G/SCM/N/3/EEC
Page 504
TOTAL 336 263 100% 26,354,621,876 14,081,567,763 100% 11,130,616,584 6,903,958,428 629,218,162 100%G/SCM/N/3/EEC
Page 505
4. Programme to Improve Technological Capacity and Innovation in the Industrial Sector.
Form of the subsidy
The programme provides for a non-repayable grant as an aid measure under the following
general regime:
(a)For annual projects carried out by enterprises without their own R&D centres in collaboration with
technological centres or university departments: a maximum of 50 per cent of the
costs invoiced by these entities up to a ceiling of 30,000,000 pesetas of subsidy or, as
the case may be, 60,000,000 pesetas;
(b)for annual projects carried out by enterprises with their own R&D centres: up to 20 per cent of
their costs or, where appropriate, up to 50 per cent of the costs invoiced by the
technological centre up to a maximum 30,000,000 pesetas of subsidy or, as the case
may be, 60,000,000 pesetas;
(c)for annual projects carried out by groupings of enterprises or non-profit-making entities the
percentages and maximum limits indicated in the two preceding paragraphs shall apply
according to the form of implementation.
Total annual amount budgeted
2,060 million pesetas.
The annual maximum amount of the non-repayable grant granted to a single applicant may not
normally exceed 60 million pesetas, 120 million pesetas for groups of enterprises and 240 million
pesetas for priority projects.
Policy objective and/or purpose of the subsidy
To promote the incorporation of technology and innovation in industry in the Basque Country,
making available to the industrial fabric in Euskadi a series of aid programmes that will allow it to
compete effectively.
Duration of the subsidy
Duration of the project submitted.
Legislative instrument
Decree 97/1994 of 22 February on the improvement of technological capacity and innovation
in the industrial sector of the Autonomous Community of the Basque Country.
Beneficiaries
(a)Industrial or service enterprises collaborating with technological centres or university
departments;
(b)industrial or service enterprises with their own R&D centres;G/SCM/N/3/EEC
Page 506
(c)groupings of enterprises, regardless of their legal character, which have been set up to carry out any of
the activities eligible for subsidies and cooperate with a R&D centre belonging to one
or more of its members or with one or more technological centres or university
departments;
(d)non-profit-making entities that collaborate with technological centres or university departments.
Criteria for granting subsidies
Basic industrial research activities, applied research and promotion of innovation were all
considered eligible for aid.
In order to receive aid, annual work programmes meeting the following requirements had to be
submitted:
-They must form part of an applicant's technological or innovation project;
-the projects must last for a number of years and be consistent with the enterprise's strategy set out in its
strategic plan for technology, so as to ensure continuity for at least two years;
-they should be technically, economically and financially viable by market standards and provide an
actual or potential improvement in the enterprise's performance as a result of the
improved processes, products or services.
Statistical data on the effects of the subsidy on trade
Statistical data that would allow an evaluation of the effects of the subsidy on trade are not
available, but it is hoped to overcome this difficulty in subsequent notifications of subsidies after we
have set up a satisfactory system of communications with our Departments.G/SCM/N/3/EEC
Page 507
AUTONOMOUS COMMUNITY OF VALENCIAG/SCM/N/3/EEC
Page 508
PRELIMINARY LIST OF SPECIFIC SUBSIDY PROGRAMMES
OF THE AUTONOMOUS COMMUNITY OF VALENCIA
1.AID FOR THE INSTALLATION OF PILOT CENTRES FOR THE TREATMENT OF
LIQUID MANURE
(i)Legal basis: Order of 14 April 1994 of the regional Ministry of Agriculture, Fisheries and Food,
establishing aid for the installation of pilot centres for the treatment of liquid manure
(Diario Oficial de la Generalitat Valenciana (Official Journal) No. 2253 of 26 April
1994).
(ii) Form of the subsidy: Non-repayable grant.
(iii)Subsidy per unit: The maximum amount of the aid will be 30 per cent of the investment (up to a
ceiling of 3 million pesetas) for individual stockbreeders and 35 per cent of the
investment (up to a ceiling of 9 million pesetas) where the project is carried out jointly
by a group of stockbreeders.
(iii)1Annual amount budgeted for financial year 1994: 20,000,000 pesetas;
(iii)2Annual amount budgeted for financial year 1995: 25,000,000 pesetas;
(iii)3Average subsidy per unit: 3,000,000 pesetas.
(iv)Purpose of the subsidy: To establish an aid facility for owners of pig farms in the Community of
Valencia, for the construction of centres for the storage and treatment of liquid manure
using new technologies coming onto the market.
