WORLD TRADE G/SCM/N/3/POL
G/SCM/N/16/POL
ORGANIZATION 5December 1996
(96-5101)
Original: English Committee onSubsidies andCountervailing Measures
SUBSIDIES
Notifications Pursuant toArticle XVI:1 oftheGATT 1994
andArticle 25oftheAgreement onSubsidies and
Countervailing Measures
POLAND
Thefollowing communication, dated 26November 1996, hasbeenreceived fromthePermanent
Mission ofPoland.
_______________
The following notification covers thespecific subsidies applied inPoland in1994-1995 in
theindustrial sector.
Thespecific subsidies applied intheagricultural sector willbenotified inaseparate document.
Alldataconcerning theamounts ofsubsidies included inthisdocument areexpressed innew
Polish zlotys (PLZ).1
1Theaverage rateofnewPolish zloty totheAmerican dollar was:
-in1994 -PLZ 1US$0.4405
-in1995 -PLZ 1US$0.4132G/SCM/N/3/POL
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TABLE OFCONTENTS
Page
A. SUBSIDIES APPLIED IN1994 ...................................3
1. Release ofthestateenterprise from theobligation ofpaying the
dividend intothestatebudget ...............................3
2. Increase ofreserve capital ofstatetreasury corporations ...............5
3. Loan from EFSAL Fund ..................................7
4. Investment taxreductions ..................................10
5. Taxforgiveness ........................................13
6. Direct grants forextra charges toproducts andservices ...............15
7. Restructuring programme ofmining sector .......................17
B. SUBSIDIES APPLIED IN1995 WITHIN PROGRAMMES APPROVED
AND STARTED BEFORE 1995 ..................................19
1. Releasing thestateenterprise from theobligation ofpaying thedividend ....19
2. Increase ofreserve capital ofstatetreasury corporations ...............19
3. Loan from EFSAL Fund ..................................20
4. Taxinvestment reductions .................................21
5. Direct grants forextra charges toproducts andservices ...............22
6. Programme ofrestructuring ofmining sector ......................23
C. PROGRAMMES STARTED IN1995 ...............................24
1. Reducing liabilities resulting from social insurance premiums ...........24
2. Warrants andguarantees ofthestatetreasury ......................26
3. Assistance forrestructuring ofthebanking sector ...................29
4. System ofcredit warrants forsmall andmedium-sized enterprises .........32
5. Support toregional programmes ..............................34
6. Programme ofrestructuring theironandsteelindustry ...............36
7. Programme oftherestructuring ofthesector ofnon-ferrous metals ........38G/SCM/N/3/POL
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A. SUBSIDIES APPLIED IN1994
1. RELEASE OFTHESTATE ENTERPRISE FROM THEOBLIGATION OFPAYING THE
DIVIDEND INTO THE STATE BUDGET
1.1 Policy objectives oftheprogramme
Support torestructuring ofState enterprises
1.2 Legal basis
Lawof31.01.1989 ontheFinancial Administration ofState Enterprises (Dziennik Ustaw -
Dz.U.- Journal ofLaws of1992No6,Item27,of1993No18,Item82andof1994No121,Item591
andof1995 No154,Item791).
1.3 Authority responsible forthesubsidy
Minister ofFinance.
1.4 Form ofassistance
Exemption oftheStateenterprise fromtheobligation ofpayment ofthecompulsory dividend
totheState budget.
1.5 Characteristics oftheprogramme
TheMinister ofFinance could exempt aStateenterprise carrying outrestructuring investments
from theobligation ofpayment ofthecompulsory dividend totheState budget inorder todesignate
itforincrease ofthefoundation fundoftheenterprise. Thedecisions concerning theexemption of
State enterprises carrying outtheinvestments, aiming atrestructuring oftheeconomic activity from
theobligation ofdividend payment were made atthediscretion oftheMinister ofFinance. Thefact
itself thatthesubject executes restructuring investments didnotconstitute asufficient argument for
theMinister ofFinance togrant thereduction tothesubject. Inthedecision-making process, thesense
ofpurposeandeffectivenessofinvestmentweretakenintoaccountaswellandtheeconomicandfinancial
situation ofthesubject. Thisreduction expired on1January 1996when theLawof1December 1995
ontheModification oftheLawConcerning theFinancial Administration ofStateEnterprises (Dz.U.
No.154,Item791)came inforce, suppressing ingeneral theobligation ofthepayment ofthedividend
totheState budget.
1.6 Amount ofassistance granted
In1994, about PLZ19.4million were utilized.
1.7 Duration ofprogramme
Theabove mentioned exemption waseffective until1January 1996.G/SCM/N/3/POL
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1.8 Beneficiaries
Therelease inthepayment ofdividend for1994wereobtained by30economic subjects; the
average subsidy perunitamounted toPLZ0.65million. Thereductions concerned mainly thefollowing
industry branches:
PLZ'000 %ofglobal reduction amount
(a) automobile industry 5,920.0 30.5%
(b) ironandsteelindustry 4,147.8 21.4%
(c) fuelandpower industry 2,000.0 10.3%
(d) chemical industry 1,679.0 8.6%
(e) building industry 960.0 4.9%
(f) aircraft industry 865.0 4.5%
(g) foodindustry 795.0 4.1%
(h) textile industry 789.8 4.1%
(i) transport industry 272.3 1.4%
1.9 Trade effects ofthesubsidy
Consideringthepurposesoftheprogramme,iteitherdoesnotaffectforeigntradeoritsinfluence
isinsignificant.G/SCM/N/3/POL
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2. INCREASE OFRESERVE CAPITAL OFSTATE TREASURY CORPORATIONS
2.1 Policy objectives oftheprogramme
Support torestructuring investments carried outbyState Treasury corporations.
2.2 Legal basis
Lawof19July1991ontheInterestoftheCapitalinStateTreasuryCorporations(Dz.U.No.75,
Item330of1992, No.45,Item200; andof1995, No.154,Item792).
2.3 Authority responsible forthesubsidy
Minister ofFinance.
2.4 Form ofassistance
Transfer ofinterest onstock forincrease ofreserve capital ofthecorporation.
2.5 Characteristics oftheprogramme
Theinterest oncapital could bedestined forincrease ofreserve capital ofthecorporation.
Decisions inthismatter weretaken bytheorgan representing theStateTreasury inconsultation with
theMinister ofFinance, incaseofcarrying outofrestructuring investments. Thedecisions onthe
increase ofreserve capital byinterest stock payable totheStatebudget inStateTreasury corporations
carrying outtheinvestments aiming atrestructuring theeconomic activity ofthecorporation were
discretionary byorgans representing theStateTreasury inconsultation withtheMinister ofFinance.
Thefactitself thatsubject executes restructuring investments wasnotasufficient argument forthe
Minister ofFinance togrant thereduction forthesubject. When undertaking thedecisions, thesense
ofpurpose andeffectiveness oftheinvestment andtheeconomic andfinancial situation oftheeconomic
subject were alsoconsidered. This reduction expired on1January 1996 when theLaw of
1December 1995onPayments fromProfit byStateTreasury Corporations (Dz.U. No.154,Item792)
cameintoforcesuppressing ingeneral theobligation ofpayment ofinterests onstocktotheStatebudget.
2.6 Amount ofassistance granted
For1994 theassistance amounted toPLZ93.3million.
2.7 Duration ofprogramme
Theabove mentioned assistance waseffective till1January 1996.
2.8 Beneficiaries
In1994, theassistance wasgranted to10State Treasury corporations.
