WORLD TRADE
ORGANIZATIONG/SCM/N/71/EEC/Add.6
18 December 2001
(01-6187)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
New and Full 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 Germany.G/SCM/N/71/EEC/Add.6
Page 2
Germany
Table of Contents
Page
I. INTEREST-RATE GRANTS TO FINANCE ORDERS TO GERMAN
SHIPYARDS ("WERF THILFEN") .......................................................................................3
II. COMPETITION AID FOR GERMAN SHIPYARDS
(WETTBEWERBS HILFE)......................................................................................................4
III. BAVARIAN REGIONAL PROGRAMMES IN SUPPORT OF COMMERCE
AND INDUS TRY................................................................................................................... ...5
IV. REDUCTION TO BETWEEN 3 AND 5 PER CENT OF THE RATES
PAYABLE ON INHERITABLE LAND-USE RIGHTS IN THE CASE OF
PROJECTS WORTHY OF SPECIAL PROMOTION OF MANUFACTURING
FIRMS DEPENDING ON THE DEGREE OF USE OF THE BUILDINGS
(BERLIN) ....................................................................................................................... ...........6
V. CONSOLIDATION PROGRAMME OF THE LAND MECKLENBURG-
WESTERN POMERANIA ON THE GRANTING OF PUBLIC FINANCIAL
AID TO SMALL AND MEDIUM-SIZED COMMERCIAL AND INDUSTRIAL
ENTERPRISES – SPECIAL FUND TO SUPPORT COMPANI ES....................................6
VI. JOINT SCHEME ON "IMPROVING THE REGIONAL ECONOMIC
STRUCTURE "..................................................................................................................... .....7
VII. REGIONAL ECONOMIC  SUPPORT PROGRAMME.......................................................8
VIII. PROMOTION OF EFFICIENT USE OF ENERGY;  PROGRAMME
SECTION "PROMOTION OF TECHNOLOGICAL DEVELOPMENT
(REN/TE)"...................................................................................................................... ...........9
IX. REGIONAL AID PROGRAMME OF RHINELAND-PA LATINATE...............................9
X. STATE AID FOR RESEARCH AND DEVELOPMENT (R&D) IN THE
SECTOR OF BI OTECHNOLOGY ......................................................................................10G/SCM/N/71/EEC/Add.6
Page 3
I. INTEREST-RATE GRANTS TO FINANCE ORDERS TO GERMAN SHIPYARDS
("WERFTHILFEN")
1. Name of the subsidy scheme or ad hoc subsidy
Interest-Rate Grants to Finance Orders to German Shipyards ("Werfthilfen")
2. Form of the subsidy
Grant.
3. Subsidy per unit
Total amount of assistance provided in 2000: DM 152,4 million
4. Objective and/or purpose of the subsidy
The eighth shipyard assistance programme (VIII.  Werfthilfeprogramm) exists to provide
non-repayable interest-rate grants under the rele vant OECD Understanding On Export Credits For
Ships and the relevant EU directives on shipbuilding subsidies.
Legal basis: Commitment authorizations in the Federal budget;
Guidelines from the Federal Ministry of Economics and Technology
Modes of payment: Those receiving the grants are shipbuilding companies in the Federal
Republic of Germany.
Support is given to the construction and reconstruction of high-
technology marine vessels (merchant vessels), respecting the OECD
Understanding On Export Credits For Ships:
8.5 year term
20 per cent advance payment
Minimum interest rate of 8 per cent p.a.
The assistance is made available  in the form of tranches in the eighth
shipyard assistance programme.
5. Duration of subsidy and other time-limits attached to it
The interest rate assistance are granted under the respective guidelines on a year-to year basis
6. Statistical data permitting an assessment of the trade effects of a subsidy
n.a.G/SCM/N/71/EEC/Add.6
Page 4
II. COMPETITION AID FOR GERMAN SHIPYARDS (WETTBEWERBSHILFE)
1. Name of the subsidy scheme or ad hoc subsidy
Competition Aid for German Shipyards (Wettbewerbshilfe)
2 . Form of the subsidy
Grant
3. Subsidy per unit
Total amount of assistance provided in 2000:  DM 276,9 millionBudgeted for payment ( 2001-2003): DM  816,8 million
4. Objective and/or purpose of the subsidy
The assistance is intended to facilitate the restructuring being undertaken by the shipyards.
