WORLD TRADE
ORGANIZATIONG/SCM/N/60/EEC/Add.13
10 October 2000
(00-4160)
Committee on Subsidies
and Countervailing MeasuresOriginal:  Spanish
SUBSIDIES
Updating Notification 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 Spain .G/SCM/N/60/EEC/Add.13
Page 2
SPAIN
Central Administration
Table of Contents
Page
CENTRAL ADMINISTRATION …………………………………………………………………… 3
I. FISHERIES .................................................................................................................... .........3
1998 BUDGET – CO-FINANCED PART  OF NATIONAL  AID .......................................3
AID TO SHIPOWNERS AFFECTED BY  THE STOPPAGE OF FISHING...................3
II. INDUSTRY AND ENERGY ..................................................................................................4
PROMOTION OF THE ECONOMIC AND SOCIAL SECTORS OF THE
AGRI-FOOD I NDUSTRY .....................................................................................................4
MINING (OTHER THAN ENER GY)..................................................................................5
ENERGY SAVING AND E FFICIENCY PLAN..................................................................6
AID TO SHIP BUILDING......................................................................................................7
A. SHIPBUILDING SUBSIDIES ............................................................................................... 7
B. INTEREST SUBSIDY FOR SHIPBUILDING  LOANS .....................................................9
SUPPORT INITIATIVE FOR TECHNOLOGY, QUALITY AND INDUSTRIAL
SAFETY (ATY CA)................................................................................................................. 10
AID UNDER TECHNOLOGICAL PROGRAMMES CONNECTED WITH
THE SEAT MODERNI ZATION PLAN ..............................................................................11
R&D PLAN FOR THE AERONAUT ICAL SECTOR II ...................................................12
III. SMALL AND MEDIUM EN TERPRISES (SMEs)..............................................................13
SME INDUSTRIAL DEVELO PMENT INIT IATIVE........................................................13
ARTE/SME PROGRAMME .................................................................................................15
IV. REGIONAL SU BSIDIES.......................................................................................................16
REGIONAL ECONOMIC I NCENTIVES SCHEME.........................................................16G/SCM/N/60/EEC/Add.13
Page 3
I. FISHERIES
1998 BUDGET – CO-FINANCED PART OF NATIONAL AID
Pursuant to Regulation 3699/93 setting out the criteria and conditions for the Community's
structural measures in fisheries, aquaculture and the processing and marketing of the products thereof,
IFOP (Royal Decree 798/1995 of 19 May) , the following aid has been granted:
1. Individual compensatory premiums
Ptas 2 million were transferred to the Autonomous Communities.  Ptas 750,000 were paid
directly to individual fisherman.
2. Subsidies for the improvement of fishing
Ptas 93.81 million
3. Promotion of aquaculture
Ptas 185.34 million.  Transferred to the Autonomous Communities.
4. Marine cultivation plans
Ptas 109.98 million. Transferred to the Autonomous Communities.
5. Reorganization and renovation of the fishing fleet
* Building and modernization:  Ptas 4,400 million.
* Definitive stoppage:  Ptas 3,424.7 million.* Temporary stoppage:  Ptas 1,394 million.
6. Conversion of the fishing fleet
* Establishment of joint ventures:  Ptas 1,627.77 million.
7. Compensatory earlier retirement as a result  of the reorganization of the fishing fleet
2 million pesetas, which were transferred to the Autonomous Communities.
AID TO SHIPOWNERS AFFECTED BY THE STOPPAGE OF FISHING
1. Title of the programme
Special economic aid to shipowners affected by the stoppage of fishing.
2. Period covered by the notification
Financial year 1999G/SCM/N/60/EEC/Add.13
Page 4
3. Policy objective and/or purpose of the subsidy
In accordance with Article 14 of Council Regulation 3699/93, amended on 3 November 1998
by new Council Regulation 2468/98, Royal Decree 798/1995 was prepared on 19 May.  Pursuant to
Article 61 of that Royal Decree, assistance is provided for the temporary cessation of the activities offishing fleets caused by unforeseen and non-repetitive events, and the requisite aid is granted to owners
of fishing vessels fishing for cephalopods and trawling for black hake in the Moroccan fishing grounds,
under the fishing agreement between the European Union and the Kingdom of Morocco, on account of
the biological cessation of fishing during March and April 1999.