(v)Duration of the subsidy: Six years (until 1999).
(vi)Statistical data permitting an assessment of the trade effects of the subsidy: The aid granted so far
has been to farms that have undergone environmental inspection and been ordered to
undertake reforms in order to continue activities. It therefore has no trade effects.
2. AID FOR THE PROMOTION OF EMPLOYMENT
(i)Legal basis: Order of 24 January 1994 of the regional Ministry of Labour and Social Affairs to
regulate measures for the promotion of employment for the financial year 199410
(Diario Oficial de la Generalitat Valenciana No. 2.197 of 2 February 1994).
(ii)Form of the subsidy: Non-repayable grant and interest-rate subsidy.
10Data are given only for subsidies to the social economy, as being the only ones which could, as the case may
be, come under the definitions in the SCM Agreement.G/SCM/N/3/EEC
Page 509
(iii)Subsidy per unit:
-10,000,000 pesetas maximum for investment per applicant entity.
-1,000,000 pesetas maximum for financial subsidy.
-3,000,000 pesetas maximum for technical assistance.
-4,000,000 pesetas maximum for promotion and development of the social economy.
(iii)1Annual amount budgeted for 1994:
1,120,949,000 pesetas.
(iii)2Annual amount budgeted for 1995:
1,266,000,000 pesetas.
(iii)3Average subsidy per unit (1994 figures):
Financial subsidy: 3,786,901 pesetas.
Technical assistance: 1,455,007 pesetas.
Investment subsidy: 907,843 pesetas.
(iv)Purpose of the subsidy: To stimulate and consolidate the social economy in order to further
economic development and the promotion of employment in the Community of
Valencia.
(v)Duration of the subsidy: 1994-2000.
(vi)Statistical data permitting an assessment of the trade effects of the subsidy: The present aid plan
aims to improve entrepreneurial structures in the Community of Valencia, particularly
in order to facilitate the creation and maintenance of SMEs with a view to creating or
maintaining jobs. The statistical data refer to measures to encourage SMEs to market
their products (attendance at trade fairs, publication of catalogues and activities to gain
access to new foreign markets).G/SCM/N/3/EEC
Page 510
SWEDEN
TABLE OF CONTENTS
Page
I.Subsidies to Swedish Industry 508
II.Subsidies to Swedish Agriculture 539
III.Subsidies to Swedish Fisheries 569G/SCM/N/3/EEC
Page 511
ANNEX I
Subsidies to Swedish Industry
Notification under Article 25 of the WTO Subsidies Agreement
Page
1. INTRODUCTION 510
1.1 Method and scope of the notification 510
1.2 The objectives of the Swedish industrial policy 510
2. SUPPORT FOR RESEARCH AND DEVELOPMENT 510
2.1 Support for R&D through NUTEK 510
2.2 Project financing and new business loans through 512
the Fund for Industry and New Business
2.3 Energy research programme 513
2.4 The Fund for Energy Technology 514
2.5 Transport and Communication Research through the Transport 515
and Communications Research Board
2.6 Research on electrical and hybrid vehicles through the Transport 516
and Communications Research Board
2.7 Information technology 517
2.8 Project financing through the Fund for Swedish-Norwegian 518
Industrial Cooperation
3. AID TO SMALL AND MEDIUM-SIZED COMPANIES 519
3.1 The regional development companies (former the regional development funds) 519
4. SUPPORT FOR EMPLOYMENT AND TRAINING 520
4.1 Support for vocational training 521
4.2 Recruitment aid 521
4.3 The Trainee Temporary Replacement Scheme 522
4.4 The Swedish Work Environment Fund 523
5. EXPORT PROMOTION 524
5.1 State supported export credits 524
5.2 Export credit guarantees 525
5.3 General export promotion 526
6. REGIONAL AID TO ENTERPRISES 527
6.1 Localization grants 527
6.2 Localization loans 529
6.3 Development grants 530
6.4 Loans to regional investment companies 531G/SCM/N/3/EEC
Page 512
Page
6.5 Employment grants 532
6.6 Reduced social security contributions 533
6.7 Transport aid 534
6.8 The Fund for Northern Sweden 535
7. OTHER FORMS OF SUBSIDIES 536
7.1 State subsidy for civil emergency preparedness supply 536
APPENDIX 538
The net cost method 538
ANNEX 2 539G/SCM/N/3/EEC
Page 513
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 main rule is that the grant is taxable as an income to the recipient. The general level for
corporate income taxes is about 30 per cent flat rate.