Grant towards production costs are given, where they are permissible under the relevant EU directive
on shipbuilding subsidies
The programme is funded jointly by the Federal-, an the Länder-governments.
Legal basis: Commitment authorizations in the Federal and Länder budgets.
Guidelines from the Federal Ministry of Economics and Technology.
Modes of payment: Those receiving the grants are shipbuilding companies in the Federal
Republic of Germany.
Support is given to the construction and conversion of high-
technology marine vessels (merchant vessels).  From 1 January 1994,
the support rate is 7 per cent of the price in the contract, for ships
with a contract price of below 10 million  EURO and for conversion
work, the rate is 4.7 per cent.
5. Duration of subsidy and other time-limits attached to it
The duration of the subsidy is dependent on the EU directive mentioned above. Admissible
aid for contracts concluded up to 31.12.2000. Time limit for payment: 31.12.2003
6. Statistical data permitting an assessment of the trade effects of a subsidy
n.a.G/SCM/N/71/EEC/Add.6
Page 5
III. BAVARIAN REGIONAL PROGRAMMES IN SUPPORT OF COMMERCE AND
INDUSTRY
1. Name of the subsidy scheme or ad hoc subsidy
Bavarian programme in support of commerce and industry (as promulgated by the Bavarian
Ministry of Economics, Transport and Technology on 4 April 2000, No. 3540 – III/3b – 29778).
2. Form of the subsidy
Investment grant.
Interest rate subsidy (to subsidize loans).
3. Subsidy per unit
Total support 2000 (DM Million)
Investment grant  86,5         "
Interest rate subsidy  25,6         "
Assisted investment volume         1.187,4         "
Number of assisted companies 422
4. Objective and/or purpose of the subsidy
Aid to finance investments in trade, industry and tourism to create and secure jobs and
training places in assisted areas.
Objective: Improving regional economic structures and tourism offers;
Increasing the economic strength of structurally weak areas.
5. Duration of subsidy and other time-limits attached to it
Unlimited.
6. Statistical data permitting an assessment of the trade effects of a subsidy
Not available.  Outside the assisted areas pursuant to the Joint Federal Government/Laender
Scheme for the Improvement of Regional Economic Structures, support is restricted to small andmedium-sized enterprises (SMEs) within the meaning of the Decree (EC) Nr.70/2001 of the European
Commission on State Aid to SME's ( EC L 10/33 dated 12 January 2001)G/SCM/N/71/EEC/Add.6
Page 6
IV. REDUCTION TO BETWEEN 3 AND 5 PER CENT OF THE RATES PAYABLE ON
INHERITABLE LAND-USE RIGHTS IN THE CASE OF PROJECTS WORTHY OF
SPECIAL PROMOTION OF MANUFACTURING FIRMS DEPENDING ON THE
DEGREE OF USE OF THE BUILDINGS (BERLIN)
1. Name of the subsidy scheme or ad hoc subsidy
Reduction to between 3 and 5 per cent of the rates payable on inheritable land-use rights in
the case of projects worthy of special promotion of manufacturing firms depending on the degree of
use of the buildings
2. Form of the subsidy
Cutting land costs by granting a reduced rate on land-use rights.
3. Subsidy per unit
Payments: DM  1.200.358,35  in  2000
4. Objective and/or purpose of the subsidy
Reducing land acquisition costs for the manufacturing industry for regional promotion
purposes.
5. Duration of subsidy and other time-limits attached to it
Unlimited.
6. Statistical data permitting an assessment of the trade effects of a subsidy
The effects of the subsidy in accordance with WTO standards cannot be assessed due to the
low financial resources.
