WORLD TRADE
ORGANIZATIONG/SCM/N/38/EEC/Add.14
21 December 1998
(98-5137)
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 Sweden .G/SCM/N/38/EEC/Add.14
Page 2
SWEDEN
TABLE OF CONTENTS
Page
Subsidies to Swedish Fishery 1997 (1996)..................................................................................4
Introduction................................................................................................................... ...............4
1. Investment aid to fi shing enterp rises ............................................................................4
1(a)     Aid for fleet renewal and modernisation of fishing vessels..............................4
1(b)     Aid for adjust ment of fish ing effort...................................................................5
2. Investment aid to aqua culture ent erprises ...................................................................6
3. Investment aid to fish ing port fa ciliti es.........................................................................7
4. Investment aid for processing and marketing..............................................................85. Aid for promotion/marketing ........................................................................................96. Aid for temporary cessatio n of fishing activity ..........................................................10
7. Aid to studies and pilot projects ..................................................................................108. Payment of compensation to producers' organisations.............................................11
9. State aid for re-st ocking of fish....................................................................................12
10. Aid to measures undertaken within the Community Initiative Pesca......................1311. Aid to research and development within the fishery sector ......................................13
Subsidies to the Swedish Industry 1997 ...................................................................................151. Introduction................................................................................................................. ..15
1.1 Method and scope of the notifi cation..............................................................15
2. Support for research and development.......................................................................15
2.1 Support for Technological R&D through NUTEK.......................................152.2 Project financing through the Fund for Industry .........................................162.3 Energy Research Programme .........................................................................172.4 The Energy Technology Fund.........................................................................18
2.5 Transport- and Communication Research through the Transport
and Communications Research Board...........................................................19
2.6 Support to Demonstration of Electrical and Hybrid vehicles
through the Transport and Communications Research Board ...................20
2.7 Information Technology – now included in 2.12.8 Project Financing through the Fund for Swedish-Norwegian
Industrial Cooperation ....................................................................................21
3. Aid to small and medium sized companies .................................................................22
3.1 The Regional Development Companies, ALMI.............................................223.2 Support to Small Companies...........................................................................24G/SCM/N/38/EEC/Add.14
Page 3
4. Support for Employment and Training......................................................................25
4.1 Support for Vocational Training ....................................................................254.2 Recruitment Aid ...............................................................................................264.3 The Trainee Temporary Replacement Scheme .............................................274.4 The Swedish Council for Work Life Research ..............................................27
5. Export promotion .........................................................................................................28
5.1 General Export Promotion..............................................................................28
6. Regional aid to enterprises...........................................................................................29
6.1 Regional Development Grant (former Localisation Grants
and Development Grants)................................................................................30
6.2 Regional Development Loans (former Localisation Loans) .........................316.3. Former Development Grants, now joined with former Localisation
Grants into Regional Development grants
6.4 Loans to Regional Investment Companies.....................................................326.5 Employment Grant ..........................................................................................336.6 Reduced Social Security Contributions..........................................................34
6.7 Regional Transport Grant...............................................................................35
6.8 The Fund for Northern Sweden......................................................................366.9 Programme for Industrial Development in Regions of
Regional Policy Priority...................................................................................37
6.10 European Union Structural Funds – Development within the
geographical objective areas 2, 5b and 6........................................................38
7. Environment Aid...........................................................................................................39
7.1 Investment Grant for Ecologically Sustainable Development......................39
8. Other forms of subsidies...............................................................................................40
8.1 Energy tax concession ......................................................................................40
Appendix ....................................................................................................................... .....42G/SCM/N/38/EEC/Add.14
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SUBSIDIES TO SWEDISH FISHERY 1997 (1996)
Introduction
This notification covers direct subsidies to the fisheries sector. Amounts reported relate in
general to commitments made by the competent au thorities between 1996 and 1997. As for "State aid
for damages to fishing gear" amounts reported relate to net expenditure, i.e. compensations minus fee
receipts.
The description of the various schemes follows the outline suggested by WTO. However,
effects on trade are difficult to assess and the notification contains, apart from a few aid schemes, noinformation as regards effects on trade.
1. Investment aid to fishing enterprises
1(a) Aid for fleet renewal and modernization of fishing vessels
1. Form of subsidy
Grant
2. Amount of subsidy (Total commitments)
1996: 42,303,000 SEK (Community funds)
12 ,30 ,00 SEK (National funds)
1997: 20,865,000 SEK (Community funds)
4,646,000 SEK (National funds)
3. Policy objectives
To strengthen the structure and to develop economically viable enterprises in the sector.
4. Duration
State aid to fisheries is from the date of accession subject to the rules and conditions which
are stipulated in Council Regulation (EC) No 3699/93.
5. Statistical data
Estimated number of recipients of aid between 1996 and 1997:   approx. 265
Information concerning effects on trade is not available.
6. Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:  1716, 1 January 1995)G/SCM/N/38/EEC/Add.14
Page 5
7. Rules and conditions
Recipients:   Fishing enterprises.
Categories of expenditures eligible for aid:
selective gear, RSW tanks, safety equipment etc.
1(b) Aid for adjustment of fishing effort
1.. Form of subsidy
Grant
2. Amount of subsidy (Total commitments)
1996: 13 500 000 SEK (Community funds)
13 500 000 SEK (National funds)
1997: 6 969 000 SEK (Community Funds)
6 969 000 SEK (National Funds)
3. Policy objectives
To achieve a sustainable balance between resources and their exploitation.
4. Duration
State aid to fisheries is from the date of accession subject to the rules and conditions which
are stipulated in Council Regulation (EC) No 3699/93.
5. Statistical data
Estimated number of recipients of aid between 1996 and 1997:  71
Information concerning effects on trade is not available.
6. Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:  1716, 1 January 1995)
7. Rules and conditions
Recipients:   Fishing enterprises
Categories of expenditures eligible for aid:
• scrapping
• permanent transfer to third country
Maximum possible aid intensity:  Participation rates are stipulated in Council Regulation
(EC) No 3699/93 and in the SPDG/SCM/N/38/EEC/Add.14
Page 6
2. Investment aid to aquaculture enterprises
1. Form of subsidy
Grant
2. Amount of subsidy (Total commitments)
1996: 13 616 000 SEK (Community funds)
3 611 000  SEK (National funds)
1997: 11 850 000 SEK (Community funds)
3 294 000 SEK (National funds)
3. Policy objectives
To develop economically viable enterprises in the sector and assist structural improvements.4. Duration
State aid to fisheries is from the date of accession subject to the rules and conditions which
are stipulated in Council Regulation (EC) No 3699/93.
5. Statistical data
Estimated number of recipients of aid between 1996 and 1997:  90
Information concerning effects on trade is not available.
6. Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:  1716, 1 January 1995)
7. Rules and conditions
Recipients:  Aquaculture enterprises and organizations concerned with development projects
within the aquaculture sector.
Maximum possible aid intensity: Participation rates are stipulated in Council Regulation (EC)
No 3699/93 and in the SPD
Categories of expenditures eligible for aid:
•       the construction, modernization and acquisition of buildings
• investments to improve the product quality and to reduce pollution
• the acquisition of new plant and machinery
The enterprise must be submitted to official animal health control.G/SCM/N/38/EEC/Add.14
Page 7
3. Investment aid to fishing port facilities
1. Form of subsidy
Grant
2. Amount of subsidy (Total commitments)
1996 4 445 000 SEK (Community funds)
3 006 000 SEK (National funds)
1997: 3 849 000 SEK (Community funds)
2 475 000 SEK (National funds)
3. Policy objectives
To improve and adapt structure in the fisheries sector.
4. Duration
State aid to investments in fishing port facilities is from the date of accession subject to the
rules and conditions which are stipulated in Council Regulation (EC) No 3699/93.
5. Statistical data
Estimated number of recipients of aid between 1996 and 1997:  59
Information concerning effects on trade is not available.
6. Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:  1716, 1 January 1995)
7. Rules and conditions
Recipients
• local authorities & other public bodies
• fishermen and fish processing enterprises connected to harbours
• fishing harbour associations
Maximum possible aid intensity:  Participation rates are stipulated in Council Regulation
(EC) No 3699/93 and in the SPD
Categories of expenditures eligible for aid:
• investments to improve the conditions under which fishery products are landed, 
• handled and stored
• investments to support fishing vessel activities
• investments to improve the safety during the landing or loading of products.G/SCM/N/38/EEC/Add.14
Page 8
4. Investment aid for processing and marketing
1. Form of subsidy
Grant
2. Amount of subsidy (Total commitments)
1996: 26 700 000 SEK (Community funds)
9 614 000 SEK (National funds)
1997: 27 535 000 SEK (Community funds)
9 523 000 SEK (National funds)
3. Policy objectives
To develop economically viable enterprises in the sector and assist structural improvements.
4. Duration
State aid to investments in processing and marketing is from the date of accession subject to
the rules and conditions which are stipulated in Council Regulation (EC) No 3699/93.
5. Statistical data
Estimated number of recipients of aid between 1996 and 1997: 107
Information concerning effects on trade is not available.
6. Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:  1716, 1 January 1995)
7. Rules and conditions
Recipients:  The Processing IndustryMaximum possible aid intensity:  Participation rates are stipulated in Council Regulation
(EC) No 3699/93 and in the SPD
Categories of expenditures eligible for aid:
• The construction and acquisition of buildings and installation
• The acquisition of new equipment needed for the processing and marketing
• The application of new technology
• Investments to improve product quality and to reduce pollutionG/SCM/N/38/EEC/Add.14
Page 9
5. Aid for promotion/marketing
1. Form of subsidy
Grant
2. Amount of subsidy (Total commitments)
1996: 6 460 000 SEK (Community funds)
5 783 000 SEK (National funds)
1997: 2 020 000 SEK (Community funds)
1 820 000 SEK (National funds)
3. Policy objectives
To improve market supply and the value added to fisheries and aquaculture products.
4. Duration
Aid for promotion is from the date of accession subject to the rules and conditions which are
stipulated in Council Regulation (EC) No 3699/93.
5. Statistical data
Estimated number of recipients of aid between 1996 and 1997:  9
Information concerning effects on trade is not available.
6. Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:  1716, 1 January 1995)
7. Rules and conditions
Recipients:Public bodies, fisheries interest associations, private contractors
Maximum possible aid intensity:  Participation rates are stipulated in Council Regulation
(EC) No 3699/93 and in the SPD
Categories of expenditures eligible for aid:Consumers surveys and market studies, promotion campaigns, organization of and
participation in trade fairs, consumption advice, services and advice to wholesalers andretailers.G/SCM/N/38/EEC/Add.14
Page 10
6. Aid for temporary cessation of fishing activity
1. Form of subsidy
Grant
2. Amount of subsidy (Total commitments)
1996: 3 653 000 SEK (Community funds)
3 130 000 SEK (National funds)
1997: 721 000 SEK (Community funds)
387 000 SEK (National funds)
3. Policy objectives
To achieve sustainable balance between resources and their exploitation.
4. Duration
State aid to temporary cessation of fishing activity is from the date of accession subject to the
rules and conditions which are stipulated in Council Regulation (EC) No 3699/93.
5. Statistical data
Estimated number of recipients of aid between 1996 and 1997:  approx. 45
6. Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:  1716, 1 January 1995)
7. Rules and conditions
Recipients:  Fishing enterprises.Categories of expenditures eligible for aid:Compensation of the loss of income associated with a temporary cessation measure
introduced as a result of unforeseen and non-recurring circumstances attributable to biologicalcauses.
7. Aid to studies and pilot projects
1. Form of subsidy
Grant
2. Amount of subsidy (Total commitments)
1996: 5 733 000 SEK (Community funds)
3 941 000 SEK (National funds)G/SCM/N/38/EEC/Add.14
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1997: 2 764 000 SEK (Community funds)
1 992 000 SEK (National funds)
3. Policy objectives
To improve and adapt structures in the fisheries and aquaculture sector.
4. Duration
State aid to studies and pilot projects is from the date of accession subject to the rules and
conditions which are stipulated in Council Regulation (EC) No 3699/93.
5. Statistical data
Estimated number of recipients of aid between 1996 and 1997:  19
Information concerning effects on trade is not available.
6. Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:  1716, 1 January 1995)
7. Rules and conditions
Recipients: Universities, Public and private institutions, enterprisesMaximum possible aid intensity: Participation rates are stipulated in Council Regulation (EC)
No 3699/93 and in the SPD
Categories of expenditures eligible for aid:The result of the study or pilot project should be of value for the Industry.Any result must be published and made accessible to the public.
8. Payment of compensation to producers' organizations
1. Form of subsidy
Grant
2. Amount of subsidy (Total commitments)
1996: 13 463 000 SEK
1997: 3 600 000 SEK
3. Policy objective
To grant financial compensation to producers' organizations for losses when fish has been
withdrawn from the market.G/SCM/N/38/EEC/Add.14
Page 12
4. Duration
From 1 January 1995.
5. Statistical data
Estimated number of recipients of aid between  1996 and 1997:   4 (Producers' organizations)
Sweden considers that this measure has had very insignificant, if any, effects on trade.
6. Legal basis
Council Regulation (EEC) No 3759/92 of 17 December 1992 on the common organization of
the market in fishery and aquaculture products.
7. Rules and conditions
Article 8-12 in Council Regulation No 375
9. State aid for re-stocking of fish
1. Form of subsidy
Grant
2. Amount of subsidy (Total commitments)
1996: 1 650 000 SEK
1997: 1 645 000 SEK
3. Policy objectives
Increasing of stocks of eel and salmonids for the commercial fisheries in coastal and inland
waters.
4. Duration
1997 is the last year for the subsidy
5. Statistical data
The grants are restricted to improve the stocks and it is not possible to estimate any effects on
trade.
6. Legal basis
Government decision. The program is financed by funds from the price regulation system
which has been abolished as from 1 January 1994.
7. Rules and conditions
The Board of Fisheries decides upon the program and the County Administrative Boards  are
responsible for carrying out the stocking programmeG/SCM/N/38/EEC/Add.14
Page 13
10. Aid to measures undertaken within the Community Initiative Pesca
1. Form of subsidy
Grant
2. Amount of subsidy
1996/1997: 3 581 000 SEK (Community funds)
3 133 000 SEK (National funds)
3. Policy objectives: The objectives for the Community Initiative Pesca are stipulated in the
Commission's notice to the Me mber States (94/C 180/01)
4. Duration
The integrated Operational Programme covers the period 1995-1999
5. Statistical data
Estimated number of recipients of aid between 1996 and 1997:   15
Information concerning effects on trade is not available.
6. Legal basis
Ordinance on fishing, aquaculture and fisheries (SFS 1994:  1716, 1 January 1995)
7. Rules and conditions
Recipients:   Pesca is designed principally for areas dependent on fisheries in regions eligible
under objective 1,2 and 5(b).
Maximum possible aid intensity: Participation rates are stipulated in the Operational
Programme
Categories of expenditures eligible for aid:
• diversification of activities in eligible areas
• business services
• maintenance or creation of jobs
• specific project of a general and/or transnational nature in the fisheries sectors
11. Aid to Research and development within the fishery sector
1. Form of subsidy
GrantG/SCM/N/38/EEC/Add.14
Page 14
2. Amount of subsidy
1995/1996 (18 months): 885 000 SEK.
Three projects; 285 000-300 000 SEK.
1997:   0 SEK
3. Policy objectives
Develop fishing gear with improved selectivity. Improve techniques for the processing of
herring and develop new products of herring.
4. Duration
Grants are given for periods of 1-3 years.
5. Statistical data
The grants are restricted to basic research and development and it is therefore not possible to
estimate effects on trade.
