export Development in  SME" is incorrect.  The correct amount is
Nkr 25,000,000 and not Nkr 186,000,000 as stated in the notification.
"The Programme for Export Development in Small and Medium Sized Enterprises" is in full
compliance with Norway's obligations under Article 3 of the Agreement.  Grants under thisprogramme are not contingent upon export performance.
The objective of the Programme is to enhance the competitiveness of Norwegian businesses
in foreign markets.  The Norwegian Trade Council carries out market research and surveys, organizes
                                                     
1 G/SCM/Q2/NOR/11
2 G/SCM/N/60/NORG/SCM/Q2/NOR/12
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seminars and training programmes.  Most of these events take place in Norway.  The Programme
comprises reduced prices for the services of the Norwegian Trade Council.  The Programme is
available to all SMEs that fulfil the EU/EEA-criteria for small and medium sized companies.  The
Programme started in 1996 and its duration has not yet been specified.
Interest Rate Subsidies for the Shipbuilding Industry:  Long-Term Financing and Construction
Loans
Q1. How is the subsidized interest rate on the loans determined?
Reply
The scheme started in 1982 and expired in 1989, but payments still took place in 1999 due to
the fact that subsidies were paid out over a 5 or 12 year period after the delivery of the ship.
For the shipowners
An interest rate subsidy was calculated on the basis of a hypothetical loan of 5 to 12 years or a
real loan of 5 to 12 years, repaid by even half-yearly instalments.
For the yards
The interest rate subsidies depended on the duration of the loan and in which form the
contract was written.  The market interest rate was 14 per cent at the time the subsidies interest rate
was determined.  The subsidized interest rate was then determined to be minimum of 7.5 per cent.
That means that the interest rate was subsidized with a maximum 6.5 per cent.  The scheme is in
accordance with the EU Council Regulation on aid to shipbuilding.
Reduced CO 2 Tax on Mineral Oil/Coal and Coke
Q1. What type of tax concessions are provided under this programme?
Reply
The Norwegian CO 2-tax is levied on mineral oil, petrol, coal and coke and production of oil
and natural gas on the continental shelf.  The tax is designed as a product tax, which means that the
tax-base is litre, kg. or Sm3, not per ton emission.  The tax-rates differ.  The following users are
exempted from the CO 2-tax:  international civil aviation, fishing in distant waters, fishing in
Norwegian waters, international shipping, museum ra ilways etc., coal and coke used in production of
cement and leca3, coal and coke used in the processing industry, export, and NATO.  The following
users are levied a reduced rate:  the paper and pulp industry, producers of fishmeal, transporters of
goods in domestic sea traffic, domestic civil aviation, and the supply fleet.
From 1991 to 1999, the CO 2-tax was integrated with existing taxes on oil products (taxes on
fuels and heating oil), petrol and coal and coke.  From 1999 and onwards the CO 2-tax was separated
from other taxes on oil products, but the practical system for tax collection has not changed.  The
producers and importers of the products (i.e. oil companies that are involved in downstream activities)
are responsible for payments to Norwegian Customs and Excise (NCE).  The payments are based on
self-declared sales of petroleum products on the domestic market.  NCE controls the tax payments byjudgement.  This is a simple and cost-effective administration of the tax;  i.e. there are only five oil
companies (downstream) on the Norwegian market.
                                                     
3 Light expanded clay aggregate.G/SCM/Q2/NOR/12
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The Norwegian Petroleum Directorate (NPD) is responsible for collecting the CO 2-tax for the
petroleum sector (up-stream).  The operators of the various fields pay the CO 2-tax twice a year
(1 October and 1 April).
The table below illustrates the CO 2-tax system and also the tax-rates per ton CO 2.
Table - CO 2-Taxes 2001
Nkr
Tax-rates per litre oil
and petrol, kg. coal and
coke or Sm3 gasTax-rates per ton
CO 2
Petrol 0.72 311
Mineral oil
Light oil
Heavy oil
Reduced tax
Pulp and paper industry
Fishmeal industry
Domestic shipping of goods
Continental shelf (supply fleet)
Exemptions
Foreign shipping
Fishing in Norway
Fishing in distant waters0.48
0.48
0.24
0.24
0.27
0.27
0
0
0182
154
91/78
91/78
104
104
0
0
0
Coal and coke
For energy purposes
Coal
Coke
Exemptions
Cement and leca production
All processing purposes0.48
0.48
0
0197
150
0
0
Oil and gas in the North Sea
Oil
Gas0.72
0.72272
309
Source:  Ministry of FinanceG/SCM/Q2/NOR/12
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Interest Rate Subsidies for Fishing Vessels for Domestic Deliveries:  Long-Term Financing and
Construction Loans
Q1. How is the subsidized interest rate on the loans determined?
Reply
The scheme started in 1982 and expired in 1989, but payments still took place in 1999 due to
the fact that subsidies were paid out in a 5 or 12 year period after the delivery of the ship.
An interest rate subsidy was calculated on the basis of a hypothetical loan of 5 to 12 years or a
real loan of 5 to 12 years, repaid by even half-yearly instalments.
For the yards
The interest rate subsidies depended on the duration of the loan and in which form the
contract was written.  The market interest rate at the time the interest rate subsidies was determinedwas 14 per cent.  The subsidized interest rate was then determined to be a minimum of 7.5 per cent.
That means that the interest rate was subsidized by a maximum of 6.5 per cent.
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