The notification covers aid to the mining and manufacturing industry (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 approach is
used in the EFTA Annual Report on State Aid and by OECD in its "Subsidies and Structural
Adjustment" project. The method is described in the appendix. The most recent figures available
refer to the fiscal year 1993/94.
The programmes that were in effect 1 July 1993 are reported on in the notification.
1.2 The objectives of the Swedish industrial policy
The Swedish industrial policy is based on the principle that the allocation of productive
resources is determined by the market forces. The government defines the legal and administrative
framework for the economic agents, but refrains from direct intervention in industry. The objective of
industrial policy is to improve the conditions for sustained growth and innovation in industry with
general measures. Improvement of the functioning of the markets and correction of specific market
flaws, e.g. open up markets, promote R&D or training, externalities and to provide the necessary
infrastructure, are important issues. Important areas are also strengthening of competition, diffusion of
new technology, stimulation of small enterprises and securing the short- and long-term supply of energy
on internationally competitive terms.
State aid to industry has been cut down considerably in the 1980s. All forms of firm specific
aid have been eliminated. Sector specific aid has also been put out of effect. The government has
declared that state resources used for financial aid to enterprises must be more efficient in the future
comprising more obvious effects on growth and creation of new jobs.
2. SUPPORT FOR RESEARCH AND DEVELOPMENT
2.1 Support for R&D through NUTEK
(a) Form of subsidy
Grants or loans with conditional repayment.G/SCM/N/3/EEC
Page 514
(b) Amount of subsidy
Net cost in SKr millions: Fiscal year 1993/1994: 449
-SKr 235 million to firms and individual inventors
-SKr 214 million to universities, technological research institutes, cooperative research institutes
Support is granted to a variety of projects and cannot be broken down per unit
(c) Policy objective
The primary objective is aid for R&D and the secondary objective is aid to SMEs.
(d)Duration
The programme commenced as from 1 July 1993. Duration until 1 July 1996.
(e)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.
(f)Legal bases
The legal provisions are laid down in the following Governmental ordinances: 1993:1332 (Förordning
om ändring av förordningen 1978:571 om statligt stöd till teknisk forskning, industriellt
utvecklingsarbete och uppfinnarverksamhet) and SFS 1993:286 (Förordning om
ändringar i förordningen 1991:660 med instruktion för Närings-och
Teknikutvecklingsverket).
(g)Rules and conditions
The National Board for Industrial and Technical Development (NUTEK), is a government agency
which among other tasks administers most of the government support to technical
R&D. Support is granted to universities, technological research institutes for basic
research, cooperative research institutes (i.e. institutes financed jointly by government
and industry) and to individual firms and inventors. A precondition for receiving
support in the form of grant 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 individual inventors is in the form of
loans with conditional repayment. A loan can cover up to 50 per cent of the costs of a
project. Repayment, including market 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 receive support from NUTEK. To the extent that this
occurs, the aid ceilings apply to the combined aid.
2.2 Project financing and new business loans through The Fund for Industry and New BusinessG/SCM/N/3/EEC
Page 515
The Fund for Industry and New Business is a public foundation. Its main objectives is to
promote industrial development and marketing. The capital of the Fund amounted to SKr 2,900
million as of July 1994. 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.
(a)Form of subsidy
Project financing in the form of loans with conditional repayment, guarantees and grants with royalty
repayments. (New business loans are extended only until the end of June 1995.)
(b)Amount of subsidy
Net cost in SKr millions: Fiscal year 1993/1994: 39
Support is granted to a variety of projects and cannot be broken down per unit
(c)Policy objective
The primary objective of the project financing is aid to SMEs and R&D. (The primary objective of the
new business loans is aid, exclusively, to SMES.)
(d)Duration
The scheme commenced in 1979 and was altered in 1993. Duration has not been specified.
(e)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.
(f)Legal bases
The legal provisions are laid down in the Governmental Ordinance SFS 1993:31 (Förordning om
finansiering genom Industri-och Nyföretagarfonden).
(g)Rules and conditions
Project financing: The Fund concentrates on support to small- and medium-sized companies. There
are no restrictions regarding industry or location. To be eligible for support, a project
must involve a substantial risk, but have a compensating potential to become
commercially successful. Financing through standard market sources shall not be
available. The maximum amount of an award cannot exceed 50 per cent of the costs
of a project. Any expenditure connected with a development project (seldom land or
buildings) is eligible for aid. All successful SMEs pay back with market interest rate or
royalty. Aid from the Fund may be combined with regional support, in accordance
with the state aid rules in the European Community.
