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PR(03)13: The EFTA Surveillance Authority decides to open a formal investigation procedure with regard to State aid in the form of regionally differentiated social security contributions and direct transport aid in Norway

16.7.2003

The EFTA Surveillance Authority has today decided to open a formal investigation procedure with regard to a notified transitional period for the regionally differentiated social security contributions in certain geographical areas of Norway (tax zones 3 and 4) and a notified new direct transport aid scheme. The Authority has doubts about the compatibility of the notified measures with the State aid provisions of the EEA Agreement.

The present Norwegian system of regionally differentiated social security contributions was approved by the Authority in 1999 until the end of 2003. At the end of  2000 the European Commission adopted a negative decision concerning reduced social security contributions by Swedish employers.

In September 2002, the Authority concluded that the present regionally differentiated social security contributions scheme does not comply with the State aid rules of the EEA Agreement. The Authority proposed at the same time that the Norwegian authorities communicate to the Authority the relevant measures adjusting the aid scheme at the latest by 25 March 2003. 

By that date the Norwegian authorities notified a transitional period for the regionally differentiated social security contributions in certain geographical areas (zones 3 and 4). The proposal implies that the present rates for the regionally differentiated social security contributions of 6,4% and 5,1% in zones 3 and 4, respectively, are to be increased over 3 years until the full rate of 14,1% is reached in 2007. The Norwegian authorities argue that the economic effect of abolishing the system as from 2004 will raise very serious difficulties for all concerned firms and thus, for the employment situation in the whole area.

Any aid granted in the form of reduced social security charges after the end of 2003 would be new operating aid requiring a new authorization by the Authority. The State aid rules of the EEA Agreement and the Authority’s Guidelines on regional State aid provide quite limited possibilities for granting operating aid. Therefore, the Authority has doubts as to whether a transitional period can be justified, and, if so, how long it could be objectively.

In March 2003, the Norwegian authorities also notified a new national direct transport aid scheme. The geographical area proposed eligible for direct transport aid covers areas with low population density (less than 12.5 inhabitants per square kilometre) in the following counties: Troms, Nordland, Nord-Trøndelag, Sør-Trøndelag,   Møre og Romsdal and Sogn og Fjordane. Aid may only be given in respect of the extra costs of transporting goods inside the national territory.

The Authority has doubts about the compatibility of the notified direct transport aid scheme and opens the formal investigation procedure because four municipalities (Herøy, Ulstein, Hareid and Aukra) are outside the regional aid map approved for Norway in 1999. Furthermore, the Authority considers that the documentation of additional transport costs does not, to a sufficient degree, prove that additional transport costs exist in the geographical areas in southern Norway proposed eligible for direct transport aid (Sogn og Fjordane, Møre og Romsdal and Sør-Trøndelag).

The Authority will inform interested parties by publication of the decision in the EEA Section of the Official Journal of the European Union and the EEA Supplement thereto. Interested parties will be invited to submit their comments within one month of the date of such publication.

For further information, please contact Mr. Amund Utne on tel. +32 2 286 18 50 or Mr. Rolf Egil Tønnessen on tel. +32 2 286 18 56.

16 July 2003




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