4. Authority
Order of 11 March 1999 (BOE, 13 March)
5. Form of the subsidy
Non-repayable subsidies
6. To whom and how the subsidy is provided
Shipowners in the fishing sector, through the collaborating entities.
A variable amount is granted depending on the gross registered tonnage (GRT) or gross tonnage
(GT), in accordance with table 2 of Royal Decree 696/1996 of 26 April.
7. Subsidy per unit or total amount of the subsidy
Aid to ship owners Number of vessels
Ptas 641.36 million  88
8. Duration of the subsidy
From 1 March to 30 April 1999
9. Statistical data permitting an assessment of the trade effect of the subsidy
This subsidy does not in fact have any effect on trade, since the objective of the programme is
to provide compensation to shipowners that cannot fish during certain periods.
II. INDUSTRY AND ENERGY
PROMOTION OF THE ECONOMIC AND SOCIAL SECTORS OF THE AGRI-FOOD
INDUSTRY
1. Title of the subsidy programme
Promotion of the economic and social sectors of the agri-food industry.
2. Period covered by the notification
1999G/SCM/N/60/EEC/Add.13
Page 5
3. Policy objective and/or purpose of the subsidy
To promote the implementation of the technical assistance and management plans for the
economic and social sectors of the agri-food industry.
4. Authority
Order of 4 July 1995 establishing subsidies for technical assistance and management plans for
the agri-food industries.
5. Form of subsidy
Non-repayable grant
6. Recipients/beneficiaries
Associations of firms in the industrial agri-food sector, associations of agricultural producers,
trade unions in the agri-food industry, professiona l associations, foundations and other organizations
whose objectives are connected with the agricultural and food industry.
7. Amount of the subsidy
Total amount for 1999:  Ptas 85,143,737
8. Duration of the subsidy
Specific, when the requirements are fulfilled.
9. Statistical data permitting an assessment of the trade effects of the subsidy
No information is available to permit such an assessment, but the effect would appear to be
minimal in any case.
MINING (OTHER THAN ENERGY)
1. Title of the subsidy programme
Development of non-energy mining
2. Period covered by the notification
1999
3. Purpose of the subsidy
Development of the non-energy mining subsector , ore prospecting, mining and processing, as
well as R&D in these fields and, in some cases, environmental rehabilitation of former mining sites.
4. Authority
Ministerial Order of 8 April 1997 (BOE, 24 April 1997)G/SCM/N/60/EEC/Add.13
Page 6
5. Form of the subsidy
Non-repayable subsidy
6. To whom and how the subsidy is provided
Enterprises, associations of enterprises or institutions whose object is to promote and develop
the use of non-energy mineral raw materials are eligible for the subsidy.
Mining investment subsidies are confined to zones defined by the EU Commission as Objective
1, since the assistance under this programme in this case is for regional development.
This aid is contingent on the applicants meeting their tax and social security obligations, and the
recipients must produce documents showing that  the subsidized activity has been carried out.
7. Amount of the subsidy
Ptas 794 million
The maximum aid is 20 per cent of subsidizable investment.
8. Duration of the subsidy
The programme lasts for five years, until 31 December 2001.
9. Statistical data on the trade effects of the subsidy
The programme has no trade effects because of the small amount compared with the size of the
sector (annual turnover between Ptas 200,000 milli on and Ptas 300,000 million) and the high number of
recipients, since the programme covers 54 enterprises.
ENERGY SAVING AND EFFICIENCY PLAN
1. Title of the subsidy programme
Energy Saving and Efficiency Plan
2. Period covered by the notification
1999
3. Purpose of the subsidy
The Plan's objectives are to promote energy efficiency in industry, transport and public
buildings;  to develop the use of renewable energy sources, such as wind, solar (thermal and
photovoltaic energy), use of the biomass and waste (urban, industrial, forest and agricultural) and small-
scale hydraulic power (up to 10 MVA).