V. CONSOLIDATION PROGRAMME OF THE LAND MECKLENBURG-WESTERN
POMERANIA ON THE GRANTING OF PUBLIC FINANCIAL AID TO SMALL AND
MEDIUM-SIZED COMMERCIAL AND INDUSTRIAL ENTERPRISES – SPECIAL
FUND TO SUPPORT COMPANIES
1. Name of the subsidy scheme or ad hoc subsidy
Consolidation programme of the Land Mecklenburg-Western Pomerania on the granting of
public financial aid to small and medium-sized commercial and industrial enterprises – special fund to
support companies
2. Form of the subsidy
Loans of up to DM 5 million at market conditions.  Usually restricted to SMEs within the
meaning of the Community Framework.G/SCM/N/71/EEC/Add.6
Page 7
3. Subsidy per unit
Approved loans in 2000: DM  6,6  million;
Disbursed loans in 2000: DM  6,3  million.
4. Objective and/or purpose of the subsidy
Liquidity aid for enterprises that are important for a region in Mecklenburg-Western
Pomerania in terms of labour-market policy and structural policy.
5. Duration of subsidy and other time-limits attached to it
The loans have a maximum duration of ten years.
6. Statistical data permitting an assessment of the trade effects of a subsidy
Statistics are not available to assess the trade effects of the subsidy.  Most of the assisted
enterprises operate on regional markets only.
VI. JOINT SCHEME ON "IMPROVING THE REGIONAL ECONOMIC STRUCTURE"
1. Name of the subsidy scheme or ad hoc subsidy
Joint Scheme on "Improving the Regional Economic Structure".
2. Form of the subsidy (i.e. grant, loan, tax concession, etc)
Regional assistance in the form of investment grants to industry and parts of commerce.  The
purpose of promotion under the Joint Scheme is a selective regional strengthening of land economic
promotion programmes in the fields of advice, schooling, human capital formation as well as research
and development;  this allows greater precision in the use of funds.
Paragraph 3 of Article 72 of the Basic Law requires living conditions to be equal throughout
the Federal territory.  Regional structural policy contributes to this end.  According to paragraph 1 of
Article 91 a of the Basic Law, it is the common task of the Federal and the Land Governments to
improve the regional economic structure.  The basis of promotion is the Act on the Joint Scheme on
"Improving the Regional Economic Structure", dated 6 October 1969.
3. Annual amount budgeted for the subsidy
In 2000 a total budget of DM 3.969 billion was granted for commerce and industry., the total
amount consisting of financial means provided by the Federal-, and Länder governments as well as
EFRE means.
This amount may be split into DM 449 million for the original Federal länder and DM 3.520
billion for the new Federal länder.
4. Policy objective and/or purpose of the subsidy
The primary regional policy objective is to enable structurally weak regions to keep pace with
general economic development by offsetting locational disadvantages and reducing regional
development differentials.  Regional structural policy focuses on supporting regional developmentG/SCM/N/71/EEC/Add.6
Page 8
activity with a view to raising the levels of employment and income in problem areas in this way.
Eligible for subsidies under this scheme are commercial and industrial firms.
Investments in commerce and industry are eligible for promotion if they generate additional
income to the region so that the region's total level of  income is raised to a not insignificant extent in
the long run (primary effect).  This is deemed to be the case if the company applying for subsidy
payment sells the better part of its products or services on a supraregional basis.  The investment
projects concerned must create new jobs in the assisted areas or secure existing ones.
Assisted areas are redefined at multiannual intervals on the basis of regional indicators (level
of income, unemployment, infrastructure).  Assist ed areas in the original laender including Berlin
(West) cover 23.4 per cent of the German population in the period from 2000 to 2003.  The newfederal states and Berlin (East) represent assisted areas in their entirety till 2003. Moreover, these
areas have been recognized as objective-1 areas wi thin the framework of the EC structural Funds until
the end of 2006
5. Duration of the subsidy
Regional assistance consists of a non-recurring payment and is granted to investment projects
in assisted areas.  The programme is under no time-limit.
6. Statistical data permitting an assessment of the trade effects of the subsidy
Regional promotion is aimed at offsetting domestic investment disadvantages of certain
regions and contributes to raising the levels of in come and employment in structurally weak areas.
Promotion under the Joint Scheme therefore is neutral in terms of competition and has no effect on
competition in international trade.
