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PR(98)05: EFTA Surveillance Authority determines the ceiling on operating aid to shipbuilding in the EFTA States and authorises prolongation of State aid to the shipbuilding industry in Norway


Following a recent decision by the EEA Joint Committee confirming that the provisions of the 7th Shipbuilding Directive shall continue to apply in the EEA context in 1998, the EFTA Surveillance Authority has decided to maintain the common maximum ceiling for operating aid to shipbuilding at 9% of the contract value before aid.  The maximum level of aid permissible for the construction of small ships of a contract value of less than ECU 10 million as well as for ship conversions covered by the Directive shall remain at 4,5%.  This decision by the Authority applies for the period as from 1 January 1998 until the OECD Agreement on shipbuilding subsidies enters into force and until 31 December 1998 at the latest.

The Authority has also decided not to raise objections to prolongation of existing Norwegian aid schemes in support of the shipbuilding industry.  This decision covers prolongation in 1998 of the following three aid schemes: Grants for shipbuilding, newbuildings and conversions, Export credit guarantee for ships, and the Guarantee scheme for ship construction.  These schemes were assessed and authorized by the Authority already in 1995.

The Norwegian authorities have introduced two amendments to the Grant scheme for shipbuilding.  Firstly, the scheme now explicitly excludes contract related aid for fishing vessels destined for the fleets of EEA countries.  Secondly, the aid level for contracts signed after 31 December 1997 has been lowered from 9% to 7% in respect of new ships whose contract value is ECU 10 million or more.  A corresponding reduction of the aid level from 4,5% to 3,5% has also been effected with respect to smaller vessels as well as major conversions.

By the amendment concerning fishing vessels, the Norwegian authorities have implemented an undertaking given in the context of the Authority’s scrutiny of the same aid scheme in 1997.  As for the reduced aid level in Norway, it implies that the operating aid now provided to the shipbuilding industry in Norway is below the levels permitted within the EEA.  As the schemes have otherwise not been subject to any substantive changes, the Authority has concluded that they remain compatible with the EEA Agreement.

For further information please contact Mr. Amund Utne (Competition and State Aid Directorate) on tel. (32 2) 286 18 50.

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