Theaverage subsidy persubject amounted toPLZ 9.3million.G/SCM/N/3/POL
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Thegreatest assistance wasgranted tocoalcorporations -PLZ49,264.7 thousand, which
accounted for52.8percentofglobal sumofassistance under thisprogramme; theremaining part
ofsubsidy wasdivided asfollows:
- ironandsteelindustry - PLZ33,240 th.(35.5%)
- chemical industry - PLZ 4,620 th.(4.9%)
- shipbuilding industry - PLZ 3,820 th.(4.1%)
- aircraft industry - PLZ 1,286 th.(1.4%)
- foodindustry - PLZ 981th.(1.1%)
2.9 Trade effects ofthesubsidy
Consideringthepurposesoftheprogramme,iteitherdoesnotaffectforeigntradeoritsinfluence
isinsignificant.G/SCM/N/3/POL
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3. LOAN FROM EFSAL FUND
3.1 Policy objectives oftheprogramme
Support torestructuring ofenterprises.
3.2 Legal basis
Regulation oftheCouncil ofMinisters of23November 1993 ontheGuiding Principles of
theRealization oftheStateBudget Concerning theExpenses Designed forSupport oftheRestructuring
andProtection oftheLiquidation ofEnterprises (Dz.U. of1993, No.119,Item531;andof1995,
No.128,Item621).
3.3 Authority responsible forthesubsidy
Minister ofFinance.
3.4 Form ofassistance
Grant orloanonpreferential terms.
3.5 Characteristic oftheprogramme
Auxiliary instrument supporting theoperations aiming atasolution oftheproblems concerning
therestructuring ofeconomic units.
Thesubjects applying fortheassistance from EFSAL mustsubmit themotion comprising i.a.
theinformation ontheeconomic andfinancial standing inprevious years andcurrent prognosis for
thefollowing years, theprogramme ofshort, medium andlong-term undertaking, aSWOT analysis
and:
- programme ofrestructuring orliquidation,
- copyofthemotion tothecompetent minister ontheabove mentioned transformation
oftheStateenterprise intoState Treasury corporation andinthecaseofacompany,
- theinformation ontheforeseen dateoftheaccessibility ofshares totheStateTreasury,
- information concerning thelegalstateoftherealestate,
- opinions ofthefinancing bank andoftheTaxOffice,
- position ofmain creditors ontherestructuring ofdebts,
- information onresults ofoperations aiming atobtaining offinancial means fromother
sources,
- programme ofutilization ofredundant property,
- proposal agreed withtrade unions concerning restructuring ofemployment andwage
freezing.G/SCM/N/3/POL
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Theassistance from EFSAL isgranted particularly for:
(a) support toenterprises andState Treasury corporations ortosocalled baselevel
companies ofNational Investment Funds (NFI) incourse oftherestructuring processes
orliquidation inorder tospeed uptheseprocesses andsupply themwithfinancial means
designed forprotection, including compensations, mostly inregions where
unemployment mayoccur.
(b) support tothepurchasing bytheAgency ofDevelopment ofIndustry Co.ofthedebts
ofbanks when bank doesnotproceed theagreement proceedings under theLawof
3February 1993 ontheFinancial Structure ofEnterprises andBanks andon
Modification ofSome Acts(Official Journal No.18,Item82)andpurchasing ofdebts
ofthedebtor 'ssuppliers tothelevelwhen thesumofdebts inpossession oftheAgency
against debtor accounts for10percentoftotalsumofobligations ofthedebtor
(providing theydonotexceed PLZ100,000) orthesumofthese debts accounts for
20percentoftotalsumofobligations ofthedebtor.
Theassistance fromEFSAL isgranted toabove mentioned subjects intheformofgrants and/or
loans andcanbeobtained onlyonce. Theassistance intheform ofgrant -asmentioned above -is
granted forprotections, including compensations, forexempted workers. Theassistance intheform
ofloanisgranted firstofallforfinancing ofrestructuring investments.
Uptonow, theloans from EFSAL were granted under more favourable terms ascompared
tothose proposed bybanks. Theinterest onloans accounted forabout 0.6percentofrefinancing
credit. Theloans frommeans ofthesecond tranche, according torecommendations oftheWorld Bank,
willbegranted under market terms. According totheWorld Bank, interests oncredits granted to
enterprises should becalculated inaccordance withinterest ratenotlower thanthemarket rateWIBOR.
TheWorld Bank laysdown conditions toapply thecapitalization ofsocalled “inflation component ”
ofmarket interest rates. Upon recovering byunits ofasatisfactory financial standing, the“inflation
component ”could thenbesubject toconversion intostocks andshares.
3.6 Amount ofassistance granted
In1994, theassistance granted fromthefirsttranche ofEFSAL amounted toPLZ78.58 million,
including grants -PLZ9.17million, loans -PLZ69.41 million.
3.7 Duration ofprogramme
TheCredit Agreement concluded between theWorld BankandtheGovernment oftheRepublic
ofPoland provides forthetransfer oftheadjustment loanfortheindustrial andfinancial sector inthree
tranches:
tranche I - US$125 million
tranche II - US$100 million
tranche III - US$125 million
TheItranche ofloan-PLZ282,356,805 (asequivalent ofUS$125million) wastransferred
in1994.
Themeans arereleased gradually upon theresolutions oftheCabinet ongranting theaidand
thedecision -withauthorization oftheCabinet -oftheMinister ofFinance.G/SCM/N/3/POL
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TheIItranche ofloan(equivalent ofUS$100 million/PLZ 261,920,000) wastransferred by
theWorld Bank totheaccount oftheStatebudget inApril 1995. Utilization oftheIItranche ofloan
isassumed totakeplace in1996-1997.
Poland resigned toapply forthetranche IIIofEFSAL loan.
3.8 Beneficiaries
Listofsectors ofeconomy, supported from EFSAL funds in1994
No
Branch ofeconomy AssistanceStructure of
global aid
Total Grant Loan
1. automobile industry 3,774,600 1,574,600 2,200,000 4.8%
2. building industry 9,000,000 - 9,000,000 11.4%
3. leather industry 714,674 714,674 - 0.9%
4. footwear industry 1,875,800 1,875,800 - 2.3%
5. ceramic industry 1,000,000 - 1,000,000 1.3%
6. glass industry 10,770,000 - 10,770,000 13.7%
7. transport industry 50,520,000 4,860,000 45,660,000 64.3%
8. foodindustry 926,537 146,537 780,000 1.2%
3.9 Trade effects ofthesubsidy
There isnodirect influence ofthissubsidy onforeign trade.G/SCM/N/3/POL
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4. INVESTMENT TAX REDUCTIONS.
4.1. Policy objectives oftheprogramme
Support ofinvestments inareas withahighlevelofstructural unemployment.
4.2 Legal basis
(i) Government Regulation ofJune22,1993ontheDeduction fromIncome ofInvestment
Expenses inCommunes Particularly Threatened withHigh Structural Unemployment
(Dz.U. No.59,Item266), replaced bytheGovernment Regulation of24January 1995
ontheDeduction from Income ofInvestment Expenses andDecreases ofIncome Tax
inCommunesThreatenedwithParticularlyHighStructuralUnemployment(Dz.U.No.14,
Item63of1995; andof1996 No.63Item293),
(ii) Regulation oftheCouncil ofMinisters of25January 1994ontheDeduction fromIncome
ofInvestment Expenses andDecreases ofIncome Tax(uniform text-Dz.U. of1996
No.39,Item171andNo.63,Item294).
4.3 Authority responsible forthesubsidy
Minister ofFinance.
4.4 Form ofassistance
Taxreduction.
4.5 Characteristics oftheprogramme
These reductions create thepossibility ofdeduction fromincome prior totaxation ordecrease
ofglobal income taxpaidbynatural persons fromsome types ofeconomic activity bythetotalorpart
ofinvestment expenditures forpurchase offixed capital components defined inthese regulations.
Theinvestment reductions forsubjects operating incommunes threatened with high
unemployment2arebased onanoutlay-employment formula, i.e.partofcarried investment expenditures
canbededucted fromincome afteremployment ofacertain number ofpersons registered previously
asunemployed.