6. Legal basis
Government decision (letter of regulation)
7. Rules and conditions
The research and development results must be published and be accessible to the public.
Frequent co-operation with a research institute is a prerequisite. Twenty-five percent of the amount is
paid when the project is finished.G/SCM/N/38/EEC/Add.14
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SUBSIDIES TO THE SWEDISH INDUSTRY 1997
1. Introduction
1.1 Method and Scope of the Notification
In Sweden, the budget of the central government is the only source of aid to industry. Local
governments are in principle prohibited by law to grant aid to enterprises. However, administration of
aid programmes funded by the central government may take place at the local level.
The notification covers aid to the business sector, in broad sense, i.e. trade and industry. It is
not possible to separate aid figures to the mi ning and manufacturing i ndustry (SITC 2 and 3).
The description of the various aid schemes follows the outline suggested by WTO. However,
it is not possible to present statistical data permitting an assessment of trade effects.
The quantitative information is based on the net cost to government  method.  This method is
used for the annual follow-up of state aid in Swed en. The approach is also used by OECD in its
"Public Support to Industry" project. The method is described in appendix.
As from 1997, the Swedish administration has changed its budgetary cycle from fiscal to
calendar years.  The programmes that were in effect 1 January 1997 are reported in the notification.
2. Support for Research and Development
2.1 Support for Technological R&D Through NUTEK
1. Form of subsidy
Grants or loans with conditional repayment.
2. Amount of subsidy
Net cost in SEK millions: Calendar year 1997:  936
• 121 millions SEK to firms and individual inventors
• 401 million to universities
• 414 millions SEK to technological research institutes and cooperative research
institutes.
Net cost for seed financing, SEK millions: Calendar year 1997:  66
Net cost for technology transfer: Calendar year 1997: 8
• 5 millions SEK to firms
• 1 million SEK to universities
• 2 millions SEK to technological research in stitutes and cooperative research institutes.
Support is granted to a variety of projects and cannot be broken down per unitG/SCM/N/38/EEC/Add.14
Page 16
3. Policy objective
The primary objective is aid for R&D and the secondary objective is aid to SMEs.
4. Duration
The programme commenced as from 1 July 1993. Duration until 1 January 2002.
5. Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
6. Legal basis
The legal provisions are laid down in the following Governmental ordinances:
SFS 1993: 1332 (Förordning om ändring av förordningen 1978:  571 om statligt stöd till tekniskforskning, industriellt utvecklingsarbete och uppfinnar-verksamhet) and SFS 1993:  286 (Förordning
om ändringar i förordningen 1991:  660 med instruktion för Närings- och Teknikutvecklingsverket).
As from 1 January 1996, Governmental ordinance 1995:  1254 (Förordning om statligt stöd till
teknisk forskning, industriellt utvecklingsarbete och uppfinnarverksamhet).
7. Rules and conditions
The National Board for Industrial and Technical Development (NUTEK), is a government
agency which among other tasks administers gove rnment support to technical R&D. Support is
granted to universities, technological research institutes for basic research, co-operative researchinstitutes (i.e. institutes financed jointly by government and industry) and to individual firms and
inventors. A precondition for receiving support in the form of grants is that the result of the supported
project is made public.
All firms, regardless of industry, are eligible. However, the support is focused on small firms
and individual innovators. The support to firms and i ndividual innovators is in the form of loans with
conditional repayment. A loan can cover up to 50 per cent of project costs. Repayment, includingmarket interest rate, is required if a project becomes commercially successful. The duration and other
terms of the loan are dependent on the objective of the loan and various economic factors. Costs for
personnel, material and supplies related to R&D, instruments and equipment, consulting bought-in
research, etc. are eligible for aid. Other possible aid should be taken into account before the decision
of support is made. In practice, projects supported by other state aid schemes do not normally receivesupport from NUTEK. To the extent that this occurs, the aid ceilings apply to the combined aid.
As from 1 January 1996 rules and conditions have been altered in accordance with the state
aid rules within the European Community. In practice the new rules have been applied as from
1 January 1995.
2.2 Project financing through The Fund for Industry
The Fund for Industry is a public foundation. Its main objective is to promote industrial
development and marketing. The Fund should earn enough money to retain its capital on a long term
basis. This calls for market interest rates to compensate for a few inevitable losses.G/SCM/N/38/EEC/Add.14
Page 17
1. Form of subsidy
Project financing in the form of loans with c onditional repayment, guarantees and grants with
royalty repayments. No calculated element of subsidy to individual enterprises, but high risk is
accepted.
2. Amount of subsidy
Net cost in SEK millions: Calendar year 1997: 105
Support is granted to a variety of projects and cannot be broken down per unit.
3. Policy objective
The primary objective of the project financing is aid to SMEs and R&D.
4. Duration
The scheme commenced in 1979 and was altered in 1993 and 1996. Duration has not been
specified.
5. Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
6. Legal basis
The legal provisions are laid down in the Governmental ordinance SFS 1996:  880
(Förordning om finansiering genom Industrifonden).
7. Rules and conditions
Project financing:   The Fund concentrates on support to small and medium-sized companies.
There are no restrictions regarding industry or lo cation. To be eligible for support, a project must
involve a substantial risk, but have a compensating potential to become commercially successful. The
maximum amount of an award cannot exceed 50 per cent of the costs of a project. Most types of
expenditures connected with a development project (seldom land or buildings) are eligible for
financing. All successful SMEs pay back with market interest rate or royalty. Financing from theFund may be combined with regional support, in ac cordance with the state aid rules in the European
Community.
2.3 Energy Research Programme
1. Form of subsidy
Grants or loans with conditional repayment.
2. Amount of subsidy
Net cost in SEK millions:   Calendar year 1997:  173G/SCM/N/38/EEC/Add.14
Page 18
• 21 millions SEK to firms and individual inventors
• 145 million to universities
• 7 millions SEK to technological research institutes and co-operative research institutes
Support is granted to a variety of projects and cannot be broken down per unit.
3. Policy objective
The primary objective of the programme is to establish fundamental competence and
expertise, to facilitate the transformation of the Swedish energy system in order to reduce the
environmental and climatic effects of energy systems. The emphasis of the programme is long-term,
i.e. on technology that can be expected to be implemented beyond the year 2000. The programme has
its main focus on basic research, while applied research only plays a minor role.
4. Duration
Programme commenced originally in 1975 and has been prolonged several times. The present
programme commenced as from 1  July 1993 . Duration until further notice, i.e. has not been specified.
5. Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
6. Legal basis
The legal provisions are laid down in the Governmental ordinance SFS 1987:  819
(Förordningen om statligt stöd till energiforskning).
7. Rules and conditions
Support is granted to universities, institutes of technology, co-operative research institutes
(i.e. institutes financed jointly by the Government a nd industry) and to firms. The general rule is that
all results from the Energy Research Programme are official and shall be made available. Aid to firms
accounts for a minor portion (about 15 per cent) of the expenditure, and is mainly in the form of loanswith conditional repayment. Costs for personnel, materials and supplies related to R&D, instruments
and equipment, consulting, bought in research etc. are eligible for aid. Maximal aid intensity is 50 per
cent of eligible costs. Other possible aid shall always be taken into account before decision of support
is made.
2.4 The Energy Technology Fund
1. Form of subsidy
Grants, soft loans and guarantees.
2. Amount of subsidy
Net cost in SEK millions:   Calendar year 1997: 181
• 138 millions SEK to firms and individual inventorsG/SCM/N/38/EEC/Add.14
Page 19
• 5 million to universities
• 38 millions SEK to technological research institutes and co-operative research
institutes
Support is granted to a variety of projects and cannot be broken down per unit.
3. Policy objective
The primary objective is aid for R&D. Research, development and preparations of
commercial introduction of new technology for energy production and for environmental protection
are supported through the Energy Technology Fund.
4. Duration
The programme commenced as from 1 July 1988. Duration until further notice, i.e. has not
been specified.
5. Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
6. Legal basis
The legal provisions are laid down in the Governmental ordinance SFS 1988:  805
(Förordning om statligt stöd ur energiteknikfonden, mm.)
7. Rules and conditions
Support is granted to the development, testing and demonstration of new techniques in the
form of test plants, pilot projects, full scale plants, etc. Support is also granted to applied research
jointly co-financed by industry. The beneficiary is  normally the user of the new technique, mainly
small-scale private energy producers and public utili ties in the energy sector. Although the maximum
possible aid is 50 per cent of the project costs, NUTEK has established the practice that maximumgrant is 25 per cent. There are no formal restrictions to which extent the grant may be combined with
other aid schemes. However, in practice, projects receiving aid from the Fund are not given support
from other schemes.
2.5 Transport- and Communication Research through the Transport and
Communications Research Board
1. Form of subsidy
Grants.
2. Amount of subsidy
Net cost in SEK millions:   Calendar year 1997: 149
- 10 million SEK to private firms
- 103 million SEK to universitiesG/SCM/N/38/EEC/Add.14
Page 20
- 36 million to technological research institutes, co-operative research institutes
Support is granted to a variety of projects and cannot be broken down per unit.
3. Policy objective
The Primary objective is aid for R&D. Secondary objective is environmental aid and support
for energy-saving.
4. Duration
Programme commenced as from 1 July 1993. Duration formally decided every year.
5. Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to present
statistical data permitting an assessment of trade effects.
6. Legal basis
The legal provisions are laid down in the Go vernment Bill "Research for Knowledge and
Progress" 1992/1993:  170 and 1996/97:  1.
7. Rules and conditions
The nature of assisted projects is basic transport and communication research and applied
research, development and demonstrations at a pre-competitive level. Grants are predominantly givento universities and research institutions. Regional authorities, municipalities and companies can be
granted aid if they are engaged in pre-competitive development or demonstration projects. Such
projects are devoted especially to the development of public transport. Costs for personnel, material
and supplies related to R&D are eligible for aid. Maximum possible aid intensity is 100 per cent of the
eligible costs. Aid is granted on a scientific basis on applications or initiatives from The Board. Grants
are regulated by an R&D contract. At least SEK 15 million a year has to be used as grants to
research-, development- or demonstration projects concerning public transports. There is no formalrestriction to what extent the aid may be combined with other aid schemes.
2.6 Support to Demonstration of Electrical and Hybrid vehicles through the
Transport and Communications Research Board
1. Form of subsidy
Grants.
2. Amount of subsidy
Net cost in SEK millions:   Fiscal year 1995/1996: 3
- 1 million SEK to private firms
- 2 million SEK to universities, technological research institutes, co-operative research
institutes.
Support is granted to a variety of projects and cannot be broken down per unit.G/SCM/N/38/EEC/Add.14
Page 21
3. Policy objective
The Primary objective is aid for R&D. Secondary objective is environmental aid and support
for energy-saving. The aim of the programme is to investigate the potentials of such vehicles have inorder to accomplish energy-saving and environmental benefits. Investigated are also the real costs for
society and users, the degree to which the vehicles can fit into the existing transport system as well as
their impact on traffic safety. The aid is not devoted to development of the vehicles as such.
4. Duration
Programme commenced as from 1 July 1993. Duration formally decided every year.
5. Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to present
statistical data permitting an assessment of trade effects.
6. Legal basis
The legal provisions are laid down in the Go vernment Bills; 1992/1993:  179 and 1993/1994:
100.
7. Rules and conditions
The aid is directed towards research, development and demonstration of electrical vehicles
and hybrid vehicles from a socio-economic and infrastructural point of view. The research is pre-competitive and the result is publicly available. Aid is granted on a scientific basis on applications or
initiatives from the Board. Grants are regulated by an R&D contract. The programme is to be carried
out in close co-operation with industry and other interested parties and the costs for the programme as
a whole are supposed to be shared with these pa rties. Costs for personnel, material and supplies
related to R&D are eligible for aid. Maximum possible aid intensity is 100 per cent of the eligible
costs. There are no formal restrictions to what extent the aid may be combined with other aid
schemes.
2.7 Information Technology - now included in 2.1 Technological R&D
2.8 Project Financing through the Fund for Swedish-Norwegian Industrial
Cooperation
The Fund for Swedish-Norwegian Industrial Co- operation is a foundation operating relatively
independently from the Swedish and Norwegian Governments. The Fund should earn enough money to
cover the inflation on a long term basis. This calls for market interest rates to compensate for a few
inevitable losses.
1. Form of subsidy
Grants, loans with conditional repayment and grants with royalty repayments.G/SCM/N/38/EEC/Add.14
Page 22
2. Amount of subsidy
Net cost in SEK millions:   Calendar year 1997:  21 (to Swedish firms).
Support is granted to a variety of projects and cannot be broken down per unit.
3. Policy objective
The primary objective is aid to SMEs and for R&D. The objective of the Fund is to support
development co-operation between Swedish and Norwegian companies.
4. Duration
The programme commenced as from 1 January 1982. Duration until the year 2001, with
possible prolongation.
5. Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to present
statistical data permitting an assessment of trade effects.
6. Legal basis
The legal provisions are laid down in the Governmental ordinance SFS 1990:  45
(Förordningen om stöd genom Fonden för svenskt-norskt industriellt samarbete), altered 1998:  45.
7. Rules and conditions
Any costs connected with a development project (seldom land or buildings) are eligible.
Maximal aid intensity is 50 per cent of eligible costs. A precondition is that the project is a high risk
project and has prospects to be commercially successful on a relatively short term basis. All
successful SMEs pay back with market interest rates or royalty. Beneficiaries are Swedish and
Norwegian companies in all industry except the extraction of oil and gas. There are no formal
restrictions to which extent financing through the Fund may be combined with other aid schemes,other than the state aid rules of the European Community.
3. Aid to small and medium sized companies
3.1 The Regional Development Companies, ALMI
ALMI, Regional Development Companies, consist of a parent company and 22 regional
subsidiaries. The objective of ALMI is to strengthen the competitiveness and profitability of small andmedium sized enterprises and to promote the formation of new firms. ALMI replaced The Regional
Development Funds in  1994.
1. Form of subsidy
Loan guarantees, loans, new business loans and development capital in the form of grants
with royalties repayment and soft loans.G/SCM/N/38/EEC/Add.14
Page 23
2. Amount of subsidy
Net cost in SEK millions: Calendar year 1997:  127
Support is granted to a variety of projects and can not be broken down per unit.
3. Policy objective
The primary objective of the scheme is aid to SMEs. The Regional Development Companies
should strengthen the competitiveness and profitability of small and medium sized enterprises
(generally defined as firms with less than 250 employees, in accordance with the European
Commission definition) and to promote the formation of new firms.
4. Duration
The programme for loans and guarantees commenced in 1978, development capital in 1982
and new business loans in 1993. Duration until further notice, i.e. has not been specified.
5. Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
6. Legal basis
The legal provisions are laid down in the following Governmental ordinance: SFS 1994:
1100 (Förordning om statlig finansiering genom regionala utvecklingsbolag) altered SFS 1995:  1196.
7. Rules and conditions
General rules for all forms of financing: The scheme is strictly complementary to private
institutions. The scheme is intended for small fi rms, i.e. firms with less than 250 employees (in
practice, often less than 50 employees.) The Regional Development Companies have discretion in
respect of the terms of the loans, i.e. the rate of interest, duration and repayment holidays. However,
the financing should be on commercial terms and aiming at a reasonable yield and risk-spread.
The lending should be on commercial terms but on a high risk level. Only firms that are
profitable or have reasonable prospects to become profitable are eligible. The Companies also provide
counselling. The scheme may be combined with regional support and support from NUTEK, inaccordance with the state aid rules in the European Community.