VII. REGIONAL ECONOMIC SUPPORT PROGRAMME
1. Name of the subsidy scheme or ad hoc subsidy
Regional Economic Support Programme (North-Rhine-Westphalia.)
2. Form of the subsidy
Grants towards investment projects of trade and industry and local infrastructure.
3. Subsidy per unit
The total amount budgeted for 2000 scheme of the Land:  DM 213.0 million.
4. Objective and/or purpose of the subsidy
Improving the regional economic structure and supporting small and medium-sized
businesses.
5. Duration of subsidy and other time-limits attached to it
not limitedG/SCM/N/71/EEC/Add.6
Page 9
6. Statistical data permitting an assessment of the trade effects of a subsidy
Given the objectives of the programme, trade effects cannot be assessed.
VIII.  PROMOTION OF EFFICIENT USE OF ENERGY;  PROGRAMME SECTION
"PROMOTION OF TECHNOLOGICAL DEVELOPMENT (REN/TE)"
1. Name of the subsidy scheme or ad hoc subsidy
Promotion of efficient use of energy;  programme section "promotion of technological
development (REN/TE)".  State subs idy N 497/94. (North-Rhine-Westpalia)
2. Form of the subsidy
Grant
3. Subsidy per unit in 2000
Approx.:  DM  18.51 million.
Total number of recipients: 18
4. Objective and/or purpose of the subsidy
The promotion section "technological development" supports companies in the fields of
energy technology, the energy industry and commercial and industrial energy users in North-
Rhine/Westphalia. The subsidy is granted for the development of new products and processes for the
efficient use of energy and raw materials and for the use of renewable energies that have a pilotcharacter beyond individual companies.
5. Duration of subsidy and other time-limits attached to it
The duration is two to three years for projects subsidised in 2000.
6. Statistical data permitting an assessment of the trade effects of a subsidy
The above-mentioned subsidy programme is based on the European Community’s Research
and Development (R&D) framework. The assisted projects comprise only development stages before
competition.
IX.  REGIONAL AID PROGRAMME OF RHINELAND-PALATINATE
1. Name of the subsidy scheme or ad hoc subsidy
Regional aid programme of Rhineland-Palatinate.
2. Form of the subsidy
Investment grantG/SCM/N/71/EEC/Add.6
Page 10
3. Subsidy per unit
Up to 7.5 per cent for medium-sized industries, 15 per cent for small-sized industries.
Total budget:  DM 17 million, disbursement in 2000:   DM 9.3 million.
4. Objective and/or purpose of the subsidy
Promotion of investment in small- and medium-sized industries.
5. Duration of subsidy and other time-limits attached to it
Unlimited.
6. Statistical data permitting an assessment of the trade effects of a subsidy
In 2000:
- creation of 288 jobs by providing financial assistance to 101 individual promotional
cases;
X. STATE AID FOR RESEARCH AND DEVELOPMENT (R&D) IN THE SECTOR OF
BIOTECHNOLOGY
1. Name of the subsidy scheme or ad hoc subsidy
Government aid for research and development (R&D) in the field of biotechnology.
2. Form of the subsidy
Only grants are awarded towards R&D expenditure.
3. Amount of grant per unit
During 2000 aid to the amount of DM 109,2 million was granted to industry.
4. Purpose of the aid
The programme "Biotechnology 2000" is intended to contribute to strengthening research in
biotechnology, one of the most important key technologies.  The programme aim forms part
of the Federal Government’s general research and technological policy :
- securing a broad-based basic research while at the same time promoting cutting edge
research;
- encouraging preventive research in the fields of environment, health, nutrition and
energy and raw materials supply;G/SCM/N/71/EEC/Add.6
Page 11
- improvement of the framework conditions for industry’s own research and
development, in particular support to small and medium-sized enterprises and
enhancing cooperation between industry and science;
- enhancing the research structure for basic biological research.
5. Duration of aid
The programme "Biotechnology 2000" formed the funding framework until 2000 and has
already been terminated.
6. Statistical data permitting an assessment of the trade effects of a subsidy
No relevant statistical data are available.
__________