WORLD TRADE
ORGANIZATIONG/SCM/N/38/EEC/Add.9
21 December 1998
(98-5134)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
New and Full Notifications Pursuant to Article XVI:1
of the GATT 1994 and 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 of Italy .G/SCM/N/38/EEC/Add.9
Page 2
ITALY
TABLE OF CONTENTS
Page
1. Female Entrepreneurs...................................................................................................... 3
2. Incentives to Manufacturing and Extractive Enterprises in Disadvantaged
Regions........................................................................................................................ ....... 3
3. Support to Innovation and Development of SMEs ........................................................ 4
4. Increase of "Artigiancassa" Fund for Interest Contributions to
Handicraft Sector.............................................................................................................. 5
5. Interest Rate Subsidies for the Industrial Sector........................................................... 66. Credit Scheme to Cooperatives and Urgent Measures for Employment
Protection..................................................................................................................... ...... 6
7. Contributions to "Pilot "Projects" Promoted by SMEs of the Food
and Agriculture Sectors (L aw No. 304/90, Art. 2).......................................................... 7
8. Contributions to "Pilot Projects" Promoted by SMEs of the Food
and Agriculture Sectors (L aw No. 304/90, Art. 3).......................................................... 8
9. Soft Loans to Companies which aim at entering new markets by the
opening of commercial operations in non-EC countries ............................................... 9
10. Art. 1, Section 2, Law No. 488/92 (re-financing of Law No. 64/86),
concerning Extraordinary interventi on in the south of Italy...................................... 10
11. Aid Scheme for the Promotion of Youth Enterprise in Italy ...................................... 10
12. Special Fund for Applied Research Fund (FRA)......................................................... 11
13. Technological Innovation Fund (FIT)........................................................................... 12
14. Contributions to the realization of National Energy Plan aimed at
rationalizing the use of energy and renewable energy sources................................... 13
15. Support to the Reduction of Energy Consumption...................................................... 14
16. Credit Scheme to Cooperatives and Urgent Measures for Employment
Protection..................................................................................................................... .... 14
17. Special Fund for the Reconversion of the Asbestos Production ................................. 15
18. Production Aids to Shipyards........................................................................................ 1619. Home Credit Sche me to Shipowners............................................................................. 17G/SCM/N/38/EEC/Add.9
Page 3
1. Female Entrepreneurs
1. Name of the subsidy scheme and legal basis
Law No. 215/92 – Female Entrepreneurs.
2. Form of the subsidy
Grant
Interest Subsidy
3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
Up to now no funds have been distributed.
4. Policy objective and/or purpose of the subsidy
(a) Promotion of new female activities in different fields (industry, agriculture, trade,
services and handicraft);
(b) Promotion and development of new qualified female entrepreneurs.
5. Duration of the subsidy
No final term is established.
6. Statistical data permitting an assessment of the trade effects of the subsidy
The measure is not considered specific and it is notified for the sake of transparency.
7. Indicate to whom and how the subsidy is paid
(A) Beneficiaries are SME’s owned by females operating in different sectors: industry,
agriculture, trade, handicraft and services. In case of a capital society, majority has to
be owned by females; in case of personal society, 60 per cent of the partners have to befemale.
(B) Ministry of Industry makes a variable contribution (from 15 per cent up to 65 per cent
in ESL) depending on geographical position of the enterprises. Contribution is
distributed in two tranches : the first, equivalent to the 40 per cent of the contribution,
during the realisation of the project; the second when the project is completed.
2. Incentives to Manufacturing and Extractive Enterprises in Disadvantaged Regions
1. Name of the subsidy scheme and legal basis
Law No. 341/95, Article 1 – Incentives to Manufacturing and Extractive Enterprises in
Disadvantaged Regions.G/SCM/N/38/EEC/Add.9
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2. Form of the subsidy
Tax concession
3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
Lit. 28 Billion.
4. Policy objective and/or purpose of the subsidy
Providing incentives to industrial enterprises operating in disadvantaged regions.
5. Duration of the subsidy
No final term is established.
6. Statistical data permitting an assessment of the trade effects of the subsidy
Due to its nature the scheme only has an insignificant impact on trade.
7. Indicate to whom and how the subsidy is paid
(A) Industrial companies operating in Objective 1, 2  and 5b areas.(B) Companies are allowed to benefit of a fiscal  “bonus” in tax payment in the following
five years.