Loans: High risk and slightly above market rates. Bad collateral accepted.Development capital: High risk and bad or no collateral accepted.Guarantees: High risk and bad collateral accepted. Guarantee fee required.New business loans: The loan to start-ups is either a personal loan made out to the
entrepreneur (injected into the company as restrict ed equity) or a risk-carrying (unsecured) debenture
loan to the company. Maximum is 30 per cent of the amount of financing, but the limit is SEK 1
million. The loan runs for 10-15 years and is installment-free during the first years. The loan is
interest-free for two years, with reduced interest for three years; from the sixth year market interest isG/SCM/N/38/EEC/Add.14
Page 24
paid. An opening charge of 2 per cent on granted loans is payable and is deducted when the loan is
paid. Security is normally not necessary.
Supplementary loan: If a company which has been granted a loan for a new company requires
further financing, a supplementary loan may be granted but only if there are good reasons for it, and ifan application is received by the fund within three years of the loan for a new company being granted.
Authorized applicants are private persons or companies. The applicant has to contribute with at least
10 per cent of the capital. All sorts of businesses are eligible.
3.2 Support to Small Companies
1. Form of subsidy
Grants.
2. Amount of subsidy
Net cost in SEK millions: Calendar year 1997:  105
Support is granted to a variety of projects and can not be broken down per unit
3. Policy objective
The primary objective is promotion of employment-generating investments within small
companies and balance within regions.
4. Duration
Duration originally as from 1 July 1994 to 30 June 1995. Prolonged until 31 December 1998.
5. Statistical data
Support is granted to a variety of projects and sectors, therefore it is not possible to present
statistical data permitting an assessment of trade effects.
6. Legal basis
The legal provisions are laid down in Govern mental ordinance: SFS 1994:  773 (Förordning
om tillfälligt småföretagsstöd), altered SFS 1996:  1496 (Förordning om ändring i förordningen
(1994:  773) om tillfälligt småföretagarstöd).
7. Rules and conditions
Support is handled by the County Administrative Boards (Länsstyrelse). It is available to
small companies throughout Sweden, with the excepti on of companies within the steel- or synthetic
fibre industries. Small companies are defined according to the European Commission definition as
consisting of 50 employees or less and  having an annual turnover of less than SEK  40 million.
Support is granted for investments estimated to create long-term employment opportunities. Theprerequisites are that it does not contribute to the relocation of an activity from one county to another,
nor to the reconstructing of an activity. An activity that recently has undergone such reconstruction is
also excluded from receiving support.  Approved capital needed for the investment can not exceedG/SCM/N/38/EEC/Add.14
Page 25
SEK 20 million. Support can be given with at most 15 per cent of total costs as long as it does not
exceed the amount of funds needed for the investment to take place.
4. Support for Employment and Training
Labour market support is aimed at stimulating companies and authorities to hire individuals
who face particular difficulties finding work, for instance youth, disabled, refugees and immigrants
and elderly. The support is generally given directly to the employer. This kind of aid is intended to
give an incentive for the employers to hire an individual they would not else have hired and to
compensate for costs for training and equipment.
The schemes noted below, i.e. support for Vocational Training, Recruitment Aid, Trainee
Temporary Replacement Scheme and Recruitment Incentive, are intended for companies and could be
regarded to constitute a subsidy in the meaning of the WTO-agreement on subsidies. Expenses under
these schemes have been significantly reduced during 1997.
4.1 Support for Vocational Training
1. Form of subsidy
Regular grants for on-the-job-training.
2. Amount of subsidy
Net cost in SEK millions:   Calendar year 1997: 143
Support is granted to a variety of projects and cannot be broken down per unit.
3. Policy objective
The primary objective of the scheme is to avoid disruption in the production mainly in small
and medium-sized companies due to lack of skilled workers, to avoid lay-off and to support workersin danger of losing their jobs.
4. Duration
The programme commenced in 1984. Duration until 31 of December 1997. This scheme will
be terminated as from 1 January 1998.
5. Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
6. Legal basis
The legal provisions are laid down in the Governmental ordinance SFS 1984:  518
(Förordning om bidrag till arbetsmarknadsutbildning i företag).G/SCM/N/38/EEC/Add.14
Page 26
7. Rules and conditions
All firms, regardless of industry, are eligible.  The aid is in the form of a grant. The state aid
to individual companies covers the actual cost of the training course up to a maximum of SEK 60 per
hour for a maximum of 920 hours.
4.2 Recruitment Aid
1. Form of subsidy
Gross wage subsidy for enterprises recruiting certain unemployed individuals.
2. Amount of subsidy
Net cost in SEK millions: Calendar year 1997:  238
Support is granted to a variety of projects and cannot be broken down per unit.
3. Policy objective
The primary objective of the scheme is to increase employment, mainly of long-term
unemployed and persons with difficulties to get a job.
4. Duration
The programme commenced in 1984. Duration has not been specified. During the calendar
year 1997 the maximum budget for this scheme is limited to 300 millions SEK.
5. Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
6. Legal basis
The legal provisions are laid down in the Governmental ordinances: SFS 1995:  338
(Förordning om ändring av förordningen 1986:  414 om rekryteringsstöd) and 1995:  720 (Förordning
om ändring i förordningen (1986:  414) om rekryteringsstöd). SFS 1996:  1427 (Förordning om
ändring i förordningen (1986:  414) om rekryteringsstöd).
7. Rules and conditions
All firms, regardless of industry, are eligible. However, as from 1 January 1997, a few
sensitive sectors according to EU rules have been exempted (steel, motor vechicles, synthetic fibre,
shipbuilding, agriculture, fisheries, transport). The aid is in the form of a grant that covers maximum
350 SEK per day or maximum 50 per cent of the wage. The individual must have been unemployed
for a period of at least one year. The dura tion of the aid must not exceed 6 months.G/SCM/N/38/EEC/Add.14
Page 27
4.3 The Trainee Temporary Replacement Scheme
1. Form of subsidy
Deduction of social fees.
2. Amount of subsidy
Net cost in SEK millions:  Calendar year 1997: 47
Support is granted to a variety of projects and cannot be broken down per unit.
3. Policy objective
The primary objective is aid to employment in the form of deduction of social fees for on-the-
job-training.
5. Duration
The scheme commenced as from 1 July 1991. Duration has not been specified.
6. Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
7. Legal basis
The legal provisions are laid down in Governmental ordinance: SFS 1993:  746 (Lagen om
ändring i lagen 1993:  237 om tillfällig avikelse från lagen 1981:  691 om socialavgifter). As from 1st
of Jauary 1997 the legal provisions are laid down in SFS 1996:  1427 (Förordning om ändring i
förordningen (1986:  414) om rekryteringsstöd).
8. Rules and conditions
Eligible costs are wage costs for the temporary employee. The employers that take on
temporary employees qualify for deduction of social fees of SEK 400 per day. The deduction for
training costs is maximum SEK 35 per hour of training and employee, subject to a limit of
SEK 20,000 per employee. All firms regardless of sector or location are eligible, however, thebeneficiaries are mainly county councils and municipalities. About 20 per cent of the programme
budget goes to private firms. Figures reported are estimation of the private sectors share of the
programme budget. The projects supported under this scheme are excluded from receiving aid from
other sources. As from 1 January 1997 support is given in the form of grants. Aid levels have been
slightly affected.
4.4 The Swedish Council for Work Life Research
             (formerly  the Swedish Work Environment Fund)
The Swedish Work Environment Fund was financed by a special work environment levy
included in the social security contributions paid by employers. The agency was established in 1972.
The Fund was closed down in June 1995 and replac ed with The Swedish Council for Work Life
Research as from 1 July 1995. The Council is financed over the state budget. The Council shallG/SCM/N/38/EEC/Add.14
Page 28
initiate and support R&D that promotes a good wo rking environment, and efficient organization of
work and a labour market that is accessible to all. The actual operations are rather different from those
of the previous fund, with an emphasis on support for mainly academic research of general
importance in the field of working life conditions. Grants to specific companies are rare.
1. Form of subsidy
Grants.
