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PR(05)29: The Authority accepts state aid to the aluminum smelter Norðurál hf. at Grundartangi, Iceland

25.7.2005

July 25 2005

The Authority decided on 20 July not to raise any objections against a number of measures which the Icelandic authorities have taken in respect of an aluminium smelter, Norðurál hf. at Grundartangi, Iceland.

The decision of 20 July is based on a notification from Iceland for amending certain tax and fee concessions in an already existing aid scheme in favour of Norðurál. The notification was dealt with in the context of a procedure undertaken by the Authority for proposing appropriate measures to Icelandregarding the existing aid scheme. This procedure resulted in a decision by the Authority on 1 June 2005 in which certain changes to the existing aid scheme were proposed. Such changes included inter alia an introduction of an overall ceiling on the amount of aid the company may receive without breaching the state aid provisions of the EEA Agreement. The Authority also proposed the abolishment of a special withholding tax scheme applicable to shareholders of Norðurál hf. The appropriate measures were accepted by the Icelandic authorities on 15 July 2005.

Against this background the Authority accepted in last week’s decision the various amendments to the aid scheme on tax and fee concessions to Norðurál hf. In its decision the Authority also concluded that the fact that the state owned power utilities built certain new facilities for purposes of supplying the expanded Norðurál hf. smelter with power does not result in the grant of state aid to the company. 

 

For further information, please contact:

Mr. Niels Fenger, Director, Legal and Executive Affairs, tel. (+32)(0)2 286 18 30, or

Ms. Lena Sandberg-Mørch, Officer in the Competition and State aid Directorate, tel. (+32)(0)2 286 18 69.

For general information about the EEA state aid rules, please consult the Authority’s website.




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