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PR(02)01: The EFTA Surveillance Authority declared film support schemes in Norway compatible with the EEA agreement

16.9.2002

The EFTA Surveillance Authority decided today, not to raise objections to a support scheme for film production and film related activities in Norway.

The Norwegian Government notified a new aid scheme in support of production and marketing of feature films, films for children and adolescents, documentaries and shorts.

These schemes provide for State support with varying aid intensities, e.g. under the support mechanism called “50/50 grants” public support is, in principle, limited to 50% of production costs, whereas support granted as “feature film production support” would, in principle, allow aid intensities to reach levels up to 75% of production costs, requiring film producers to contribute with at least 25% own capital. In addition, film producers may benefit from the so-called “box office returns”, calculated as a certain percentage of box office revenues. The scheme notified contained provisions limiting the aid intensities by introducing absolute aid ceilings and a repayment obligation. According to the Norwegian authorities, it could be expected that the new provisions would limit the cumulated aid level, in general, to around 60%.

The Authority assessed the film support schemes under Article 61 (3)(c) of the EEA Agreement, taking into account EC Commission practice as regards film support measures in the EC Member States as well as the recent Commission communication on cinema. Against this background, the Authority examined, in particular, whether the film support measures respected the general principles of the EEA Agreement (e.g. non-discrimination on the grounds of nationality) and whether the aid could be regarded as necessary and proportionate to the objectives pursued (based on criteria established by the EC Commission in the “French” decision on film support measures).

The Authority verified that public support under the notified film support scheme would also be available for foreign producers, that the film support schemes did not contain requirements to spend a given amount of the production budget in Norway (so-called “territorialisation”) and that the aid awarded under the film support schemes was necessary and proportionate to the objectives pursued. The Authority concluded that, given the absence of elements of territorialisation and further given the limited market potential for Norwegian films, support exceeding 50% of total production costs could be accepted. The Authority was satisfied that the film support schemes contained provisions which would limit the aid to what was necessary and proportionate (in particular, absolute aid ceilings and repayment obligation).

For further information, please contact Mr. Amund Utne (tel.: 286.18.50) or Mrs. Alexandra Antoniadis (tel.: 286.18.52).

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