RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q2/EEC/34
8 May 2002
(02-2584)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Replies to Questions from the UNITED STATES1 Regarding the
Updating Notification of the EUROPEAN COMMUNITIES2
The following communication, dated 30 April 2002, has been received from the Permanent
Delegation of the European Commission.
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European Regional Development Fund
Q1. How is it decided whether the aid will be disbursed in the form of a loan or a grant?Q2. If aid is disbursed as a loan, under what terms are the loans offered?
Reply
Aid is generally given in form of grants, not loans.
European Social Fund
Q1. What types of ‘innovative measures’ qualify for aid?  How is it determined that these
measures qualify for aid?
Reply
The legal basis for innovative measures (experimental projects) is to be found in Council
Regulations (EC) No. 1260/99, Art. 22, and No. 1784/ 99, Art.6.  The innovative actions are subject to
an overall ceiling of 0.4 per cent of the annual fundi ng under each Structural Fund (SF).  They aim at
innovative methods and practices designed to improve the quality of assistance under the objectives of
the Structural Funds.  They shall be implemented in a simple and transparent fashion on the basis of
sound financial management.  In accordance with Art. 6 of the ESF regulation (above) they may
include operations of innovatory nature related to the themes of the ESF (i.e. they can be process-
oriented, goal-oriented or context-oriented).  They are launched annually at the initiative of theCommission, after consultation of the respective SF-committees, on basis of thematic open calls for
proposals.  The submitted proposals are chosen on basis of the selection and award criteria published
with the open call.  They are limited in time (1-3 years for any project) and size (approx. 1 mio€ on
average per project).
                                                     
1 G/SCM/Q2/EEC/27
2 G/SCM/N/60/EECG/SCM/Q2/EEC/34
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Q2. How is it decided whether the aid will be disbursed in the form of a loan or a grant?
Reply
The ESF co-finances the projects on basis of a grant.
Q3. If aid is disbursed as a loan, under what terms are the loans offered?
Reply
Not applicable.
Q4. It is stated that the duration of the programme is from 1994 to 1999.  Does this mean the
programme has been terminated?  If so, has another programme taken its place?
Reply
Innovative actions took place during the 1994-99 programming period in accordance with the
relevant legal provisions (Regulation (EEC) No. 2084/ 83), and will also take place during the present
programming period (see above).
European Agricultural Guarantee and Guidance Fund
Q1. How is it decided whether the aid will be disbursed in the form of a loan or a grant?Q2. If aid is disbursed as a loan, under what terms are the loans offered?
Reply
There is no aid in the form of a loan.
Q3. It is stated that the duration of the programme is from 1994 to 1999.  Does this mean the
programme has been terminated?  If so, has another programme taken its place?
Reply
Yes, the programmes has been terminated in 1999.  New programmes have started in 2000
(until 2006).
Agricultural Aid
Q1. In response to the BSE crisis, the EU implemented action programmes in various
member countries to promote quality beef and veal during the 1999/2000 marketing year.Please provide details on the programmes that were begun and how much aid was provided
under those programmes.
Reply
Regulation No. 1318/93 provide details on promotion actions in the beef sector.  For the
marketing year 1999/2000 13.5 million € were spent for those cofinanced programmes (60 per cent
CE, 40 per cent MS).G/SCM/Q2/EEC/34
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Aid to the Coal Industry
Q1. Under the notification for Aid to the Coal I ndustry, you note that France notified aid for
1997, 1998, and 1999 but that the aid was not authorized and is being considered by the
Commission.  When will it be decided whether or not the aid is authorized?
Reply
On 20 September 2000 the European Commission decided to authorize state aid granted by
France to the coal industry for the years 1997 until 1999 (see Official Journal of the European
Communities of 31.1.2001, L 29, p. 45).
Joint European Venture Programme
Q1. Please provide details on what are considered ‘eligible expenses.’
Reply
Eligible expenses  (based on Article 5.4.2 of the JEV Framework Agreement)
The eligible expenses are those connected with preparatory work (such as market surveys,
preparation of the legal framework, environmental impact assessment, technical standards, business plan,etc ...) related to the conception and setting-up of a joint venture, i.e. initial expenses only.  They include:
(a) external expert and consultant fees (lawyers, advisors, accountants), based on actual
expenses up to EUR 650 per day.  In case that the total amount of the contract for
experts and consultants exceeds for each contractual partner EUR 25,000, thedetermination of the contribution shall be based on the lowest of a minimum of three
bids;
(b) internal expert fees incurred abroad.  These shall be charged on a fixed amount of
EUR 200 per day of travel;
(c) travel and hotel expenses in the countries concerned by the project; these expenses are
eligible within the limits provided by the rules applicable to the Commission’s contracts
for the provision of services;
(d) other expenses necessary in this context may be approved at EC’s discretion, provided
that they are already specified and justified in the submission and agreed upon by theCommission in the relevant Annex of the Specific Agreement.  Financing costs and
expenses relating to partner search are excluded.
Q2. Is aid in any way contingent on the subsequent joint venture’s export intentions or
capabilities?
Reply
The JEV aid is not contingent on the subsequent joint venture’s export intentions or
capabilities. The information on the joint venture part ners’ past or future exports is neither requested
nor relevant in determining the amount of support for the preparatory works or for the investment.
Furthermore, from the start of the programme in 1997 until 31.12.2000 only 83 joint venture projects
have received support from the JEV programme, due to which the impact of this programme on trade
is negligible.G/SCM/Q2/EEC/34
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FIFG and PESCA
Q1. It is noted that the programme duration was from 1994 to 1999.  Does this mean the
programme was terminated?  If so, was it replaced with another programme?
Reply
The PESCA Community initiative was terminated in 1999. However, measures aimed at
helping economic and social diversification, currently covered by PESCA, will continue to benefit
from aid under new Objectives 1 and 2 (of the Structural Funds) and, to some extent, under the new
FIFG granted measures.
For further information on this item:
http://europa.eu.int/comm/fisheries/news_corner/doss_inf/ifop4_en.htm
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