Theresolutions ofthesecond previously mentioned Regulation (i.e.theRegulation of
25January 1995) concern alltax-payers meeting theconditions defined intheregulations.
These conditions are,firstofall:
- obtaining acertain index oftheshare ofincome (before tax)inthereceipts, intheyear
preceding theyearinwhich deductions aremade,
- notaxarrears,
2Listofcommunes threatened withhighstructural unemployment isgiven intheGovernment Regulation
of25June 1996 (Dz.U. No.71,Item 338).G/SCM/N/3/POL
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- documentation ofcarried investment expenses withVAT invoices.
Therighttodeductionsordecreaseofincometaxisstrictlytiedtoeffectivenessofadministration,
i.e.withrationalization ofcosts andamount ofthedeclared income. Thehigher theincome ofthe
tax-payer, thehigher theamount sizeofdeclared investment expenses which canbededucted from
taxable income.
Thegeneral investment reductions donotmean thefullexemption oftheobtained income from
tax.Thetax-payers candeduct fromtaxation thetotality orpartofcarried investment expenses tothe
amount nothigher than25percentofincome obtained inthetaxyear; from theremaining partof
income -regardless ofamount ofinvestment expenses -thetax-payers always paythetax.
Thegroup oftax-payers determined intheordinance isentitled tohigher deductions (upto
50percentoftheincome tax).
Regardless ofthese deductions, thetax-payers havetherighttoanadditional decrease oftax
strictly linked withtheamount ofinvestment outlays andwiththeamount ofthedeclared income.
However, theadditional decrease isapplied, onlynextyearfollowing theyearinwhich thetax-payer
made deductions ofinvestment expenses fromincome ordecrease ofglobal income tax.Theadditional
decrease involves thedecrease ofbaseoftaxation withincome taxbyhalfofinvestment expenses
deducted inprevious yearfromtaxable income, butyetinanamount notgreater than25percentof
income obtained inthegiven year.Another instrument supporting thecreation ofnewjobsincommunes
threatened withhighstructural unemployment isapreference fortax-payers conducting theeconomic
activity inthese communes andpaying income taxonthebasisofataxcard. Thispreference consists
ofthepossibility ofadditional employment -overthelimit given inthetaxcardregulations -tothree
workers without causing thelossofthetaxinthisform. Atthesame theamount ofanother formdoes
notincrease.
SinceJanuary1994,apartfromtax-payersoperatingincommunesthreatenedwithhighstructural
unemployment,theremainingtax-payerscanprofitfrominvestmentreductions,iftheyreachappropriate
indices ofincome (8or4percent) determined intheRegulation oftheCouncil ofMinisters of
25January 1994 concerning deductions from income investment expenses anddecreases ofincome
tax(Dz.U. No.18,Item62withfurther adjustments).
According tothisregulation thetax-payers whocarried investment expenses, i.a.:
(a) forthepurchase ofmachines andequipment, buildings, transportation means (with the
exception ofpassenger cars), enterprises ororganized partofenterprise property from
StateTreasury orAgency ofAgricultural Property ofStateTreasury, licences, patents
andknow-how,
(b) forbuilding andexpansion ofbuildings andconstructions forconducting theeconomic
activity,
(c) forpayment ofleasing instalments concerning theabove mentioned fixed assets and
intangible assets considered ascomponents oftheproperty oftheleasing consignee;
andtheymeet theconditions determined intheordinance, theycanmake deductions anddecreases
ofincome taxinthisrespect.G/SCM/N/3/POL
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4.6 Amount ofassistance granted
Theamountoftaxunpaidbytax-payersin1994pursuanttoreductionsforeseenintheRegulation
of25January 1994wasPLZ1069.9 million andofthissumPLZ889.9 million concerned legalpersons
andPLZ180.0 million -natural persons.
Theamount oftaxunpaid bytax-payers in1994 onthebasis ofreductions foreseen inthe
Regulation of22June 1993 (i.e.regarding onlyareas withhighstructural unemployment) was
PLZ10.7million andconcerned legalpersons only.
4.7 Duration ofprogramme
Theapplication oftaxinvestment reductions isnotlimited bydetermined timelimits.
4.8 Beneficiaries
Thefollowing number oftax-payers tookadvantage oftaxinvestment reductions onthebasis
oftheordinance of25.01.1994 :
- 2,272 legalpersons,
theaverage subsidy persubject amounted toPLZ391,000
- 28,553 natural persons.
theaverage subsidy persubject amounted toPLZ6,300.
4.9 Trade effects ofthesubsidy
Theprogramme ’saimistosupport investments inareas threatened withhighunemployment,
carried outbothbynational firms andfirms withforeign capital; ithasnodirect influence ontheforeign
trade.G/SCM/N/3/POL
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5. TAX FORGIVENESS
5.1 Policy objectives oftheprogramme
Clearing ofdebts ofeconomic subjects.
5.2 Legal basis
Regulation oftheMinister ofFinance of4March 1994 onthePartial Forgiveness ofSome
Taxes andOther Liabilities forWhich theRegulations ontheTaxObligations andConditions ofits
Forgiveness areApplied (Monitor Polski M.P. No.18,Item137).
5.3 Authority responsible forthesubsidy
Minister ofFinance.
5.4 Form ofassistance
Taxforgiveness.
5.5 Characteristics oftheprogramme
According totheregulation, thetaxforgiveness occurs onmotion ofthetax-payer oncondition
oftheminimal payment byhim,theamount ofwhich depends ontheratioofindebtedness toincome
ofthesubject in1993. Iftheindebtedness waslower orequal totheincome, thepayment was10per
centofthedebt,ifthearrears exceeded theobtained receipts -5percentofindebtedness.
Theamount ofquota oftherelinquished taxdepended onthetimeofthispayment.
Iftheminimal payment wasmade till:
30.06.1994 -theforgiveness amounted to200percentofpaidquota,
31.08.1994 -theforgiveness amounted to150percentofpaidquota,
31.10.1994 -theforgiveness amounted to125percentofpaidquota,
30.11.1994 -theforgiveness amounted to100percentofpaidquota.
TheRegulation isnotapplied tosubjects against which:
- thebankagreement proceedings werestarted ortheagreement wasconcluded according
toprocedure provided forintheLawof3February 1993ontheFinancial Restructuring
ofEnterprises andBanks (Dz.U. No.18, Item82),
- theliquidation procedure wasopened,
- theinsolvency wasdeclared,
- thecompromise procedure wasopened.
Simultaneously decisions ofdebtclearance weretaken onthebasis ofgeneral regulations on
thetaxobligations according torules approximating those given intheRegulation.G/SCM/N/3/POL
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Thisoccurred most frequently when intheopinion oftreasury organs, thesituation ofthe
economic subject indicated thenecessity ofproviding aidand,atthesame time, thesubject didnot
meetalltheconditions determined intheordinance.
5.6 Amount ofassistance granted
Intheperiod of1994-95 asaresult ofthetaxforgiveness process, theamount oftaxobligations
wasreduced byPLZ1,290 million, ofthissumPLZ605million asresult ofpayment made and
PLZ685million asresult ofdecisions ontaxforgiveness orremission ofliabilities.
Atthebeginning of1994, thearrears oftheeconomic subjects ontheground oftaxes remitted
andbeing remitted amounted toabout PLZ3.4billion andfromthissumPLZ1.64billion concerned
thetaxonsalary increases, PLZ0.71billion -turnover taxandPLZ0.68billion -dividend.
5.7 Duration ofprogramme
ThisRegulation wasinforce tilltheendof1994. Incaseofpayment oftheobligations by
instalments, thisperiod isextended.
5.8 Beneficiaries
Thetaxforgiveness process conducted in1994 and1995 onthebasisoftheRegulation ofthe
Minister ofFinance of4March 1994 comprised from tentotwenty thousand economic subjects.