2. Amount of subsidy
Net cost in SEK millions: Calendar year 1997: 4
Support is granted to a variety of projects and cannot be broken down per unit.
3. Policy objective
The primary objective is improvement of work conditions and quality of work. The secondary
objective is aid for R&D. The Council supports such R&D, education and information that can
counteract the emergence of industrial injury or in other ways promotes improved working
environment.
4. Duration
Duration has not been specified.
5. Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
6. Legal basis
The legal provisions are laid down in govern mental ordinance: SFS 1995:  865 (Förordning
med instruktion för Rådet för arbetslivsforskning).
7. Rules and conditions
Project costs for R&D in the area of occupational safety and health, work organization and
labour market issues. The support from the Counci l may be combined with other aid, however, for
mainly research projects it depends on the purpose.
5. Export Promotion
5.1 General Export Promotion
1. Form of subsidy
The financial support of the Government is direct ed to the Swedish Trade Council, which is a
semi-public organization, which mainly provides information and advice to Swedish companies,
mainly SMEs. The Council also initiates and implements various collective export promotion
activities like exhibitions and sales missions. Such activities are mainly financed by the companies.G/SCM/N/38/EEC/Add.14
Page 29
2. Amount of subsidy
Net cost in SEK millions: Calendar year 1997: 0
3. Policy objective
The primary objective is to support export and internationalization of Swedish companies in a
way that promotes the long-term  development of the Swedish economy.
4. Duration
The scheme commenced in 1972. Duration has not been specified.
5. Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
6. Legal basis
Agreement between the Government and the General Swedish Export Association. The
existing agreement is from 1992. Government Bill 1991/1992:  108.
7. Rules and conditions
The services of the Trade Council are available for all Swedish firms regardless of industry
and to the export of services as well as goods. A number of companies choose to pay a fee that gives
them a discount on certain services. Small and medium-sized firms are given priority.
Support is given in the form of:
• Information on matters regarding foreign trade and foreign markets.
• Export promotion activities, partly financed by government funds, e.g. exhibitions, market
surveys, and missions abroad.
The activities of the Trade Council are partly financed by the Government, partly by the
companies subscribing to its services. Government f unds are used to finance most of the information
services and a smaller part of the export promotion activities.
The total turnover of the Swedish Trade Council was around SEK 400 million in the calendar
year 1996. Out of this amount around SEK 144 million was funded by the Government and the rest by
individual companies, through fees to the Trade Council or by payment for specific export activities.
6. Regional Aid to Enterprises
Regional aid to enterprises in Sweden is granted within the framework of six main schemes:
Regional Development Grants, Regional Development Loans, Loans to Regional Investment
Companies, Employment Grants, Reduced Social S ecurity Contributions and Regional Transport Aid.
The main goal of Swedish regional policy is to promote sustainable growth, freedom of choice and a
good environment, so that equal living conditions ar e created for the citizens in whatever part of theG/SCM/N/38/EEC/Add.14
Page 30
country they live. Because of the special conditions  of living in large parts of Sweden an active
regional policy has for many years been of major importance for these regions.
6.1 Regional Development Grant (former Localization Grants and Development
Grants)
1. Form of subsidy
Grants and conditional loans for tangible or  intangible investments. The grants can be
reclaimed if the objectives, especially the purpose of creating new jobs, are not fulfilled.
2. Amount of subsidy
Net cost in SEK millions: Calendar year 1997: 490
Support is granted to a variety of sectors and recipients and cannot be broken down per unit.
3. Policy objective
The program supports investments in tangible and intangible investments. The primary
objective is regional aid in designated areas. The secondary objective is aid to SMEs, employment and
R&D in designated areas. The main objective is to promote development of industry and to createnew employment in the designated areas.
4. Duration
The programme commenced as from 1 July 1990. Duration formally decided for every new
fiscal year.
5. Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
6. Legal basis
The legal provisions are laid down in the Governmental ordinance (Förordningen om
regionalpolitiskt företagsstöd): SFS 1990:  642, and (from 1 January 1997) in SFS 1996:  1570
(Förordning om ändring i förordningen (1990:  642) om regionalpolitiskt företagsstöd).
7. Rules and conditions
Eligible are natural or juridical persons operating in Sweden and public authorities working
with viability in certain competitive sectors on market conditions. In certain cases aid can also begranted to non-profit associations. The firm must be profitable and the firm must, as a rule, increase
employment. In order to promote equality between men and women there is also a rule that at least 40
per cent of the new jobs created in each project shall be reserved for each sex. The total grant element
may not exceed the maximal aid intensity allowed in each designated area.
Regional Development Grants can be awarded in connection with investments in buildings,
machinery, etc. It can also be awarded for intang ible investment, such as investments in patent,
licenses, marketing activities, development of new products and education. The form of the aid is aG/SCM/N/38/EEC/Add.14
Page 31
grant, which can be reclaimed if the objectives, especially the purpose of creating new jobs, are not
fulfilled.
The grant is awarded discretionary according to the calculated need for each individual
project, the size of the investments, the number of new jobs, etc. Maximal intensity is 35 per cent ofeligible investment costs in aid area 1 and 20 per cent in aid area 2 and structural aid areas. In some
cases the maximal intensity is lower and in exceptional cases it can be higher, maximum 50 per cent
(government decision). As from 1 January 1997 the maximum grant is 40 per cent of eligible
investment for small and medium sized companies, and 35 per cent for other companies i.e. up to
250 employees, in regional aid area 1. In aid area 2 the maximum grant is 20 per cent.
The awarding of a grant has many reasons. For example:   The cost of building is higher in
the designated areas because of climatic reasons, transport costs, etc. It is more difficult to finance
these investments on the regular credit market because of their low alternative value.
The main rule is that the grant is taxable as an  income to the recipient. The general level for
corporate income taxes is about 28 per cent flat ra te. In Sweden, the value of buildings may depreciate
at rates varying from 2 to 5 per cent per annum, depending on the type of the building. Machinery is
normally depreciated during a 5-year period. The grant can be awarded either by the Government,
NUTEK (National Board for Industrial and Techni cal Development) or the County Administrative
Boards.
6.2 Regional Development Loans (former Localization Loans)
1. Form of subsidy
Loans that can be reclaimed immediately if the objectives, especially the purpose of creating
new jobs, are not fulfilled.
2. Amount of subsidy
Net cost in SEK millions: Calendar year 1997:  60
Support is granted to a variety of sectors and recipients and cannot be broken down per unit.
3. Policy objective
The primary objective is regional aid in designated areas. The secondary objective is aid to
SMEs and aid to employment in designated areas. The main objective of the scheme is to promotedevelopment of industry and to create new employme nt  in the designated areas. In these areas the
credit market is less developed compared with other parts of Sweden. This is mainly due to the low
alternative value of the fixed assets. Regional Development Loans can be awarded in connection with
investments in buildings, machinery, etc.
4. Duration
The programme commenced in 1992. Duration formally decided for every new fiscal year.
5. Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.G/SCM/N/38/EEC/Add.14
Page 32
6. Legal basis
The legal provisions are laid down in the Governmental ordinance (Förordningen om
regionalpolitiskt företagsstöd): SFS 1990:  642, and (from 1 January 1997) in SFS 1996:  1570
(Förordning om ändring i förordningen (1990:  642) om regionalpolitiskt företagsstöd).
7. Rules and conditions
Natural or juridical persons operating in Sweden  and public authorities working with viability
in competitive sectors on market conditions are eligible. Loans can also be granted to non-profit
associations. The loan is granted discretionary and limited to an amount actually needed. The firm
must be profitable and the firm must, as a rule, increase employment. At least 40 per cent of the newjobs created in each project must be reserved for each sex. Loans at market conditions, no subsidy,
risk-sharing. The interest rate of the loan is the Swedish discount rate plus 4.25 percentage units. The
state financing, grant and loans, may not exceed 70 per cent in aid area 1 and 50 per cent in aid area 2
and structural aid areas.