3. Support to Innovation and Development of SMEs
1. Name of the subsidy scheme and legal basis
Law No. 317/91 – Support to Innovation and Development of SMEs
2. Form of the subsidy
Grant/Tax concession/Guarantee
3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
Grant Lit. 2.25 Billion
Tax conc.         Lit 45 Billion (art. 6)Tax conc.         11.8 Billion (art. 8)
 Note: These figures refer to the global amount of subsidies distributed during 1997, by the Ministry
of Industry, Trade and Handicraft to the Small and Medium Enterprises (S.M.E.) and Services
Consortia.G/SCM/N/38/EEC/Add.9
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4. Policy objective and/or purpose of the subsidy
Development of SMEs, SMEs consortia, SMEs services consortia.
5. Duration of the subsidy
No final term is established.
6. Statistical data permitting an assessment of the trade effects of the subsidy
The measure is not considered specific but is notified for the sake of transparency.
7. Indicate to whom and how the subsidy is paid
(A) Beneficiaries are SME’s in industrial and services sector; SME’s consortia.(B) On request of the beneficiaries through contribution in grants or tax concessions.
4. Increase of "Artigiancassa" Fund for Interest Contributions to Handicraft Sector
1. Name of the subsidy scheme and legal basis
Increase of "Artigiancassa" Fund for Inte rest Contributions to Handicraft Sector
2. Form of the subsidy
Interest Subsidy
3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
Lit 386 Billion.
4. Policy objective and/or purpose of the subsidy
Making credit more accessible to handicraft undertakings.
5. Duration of the subsidy
No final term is established.
6. Statistical data permitting an assessment of the trade effects of the subsidy
Due to its nature the scheme only has an insignificant impact on trade.
7. Indicate to whom and how the subsidy is paid
(A) Beneficiaries are handicraft enterprises which receive funds through  bank loans.
(B) Interest subsidy is paid every six months.G/SCM/N/38/EEC/Add.9
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5. Interest Rate Subsidies for the Industrial Sector
1. Name of the subsidy scheme and legal basis
Law No. 902/76 – Interest Rate Subsidies for the Industrial Sector
2. Form of the subsidy
Interest Subsidy
3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
Lit 37 Billion.
4. Policy objective and/or purpose of the subsidy
SMEs’ development.
5. Duration of the subsidy
The scheme is no longer in force since the law was abrogated. The above figure refers to
the amount the Administration is still distributing due to previous decisions.
6. Statistical data permitting an assessment of the trade effects of the subsidy
The trade effects are minimal.
7. Indicate to whom and how the subsidy is paid
(A) SME’s in industrial sector operating in the Center and in the North of Italy.
(B) Contributions are spread over 10 years; interest rate is equivalent to 40 per cent-60
per cent of the rate of reference.  Contribution is distributed every 6 months.
6. Credit Scheme to Cooperatives and Urgent Measures for Employment Protection
1. Name of the subsidy scheme and legal basis
Law No. 49/85 – Credit Scheme to Coopera tives and Urgent Measures for Employment
Protection.
2. Form of the subsidy
Grant
Soft LoanG/SCM/N/38/EEC/Add.9
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3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
Grant: Lit 11.3 Billion
Soft loans: Lit 34.2 Billion
4. Policy objective and/or purpose of the subsidy
The scheme is intended to provide grants and soft loan to cooperatives in order to tackle
unemployment. In particular, it encourages new enterprises created by workers who have been fired,
who are in a mobility list or have been suspended from work in an overmanned factory.
5. Duration of the subsidy
No final term is established.
6. Statistical data permitting an assessment of the trade effects of the subsidy
Minimal trade effects.
7. Indicate to whom and how the subsidy is paid
(A) Beneficiaries are cooperatives with a maximum invested capital of Lit 0.5  billion for
restructuring or reconversion activities.
(B) Contributions (which last maximum 12 years) are distributed in a single tranche  or in
different period.
7. Contribution to "Pilot Projects" Promot ed by SMEs of the Food and Agriculture
Sectors and aimed at facilitating connections with the major distributors in non-EC
markets (Law No. 304/90, Art. 2)
1. Name of the subsidy scheme and legal basis
Law No. 304/90, Art. 2 - Contribution to "Pilot Projects" Promoted by SMEs of the Food and
Agriculture Sectors and aimed at facilitating connections with the major distributors in non-EC
markets
2. Form of the subsidy
Grant
3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
The programme is no longer in force (Law was financed until 1993). In 1997 , Lit 877
millions were distributed concerning projects approved in the past.G/SCM/N/38/EEC/Add.9
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4. Policy objective and/or purpose of the subsidy
The programme aims at the facilitating the internationalization of Italian companies operating
in the food and agriculture sector (generally small and medium sized and often family companies), by
helping them to create connections with major distributors.