Although themostnumerous group (90percent) consisted ofnatural persons andcivilassociations
ofnatural persons, over70percentoftheeffects ofclearing debts process concerned Stateenterprises,
co-operatives andother state-owned units.
5.9 Trade effects ofthesubsidy
Nodirect consequences intrade.G/SCM/N/3/POL
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6. DIRECT GRANTS FOR EXTRA CHARGES TOPRODUCTS AND SERVICES
6.1 Policy objectives oftheprogramme
Support tothepoorest social groups.
6.2 Legal basis
Lawof5January 1991, Budget law(Dz.U. of1993No.72,Item344,of1994No.76,Item344,
No.121,Item591andNo.113,Item685,of1995No.78,Item390andNo.124,Item601,No.132,
Item640,andof1996, No.89,Item402andNo.106,Item496).
6.3 Authority responsible forthesubsidy
(i) Theobject grants tomeals soldinmilkbarsareincluded inthebudget ofMinistry of
Finance.
(ii) Thedisposer ofobject grants topassenger transports ofPolish State Railways (PKP)
andPolish Motor Transport (PKS) istheMinister ofTransport andMaritime Economy.
Amounts oftheabove mentioned grants aredetermined annually bytheMinister of
Finance inaregulation.
(iii) Thedisposer ofobject grants fortheintercity communication organized bymunicipal
governments ofcommunes andunions ofcommunes oftheKatowice agglomeration
wastheVoivode ofKatowice.
(iv) Thedisposer ofobject grants toschool andacademic books istheMinister ofEducation.
Thepublishers ofmanuals receive these grants according toprinciples determined by
theRegulation oftheMinister ofEducation of27August 1992ontheDetailed Principles
andProcedureoftheGrantingofObjectDonationstoSchoolandAcademicBooks(Dz.U.
No.30,Item209).
6.4 Form ofassistance
Grant.
6.5 Characteristics ofprogramme
Theobject dotations aregranted forenterprises andotherunitsproducing given typesofproducts
orrendering given types ofservices, andcalculated according tounitary rates. Theratesofobject grants
aredetermined byexecutive actstotheabove mentioned Law(see6.2).
6.6 Amount ofassistance granted
Thetotalobject grants in1994 amounted toPLZ516.66 million.
6.7 Duration ofprogramme
Thelawisinforce foranindefinite period oftime. Theamount ofassistance oftheStatefor
above mentioned purposes isdefined annually inthebudget .G/SCM/N/3/POL
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6.8 Beneficiaries
Thedivision ofobject grants in1994 PLZ'000
1. Tomeals soldinmilkbars 5,790
2. Torailway passenger transports ininternal communication 339,000
3. Tobuspassenger transports inintercity communication 164,320
including:
intercity communication inagglomeration ofKatowice
organized byself-government ofcommunes andcommune
unions 17,500
4. Tospecialistic school andacademic books 7,550
6.9 Trade effects ofthesubsidy
Duetopurposes oftheprogramme, itdoesnotaffect foreign trade.G/SCM/N/3/POL
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7. RESTRUCTURING PROGRAMME OFMINING SECTOR
7.1 Policy objectives oftheprogramme
- improvement oftheeconomic andtechnological effectiveness ofmines
- continuation ofliquidation ofmines which arepermanently unprofitable
- restructuring ofemployment
- restructuring ofdebts
7.2 Legal basis
- Programme approved bytheCouncil ofMinisters on20March 1994 “Restructuring
ofcoalmining ”-programme fortherealization ofStage IIin1994-1995 ”
- Budget Lawfor1994 ofMarch 25,1994 (Dz.U. No.52, Item209)
- Regulation No.6oftheMinister ofIndustry andTrade of18July1994, Concerning
thePrinciples andProcedure ofGranting andMode ofUtilization ofGrants Destinated
forMining.
7.3 Authority responsible forthesubsidy
Minister ofIndustry andTrade.
7.4 Form ofassistance
Direct subject grants, taxexemptions, reductions inexploitation charges andincharges on
economic utilization ofthenatural environment.
7.5 Characteristics oftheprogramme
Thegovernmental programme foresaw thesupport totherestructuring ofthemining sector
inyears 1994-1995 through:
(i) direct support:
- subject grants (mining damages, liquidations ofmines, social protection),
- investment grants,
(ii) indirect support:
- leaving theinterest oncapital atthedisposal ofcoalcompanies,
- guarantee forrepayment ofbankloans,
- relinquishment ofthecollection ofapartofincome taxtosupport theconducting
ofsettlement procedures ofcoalcompanies,
- settlement ofobligations bycoalcompanies tothebudget from income taxby
coaldeliveries forState reserves.G/SCM/N/3/POL
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7.6 Amount ofassistance granted
Direct assistance in1994:
- grants forphysical liquidation ofmines -PLZ279.1 million
- additional financing foramelioration ofmining damages -PLZ19.2million
- claims offormer workers -PLZ5.6million
- social protections fordismissed workers -PLZ19.6million
Budget grants forfinancing central investments in1994:
- totalsum-PLZ 67.1million, ofwhich hardcoalmining -PLZ 52.1million.
7.7 Duration ofprogramme
Years 1994 -1995.
7.8 Beneficiaries
In1994 thefollowing economic subjects received support inthesector ofhardcoal
mining:
Aimofgrant Number ofsubjects Average subsidy per
subject (PLZ million)
Liquidation ofmines 14 19.9
Amelioration ofmining damages 18 1.1
average subsidy
per1person/year
(PLZ '000)
Claims oftheformer workers 1 3.73
Social protection 45 5.12
7.9 Trade effects ofthesubsidy
Nodirect trade consequences.
Note: In1994, salt,sulphur andother mineral mining received grants tothetotal amount of
PLZ65.3million.Inthissectorgrantsin1994wereobtainedbysixsubjects,theaveragesubsidy
persubject was-PLZ10.9million.G/SCM/N/3/POL
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B. SUBSIDIES APPLIED IN1995WITHIN PROGRAMMES APPROVED AND STARTED
BEFORE 19953
1. RELEASING THE STATE ENTERPRISE FROM THE OBLIGATION OFPAYING THE
DIVIDEND
1.1 Amount ofassistance granted
In1995, about PLZ23.5million wasutilized.
1.2 Beneficiaries
14economic subjects intotalreceived reductions inpayment ofthedividend for1995, this
applied tothefollowing industrial branches:
PLZ th. %ofglobal sumofreduction
(a)ironandsteelindustry 16,909.1 71.9%
(b)fuelandpower industry 2,627.0 11.2%
(c)chemical industry 1,625.4 6.9%
(d)textile industry 1,219.2 5.2%
(e)building industry 901.2 3.8%
2. INCREASE OFRESERVE CAPITAL OFSTATE TREASURY CORPORATIONS
2.1 Amount ofassistance granted
Theassistance for1995 yearamounted toPLZ43.8million.
2.2 Beneficiaries
In1995, theprogramme encompassed tenState Treasury corporations.
Thebiggest assistance wasobtained asintheprevious year, bycoal companies -
PLZ25,851.2 thousand, which constituted 59percentoftheglobal amount ofassistance from this
programme; further onthelistwere:
ironandsteelindustry - PLZ1,080,000 (25.3 %)
shipyards - PLZ3,825,000 (8.7%)
machinery industry - PLZ1,569,000 (3.6%)
foodindustry - PLZ1,098,700 (2.5%)
aircraft industry - PLZ 386,000 (0.89 %)
3Inthispartofthenotification, onlytheamounts ofsubsidies obtained byenterprises in1995 arerevealed;
theremainingdataanddetaileddescriptionoftheseprogrammes arenotrepeatedastheyhavebeenfullydescribed
inthefirstpartofthenotification.G/SCM/N/3/POL
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3. LOAN FROM EFSAL FUND
3.1 Amount ofassistance granted
In1995, theassistance granted fromtheItranche ofEFSAL amounted toPLZ204.09 million,
including grants -PLZ12.69 million, loans -PLZ191.42 million.