New business loans: The equity loan to start-ups is either a personal loan made out to the
entrepreneur (injected into the company as restricted equity) or a risk-carrying
(unsecured) debenture loan to the company. Maximum is 30 per cent of the amount
of financing, but minimum SKr 100,000 and maximum SKr 1 million. The loan runs
for up to 15 years and is instalment-free during the first five years. The loan isG/SCM/N/3/EEC
Page 516
interest-free for two years, reduced interest for three years; from the sixth year market
interest is paid. Repayment starts the sixth year. An opening charge of 2 per cent on
granted loans is payable and is deducted when the loan is paid out. Security is 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 is good reason and if an 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. The minimum value is approximately SKr 0.35 million in
capital requirements. All sorts of businesses are eligible. The loan may be combined
with regional support. New business loans will expire at the end of June 1995.
2.3 Energy research programme
(a) Form of subsidy
Grants or loans with conditional repayment.
(b) Amount of subsidy
Net cost in SKr millions: Fiscal year 1993/1994: 30
Support is granted to a variety of projects and cannot be broken down per unit
(c)Policy objective
The primary objective of the programme is to establish fundamental competence and expertise, to
facilitate the conversion of the Swedish energy system from the use of nuclear power to
alternative renewable sources of energy and to enhance the awareness of the climatic
and environmental 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.
(d)Duration
Programme commenced as from 1 July 1993. Duration until 1 July 1996.
(e)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.
(f)Legal bases
The legal provisions are laid down in the Governmental Ordinance SFS 1987:819 (Förordningen om
statligt stöd till energiforskning).G/SCM/N/3/EEC
Page 517
(g)Rules and conditions
Support is granted to universities, institutes of technology, cooperative research institutes (i.e. institutes
financed jointly by the government and industry) and to firms. However, aid to firms
accounts for a minor portion (about 15 per cent) of the expenditure, and is mainly in
the form of loans with conditional repayment. The general rule is that all results from
the Energy Research Programme are official and shall be made available. 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 Fund for Energy Technology
(a) Form of subsidy
Grants, soft loans and guarantees.
(b) Amount of subsidy
Net cost in SKr millions: Fiscal year 1993/1994: 147
Support is granted to a variety of projects and cannot be broken down per unit.
(c)Policy objective
The primary objective is aid for R&D. The Fund supports research, development and preparations of
commercial introduction of new technology for energy production and for
environmental protection.
(d)Duration
The programme commenced as from 1 July 1988. Duration until further notice, i.e. has not been
specified.
(e)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.
(f)Legal bases
The legal provisions are laid down in the Governmental Ordinance SFS 1988:805 (Förordning om
statligt stöd ur energiteknikfonden, mm.)
(g)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. The beneficiary is normally the user of the
new technique, mainly small-scale private energy producers and public utilities in the
energy sector. Although the maximum possible aid is 50 per cent of the project costs,
NUTEK has established the practice that maximum grant is 25 per cent. There is no
formal restrictions to which extent the grant may be combined with other aid schemes.G/SCM/N/3/EEC
Page 518
However, in practice, projects receiving aid from the Fund are not given support from other
schemes.
2.5Transport and Communication Research through the Transport and Communications Research
Board
(a)Form of subsidy
Grants
(b) Amount of subsidy
Net cost in SKr millions: Fiscal year 1993/1994: 52
Support is granted to a variety of projects and cannot be broken down per unit.
(c)Policy objective
The primary objective is aid for R&D. Secondary objective is environmental aid and support for
energy-saving.
(d)Duration
Programme commenced as from 1 July 1993. Duration until l July 1996.
(e)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.
(f)Legal bases
The legal provisions are laid down in the Government Bill "Research for Knowledge and Progress"
1992/1993:170.
(g)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 given to universities and research institutions. Regional authorities,
municipalities and companies can be granted aid if they are engaged in pre-competitive
development or demonstrations 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.
A grant is regulated by an R&D contract. At least SKr 15 million a year have to be
used as grants to research, development or demonstrations projects concerning public
transports. There is no formal restriction to what extent the aid may be combined
with other aid schemes.
2.6Research on electrical and hybrid vehicles through the Transport and Communications Research
BoardG/SCM/N/3/EEC
Page 519
(a)Form of subsidy
Grants
(b) Amount of subsidy
Net cost in SKr millions: Fiscal year 1993/1994: 3
Support is granted to a variety of projects and cannot be broken down per unit.
(c)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 what potential the vehicles
have in order to accomplish energy-saving and environmental benefits, the real costs
for society and users, to what degree the vehicles can fit into the existing transport
system and impact on traffic safety. The aid is not devoted to development of the
vehicles as such.