This is done in accordance with the objectives of Law 82/80 on energy conservation and of the
National Energy Plan, which defines the energy objectives for the decade 1991-2000.G/SCM/N/60/EEC/Add.13
Page 7
4. Authority
Law 82/80 on energy conservation and Ministerial Order of 6 February 1997 establishing the
regulatory bases for subsidies under this programme for the period 1997-1999 and setting the subsidies
for 1997.
5. Form of the subsidy
Non-repayable subsidy
6. To whom and how the subsidy is provided
The following are eligible for such subsidies:
- Public or private enterprises;- groups of such enterprises;- condominium owners' associations;- non-profit making institutions;
- local corporations;
- natural persons engaging in activities covered by the Plan;- neighbourhood associations and groups of such associations which submit integrated
programmes for the supply of services to a minimum of 150 housing units.
To receive this subsidy, the beneficiary must show that he has met his current tax and social
security obligations and that the subsidized activity has been carried out.
7. Amount of the subsidy
For the 1999 financial year, subsidies under this programme amounted to Ptas 1,540 million.
8. Duration of the subsidy
This programme covers the period 1997-1999.
9. Statistical data on the trade effects of the subsidy
Since the subsidy is for all energy users, this question does not apply.
AID TO SHIPBUILDING
A. SHIPBUILDING SUBSIDIES
A1. Title of the subsidy programme
Shipbuilding subsidiesG/SCM/N/60/EEC/Add.13
Page 8
A2. Period covered by the notification
1999
A3. Purpose of the subsidy
The fundamental aim of Community and national poli cy is to ensure that the shipbuilding sector
remains competitive on the world market.
Since third countries continue to apply aid and/or measures that distort free competition in the
shipbuilding sector, in order to compete on the in ternational market Community shipyards must have
access to operational aid (limited by a common ceiling:  9 per cent or 4.5 per cent, depending onwhether or not the value of the ship to be built exceeds € 10 million) and restructuring aid (for
investments which do not imply an increase in capacity, total or partial closure of facilities and research
and development).
A4. Authority
Royal Decree 442/1994 of 11 March (BOE 96 of 22 April 1994) on shipbuilding subsidies and
financing, amended by Royal Decrees 1395/1995, 1562/1997, and 2600/1998 of 4 December 1998
(BOE 301 17 of December 1998).
A5. Form of the subsidy
Non-repayable subsidy
A6. To whom and how the subsidy is provided
The subsidy is paid to shipyards building metal-hull vessels of over 100 gross registered tonnes
with the exception of fishing vessels since 19 October 1997.
The subsidy is provided once the relevant construction or conversion contract has come into
effect.  Payments are made as the ship is built or converted, subject to provision being made in the
annual budget, which means an average delay in paym ents of approximately six months to one year.
A7. Amount of the subsidy
Total subsidy granted in 1999: Ptas 17,580 million
A8. Duration of the subsidy
The period of application of the programme is the same as that provided for in Council
Regulation (EC) No. 1540/98 of 29 June 1998 (OJEC 18 July 1998)
A9. Statistical data on the trade effects of the subsidy
The subsidies are granted under the Seventh Directive on aid to shipbuilding applicable in all
countries of the European Union.  Nevertheless, in 1997 shipbuilding in the European Union
represented 14.4 per cent of the global total, as opposed to 19.4 per cent in 1996, while at the same timethe shares of Japan and Korea rose from 36 per cent and 21.4 per cent respectively in 1996 to 39.1 per
cent and 27.5 per cent in 1997.  Consequently, these subsidies have not increased the European Union's
share of the global market.G/SCM/N/60/EEC/Add.13
Page 9
B. INTEREST SUBSIDY FOR SHIPBUILDING LOANS
B1. TITLE OF THE SUBSIDY PROGRAMME
Interest subsidy for shipbuilding loans
B2. Period covered by the notification
1999
B3. Purpose of the subsidy
The same objectives as those described in section 3 above.