3.2 Beneficiaries
Thelistofeconomic sectors, assisted withmeans ofEFSAL in1995.
No Branch ofeconomy Assistance Structure of
global aid
Total Grant Loan
1. electro-engineering 52,230,430 1,499,431 50,731,000 25.6%
2. metallurgy 47,375,040 5,623,259 41,751,781 23.2%
3. hardcoalmining 31,565,072 - 31,565,072 15.5%
4. chemical industry 29,200,000 - 29,200,000 14.3%
5. lightindustry 10,533,493 3,623,893 6,909,600 5.2%
6. foodindustry 5,474,879 - 5,774,136 2.8%
7. glass industry 5,474,879 408,879 5,066,000 2.7%
8. pulpandpaper
industry4,788,900 - 4,788,900 2.4%
9. building industry 3,945,150 945,150 3,000,000 1.9%
10. transport industry 975,392 28,392 947,000 0.5%
11. other 11,660,000 540,000 11,120,000 5.7%G/SCM/N/3/POL
G/SCM/N/16/POL
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4. TAX INVESTMENT REDUCTIONS
4.1 Amount ofassistance granted
Theamountoftaxunpaidbytax-payersin1995pursuanttoreductionsforeseenintheRegulation
of25January 1994 wasPLZ1784.61 million andofthissumPLZ1,680.1 million concerned legal
persons andPLZ104.51 million -natural persons.
Theamount oftaxunpaid bytax-payers in1994 onthebasis ofreductions foreseen inthe
Regulation of24January 1995 (i.e.regarding onlyareas withhighstructural unemployment) was
PLZ32.8million, where PLZ17million referred tolegal persons andPLZ15.8million -natural
persons.
4.2 Beneficiaries
In1995, theinvestment reductions pursuant totheRegulation of25January 1994wereutilized
by:
- 2,579 tax-payers being thelegalpersons;
theaverage subsidy persubject wasPLZ651th.
- 19,128 tax-payers being thenatural persons;
theaverage subsidy persubject wasPLZ5.46th.
In1995, thefollowing profited pursuant totheRegulation of24January 1995:
- 176tax-payers being thelegalpersons;
theaverage subsidy persubject wasPLZ96.6th.
- 2,617 tax-payers being thenatural persons;
theaverage subsidy persubject wasPLZ6.04th.G/SCM/N/3/POL
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5. DIRECT GRANTS FOR EXTRA CHARGES TOPRODUCTS AND SERVICES
5.1 Amount ofassistance granted
In1995, theobject grants ingeneral amounted toPLZ-512,788 th.
5.2 Beneficiaries
Thedivision ofobject grants in1995 inPLZ'000
1. Tomeals soldinmilkbars 8,660
2. Topassenger railway transports ininternal communication 352,000
3. Tobuspassenger transport inintercity communication 144,630
4. Tospecialistic school andacademic books 7,498G/SCM/N/3/POL
G/SCM/N/16/POL
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6. PROGRAMME OFRESTRUCTURING OFMINING SECTOR
6.1 Amount ofassistance granted
Direct assistance in1995:
(i) hardcoalmining:
- grants forphysical liquidation formines -PLZ201.8 million
- additional financing foramelioration ofmining damages -PLZ19.5million
- claims offormer workers -PLZ26.7million
- social protection fordismissed workers -PLZ4.3million
(ii) salt,sulphur andother mining:
- totalamount ofgrants -PLZ82.2million
Budgets grants foradditional financing ofcentral investments in1995:
- totalamount -PLZ62.1million including hardcoalmining -PLZ 44.1million.
6.2 Beneficiaries
In1995, thefollowing economic subjects received support inthehardcoalmining sector:
Aimofgrant Number ofsubjects Average subsidy
persubject (PLZ million)
Liquidation ofmines 14 14.4
Amelioration ofmining damages 19 1.0
Average subsidy
per1person/year (PLZ th.)
Claims offormer workers 8 0.52
Social protections 61 1.62
Insector ofsalt,sulphur andother mineral mining thegrants in1995 were given to
6subjects; theaverage subsidy persubject was-PLZ13.7million.G/SCM/N/3/POL
G/SCM/N/16/POL
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C. PROGRAMMES STARTED IN1995
1. REDUCING LIABILITIES RESULTING FROM SOCIAL INSURANCE PREMIUMS
1.1 Policy objectives oftheprogramme
RestructuringoftheindebtednessofStateenterprisesandStateTreasurycorporationswithrespect
toSocial Insurance Institution (ZUS).
1.2 Legal basis
(1) Art.14ofthebudget lawfor1995 ofFebruary 1,1995 (Dz.U. No.27Item141
and142).
(2) Regulation oftheCouncil ofMinisters ofMay12,1995Concerning theDetermination
OfTime-limits forSubmission ofApplications, Principles ofDivision andProcedure
ofTransfer oftheBudget Grants forRestructuring theDebts Resulting from Social
Insurances Premiums (Dz.U. No.59,Item307).
1.3 Authority responsible forthesubsidy
Minister ofFinance.
1.4 Form ofassistance
Grant.
1.5 Characteristics oftheprogramme
Introducedin1995possibilityofsupportingtheoperationsofStateenterprisesandStateTreasury
corporations isrealized through grants, forsupporting therestructuring ofdebts toZUS, ofState
enterprises andStateTreasury corporations withrespect towhich cameintoforcetill31December 1994:
- Ruling oftheCourt ofJustice concerning theconfirmation oftheagreement based on
theRegulation ofthePresident oftheRepublic ofPoland of24October 1934 -Law
Concerning theCompound Procedure (Dz.U. No.93,Item836,of1950 No.38,
Item349andof1990 No.55,Item320),
- bankagreement concluded ontheground oftheLawConcerning theFinancial
Restructure ofEnterprises andBanks andtheModification ofSome Acts(Dz.U. No.18,
Item82).
Theamount ofgrant forrepayment ofthedebts toZUSisdetermined forrespective unitson
alevelnotexceeding product ofthisdebtandtheindex ofreduction ofdebtcovered bythecompromise
procedure, resulting fromthisprocedure orthedebtforgiveness index resulting frombankagreement
procedure, notexceeding however theamount of50percentofthedebt.
According toprovisions oftheabove mentioned Regulation oftheCouncil ofMinisters, the
Minister ofFinance undertakes thedecisions ongranting thesubsidy onthebasis ofmotions oftheG/SCM/N/3/POL
G/SCM/N/16/POL
Page25
founding organs ororgans representing theStateTreasury inthecorporation. Thegrant istransferred
tothefounding organ, which transfers thisamount totheSocial Insurances Institution.
Though economic subjects physically donotreceive thisgrant, itistreated asreceipts subject
totaxation withincome taxfromlegalpersons. Nevertheless theMinister ofFinance bytheRegulation
of11August 1995Concerning thePartial Relinquishment ofSettlement andCollection oftheIncome
TaxfromSome Legal Persons (M.P. No42,Item489)gaveupthesettlement andcollection ofincome
taxfrom income being theequivalent ofthegrant obtained, according toprocedure andprinciples of
theabove mentioned Regulation oftheCouncil ofMinisters, forrepayment ofthedebttowards ZUS.
TheState assistance inthisform serves toimprove thebalance situation oftheeconomic subjects
mentioned above anditisgranted regardless ofthemarkets onwhich theyselltheirgoods andservices.
Theabove forms ofassistance oftheStatebudget weredirected atsupporting restructuring processes
oftheabove mentioned economic subjects andareasupplement ofthecourt orbank settlement, as
according tothelaw,thedebttoZUSdoesnottakepartintheproceedings mentioned here.