(d)Duration
Programme commenced as from l July 1993. Duration until 1 July 1996.
(e)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.
(f)Legal bases
The legal provisions are laid down in the Government Bills: 1992/1993:179 and 1993/1994:100.
(g)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
precompetitive 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 cooperation with industry and
other interested parties and the costs for the programme as a whole are
supposed to be shared with these parties. 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
(a)Form of subsidy
Grants or loans with conditional repayment.
(b)Amount of subsidyG/SCM/N/3/EEC
Page 520
Net cost in SKr millions: Fiscal year 1993/1994: 119
-SKr 77 million to firms and individual inventors
-SKr 42 million to universities, technological research institutes, cooperative research institutes
Support is granted to a variety of projects and cannot be broken down per unit.
(c)Policy objective
The primary objective is aid for R&D. The secondary objective is aid to SMEs.
(d)Duration
The programme commenced as from 1 July 1993. Duration until 1 July 1996.
(e)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 o trade effects.
(f)Legal bases
The legal provisions are laid down in Government Bill "Research for Knowledge and Progress"
1992/1993:170, and the Governmental Ordinance: SFS 1991:1332 (Förordning om
ändring av förordningen 1978: 571 om statligt stöd till teknisk forskning, industriellt
utvecklingsarbete och uppfinnarverksamhet) and SFS: 1993:286 (Förordning om
ändringar i förordningen 1991:660 med instruktion för Närings- och
Teknikutvecklingsverket).
(g)Rules and conditions
The National Board for Industrial and Technical Development (NUTEK), is a government agency
which among other tasks administers most of the government support to technical
R&D. Support is granted to universities, technological research institutes for basic
research, cooperative research institutes (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 individual inventors is in the form of
loans with conditional repayment. A loan can cover up to 50 per cent of the costs of a
project. Repayment, including market 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 decision of support is made. In practice, projects supported by other State aid
schemes do not normally receive support from NUTEK. To the extent that this
occurs, the aid ceilings apply to the combined aid.
2.8 Project financing through the Fund for Swedish-Norwegian Industrial CooperationG/SCM/N/3/EEC
Page 521
The Fund for Swedish-Norwegian Industrial Cooperation 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.
(a)Form of subsidy
Grants, loans with conditional repayment and grants with royalty repayments.
(b)Amount of subsidy
Net cost in SKr millions: Fiscal year 1993/1994: 34 (to Swedish firms).
(granted-in a historical perspective only 70 per cent of this amount will actually be paid out)
Support is granted to a variety of projects and cannot be broken down per unit.
(c)Policy objective
The primary objective is aid to SMEs and for R&D. The Fund objective is to support development
cooperation between Swedish and Norwegian companies.
(d)Duration
The programme commenced as from l January 1982. Duration until the year 2001.
(e)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.
(f)Legal bases
The legal provisions are laid down in the Governmental Ordinance SFS 1990:45 (Förordningen om
stöd genom Fonden för svenskt-norskt industriellt samarbete).
(g)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, in exceptional cases the aid intensity can be
higher, however the maximal amount is SKr 50 millions. A precondition is that the
project is a high-risk project, has prospects to be commercially successful on a relatively
short term basis and that standard market sources are not available. 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 the aid may be combined with other aid
schemes.
3. AID TO SMALL- AND MEDIUM-SIZED COMPANIES
3.1 The regional development companies (the former regional development funds)
The regional development funds were public foundations established in each of the 24 counties
of Sweden. The objective of the funds was to strengthen the competitiveness and profitability of small-G/SCM/N/3/EEC
Page 522
and medium-sized enterprises (generally defined as firms with less than 200 employees) and to promote
the formation of new firms. The regional development funds have been replaced as from 1994 by
regional development companies. They should earn enough to retain their capital, which prevents real
subsidies to SMEs.
The guiding principles will remain. The amount of loans granted by the regional development
funds has been approximately SKr 600 million during the last years.
(a)Form of subsidy
Loan guarantees, loans, new business loans and development capital in the form of grants with royalties
repayment and soft loans.
(b)Amount of subsidy
Net cost in SKr millions: Fiscal year 1993/1994: 232
Support is granted to a variety of projects and cannot be broken down per unit.
(c)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 200 employees) and to promote
the formation of new firms.
(d)Duration
The programme for loans and guarantees commenced in 1978, development capital in 1982 and new
business loans in 1993. Duration has not been specified.
(e)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.