5. Duration of the subsidy
 No longer in force.
6. Statistical data permitting an assessment of the trade effects of the subsidy
Minimal trade effects.
7. Indicate to whom and how the subsidy is paid
(A) The funds, at the disposal of the Ministry of Foreign Trade, were transferred to the
“Italian Institute for Foreign Trade” (ICE) which has provided for the payment of the
grants.
(B) Maximum amount of the grant: Lit 500 millions.  Payment is made in 3 instalments
by bank transfer.
8. Contribution to "Pilot Projects" Promot ed by SMEs of the Food and Agriculture
Sectors and aimed at facilitating connections with the major distributors in non-ED
markets (Law No. 304/90, Art. 3)
1. Name of the subsidy scheme and legal basis
Law No. 304/90, Art. 3 - Contribution to "Pilot Projects" Promoted by SMEs of the Food and
Agriculture Sectors and aimed at facilitating connections with the major distributors in non-ED
markets
2. Form of the subsidy
Soft Loan
3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
Lit 8.7 Billion.
4.      Policy objective and/or purpose of the subsidy
The soft loan is referred to expenses born  by Italian companies who intend to submit pre-
qualification applications for international tenders in non-EC  Countries.
5. Duration of the subsidy
Final term is not established.G/SCM/N/38/EEC/Add.9
Page 9
6. Statistical data permitting an assessment of the trade effects of the subsidy
Due to its nature the scheme only has an insignificant impact on trade.
7. Indicate to whom and how the subsidy is paid
(A) Beneficiary companies belong mainly to civil and industrial construction,
infrastructures;  projects covered include feasibility studies, etc..
(B) The soft loan is paid by Mediocredito Centrale on the basis of the documents
demonstrating the costs born by the recipient.  Lit 2 billions is the maximum amount
which can be granted and is related to the procurement value.
9. Soft Loans to Companies which aim at entering new markets by the opening of
commercial operations in non-EC countries
1. Name of the subsidy scheme and legal basis
Law No. 394/81, Art. 2 – Soft loan to companies which aim at entering new markets by the
opening of commercial operations in non-EC countries.
2. Form of the subsidy
Soft Loan
3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
Lit 219.3 Billion.
4. Policy objective and/or purpose of the subsidy
The programme is meant to facilitate the in ternationalization of Italian companies (mostly
small and medium sized), by helping them to create stable commercial  operations abroad (such as
offices, warehouses, show - rooms etc.).
5. Duration of the subsidy
No final term is established.
6. Statistical data permitting an assessment of the trade effects of the subsidy
The measure is not specific to any sector – minimal effect on trade.
7. Indicate to whom and how the subsidy is paid
(A) Beneficiaries are in the following sectors: Industry 74.4 per cent - Trade 18.4 per cent
- Services 7.2 per cent.
(B) The maximum level  of funding  is fixed at 85 per cent of the total planned expenses.G/SCM/N/38/EEC/Add.9
Page 10
10. Art. 1, Section 2, Law No. 488/92 (re-financing of Law No. 64/86), concerning
Extraordinary intervention in the south of Italy
1. Name of the subsidy scheme and legal basis
Art. 1, Section 2, Law No. 488/92 (re-financing of Law No. 64/86) concerning Extraordinary
intervention in the south of Italy.
2. Form of the subsidy
Grant
3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
Lit 3772 Billion.
4. Policy objective and/or purpose of the subsidy
Providing aid to entrepreneurial activities in the disadvantaged areas.
5. Duration of the subsidy
No final term is established.
6. Statistical data permitting an assessment of the trade effects of the subsidy
The aim of the measure is to compensate enterprises for the disadvantages of being located in
the regions involved;  little effect on trade.
7. Indicate to whom and how the subsidy is paid
(A) Beneficiaries are extractive and manufacturing enterprises and related service
companies.
(B) Contributions are paid  in accordance the EU regional aid ceilings.
11. Aid Scheme for the Promotion of Youth Enterprise in Italy
1. Name of the subsidy scheme and legal basis
Aid Scheme for the Promotion of Youth Enterp rise in Italy – Law 95/95 (ex Law 44/86) and
236/93.
2. Form of the subsidy
Grant
Interest SubsidyOther (Management Contribution).
Moreover both Laws provide for tutorship for financed enterprisesG/SCM/N/38/EEC/Add.9
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3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
Law 95/95 (in Billion)     Law 236/93 (in Million)
Grant 109.773 339.669
Interest Subsidy     76.853            0
Management Contribution      45.231    84.000
Total  231.858   423.669
4. Policy objective and/or purpose of the subsidy
To encourage young people in the disadvantaged regions of the country, defined according to
EC Objectives 1, 2 and 5b, to undertake industrial activities.