Thepresented above forms ofStateassistance inrestructuring activity ofStateenterprises and
StateTreasury corporations arenottobeidentified withexport subsidies andextracompensatory charges
toprices which unnaturally change therelations between costs andprices.
1.6 Amount ofassistance granted
In1995, theeconomic units received thegrant amounting toPLZ788.2 million. Thefixed
amount ofbudget grant destinated forthisgoalin1996 isPLZ600million.
1.7 Duration ofprogramme
Theprovisions oftheabove regulation concerned onlytheyear1995.
In1996, according toresolutions ofArt.20oftheBudget Lawfor1996(Dz.U. No.19,Item87)
thisform ofbudget assistance willbeapplied aswell.
TheRegulation oftheCouncil ofMinisters of7May1996(Dz.U. No.56,Item254)willgive
thedates forsubmitting motions, principles ofdivision andtransfer procedures forgrants.
1.8 Beneficiaries
In1995, 212economic subjects received thisgrant including:
- 99State enterprises,
- 111State Treasury corporations,
- 2partnerships withparticipation oftheState Treasury.
Theaverage subsidy persubject wasPLZ3.72million.
1.9 Trade effects ofthesubsidy
Duetopurposes oftheprogramme, itdoesnotaffect foreign tradeoritsinfluence isinsignificant.G/SCM/N/3/POL
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2. WARRANTS AND GUARANTEES OFTHE STATE TREASURY
2.1 Policy objectives oftheprogramme
Support ofadaptation anddevelopment processes ineconomic subjects.
2.2 Legal basis
Art.23oftheLawof5January 1991 -Budget Law(Dz.U. of1993 No.72, Item344with
further modification).
Regulation oftheCouncil ofMinisters of19September 1995, Concerning Conditions and
Procedure ofGranting ofGuarantees andWarrants oftheRepayment fromtheStateBudget oftheBank
CreditandChargesResultingfromGuaranteesandWarrantsGranted.(Dz.U.of1995No.114,Item549).
2.3 Authority responsible forthesubsidy
TheCouncil ofMinisters andtheMinister ofFinance.
2.4 Form ofassistance
Warrants andcredit guarantees oftheState Treasury.
2.5 Characteristic oftheprogramme
According totheprovisions oftheLawof5January 1991 Budget Law, onlytheCouncil of
Ministers orMinister ofFinance cangrant thewarrants ofrepayment fromtheStatebudget ofthepart
ortotalamountofbankcredittogetherwithinterest.Thetotalamountofobligationswhichcanbecovered
bywarrants orguarantees oftheState Treasury isannually determined bytheBudget Law.
Theterms andprocedures ofgranting warrants andensuring therepayment fromStatebudget
ofbankcreditandchargesresultingfromgrantedwarrantsandguaranteesareregulatedbytheRegulation
oftheCouncil ofMinisters of19September 1995. Thewarrants andguarantees maybegranted for
repayment ofcredits destinated forfinancing ofundertakings which mainly havethegoalof:
- development andmaintenance oftheinfrastructure,
- protection oftheenvironment,
- support ofadaptation anddevelopment processes ineconomic subjects ensuring the
increase ofprofitability, aswellascompetitiveness,
- undertaking short-term restructuring investments, based onthemost modern
technological solutions andmeeting theenvironmental requirements,
- thepurchase ofmaterials andfinished products destined forproduction ofinvestment
goodsforexport,withvalueoverECU10millionandproductioncycleofover6months,
- launching governmental privatization programmes withfunding from international
financial institutions.G/SCM/N/3/POL
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Theapplications forgranting warrants aresubmitted totheMinister ofFinance whoanalyses
them. TheMinister ofFinance grants warrants andguarantees insituations, when theamount ofthe
warranted domestic credit together withinterest doesnotexceed PLZ20million, andtheforeign credit
-ECU 7million. Inother cases, warrants andguarantees aregranted bytheCabinet. Inparticularly
exceptional circumstances theCabinet maygrant awarrant (guarantee) forrepaying theentire amount
ofthecredit withinterest. ThescaleofStateassistance granted intheformofwarrants andguarantees
ischaracterised bytheamount of“exposure torisk”,i.e.potential obligations oftheState Treasury
which willberequirable, ifthedebtors donotrepay thewarranted credits.
TheState warrants andguarantees donothavetheform ofgrants forenterprises astheState
Treasury canclaim therepayment ofamounts spent duetowarrant orguarantee, andtheyaregranted
basing ontheanalysis ofthefinancial market.
2.6 Amount ofassistance granted
Thepotential obligations oftheState Treasury duetowarrants andguarantees on
31December 1995 amounted to:
Intotal: PLZ27,587 million, including:
- duetowarranted central investments: PLZ17,842 million,
- home warrants granted ontheground ofArt.23oftheBudget Law: PLZ1,611 million,
- foreign warrants andguarantees granted ontheground ofArt.23oftheBudget Law:
PLZ8,133.8 million.
Art.24oftheBudget Lawfor1996 (Dz.U. No.19,Item87)settles thatwarrants andguarantees
oftherepayment ofbank credit from theState budget in1996 canbegranted totheglobal amount
ofPLZ4billion, including 3billion forwarrants andguarantees ofrepayment oftheforeign credits.
Inthecoming years significant increase ofbudget limits forwarrants andguarantees oftheStateTreasure
isnotexpected.
2.7 Duration ofprogramme
TheLawdoesnotdetermine thetime-limit oftheoftheabove programme.
Atpresent theParliament examines thegovernmental draftlawontheWarrants andGuarantees
Granted bytheStateTreasury andSome Legal Persons. Itassumes thecomplete regulation ofthebasic
competence andprocedural issues concerning granting ofwarrants andguarantees, determination of
therange ofresponsibility oftherespect subjects participating inthisprocess, regulation ofthecriteria
forgranting warrants andguarantees andlimits ofentering intoobligations ofthistypebytheState.
Asregards warrants andguarantees ofrepayment ofcredits andloans theprojected lawassumes the
maintenance -withsome modifications -ofthesolutions which inthisrespect function uptothepresent.
2.8 Beneficiaries
In1995, foureconomic subjects weregranted thewarrants ofrepayment ofhome credits for
theglobal sumofPLZ297million andtwosubjects weregranted guarantees oftherepayment offoreign
credits tothetotalamount ofPLZ1,329.28 million.G/SCM/N/3/POL
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Thepercentage participation ofbranches oftheeconomy inwarrants andguarantees oftheState
Treasury in1995 wasasfollows:
- transport - 55.4%
- power industry - 26.3%
- mining - 11.8%
- metallurgy - 5.9%
- electro-engineering - 0.5%
- foodindustry - 0.1%
2.9 Trade effects ofthesubsidy
Nodirect influence ontheexchange withabroad.G/SCM/N/3/POL
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Page29
3. ASSISTANCE FOR RESTRUCTURING OFTHE BANKING SECTOR
3.1 Policy objectives oftheprogramme
Restructuring ofthebanking sector.
3.2 Legal basis
Lawof3February 1993ontheFinancial Restructuring ofEnterprises andBanks andAdjustment
ofSome Acts(Dz.U. No.18,Item82)andtheLawof24June1994ontheRestructuring ofCooperative
Banks andofthe“Bank Gospodarki Zywnos´ciowej (BGZ )andontheAdjustment ofSome Acts(Dz.U.
No.80,Item369)
3.3 Authority responsible forthesubsidy
Minister ofFinance, National Bank ofPoland (NBP).
3.4 Form ofassistance
Grants, preferential loans, taxreductions.
3.5 Characteristics oftheprogramme
(i) Statetreasury bonds forincreasing ofthecapital ofthe“BGZ"bankandregional banks
andforrestructuring ofdebts ofcooperative banks.
Onthegrounds oftheLawof3February 1993 the“BGZ"Bank received StateTreasury bonds
forincreasing ownfundinthetotalamount ofPLZ1,622.4 million.