6.3 Former Development Grants, now joined with the former Localization Grants into
Regional Development grants
6.4 Loans to Regional Investment Companies
1. Form of subsidy
Loans. During the first years the interest rate may be lower than market rates, provided that
the state e.g. receives a share of the value added in the company after about ten years.
2. Amount of subsidy
Total amount of granted loans in SEK millions: Calendar year 1997:  0
3. Policy objective
The primary objective is regional aid to designated areas. The secondary objective is aid to
SMEs in designated areas. The main objective is to create new employment by stimulating private
capital to engage in certain businesses in the aid areas. The objective is also to take advantage of
management knowledge in order to promote the expansion of small businesses.
4. Duration
The programme commenced as from 1 July 1982. Duration formally decided for every new
fiscal year.
5. Statistical data
The support is granted to a variety of sectors and recipients, therefore it is not possible to
present statistical data permitting an assessment of trade effects.G/SCM/N/38/EEC/Add.14
Page 33
6. Legal basis
The legal provisions are laid down in the Governmental ordinance (Förordningen om
regionalpolitiskt företagsstöd): SFS 1990:  642, and (from 1 January 1997) in SFS 1996:  1570
(Förordning om ändring i förordningen (1990:  642) om regionalpolitiskt företagsstöd).
7. Rules and conditions
Eligible are privately Swedish or foreign ow ned regional investment companies, working
with viability in competitive sectors on market conditions. The size of the loan is related to the capital
raised by the share holders. Decisions on loans to regional investment companies are made by the
government. During the fiscal year 1997 no such decisions have been made.
6.5 Employment Grant
1. Form of subsidy
Grant.
2. Amount of subsidy
Net cost in SEK millions: Calendar year 1997:  296
Support is granted to a variety of sectors and recipients and cannot be broken down per unit.
3. Policy objective
The primary objective is regional aid to designated areas. The secondary objective is aid to
SMEs and employment in designated areas. The sche me is aimed at creation of  new employment by
reducing the extra costs during the first years when taking on additional labour.
4. Duration
The programme commenced as from 1 July 1990. Duration formally decided for every new
fiscal year.
5. Statistical data
The support is granted to a variety of sectors and recipients, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
6. Legal basis
The legal provisions are laid down in the Governmental ordinance (Förordningen om
regionalpolitiskt företagsstöd): SFS 1990:  642, and (from 1 January 1997) in SFS 1996:  1570
(Förordning om ändring i förordningen (1990:  642) om regionalpolitiskt företagsstöd).
7. Rules and conditions
Eligible for aid are public authorities, natural or juridical persons operating in Sweden and
working in competitive sectors on market conditions. In some cases aid can also be granted to non-
profit making associations. There is a requirement that at least 40 per cent of the new jobs createdG/SCM/N/38/EEC/Add.14
Page 34
shall be reserved for each sex. Grants are awarded according to the amount of new jobs created
measured in additional man-years (i.e. total net increase of working hours performed by employees in
companies applying and eligible for aid). Minor em ployment grants are awarded after application if
all conditions are fulfilled. If the number of additional years of work is exceeding ten, the applications
are examined from the company’s economic point of view. Support is only granted for employmentthat is considered fixed and the employer shall supply competence raising education in the form of
theory or practice of at least 125 hours during a period of 2 years.
The aid intensity in regional aid area 1: A total sum of SEK 200,000 per additional year of
work allocated according to a uniform scheme during a five year period.
The aid intensity in regional aid area 2: A total sum of SEK 120,000 per additional year of
work allocated according to a uniform scheme during a five year period.
Year Aid area 1 Aid area 2
1 60,000 40,000
2 50,000 30,000
3 40,000 25,000
4 30,000 15,000
5 20,000 10,000
Total 200,000 120,000
6.6 Reduced Social Security Contributions
1. Form of subsidy
Tax concessions in the form of reduced social security contributions.
2. Amount of subsidy
Net cost in SEK millions: Calendar year 1997: 410
Support is granted to a variety of sectors and recipients and cannot be broken down per unit.
3. Policy objective
The primary objective is regional aid to designated areas. The secondary objective is aid to
SMEs and employment in designated areas. The main objective is to create  new employment and to
maintain employment in certain sectors in the most disadvantaged areas by reducing the cost oflabour. An overall aim is to compensate for additional costs due to permanent geographical
disadvantages in the form of long distances, low population density and remote location.
4. Duration
In aid area 1 and 2 the duration is until and including the year 2000.G/SCM/N/38/EEC/Add.14
Page 35
5. Statistical data
The support is granted to a variety of sectors and recipients, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
6. Legal basis
The legal provisions are laid down in the Act (Lag om nedsättning av social-avgifter och
allmän löneavgift) SFS 1990:  912 and SFS 1994:  549 (Förordning om nedsättning av socialavgifter).
7. Rules and conditions
In aid area 1 and parts of aid area 2 the reduction is ten percentage units. In those parts of the
northernmost county of Norrbotten which are not included in aid area 1 the reduction is five
percentage points.
The social security contributions are reduced for employers engaged in the following sectors
in aid area 1:   mining and quarrying (except iron, ore and mining), manufacturing (except pulp,
paper, iron, steel and ferro-alloys), wholesaling of manufacturing goods, hotels and restaurants and
service activities. In aid area 2 the reduction is only available in the most sparsely populated areas. In
these parts e.g. agricultural and forestry activities and certain private business services are eligible.
These activities are very important for women’s employment. In the vast majority of cases the aid isawarded automatically. Reduced social security contributions may be combined with employment
grants.
6.7 Regional Transport Grant
1. Form of subsidy
Grants.
2. Amount of subsidy
Net cost in SEK millions: Calendar year 1997: 352
Support is granted to a variety of sectors and recipients and cannot be broken down per unit.
3. Policy objective
The primary objective is regional aid to designated areas. The objective of the grant is to
partly compensate for high transport costs due to long distances to the main markets. It is important to
create new employment and to maintain employment in those areas in Sweden  where the cost of
transport is considerably higher than in the rest of the country. Hereby these companies are put on
more equal footing when competing with comp anies situated closer to the large markets.
4. Duration
The scheme commenced in 1971. Duration formally decided for every new fiscal year.
5. Statistical data
The support is granted to a variety of sectors and recipients, therefore it is not possible to
present statistical data permitting an assessment of trade effects.G/SCM/N/38/EEC/Add.14
Page 36
6. Legal basis
The legal provisions are laid down in the Governmental ordinance: SFS 1980:  803
(Förordningen om regionalpolitiskt transportstöd). SFS 1996:  1569 Förordning om ändring iförordningen (1980:  803) om regionalpolitiskt transportstöd.
7. Rules and conditions
Eligible are Swedish natural or juridical pe rsons, foreign company branches in Sweden or
foreign natural persons living in Sweden.
The assisted projects: actually paid domestic transport costs from the regional aid area for
goods that have been produced or manufactured (processed) in this area (except for certain products
like pulp, paper, metals, certain steel products and iron ore), transport costs for raw materials that
shall be processed in the regional transport aid area are also eligible. However, in principle, materials
from outside the aid area that are also produced in the aid area are not eligible. The goods transportedmust be highly processed in order to be eligible. The grant is awarded automatically after application
if all the conditions are fulfilled. As from 1 July 1995 regional transport aid was terminated in 12
municipalities outside the regional aid areas approved by ESA, i.e. outside areas with population
density above 12,5 inhabitants per square kilometres.
The regional aid area for transport is divided into five zones. The percentages of the transport
costs that are covered appear in the following table:
Distance
in kilometresTransport
aid zoneTransport
aid zoneTransport
aid zoneTransport
aid zoneTransport
aid zone
12345
251 - 400 5% 5% 5% 5% 5%
401 - 700 5% 15% 25% 30% 30%
701 - 5% 15% 25% 30% 45%
6.8 The Fund for Northern Sweden
The Fund has been operating with two different types of activities:
- loans, including guarantees and conditional loans given primarily to small and
medium sized companies within the industrial and service sector.
