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PR(97)11: The EFTA Surveillance Authority opens investigation procedure on the Norwegian system of regionally differentiated social security contributions


The EFTA Surveillance Authority has decided to open a procedure to investigate whether the Norwegian system for employers' contributions to the National Social Security Scheme (Folketrygden) involves State aid incompatible with the EEA Agreement.

The Authority proposed on 14 May 1997 a set of appropriate measures to Norway outlining a way for the system for employers' contributions to the National Social Security Scheme (Folketrygden) to become compatible with the State aid rules of the EEA Agreement. The required adjustments to the scheme, as outlined in the Authority's proposal of 14 May 1997, implied i.a. that certain economic activities, irrespective of location, could not continue to benefit from the lower contribution rates applied in certain regions of the country.

The Norwegian Government has however, disputing that the scheme under consideration constitutes State aid in the meaning of the EEA Agreement, expressed its unwillingness to comply with the Authority's proposal for appropriate measures.

The substance of the matter concerns the regionally differentiated social security charges levied on employers in relation to the salary of each employee. Lower contribution rates are applied in respect of employees residing in remote regions. In the opinion of the Authority, such lower rates lead to disbursements of State aid. Moreover, the aid in question constitutes operating aid, which normally is incompatible with the aid disciplines in the European Economic Area. The EEA rules permit, however on certain specific conditions, such aid to be granted in order to take account of special regional development problems arising out of special features characteristic for the Nordic countries, such as very low population density and long distances within the national borders.

The Authority's decision to open proceedings is without prejudice to its final decision, which may still be to find that aid is not involved, or that possible aid elements may be compatible with the functioning of the EEA Agreement.

The Norwegian Government has been invited to submit its comments within a period of one month. Other EFTA States, EU States, and interested parties will be informed by the publication of a notice in the EEA Section of the Official Journal of the European Communities and the EEA Supplement thereto. Copies of that notice are immediately available on request.

For further information please contact Amund Utne (Competition and State Aid Directorate) on tel. 286 18 50 or Morten Sandberg on tel. 286 18 53.


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