5. Duration of the subsidy
Law 95/95 (ex Law 44/86):  2 years;
Law 236/93:  3 years.
6. Statistical data permitting an assessment of the trade effects of the subsidy
Due to their nature the schemes only have an insignificant impact on trade.
7. Indicate to whom and how the subsidy is paid
Both laws (95/95 and 236/93) aim to encourage and support new entrepreneurial initiatives
among young people (between 18 and 35), residents  in the disadvantaged areas identified according
to EU parameters.
12. Special Fund for Applied Research Fund (FRA)
1. Name of the subsidy scheme and legal basis
Law No. 46/82: Special Fund for Applied Res earch Fund (FRA), Decision of Ministry
08.08.97.
2. Form of the subsidy
Grant 
Soft Loan
3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
Grant Lit 176.4 billion
Soft loan Lit 264.9 billion
 _____________
Lit 441.3 billionG/SCM/N/38/EEC/Add.9
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4. Policy objective and/or purpose of the subsidy
To encourage incentives to pluriannual programmes aimed to introduce technological
innovations.
5. Duration of the subsidy
No final term is established.
6. Statistical data permitting an assessment of the trade effects of the subsidy
The measure is generally available and is not considered specific;  it is notified for the sake of
transparency.
7. Indicate to whom and how the subsidy is paid
(A) Industrial firms, consortia, research companies, public or private laboratories.(B) Activities of industrial research can benefit a contribution up to 50 per cent in ESL of
the cost of the project. For pre-competitive activities maximum amount is 25 per cent
in ESL.
13. Technological Innovation Fund (FIT)
1. Name of the subsidy scheme and legal basis
Law No. 46/82, Art. 14 and followings:  Technological Innovation Fund (FIT)
2. Form of the subsidy
Grant
Soft Loan
3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
  Distributed Accorded
Grant Lit 33 billion Lit 22 billion
Soft loan Lit 265 billion Lit 295 billion
____________ ___________
Lit 298 billion Lit 317 billion
4. Policy objective and/or purpose of the subsidy
Promoting pluriennal programmes aimed at  introducing technological innovations.
5. Duration of the subsidy
No final term is established.G/SCM/N/38/EEC/Add.9
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6. Statistical data permitting an assessment of the trade effects of the subsidy
Due to its nature the scheme has an insignificant impact on trade.
7. Indicate to whom and how the subsidy is paid
(A) Beneficiaries are industrial and service enterprises.  Big firms are eligible only if they
act in the main sectors mentioned in the legal framework.
(B) The soft loan rate changes from 25 per cent to 60 per cent of the reference rate,
according to the dimensions and the geographical location of the enterprise; it is
accorded for 15 years maximum (of which 5 years are pre-amortization) and it isequal to 35 per cent-55 per cent of the admissible costs.
14. Contribution to the realization of National  Energy Plan aimed at rationalizing the use of
energy and renewable energy sources
1. Name of the subsidy scheme and legal basis
Law No. 10/91 - Contribution to the real ization of National Energy Plan aimed at
rationalizing the use of energy and renewable energy sources
2. Form of the subsidy
Grant
3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
Lit 58 billion
4. Policy objective and/or purpose of the subsidy
Energy efficiency, research and developmen t, technological innovation, environment
protection.
5. Duration of the subsidy
No final term is established.
6. Statistical data permitting an assessment of the trade effects of the subsidy
The measure is not considered specific and is notified for the sake of transparency.
7. Indicate to whom and how the subsidy is paid
(A) Beneficiaries are public and private companies; and related consortia, operating in
industrial and service sectors.
(B) The amount of the grant is related to the level of the investment and to the expenses
of the energy saved or produced with renewable sources.G/SCM/N/38/EEC/Add.9
Page 14
The grant is paid in one payment  or in tranches.
15. Support to the Reduction of Energy Consumption
1. Name of the subsidy scheme and legal basis
Law No. 308/82 - Support to the reduction of energy consumption
2. Form of the subsidy
Grant
3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
Lit 22.8 billion
Note: Although the law 308/82 has been replaced by the law 10/91, the reported amounts are refer
to the obligations engaged before the entry into force of law 10/91.
4. Policy objective and/or purpose of the subsidy
Energy efficiency, research and technological innovation.
5. Duration of the subsidy
In 1992 possibility to submit requests under this scheme ceased.
6. Statistical data permitting an assessment of the trade effects of the subsidy
Due to its nature the scheme has an insignificant impact on  trade.