(f)Legal bases
The legal provisions are laid down in the following Governmental Ordinance: SFS1994:1100
(Förordning om statlig finansiering genom regionala utvecklingsbolag).
(g)Rules and conditions
General rules for all forms of aid: The scheme is strictly complementary to private institutions. The
scheme is in tended for small firms, i.e. firms with less than 200 employees. (In
practice, often under 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. But 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 funds also provideG/SCM/N/3/EEC
Page 523
counselling. The scheme may be combined with regional support and support from
NUTEK, in accordance 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 restricted 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 SKr 1 million. The loan runs for 10-15 years and is instalment-free
during the first five years. The loan is interest-free for two years, with reduced interest
for three years; from the sixth year market interest is paid. Repayment starts the
sixth year. 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 is good reason and if
an 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.
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 and trainee
temporary replacement scheme, are intended for companies and are regarded to constitute a subsidy in
the meaning of the WTO Agreement on Subsidies. Noted below is also a scheme aimed at improved
work life conditions.
4.1 Support for vocational training
(a)Form of subsidy
Regular grants for on-the-job-training.
(b)Amount of subsidy
Net cost in SKr millions: Fiscal year 1993/1994: 387
Support is granted to a variety of projects and cannot be broken down per unit.
(c)Policy objectiveG/SCM/N/3/EEC
Page 524
The primary objective of the scheme is to avoid disruption in the production due to lack of skilled
workers, to avoid lay-offs and to support workers in danger of losing their jobs.
(d)Duration
The programme commenced in 1984. Duration has not been specified.
(e)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.
(f)Legal bases
The legal provisions are laid down in the Governmental Ordinance SFS 1984:518 (Förordning om
bidrag till arbetsmarknadsutbildning i företag).
(g)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
SKr 60 per hour for a maximum of 920 hours.
4.2 Recruitment aid
(a) Form of subsidy
Gross wage subsidy for enterprises recruiting certain unemployed individuals.
(b)Amount of subsidy
Net cost in SKr millions: Fiscal year 1993/1994: 1,550
Support is granted to a variety of projects and cannot be broken down per unit.
(c)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.
(d)Duration
The programme commenced in 1984. Duration has not been specified.
(e)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.
(f)Legal bases
The legal provisions are laid down in the Governmental Ordinance: SFS 1995:338 (Förordning om
ändring av förordningen 1986:414 om rekryteringsstöd).G/SCM/N/3/EEC
Page 525
(g)Rules and conditions
All firms, regardless of industry, are eligible. The aid is in the form of a grant that covers maximum 65
per cent of the total wage cost of the new entrant for a certain period. The duration of
the aid must not exceed 6 months. Immigrants and political refugees are entitled to
this support for a period of maximum 12 months with maximum subsidy of 75 per
cent. Recruitment support can be granted after three months continued
unemployment for individuals above 24 years and after one month of unemployment
for younger people.
4.3 The Trainee Temporary Replacement Scheme
(a)Form of subsidy
Deduction of social fees.
(b)Amount of subsidy
Net cost in SKr millions: Fiscal year 1993/1994: 375 (to private firms).
Support is granted to a variety of projects and cannot be broken down per unit.
(c)Policy objective
The primary objective is aid to employment in the form of deduction of social fees for
on-the-job-training.
(d)Duration
The scheme commenced as from l July 1991. Duration has not been specified.
(e)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.
(f)Legal bases
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).
(g)Rules and conditions
Eligible costs are wage costs for the temporary employee. The employer which take on temporary
employees qualify for deduction of social fees of SKr 475 per day. The deduction for
training costs is maximum SKr 75 per hour of training and employee, subject to a limit
of SKr 30,000 per employee. All firms regardless of sector or location are eligible,
however, the beneficiaries are mainly county councils and municipalities. About 20
per cent of the programme's budget goes to private firms. Figures reported are an
estimation of the private sectors share of the programme's budget. The projects
supported under this scheme are excluded from receiving aid from other sources.G/SCM/N/3/EEC
Page 526
4.4 The Swedish Work Environment Fund
The Swedish Work Environment Fund is financed by a special work environment levy
included in the social security contributions paid by employers. The agency was established in 1972.
(a)Form of subsidy
Grants.
(b)Amount of subsidy
Net cost in SKr millions: Fiscal year 1993/1994: 47 of SKr 725 millions can be directly assigned to
industry.
Support is granted to a variety of projects and cannot be broken down per unit.
(c)Policy objective
The primary objective is improvement of work conditions and quality of work.
The secondary objective is aid for R&D. The Fund supports such R&D, education and information
which can counteract the emergence of industrial injury or in other ways promotes an
improved working environment.