According toterms oftheissue ofState Treasury bonds therepurchase ofbonds emitted in
1994 willtakeplace tilltheyear2009.
Atthesame time, within theissue ofbonds conducted in1994 andaccording toprovisions of
theRegulation oftheMinister ofFinance of2June1995 ontheDivision Among Regional Banks of
Bonds forRestructuring ofDebts ofCooperative Banks Associated withthem(Dz.U. No.64,Item330)
thepartofbonds withvalue ofPLZ45million wasdestinated forincreasing thereserve capital of
regional banks created according tosettlements oftheabove mentioned Lawof24June1994. Starting
from1995, thesebonds werebeing successively transferred toregional banks being created. Theissued
StateTreasury bonds werealsodestinated forrestructuring ofthedebts ofcooperative banks affiliated
inregional banks. According totheLawof24June1994andtheRegulation oftheMinister ofFinance
of2June1995 theState Treasury bonds were destinated forthispurpose withthenominal value in
thedayofissue overPLZ251million.
According toterms oftheissueofStateTreasury bonds, repurchase ofbonds emitted in1994
willtakeplace successively intheyears 1996 -2009.
(ii) Repayable assistance forcooperative banks carrying outrepair programmes.
Following theresolution of12July1995 passed byParliament oftheRepublic ofPoland on
theactions tosupport repair processes incooperative banks -therepayable assistance forcooperative
banks taking overother cooperative banks inacritical situation, amounted toPLZ40million wasG/SCM/N/3/POL
G/SCM/N/16/POL
Page30
destinated. Within thisamount, theassistance isgranted byNBPinconsultation withMinistry ofFinance
andthisassistance decreases thesumofNBP payments fromtheprofit intotheStatebudget. Altogether
thefinancial consequences forthebudget intheyears 1995-1996 areevaluated atPLZ20million.
(iii) Taxreductions forcooperative banks creating regional banks
Theadditional financial support wasobtained bycooperative banks onthebasis asprovided
intheRegulation oftheMinister ofFinance ontheRelinquishment ofCollection oftheIncome Tax
fromSome Cooperative Banks. Thefinancial consequences forthebudget resulting fromtheseincome
taxforgiveness for1995 areevaluated atPLZ50million.
Inaddition, onthebasisoftheRegulation ofMinister ofFinance of4July1996(M.P. No.42,
Item406)thetaxforgiveness covered alsosomereceipts ofthe“BGZ"bank, regional banks, cooperative
banks, linked withStateTreasury bonds destinated forrestructuring ofthecooperative banking sector.
Thetotalfinancial consequences resulting fromtheabove mentioned Ordinance areestimated atabout
PLZ620.4 million intheperiod until2009.
(iv) Assistance oftheState budget totheBank Guarantee Fund
Following thelaunching oftheBank Guarantee Fund (Bankowy Fundusz Gwarancyjny -BFG)
in1995, theState budget designated PLZ50million fortheshare capital, which enabled tostartits
activity. In1995, despite thelaunching theBankGuarantee Fund(BFG), theStateTreasury wasobliged
tocover itsobligations inbankrupt cooperative banks fromthebeginning of1995andprevious years.
In1995, PLZ151.5 million were destinated forthispurpose.
Inthebudget for1996 ,PLZ50million were reserved forBFGpossible grants.
TheStateTreasury willdepart fromproviding grants forthefund'soperations andtheburden
ofmaintaining thefundwillrestwiththebanks.
(v) Grants for“Bank Gospodarstwa Krajowego (BGK) ”bank
In1995, the“BGK”bankwhich carries outthegovernmental projects, received PLZ10million
forincreasing itsstatutory fund. In1996, thesumofPLZ10million hasbeenreserved forfurther
additional financing oftheowncapital.
Duetotheincreased significance ofBGK asthebank -government 'sagent andalsodueto
thefactthatitsprivatization isnotforeseen inthenearest future, there isfurther necessity toreinforce
thecapital ofthisbank.
3.6 Amount ofassistance granted
Totheendof1995, theassistance within thisprogramme was:
- grants - PLZ2,084.9 million
- loans - PLZ40million
- taxreductions - PLZ50million
3.7 Duration ofprogrammeG/SCM/N/3/POL
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Page31
Theregulations inforce, uptothepresent concern theyears 1994-1996, though according to
terms ofissueofStateTreasury bonds which constituted themaincomponent oftheassistance within
theabove programme, theirrepurchase willbecompleted in2009.
3.8 Beneficiaries
(1) In1995, therestructuring bonds forincreasing thereserve capital (each set
PLZ5million) were received bytwobanks.
(2) Thebonds destinated fortherestructuring ofdebts ofcooperative banks affiliated in
regional banks (with totalvalue ofPLZ251million) weredivided among fourregional
banks, further according torestructuring plans developed bythese banks, theprocess
ofrestructuring included 480cooperative banks.
(3) In1995, onlyonebanktookadvantage oftheassistance oftheNBPtocooperative banks
taking overother cooperative banks.
(4) In1995, 1,174 cooperative banks benefited fromtaxreductions forcooperative banks.
3.9 Trade effects ofthesubsidy
Noinfluence ontheexchange withabroad.G/SCM/N/3/POL
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4. SYSTEM OFCREDIT WARRANTS FORSMALL AND MEDIUM-SIZED ENTERPRISES
4.1 Policy objectives oftheprogramme
Support tosmall andmedium-sized enterprises.
4.2 Legal basis
Inaddition towarrants ofrepayment from theState budget ofthepartorwhole bankcredit,
there exists alsoasystem ofwarrants forsmall andmedium-sized enterprises. Itactsasaresult of
creation, according toRegulation of7December 1994(Dz.U. No.131,Item662)ofthefundofcredit
warrants inthe“Bank Gospodarstwa Krajowego ”bank.
4.3 Authority responsible forthesubsidy
Minister ofFinance.
4.4 Form ofassistance
Credit warrants.
4.5 Characteristics oftheprogramme
Thefundwascreated fromthemeans oftheStatebudget through additional grants for“BGK”
bankanditisdesignated forsecurity ofrepayment ofcredits granted bybanks tonatural persons and
enterprisesemployingupto250personsandobtainingtheannualreceiptsnotexceedingECU20million.
Thecredits mustbedesignated forinvestments orpurchase ofmaterials andrawmaterials forproduction.
Atpresent, theapplications forwarrants fromthefundarereceived by12banks cooperating withBGK,
having attheirdisposal anetwork ofdivisions throughout thecountry. Theoperation ofthesystem
ofwarrants forsmall andmedium-sized enterprises attheBGK iseffected bywayofadecentralization
ofthisform ofState assistance, which willfacilitate access toit.
4.6 Amount ofassistance granted
TotheendofDecember 1995, nowarrants weregranted; thefirstwarrant within thisprogramme
wasgranted inApril 1996.
4.7 Duration ofprogramme
ThedraftoftheLawonWarrants andGuarantees Granted bytheState Treasury andSome
Legal Persons, which isatpresent thesubject ofparliamentary proceedings, envisages atransformation
ofthecredit warrant fundintoaNational Fund ofCredit Warrants inBGK, andwarrants forrepaying
bankcredits ofsmall andmedium-sized enterprises willalsobegranted fromitsresources. Itisexpected
thatthedraftmentioned above willbecome lawandwillcome intoforce on1January 1997.
4.8 Beneficiaries
None.G/SCM/N/3/POL
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4.9 Trade effects ofthesubsidy
Duetothepurposes oftheprogramme, itdoesnotaffect foreign trade oritsinfluence is
insignificant.G/SCM/N/3/POL
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5. SUPPORT TOREGIONAL PROGRAMMES
5.1 Policy objectives oftheprogramme
Additional financing ofinfrastructural investments insome regions ofthecountry.
5.2 Legal basis
(i) Art.19oftheBudget Lawfor1995 (Dz.U. No.27,Item141and142).