7. Indicate to whom and how the subsidy is paid
(A) Beneficiaries are public and private companies, and related consortia, operating in
industrial and service sectors.
(B) The amount of the grant is related to the level of the investment and to the expenses
of the energy saved or produced with renewable sources.
The grant is paid in one payment or in tranches.
16. Credit Scheme to Cooperatives and Urgent Measures for Employment Protection
1. Name of the subsidy scheme and legal basis
Law No 49/85 - Credit scheme to cooperati ves and urgent measures for employment
protectionG/SCM/N/38/EEC/Add.9
Page 15
2. Form of the subsidy
Grant
Soft Loan
3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
Grant: Lit 11.3 billion
Soft loans: Lit 34.2 billion
4. Policy objective and/or purpose of the subsidy
The scheme is intended to provide grants and soft loan to cooperatives in order to tackle
unemployment. In particular, it encourages new enterprises created by workers who have been fired,
who are in a mobility list or have been suspended from work in an overmanned factory.
5. Duration of the subsidy
No final term is established.
6. Statistical data permitting an assessment of the trade effects of the subsidy
Minimal trade effects.
7. Indicate to whom and how the subsidy is paid
(A) Beneficiaries are cooperatives with a maximum invested capital of Lit 0.5 billion for
restructuring or reconversion activities.
(B) Contributions (which last maximum 12 years) are distributed in a single tranche  or in
different period.
17. Special Fund for the Reconversion of the Asbestos Production
1. Name of the subsidy scheme and legal basis
Law 257/92 - Special Fund for the reconversion of the asbestos production
2. Form of the subsidy
Grant
3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
Accorded: Lit 6 billion
Distributed: 0G/SCM/N/38/EEC/Add.9
Page 16
4. Policy objective and/or purpose of the subsidy
Facilitating reconversion of the asbestos production.  Allowances are granted to enterprises
which have given up producing asbestos, in order to improve environmental standards of the whole
industrial sector.
5. Duration of the subsidy
Final  term for the submission of the request under this scheme was October 1995.
6. Statistical data permitting an assessment of the trade effects of the subsidy
Due to its nature the scheme only has  an insignificant impact on trade.
7. Indicate to whom and how the subsidy is paid
(A) Beneficiaries are companies reconverting their production with the aim to eliminate
asbestos.
(B) The grant is equal to 15 per cent or  30 per cent of the cost of the approved project.The subsidy is paid in one amount after a final inspection.
18. Production Aids to Shipyards
1. Name of the subsidy scheme and legal basis
Law No. 234/89 and Law No. 132/94 (imple menting the sixth and the seventh
directive on aids to shipbuilding) - Production aids to shipyards
2. Form of the subsidy
Grant
3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
Lit 710 billion
4. Policy objective and/or purpose of the subsidy
To bridge the gap between the most competitive EU shipyard and the market prices.
5. Duration of the subsidy
According to OECD rules.G/SCM/N/38/EEC/Add.9
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6. Statistical data permitting an assessment of the trade effects of the subsidy
As regards the commercial effects, the Italian shipyards were allowed by EC rules to maintain
their own position on the market on an equal basis as far as competitive conditions are concerned.
7. Indicate to whom and how the subsidy is paid
(A) To shipyards.
(B) To the shipyard during the construction of the ship up to 75 per cent of the subsidy
and the remaining 25 per cent  after the delivery of the ship.
19. Home Credit Scheme to Shipowners
1. Name of the subsidy scheme and legal basis
Law No. 234/89 and Law No. 132 /94 (implementing the sixth and the seventh directive on
aids to shipbuilding) – Home Credit Scheme to Shipowners.
2. Form of the subsidy
Interest Subsidy (equivalent to loans at OECD terms – according to the understanding on
export credits for ship – OECD Council Resolution dated 3 rd August 1981).
3. Subsidy per Unit or, in case this is not possible, the global amount of subsidies distributed
during 1997
Lit 441 Billion.
4. Policy objective and/or purpose of the subsidy
To bridge the difference between the Italian financing terms and standard OECD financing
terms. The shipowner’s subsidies are granted in 17 half yearly instalments.
5. Duration of the subsidy
According to OECD rules (8.5 years).
6. Statistical data permitting an assessment of the trade effects of the subsidy
As regards the commercial effects, the Italian shipowners were allowed to work  on an equal
basis on the market as far as financing conditions are concerned.
7. Indicate to whom and how the subsidy is paid
(A) To shipowners.
(B) The subsidies are granted in 17 half yearly instalments according to the understanding
OECD Council Resolution on export credits for ships.
__________