B4. Authority
Royal Decree 442/1994 of 11 March (BOE 96 of 24 April 1994) on shipbuilding subsidies and
financing, amended by Royal Decrees 1395/1995, 1562/1997 and 2600/1998 of 4 December 1998
(BOE 301 of 17 December 1998).
B5. Form of the subsidy
Interest subsidy
B6. To whom and how the subsidy is provided
Domestic shipbuilders or those domiciled in the European Economic Area and, since
19 October 1997, under certain conditions, shipbuilders domiciled outside the European Economic Area
are eligible for this subsidy.  It consists of payment of up to three percentage points of the interest on
shipbuilding loans granted by domestic or foreign financial entities.
The subsidy is paid throughout the term of the loan (8.5 to 14 years) subject to provision being
made in the annual budget, which means that there is a three to nine months' delay in payments.
B7. Amount of the subsidy
Total subsidy granted in 1999: Ptas 6,400 million
B8. Duration of the subsidy
The period of application of the programme is the same as that provided for in Council
Regulation (EC) No. 1540/98 of 29 June 1998 (OJEC 29 June 1998).
B9. Statistical data on the trade effects of the subsidy
The comments made in A.9 also apply to this  section as the subsidy under the interest rate
subsidy is deducted from the common maximum ceiling, 9 per cent or 4.5 per cent depending on
whether or not the value of the vessel to be built exceeds € 10 million.G/SCM/N/60/EEC/Add.13
Page 10
SUPPORT INITIATIVE FOR TECHNOLOGY, QUALITY AND INDUSTRIAL SAFETY
(ATYCA)
1. Title of the subsidy programme
Support Initiative for Technology, Quality and Industrial Safety (ATYCA)
2. Period covered by the notification
1999
3. Purpose of the subsidy
The basic objective of the ATYCA initiative is to enhance the technological and innovative
capacity, as well as the safety and industrial quality, of Spanish enterprises in conformity with the
European Union's policy on aid for technological research and development, and the incorporation of
quality and safety in industrial processes.
The ATYCA initiative consists of two main lines of action:  the Industrial Technology
Development Programme (PFTI) and the Quality and Industrial Safety Programme (PCSI).
4. Authority
Aid under the ATYCA initiative is granted under the Order of the Ministry of Industry and
Energy of 4 March 1999 calling for aid and establishing the regulatory bases for the granting of aid
under the ATYCA initiative of  the Energy R&D Technological Programme, inter alia  (BOE of
24 March 1999).
5. Form of the subsidy
Non-repayable subsidy
6. To whom and how the subsidy is provided
Public or private enterprises and bodies, groups of such enterprises and non-profit-making
institutions are eligible.
The annual amount of ATYCA ai d is available to potential beneficiaries which apply for
subsidies in order to carry out projects in various technological areas.  The aid is granted subject to thestudy and assessment of the applications by a committee.  The amount of the subsidy in relation to the
costs of projects may not exceed the limits of State aid authorized under European Union directives.
The aid is contingent on compliance by applicants with their tax and social security obligations
and proof that the activity has actually been carried out.
7. Annual amount of the subsidy
In 1999, subsidies paid under the ATYCA initiative amounted to Ptas 22,753 million.  The
number of eligible programmes was 2,619.
8. Duration of the subsidy
The ATYCA initiative remained in force from 1997 to 1999, with the subsidies granted
annually.G/SCM/N/60/EEC/Add.13
Page 11
9. Statistical data on the trade effects of the subsidy
Because of the nature of this programme, which mainly concerns the development of
technology and industrial quality and is open to enterprises in all industrial sectors, including building,the trade effects are minimal since the aid is distributed over virtually the whole of industry.
Additional note
The majority of the subsidies granted under the ATYCA initiative are used to support R&D
projects under the Industrial Technology Development Programme;  consequently, the subsidies under
this programme are non-actionable subsidies under Article 8.2 of the SCM Agreement, notifiedpursuant to Article 25 as granted in 1997.
