RESTRICTED
WORLD TRADE G/SCM/Q2/CZE/15
13November 1997
ORGANIZATION(97-4977)
Original: English Committee onSubsidies
andCountervailing Measures
SUBSIDIES
Replies toQuestions from POLAND1
Regarding theUpdating Notification oftheCZECH REPUBLIC2
Thefollowing communication, dated 23October 1997, hasbeenreceived fromthePermanent
Mission oftheCzech Republic.
_______________
Q1. Could wereceive more detailed information onthecriteria ofeligibility concerning the
following twoschemes?
(A) State Loan Guarantees tofinance certain development programmes approved bythe
Government
Reply
TheBudgetary Rules statethattheMinister ofFinance shallbeauthorized toprovide state
guarantees tosecure payments oncredit andsimilar forms offinancial assistance andtheinterest thereon,
adjusted byanyexchange-rate differences, andother expenditures connected withcredit andsimilar
forms offinancial assistance designed tofinance government-approved developmental programmes.
Inpractice, itmeans thattheGovernment maydecide toprovide astateguarantee iftheproject
submitted bytheapplicant isconsidered tobeofabroader national interest (importance) andifsuch
aproject isfinancially recoverable tominimize theriskborne bytheState. TheBudgetary Rules state
thatiftheborrower isnotintheposition torecover allamounts andthisdutyisfulfilled bytheState
asaguarantor thentheborrower isobliged tohonour thiscommitment atalaterstage agreed upon
withtheState.
State loanguarantees aregranted, asarule,tomajor investment projects ininfrastructure,
intheareaofenvironment protection, etc.
1G/SCM/Q2/CZE/14.
2G/SCM/N/16/CZE.
./.G/SCM/Q2/CZE/15
Page2
(B) Support toAgriculture
Thesupport toagriculture isgranted inthree main streams:
(a) Direct subsidies -eligibility fororentitlement toadirect subsidy isbased ontheconcept of
agricultural production restructuring, reforestation, revegetation, non-agricultural useofland,
landscape upkeep, andactivities contributing tothepreservation oftheenvironment.
Furthermore, support isalsogiven toforestry management, reforestation projects inpollution-
damaged forests, preservation ofthegenetic potential ofanimal andvegetation stock, vineyard
restoration, hopfieldandorchard cultivation, andrestoration ofdrinking water supply to
population.
(b) TheAgriculture andForestry Support andGuarantee Fund (PGRLF) -itsprincipal mission
istoguarantee credits provided bycommercial banks toindividual entities conducting basic
activities inagriculture andforestry, aswellassubsidizing portions ofsuchcredits, provided
thatalltheconditions stipulated under therespective PGRLF programme aresatisfied.
(c) TheState Fund forMarket Regulation inAgriculture (SFTR) -forfurther details seethe
notifications made regularly bytheCzech Republic under theState Trading.
Themaincriterion foralltheabove-mentioned support schemes toagriculture isthefinancial
recovery ofinvestment andthefulfilment oftheduties vis-à-vis theState.
Q2. De-commissioning ofMining Activity
Could theCzech Republic please comment onatleasttheapproximate duration ofthis
programme?
Reply
AsstatedindocumentG/SCM/N/16/CZE,thede-commissioningofminingindustryisgoverned
bytheGovernment Resolutions. Thelatest Government Resolution No.558/1995 oncoalindustry
states thatthefinancial participation oftheState shallbeensured untiltheendof1998. However,
theMinistry ofIndustry andTrade isobliged toprepare anewconcept ofde-commissioning forthe
future. Itis,therefore, possible thattheparticipation oftheStateinde-commissioning shallcontinue
after1998.
Q3. Promotion ofSmall andMedium-Sized Enterprises
Could theCzech Republic please define small andmedium enterprise providing thatsuch
official definition exists inlaworistheonlycriterion thenumber ofemployees asstated inthe
notification?
Reply
Theofficial definition ofSMEs iscontained intheActontheState Support ofSmall and
Medium-Sized Enterprises. Itstates thatthemaximum sizeofanenterprise under thisActisupto
500employees. TheGovernment approves thecriteria forgranting aidonanannual basis. Since
1997, acriterion of250employees isusedasamaximum. There arenoother criteria fortheeligibility
under thescheme inquestion.