- guarantees and project support given to institutions or projects and research of
infrastructural character (for example, research activities at universities and colleges,
foundations of research bodies outside the university sphere). As from 1994 the Fund
has primarily concentrated on the loan operation.
1. Form of subsidy
Mainly loans at market conditions. No subsidies, risk-sharing. Conditional loans, guarantees,
grants and project support.G/SCM/N/38/EEC/Add.14
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2. Amount of subsidy
Net cost in SEK millions: Calendar year 1997:  35
Support is granted to a variety of projects and recipients and cannot be broken down per unit.
3. Policy objective
The primary objective is regional aid to designated areas. The secondary objective is aid to
SMEs and R&D. The aim of the fund is to promote development mainly of SMEs, at present, in the 5
northernmost counties.
4. Duration
The scheme commenced in 1961. Duration has not been specified.
5. Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
6. Legal basis
Government Decision 1961, last revision in 1995.
7. Rules and conditions
Expenditure eligible for financing is product development, marketing, fixed assets and
working capital. If loans from The Fund Northern Sweden are combined with Regional Development
aid, the State financing may only amount to 70 per cent of investment costs in aid area 1 and 50 per
cent in aid area 2 and structural aid areas. The Government can decide that these levels may be
exceeded if there is a special priority.
6.9 Programme for Industrial Development in Regions of Regional Policy Priority
1. Form of subsidy
Grants.
2. Amount of subsidy
Net cost in SEK millions: Calendar year 1997:   4
• 1,4 million SEK to private firms
• 1 million SEK to universities
• 2 million to other governmental bodies
Support is granted to a variety of projects and cannot be broken down per unit.G/SCM/N/38/EEC/Add.14
Page 38
3. Policy objective
The primary objective of the programme is regional aid in designated areas. The aim is to
improve  companies own ability to develop through knowledge-raising activities. Secondary objective
is aid for R&D activities.
4. Duration
Programme started as from 1 August 1994. Duration until 31 December 1999.
5. Statistical data
Support is granted to a variety of projects and sectors, therefore it is not possible to present
statistical data permitting an assessment of trade effects.
6. Legal basis
The legal provisions are laid down in Government Decision No. 7 from 10 February 1994.
7. Rules and conditions
Support is allocated by NUTEK to 22 consortiums (programmes). These programmes have
been selected from submitted proposals, according to criteria such as relevance to industry and
connection to external sources of knowledge (size and quality of network).
The consortiums include around 200 companies and a number of research institutes or
universities. These are working together to raise th e level of knowledge in companies. No financial
resources are directed to an individual company, but to the consortiums as collective bodies. Support
to each consortium can amount to 37,5 per cent of total programme costs at most.
Costs eligible for aid include personnel, materials and supplies related to R&D. Instruments
and equipment costs are only to a limited extent supported.
6.10 European Union Structural Funds - Development within the geographical
objective areas 2, 5b and 6.
1. Form of subsidy
Grant.
2. Amount of subsidy
EU funds accorded during calendar year 1997, net cost in SEK millions:
Objective area 2: 14
Objective area 5b: 37
Objective area 6: 36G/SCM/N/38/EEC/Add.14
Page 39
3. Policy objective
Aid to structural development within the different geographical objective areas. The
programmes are dominated by measures for small and medium-sized enterprises. Priorities: Industrial
development, local development and tourism, and skills development.
4. Duration
The programme is running from 1995 to 1999.
5. Statistical data
Funds are distributed horizontally mainly to small and medium-sized companies, and trade
effects are considered minimal.
6. Legal basis
Council Regulation (EEC) No. 2082/93.
7. Rules and conditions
Funds from the European Union are to be complemented by national funds at the rate
30/70 per cent. Programme no. 3.2, Temporary Support to Small Companies, is used for Swedish
national co-financing. Co-financing is included in the total reported under that program.
7. Environment Aid
7.1 Investment Grant for Ecologically Sustainable Development
1. Form of subsidy
Grants.
2. Amount of subsidy
Net cost in SEK millions: Calendar year 1997: 114,4
Support is granted to a variety of projects and cannot be broken down per unit.
3. Policy objective
Primary objective is to obtain higher levels of environmental protection compared to what is
demanded by international standards.
4. Duration
The programme started in July 1995 and was terminated in June 1996. A new programme, with
basically the same objectives, started 1 January 1997.G/SCM/N/38/EEC/Add.14
Page 40
5. Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
6. Legal basis
The legal provisions are laid down in the Governmental ordinances: SFS 1995:  1044
(Förordning om bidrag till ekologisk omställning), and from 1 January 1997 in SFS 1996:  1378
(Förordning om statligt investeringsbidrag för en ekologiskt hållbar samhällsutveckling).
7. Rules and conditions
Support is granted to environmentally friendly investments. The grant is to be given to
projects that are rational, cost-effective, that produce obvious environmental gains and that have
obvious effects on employment. Support is not to cove r more than 30 per cent of the additional costs
that arise due to upgrading of investments into a more environmentally friendly direction. Investments
can not receive other forms of state aid.
8. Other Forms of  Subsidies
8.1 Energy tax concession
1. Form of subsidy
Tax exemption.
2. Amount of subsidy
Net cost in SEK millions: Calendar year 1997: 52,8
Support is granted to a variety of projects and cannot be broken down per unit.
4. Policy objective
The tax measure aims at reducing emission s of CO2. The objective of the concession
provisions is to safeguard that enterprises with energy intensive production are not burdened with an
unreasonably high tax level.
5. Duration
The present system started 1 July 1997. Expiration date 31 December 1999.
6. Statistical data
The support is granted to a variety of projects and sectors, therefore it is not possible to
present statistical data permitting an assessment of trade effects.
7. Legal basis
The legal provisions are laid down in the Act  (Lagen om skatt på energi) SFS 1994:  1776.G/SCM/N/38/EEC/Add.14
Page 41
8. Rules and conditions
For enterprises within the industry sector there is a general rule stipulating a 50 per cent
reduction of the CO2-tax for the use of fossil fuels. As concerns enterprises with energy intensive
production, they also benefit from a special tax reduct ion; If the CO2 tax payable according to the 50
per cent-rule exceeds 0,8 per cent of the companies value of sales, then the enterprise only has to pay
12 per cent tax on the exceeding sales value. In addition, there are complementary rules for certain
types of fuels. According to these rules CO2 tax exceeding 1,2 per cent of sales value is deductible
from the total CO2 tax amount to be paid. (The 0,8 per cent rule was introduced as from 1 July 1997.
The 1,2 per cent rule was in force former to that date).G/SCM/N/38/EEC/Add.14
Page 42
APPENDIX
The net cost method
The objective of the net cost to government (N CG) method is to obtain a consistent measure
of government aid, where support from various inst ruments, i.e. grants, loans, guarantees, equity
injections and tax concessions, are added. The NCG- method is used by OECD in its project "Public
support to industry".
Net costs are calculated as follows:Grants: Actual amounts paid out minus repayments and royalties if any.
Guarantees: Claims paid minus fees received and recoveries.
Loans: Estimated capital cost based on the difference between the government borrowing rate
and actual interest payments received.Equity capital: Estimated capital cost based on the government borrowing rate and dividends
received.Tax concessions: Estimates of revenue forgone.
Capital against Royalty: Estimated capital cost based on the difference between the
government borrowing rate and actual royalty payments received.It should be noted that the net cost does not correspond to the actual transfer of funds from the
government to the firms in any given year, i.e. th e expenditure as reported in the government budget.
Instead the purpose is to indicate the net cost to  government of support to industry. Since imputed
capital costs on previous loans and equity injections are included, the net cost figures to a certain
extent reflect past policies. The NCG-method is not a direct guide to determine the extent of distortion
of competition nor to approximate the ultimate benefit to industry. However, the NCG is a useful
guide to the evolution and the structure of government support over time.
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