AID UNDER TECHNOLOGICAL PROGRAMMES CONNECTED WITH THE SEAT
MODERNIZATION PLAN
1. Title of the subsidy programme
Aid under technological programmes connected with the SEAT Modernization Plan
(1994-1997).  This programme has been completed.
2. Period covered by the notification
1999.
3. Purpose of the subsidy
The aid is intended for innovation, technological development and training projects in the
SEAT company, a subsidiary of the Volkswagen Group, under a plan that will mean a 29 per cent
reduction in SEAT's capacity and a 5 per cent capacity reduction of the VW Group, at the Community
level.
4. Authority
Commission Decision 96/257/EC of 31 November 1995 concerning the aid granted by Spain to
SEAT S.A., a member of the VW Group.
5. Form of the subsidy
Non-repayable subsidy
6. To whom and how the subsidy is provided
The subsidy is payable exclusively to the SEAT company, which must produce evidence to the
Spanish authorities that the innovation, technological development and training projects have been
implemented.
7. Amount of the subsidy
Since the programme has been completed, no subsidies were granted.G/SCM/N/60/EEC/Add.13
Page 12
8. Duration of the subsidy
The Modernization Plan covers the period 1994-1997 and subsidies may be granted in the years
1995-1998.
9. Statistical data on the trade effects of the subsidy
The subsidy has no adverse affects on trade for SEAT's competitors since it fulfils the
requirements under the Agreement on Subsidies and Countervailing Measures for aid for this purpose
(R&D, Article 8.2(a));  furthermore, the Modernizati on Plan for which the aid is intended involves a
reduction of 29 per cent in production capacity and of 49 per cent in employment by the end of the Plan,
so that by the end of 1997 SEAT's technical capacity will not exceed 2,125 units per day, comparedwith 3,000 units per day at the end of 1993.
R&D PLAN FOR THE AERONAUTICAL SECTOR II
1. Title of the subsidy programme
R&D plan for the aeronautical sector
2. Period covered by the notification
1999
3. Purpose of the subsidy
Basic research and development projects in the aeronautical sector
4. Authority
Decision of the Government Commission for Economic Affairs and Cooperation Agreements
with Enterprises.  Ministerial Order of 29 July 1999 (BOE 12 August 1999).
5. Form of the subsidy
Repayable advances
6. To whom and how the subsidy is provided
Aircraft companies which have signed a Cooperation Agreement.  The repayable advances are
paid out annually.
7. Amount of the subsidy
Ptas 5,761 million
8. Duration of the subsidy
This second R&D plan will last five years, from 1 January 1999 to 31 December 2003.G/SCM/N/60/EEC/Add.13
Page 13
9. Statistical data on the trade effects of the subsidy
Since the Programme covers basic industrial research, which is far removed from the marketing
stage, it has no trade effects.
Additional note
The Plan is for basic research projects and is therefore regarded as a programme of "non-
actionable" aid within the meaning of Article 8.2(a) of the SCM Agreement.  It is notified under Article
25, having been in force in 1996.
III. SMALL AND MEDIUM ENTERPRISES (SMEs)
SME INDUSTRIAL DEVELOPMENT INITIATIVE
1. Title of the subsidy programme
SME Industrial Development Initiative:  aid and promotion
2. Period covered by the notification
1999
3. Purpose of the subsidy
The SME Industrial Development Initiative incorporates a number of activities for small and
medium enterprises (SMEs) and includes the following subprogrammes:
3.1 Business cooperation
Purpose:  The official aid is intended to finance some of the cost for national partners of
concluding cooperation agreements and the cost of cooperation awareness and promotion plans.
The activities must not lead to restrictive business practices, must offer guarantees of
permanence and stability and must be directed at promoting and supporting inter-business cooperation.
