State aid: Multisectoral framework on regional aid to large investment projects.

1. Reference is made to the EFTA Surveillance Authority’s letter of 18 December 2003 where the Norwegian Government was informed of the Commissions proposal for appropriate measures regarding the above-mentioned guidelines. In the same letter the Authority informed of its intention to propose similar appropriate measures for the EFTA states regarding the above-mentioned guidelines.

2. In relation to this The Ministry of Trade and Industry would like to point out that this process has been subject to a considerable delay that should not have occurred.

3. The Ministry takes note of the decision to postpone the implementation of the list of sectors suffering from structural difficulties in order to reflect on an appropriate methodology, and to explore the technical feasibility, and the political and economic opportunities for the implementation of such a list. We agree to further and broader reflections on an appropriate methodology for any definition of structural decline.

4. The Commissions decision to develop a broader methodology further appears to be in accordance with our concerns and questions regarding the first methodology which was reflected in a letter to the Commission 10 July 2003. The Ministry also requests being involved in the process of defining which sectors that suffer from structural decline in the period leading up to 31 December 2005.

5. We also take note of the notification requirements of all regional aid schemes that does not explicitly exclude aid to shipbuilding. Our understanding is that these aid schemes are already notified and approved according to the guidelines in operation at the time of notification. We also notice that article 7 in the 1998 Shipbuilding regulation and article 3.3.6 in the new Framework on aid to shipbuilding are identical in substance.

6. Regarding the Commissions proposal for appropriate measures for the MSF, point 3.2, it is unclear how to read the notification obligation of all regional investment schemes in relation to the new framework on State aid to shipbuilding. Could the Authority offer any guidance on how these two guidelines should be read in connection to each other?

7. Further to this we assume that only aid to shipbuilding will be examined in any notification of regional aid schemes that includes regional investment aid to general purposes and thus does not explicitly exclude aid to shipbuilding. Could the Authority offer any guidance on this issue prior to suggesting appropriate measures?

8. Article 4 paragraph 27 of the New Framework on State Aid to Shipbuilding stipulates that all plans to grant new aid to shipbuilding, ship repair or ship conversion, either in the form of a scheme or as individual aid not covered by a scheme, shall be notified to the Commission (ESA in case of the EFTA States) except if they fulfil the conditions set forth in one of the Regulations exempting certain categories of State aid from the requirement of prior notification.

9. To the Ministry’s understanding, this implies that any new aid scheme, and any new individual grant not covered by any scheme to shipbuilding must be notified for approval before implementation. Further to this, we have the understanding that individual awards to shipbuilding under general aid schemes that are approved, do not have to be subject to individual notifications. Could the Authority please clarify these questions or offer any guidance on these issues?

10. In this regard the Ministry would like to ask whether general aid schemes that does not explicitly include or exclude aid to shipbuilding, and which have been in operation for some time, and have been subject to minor adjustments also have to be notified as “new” aid as from 1 January 2004.

11. We are also uncertain of the nature of the notification procedures in this case. Will it suffice to notify a list of all regional aid schemes that does not explicitly exclude aid to shipbuilding, similar to the process carried out in February and July 2003, or is it necessary to use the notification form in Annex E to the MSF and carry out a full notification procedure? Could the Authority examine how this process has been carried out for the EU- members?

12. Regarding the appropriate measures for the synthetic fibres sector and the motor vehicle sector, The Ministry of Trade and Industry has no additional comments to the Commissions letter. We however, reserve the right to raise questions related to these two sectors at a later stage.

Yours sincerely,