(d)Duration
The agency was established in 1972. Duration has not been specified.
(e)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.
(f)Legal bases
The legal provisions are laid down in Governmental Ordinance: SFS 1991:1158 (Förordning med
instruktion för Arbetsmiljöfonden).
(g)Rules and conditions
Project costs for new knowledge concerning work environment and other aspects of the conditions for
work life. The support from the fund may be combined with other aid, however, for
mainly research projects it depends on the purpose. For development projects
especially concerning workplace innovations, the fund expect external partners.
5. EXPORT PROMOTION
5.1 State supported export credits
(a)Form of subsidyG/SCM/N/3/EEC
Page 527
Interest rate subsidies, state supported export credits directed to the Swedish Export Credit
Corporation.
(b)Amount of subsidy
Net cost in SKr millions: Fiscal year 1993/1994: 131
Support is granted to a variety of projects and cannot be broken down per unit.
(c)Policy objective
The primary objective of the scheme is to provide long-term export financing for exports of capital
goods and/or services to countries in Eastern Europe and the third world. Direct
market investments abroad by Swedish exporters can also be financed by the Swedish
Export Credit Corporation.
(d)Duration
The scheme commenced in 1978. Duration unlimited.
(e)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.
(f)Legal bases
The legal provisions are laid down in the following Governmental Ordinances: SFS 1989:826
(Förordning om ändring av förordningen 1981:665 om exportkredit-finansiering med
statligt stöd) and SFS 1981:665 (Förordning om exportkreditfinansiering med statligt
stöd).
(g)Rules and conditions
The scheme is available for exports of capital goods and/or services to countries in Eastern Europe and
the third world. A precondition is that competitors abroad offer credits subsidized by
their government. The scheme is in conformity with the OECD Arrangement on
Guidelines for Officially Supported Credits. However, the interest rates are higher
than the minimum interest rates of the OECD Arrangement, which has decreased the
attraction of the credits.
The Swedish Export Credit Corporation was founded in 1962 and is owned half by the State and half
by the largest Swedish commercial banks.
5.2 Export credit guarantees
The Swedish Export Credits Guarantee Board (EKN) is a government agency established in
1933 to promote Swedish exports by issuing of guarantees. EKN can cover political and/or
commercial risks in connection with export transactions. Parliamentary and government guidelines
have always required the EKN to aim at being self-supporting. However, the international debt crisis of
the 1980s has led to a substantial financial deficit. This deficit can only to a limited extent be
influenced by measures adopted by EKN. To the extent recoveries fall short of paying off EKN'sG/SCM/N/3/EEC
Page 528
borrowing in the National Debt Office, financing must eventually be effected by the state budget. The
principle that new operations are to be self-supporting has been re-affirmed. Against this background,
old operations, i.e. guarantees issued before 30 June 1990, are now reported in accounts completely
separated from new operations. The financial objective that the new operations should break even has
prompted a thorough review of the premium system.
(a)Form of subsidy
Guarantees against political and commercial risks.
(b)Amount of subsidy
Net cost in SKr millions: Fiscal year 1993/1994: 5
(Note: The net cost is very low, due to regained guarantees.)
Support is granted to a variety of projects and cannot be broken down per unit.
(c)Policy objective
The primary objective is to promote exports and internationalization of Swedish companies in a way
that promotes the long-term development of the Swedish economy.
(d)Duration
The scheme commenced in 1933. Duration unlimited.
(e)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.
(f)Legal bases
The general framework for the Mandate of the EKN and its activities was established by a Government
Bill to the Parliament in October 1989. The mandate of the EKN are furthermore
regulated by Governmental Ordinances: SFS 1987:861, 1988:1225 and 1990:113.
(g)Rules and conditions
Export credit guarantees may be granted to exporters operating in Sweden, Swedish and foreign banks
or financial institutes that are financing Swedish exports. A certain amount of
non-Swedish goods may also be guaranteed by EKN if it is part of a Swedish export
sale. A foreign company may also receive an EKN guarantee if it exports Swedish
goods and/or services. Export credit guarantees are issued for short-, medium- and
long-term credits. The rules of the Arrangement on Guidelines for Officially
Supported Export Credits ("consensus" and the Berne Union Understanding are
adhered to. The export credit guarantee activities should break even. There is no ex
ante subsidy. The companies pay a premium for the guarantee. This premium is
risk based and should cover expected losses and administrative costs. The Swedish
system is one of the most stringent when it comes to the demand for break even and
for risk-based premiums.G/SCM/N/3/EEC
Page 529
5.3 General export promotion
(a)Form of subsidy
The financial support of the government is directed 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.