(ii) Regulation oftheCouncil ofMinisters Concerning theProcedure forSubmitting
Applications andPrinciples ofGranting Grants from TheState Budget for1995 for
Additional Financing ofInvestments Determined inRegional Restructuring Programmes
(Dz.U. No.58,Item300).
(iii) Regulation oftheCouncil ofMinisters ontheSubmission ofApplications andPrinciples
ofGranting Grants from theState Budget for1995 forAdditional Financing Of
Infrastructural Investments intheSystem OfPublic Works asCommunes ’OwnTasks,
inRegions Threatened withHighStructural Unemployment (Dz.U. No.59,Item308).
5.3 Authority responsible forthesubsidy
Minister ofFinance.
5.4 Form ofassistance
Grants.
5.5 Characteristics oftheprogramme
Thegrants foradditional financing ofinvestments provided inregional restructural programmes
were foreseen for:
(1) restructuring programme forthevoivodship ofódz´,
(2) programme covering theinvestments invoivodships ofOlsztyn andSuwa kiwhich are
includedintheProgrammeofenvironmentalprotection-MASTERPLANfortheregion
oftheGreat Lakes ofMazuria andfinanced bytheFoundation forProtecting theGreat
Lakes ofMazuria atGizycko,
(3) programme covering restructuring investments carried outinthemicroregion ofMielec
(region ofLabour Office atMielec invoivodship ofRzeszów),
(4) programme ofrestructuring oftheregion ofWabrzych.
Thegrants foradditional financing ofinfrastructural investments carried outinthesystem of
public works ascommunes ’owntaskinregions threatened withhighstructural unemployment were
foreseen forinfrastructural investments, inthefields ofwater supply, electricity andheat,energy, sewage
system andmunicipal sewage treatment, sanitary equipment, waste dumps andutilization ofmunicipal
waste, roads andstreets andsport- recreational facilities.G/SCM/N/3/POL
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Page35
5.6 Amount ofassistance granted
In1995, PLZ84.79 million wasdestinated foradditional financing ofregional programmes.
IntheState budget for1996 forthispurpose PLZ102.1 million isforeseen.
5.7 Duration ofprogramme
Theprovisions ofabove Regulations were applied onlyin1995.
However, in1996, according toArt.27,par.1,Items 1,2and4oftheBudget Lawfor1996
of1February 1996(Dz.U. No.19,Item87)theregional programmes willbesupported fromtheState
budget aswell.
5.8 Beneficiaries
Thegrants foradditional financing ofinvestments defined inregional restructuring programmes
amounted toPLZ30million in1995. Within these, theadditional financing for172investments was
provided.Inthisnumber109investmentsbelongedtolocalinvestmentsofcommunes-PLZ22.87million
(76percentofthetotalgrant). Ontheother hand, theeconomic subjects carried out63investments
withparticipation ofthese grants, engaging thebudget means tothesumofPLZ7.13million (24per
centofthetotal).
Thegrants foradditional financing ofinfrastructural investments carried outinthesystem of
publicworksascommunes’,owntasks,inregionsthreatenedwithhighstructuralunemploymentamounted
toPLZ54.79 million in1995; 855investments in399communes received theadditional financing.
Thisassistance concerned exclusively theowninvestments ofcommunes.
5.9 Trade effect ofthesubsidy
Noinfluence ontheexchange withabroad.G/SCM/N/3/POL
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6. PROGRAMME OFRESTRUCTURING THE IRON AND STEEL INDUSTRY
6.1 Policy objectives oftheprogramme
- improving theeconomic effectiveness ofthemetallurgic production through
modernization ofthetechnology (increase ofshare ofthecontinuously casted steelfrom
8percentto75percent)andadapting theproduction potential andemployment tothe
market requirements (decrease ofproduction capacity oftherawsteelfrom19million
tons to11.7 million tons annually, decrease ofemployment from 147,000 to
43,500 persons);
- adapting theproduction assortment andquality ofproducts tomarket needs;
- protection ofthenatural environment against harmful effects oftheironandsteel
industry.
6.2 Legal basis
Budget Lawfor1995 (Dz.U. No.27,Item141and142), innextyears ofthefunctioning of
theprogramme -subsequent budget acts.
6.3 Authority responsible forthesubsidy
Minister ofIndustry andTrade.
6.4 Form ofassistance
Governmental credit guarantees, subject grants.
6.5 Characteristics oftheprogramme
Theprogramme oftherestructuring oftheironandsteelindustry foresees theexpenditure of
US$1.8 million forinvestments andUS$550 million forpurposes ofthefinancial restructuring. The
investment tasks arecarried outmainly fromownfunds ofironworks withbankcredits supported by
governmental guarantees onlyinnecessary cases. Theneeds concerning credit warrants intheyears
1995-2000 withtheactual dollar rateofexchange areevaluated inthefollowing years intheamount
of:PLZ520million, 520million, 950million, 25million, 25million, 10million respectively.
6.6 Amount ofassistance granted
Until theendof1995, thecredit warrants amounting toPLZ500million were granted (i.e
PLZ20million lessthanitwasassumed intheprogramme forthisyear), moreover, onesubject grant
- PLZ3.3million wasgranted in1995.
6.7 Duration oftheprogramme
Therestructuring programme oftheironandsteelindustry covers years 1995 -2000.G/SCM/N/3/POL
G/SCM/N/16/POL
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6.8 Beneficiaries
Uptonow, fourironworks benefited from credit warrants; therefore theaverage subsidy per
subject in1995 wasPLZ125million. Theironwork inbankruptcy procedure tookadvantage ofthe
subject grant -PLZ3.3million. Thepurpose ofthegrant wastheliquidation, forsecurity reasons,
ofworthless components oftheproperty andbringing intocultivation ofcinder tipsandwaste land.
6.9 Trade effects ofthesubsidy
Considering thefactthatthisprogramme isonlyintheinitial phase ofrealization, itisdifficult
toevaluate theinfluence ofthese subsidies ontheforeign trade.G/SCM/N/3/POL
G/SCM/N/16/POL
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7. PROGRAMMEOFTHERESTRUCTURINGOFTHESECTOROFNON-FERROUSMETALS
7.1 Policy objectives oftheprogramme
- increase andextension ofproduction assortments ofhighly processed products,
- increase ofrecycling,
- rationalization ofemployment,
- financial restructuring,
- commercialization andprivatization ofenterprises ofthesector,
- decrease ofinconveniences ofthesector forthenatural environment.
7.2 Legal basis
Budget Lawfor1995 (Dz.U. No.27,Item141and142), innextyears ofthefunctioning of
theprogramme -subsequent budget acts.
7.3 Authority responsible forthesubsidy
Minister ofIndustry andTrade.
7.4 Form ofassistance
Governmental credit guarantees, direct grants.
7.5 Characteristics oftheprogramme
Thetotalvalue oftheStateassistance forthesector ofnon-ferrous metals in1995 -2000 will
amount toPLZ500million. Itiscomposed bothofcredit guarantees anddirect grants; aconsiderable
partofthisamount -PLZ140million aregrants andwarrants designated forliquidation ofthezink-lead
oremine. Theabove programme doesnotcover thecopper sector; thisindustry willhaveaseparate
restructuring programme starting from 1996.
7.6 Amount ofassistance granted
In1995, within thisprogramme direct grant ofPLZ9million wasgranted. Credit warrants
were notobtained.
7.7 Duration ofprogramme
Therestructuring programme forthesector ofnon-ferrous metals covers years 1995-2000.
7.8 Beneficiaries
In1995, grantwasreceived onlybyoneeconomic subject -thezink-lead oremineinliquidation.
7.9 Trade effects ofthesubsidy
Considering thefactthatthisprogramme isintheinitial phase ofrealization, itisdifficult to
evaluate theinfluence ofthese subsidies onthetrade withabroad.