3.2 Promotion of information services
Purpose:  The aid is granted to facilitate cooperation among information centres which, using
telematics, promote and reinforce the supply of sophisticated business information services.3.3 Industrial design
Purpose:  The implementation of design projects by companies to be used to incorporate,
include or apply innovative and/or design technolo gy in SMEs so as to provide information on the
product, marketing, corporate identity, and to disseminate, promote and make businesses and consumers
aware of the importance of design and innovation as tools for improving the competitiveness of
businesses.G/SCM/N/60/EEC/Add.13
Page 14
3.4 Financing
Purpose:  To facilitate access by small and medium enterprises to various sources of financing,
to assist investment, lower the cost, and improve the economic and financial structure of such
enterprises.
3.5 Networks of intermediate organizations supporting innovation
Purpose:  Assistance to businesses for acti on plans or project start-up, principally those
intended to install mechanisms used for innovation management, utilize technological resources or
improve internal technology learning processes within the business.
Spreading ideas, experience, practical improvements, results and techniques involving
innovation management, including joint training activities to reinforce the human resources of SMEs
and/or intermediate organizations.
Study and introduce commercial and technological monitoring systems in appropriate sectors,
to improve the formulation of technological and trade plans and strategies by the SMEs.
Support for studies on the incorporation of innovation in the strategies of intermediate
organizations and their integration into supranational organizations.
4. Authority
Royal Decree 937/1997 of 20 June 1997 (BOE, 11 July 1997)
5. Form of the subsidy
Non-repayable subsidy
6. To whom and how the subsidy is provided
Small and medium enterprises and intermediate organizations are eligible for this aid.
For the purposes of this Royal Decree, a small or medium industrial enterprise (SME) is
deemed to be an economic unit with natural or legal personality which, at the time of the application,
meets the following requirements:
(a) Employs not more than 250 workers;(b) either:  an annual turnover of not more than € 40 million, or an overall balance of not
more than € 27 million;
(c) 25 per cent or more of their shares are not held by companies that do not meet the
aforesaid requirements, unless they are State investment enterprises, risk capital
enterprises or institutional investors, provided they do not exercise control.
For the purposes of this Royal Decree, an intermediate organization is deemed to be:
Any public, semi-public or private organization which, regardless of the way it is established or
whether it has legal personality, on a non-profit making and habitual basis, provides support services for
small and medium enterprises by carrying out joint assistance programmes or supplying services to
promote and help improve the management of SMEs.G/SCM/N/60/EEC/Add.13
Page 15
Organizations in which the majority of the capital is State owned and which, for profit-making
purposes, pursue the objectives set out in the previous paragraph.
Financial bodies, excluding credit bodies, engaged in activities covered by the financial support
programmes in the Royal Decree, as well as bodies whose purpose is to grant loans to SMEs and/orcontribute towards the risk capital/capital investment , either from their own resources or from resources
managed by them.
Before receiving this subsidy, beneficiaries must  show that they have complied with their tax
and social security obligations.
They must also show that the subsidized activity has actually been carried out.
7. Amount of the subsidy
Ptas 18,481.7 million, committed in their totality and allocated according to the territorial scope
laid down in Article 153 of the General Budget Law, as implemented by Law 13/1996 of 30 Decemberon administrative tax and social order measures.
Breakdown of commitments by subprogramme:Business cooperation 11.33%
Business information 20.03%
Design 26.97%
Innovation networks 29.47%
Financing 12.73%
8. Duration of the subsidy
The Programme is for three years until 31 December 1999.
9. Statistical data permitting an assessment of the trade effects of the subsidy
Given the nature of this aid programme, there is no effect on trade.
ARTE/SME PROGRAMME
1. Title of the subsidy programme
ARTE/SME Programme under the operational programme of the Community SME initiative.
2. Period covered by the notification
1999
3. Purpose of the subsidy
Aid for the financing of advanced telecommunication services projects of common interest to
small and medium enterprises.
4.  Authority
Ministerial Order of 31 July 1995 (BOE, 21 August 1995).G/SCM/N/60/EEC/Add.13
Page 16
5.  Form of the subsidy
Non-repayable subsidy
6. To whom the subsidy is provided
Only legally established non-profit-making public or private entities are eligible for the subsidy.