(b)Amount of subsidy
Net cost in SKr millions: Fiscal year 1993/1994: 20
Support is granted to a variety of projects and cannot be broken down per unit.
(c)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.
(d)Duration
The scheme commenced in 1972. Duration has not been specified.
(e)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.
(f) Legal bases
Agreement between the government and the General Swedish Export Association. The existing
agreement is from 1992. Government Bill 1991/1992:108.
(g)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 which
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 funds are used to finance most of the information
services and a smaller part of the export promotion activities.G/SCM/N/3/EEC
Page 530
The total turnover of the Swedish Trade Council was around SKr 422 million in the fiscal year
1993/94. Out of this amount around SKr 177 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 seven main schemes:
localization grants, localization loans, development grants, loans to regional investment companies,
employment grants, reduced social security contributions and transport aid. A limited aid to small
enterprises can also be awarded according to a scheme of support to very sparsely populated areas.
The main goals of Swedish regional policy are to give people access to sustainable growth, justice,
freedom of choice and a good environment, so that equal living conditions are created for the citizens
in whatever part of the 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 Localization grants
(a) Form of subsidy
Grants, which can be reclaimed if the objectives, especially the purpose of creating new jobs, are not
fulfilled.
(b) Amount of subsidy
Net cost in SKr millions: Fiscal year 1993/1994: -85
(Note: The net cost to government was negative due to reclaimed (refunded) grants amounting to SKr
216 million. The gross cost was Skr 131 million.)
Support is granted to a variety of sectors and recipients and cannot be broken down per unit.
(c) 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
promote development of industry and to create new employment in the designated
areas. Localization grants can be awarded in connection with investments in buildings,
machinery, etc. The awarding of a grant for these objectives has many reasons. As
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.
(d) Duration
The programme commenced as from 1 July 1990. Duration formally decided on for every new fiscal
year.
(e)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.
(f) Legal basesG/SCM/N/3/EEC
Page 531
The legal provisions are laid down in the Governmental Ordinance (Förordningen om regionalpolitiskt
företagsstöd): SFS 1990:642.
(g)Rules and conditions
Natural or juridical persons operating in Sweden and public authorities working with viability in certain
competitive sectors on market conditions are eligible. (In certain cases aid can also be
granted 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 in each designated area.
The nature of assisted projects can be investments in buildings and machinery, etc. The form of the
aid is a 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 of eligible 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).
The main rule is that the grant is taxable as an income to the recipient. The general level for corporate
income taxes is about 30 per cent flat rate. In some cases the taxation is based on
lower depreciation. In Sweden, buildings may be depreciated at rates varying from 2
to 5 per cent per annum, depending on the type of the building. Machinery is
normally depreciated during a five-year period. The grants can be awarded either by
the Government, the Industrial and Technical Development Board or the County
Administrative Boards.
6.2 Localization loans
(a) Form of subsidy
Loans that can be reclaimed immediately if the objectives, especially the purpose of creating new jobs,
are not fulfilled.
(b)Amount of subsidy
Net cost in SKr millions: Fiscal year 1993/1994: 76
Support is granted to a variety of sectors and recipients and cannot be broken down per unit.
(c)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
promote development of industry and to create new employment 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.G/SCM/N/3/EEC
Page 532
Localization loans can be awarded in connection with investments in buildings,
machinery, etc.
(d)Duration
The programme commenced in 1992. Duration formally decided on for every new fiscal year.
(e)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.
(f)Legal bases
The legal provisions are laid down in the Governmental Ordinance (Förordningen om regionalpolitiskt
företagsstöd): SFS 1990:642.
(g)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 new jobs created in each project must be
reserved for each sex. Loans at market conditions, no subsidy, risksharing. The
interest rate of the loan is the Swedish discount rate plus 4.25 percentage points. The
State financing, grants 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 Development grants
(a) Form of subsidy
Grants and conditional loans, which can be reclaimed if the objectives are not fulfilled.
(b)Amount of subsidy
Net cost in SKr millions: Fiscal year 1993/1994:
(The figures for this grant are included in localization grants, 6.1.)
Support is granted to a variety of sectors and recipients and cannot be broken down per unit.
(c) Policy objective
The primary objective is regional aid in designated areas. The secondary objective is aid to SMEs and
aid to R&D in designated areas. The main objective of the scheme is to create new
jobs in small firms by stimulating intangible investments.
(d)Duration
The programme commenced as from l July 1990. Duration formally decided on for every new fiscal
year.