Zones classified as Objective 1 under the European Regional Development Fund (ERDF) are
priority zones for action.
Action may also be undertaken in Objective 2 and 5-b zones, although to a much lesser degree.
Some residual allocations go to non-ERDF zones.
The aid is contingent on the applicants meeting their tax and social security obligations and the
recipients must produce documents showing that th e subsidized activity has been carried out and the
relevant costs have been paid.
7. Amount of the subsidy
Subsidies approved in 1999:  Ptas 1,380 million.  Around 70 per cent of this amount was used
to acquire computer equipment (hardware and software), to develop customized software and topurchase telecommunications terminals (modems, PCs) for use by SMEs.  The remainder was used for
communications costs and costs related to feasibility studies, promoting the use of advanced
telecommunications services and providing technical assistance.
8. Duration of the subsidy
The ARTE/SME programme is for five years, remaining in effect until June 1999 for the
submission of new projects.  Subsidized projects may be terminated after this date.
9. Statistical data permitting an assessment of the trade effects of the subsidy
The aid regime has no trade effects due to its small scale in comparison with the scale of trade
and the large number of SMEs that have indirectly benefited from this aid, estimated at 13,713 in
various economic sectors as the programme is multisectoral.
IV. REGIONAL SUBSIDIES
REGIONAL ECONOMIC INCENTIVES SCHEME
1. Title of the subsidy programme
Regional Economic Incentives Scheme
2. Period covered by the notification
1999
3. Policy objective and/or purpose of the programme
The purpose  is to promote the economic development of the most disadvantaged areas.  The
objective of regional incentives is to foster entrepreneurship and encourage firms to locate in previouslyG/SCM/N/60/EEC/Add.13
Page 17
determined areas, so as to reduce economic disparities on Spanish territory, secure a more equitable
spread of economic activities and strengthen the regions' potential for internally generated development.
4. Authority
The mandate under the Spanish Constitution, which sets out in Article 40.1 an obligation on the
authorities to foster favourable conditions for a more equitable distribution of regional income.
Similarly, Article 138 lays down that the State shall establish a suitable and fair economic balance
among the various parts of Spanish territory.
The legislative basis is:
- Law 50/85 of 27 December, on regional economic incentives to remedy inter-regional
economic imbalances.
- Regulation adopted by Royal Decree 1535/1987 of 11 December and amended by
Royal Decree 897/1991 of 14 July, Roya l Decree 302/1993 of 26 February, Royal
Decree 2315/1993 of 29 December and Royal Decree 78/1997 of 24 January.  It was
approved by the EU Commission's Decision of 1 June 1987.
- 13 Royal Decrees delimiting the Economic Promotion Areas, some amended.
5. Form of the subsidy
Non-repayable subsidies, granted for productive investments and calculated on the investment
approved by the Administration.
6. To whom the subsidy is provided
Once it is approved, the subsidy is notified individually to the persons concerned in an
Individual Resolution establishing the basic data for the project, including the name of the recipient
enterprise that has applied for it.
The aid is paid once the relevant Autonomous Community has issued a report substantiating
full execution of the project and on fulfilment, within the specified periods, of the conditions required in
the relevant Individual Resolution, accepted by the beneficiary beforehand.  Enterprises may apply to
receive the subsidy in instalments provided they pr oduce evidence that the part of the investment for
each instalment has been made together with adequate guarantees against failure to complete.
7. Amount of the subsidy
General State Budget for 1999:  Ptas 53,654 million.
8. Duration of the subsidy
The scheme will continue as long as the reason for introducing it, namely the imbalance in
regional development, persists.G/SCM/N/60/EEC/Add.13
Page 18
9. Statistical data permitting an assessment of the trade effects of the subsidy
As to the statistical data permitting an assessmen t of the programme's trade effects, it should be
noted that, since the subsidies take the form of capital for productive investment in disadvantagedregions, the principle of free competition is not deemed to be jeopardized.
__________