EFTA SURVEILLANCE AUTHORITY
Doc 9 4 -1 3 6 9 6 -I Dec.No.1 0 7 / 9 4 / CO L Ref.No. SAM 0 3 0 .9 4 .0 1 1
EFTA SURVEILLANCE AUTHO RITY DECISIO N O F 2 8 SEPTEMBER 1 9 9 4
ALTERATIO N O F REGIO NA L AID SCHEMES -RESTRUCTURING O F TRADITIO NAL SAMI ACTIVITIES (NO RWAY)
THE EFTA SURVEILLANCE AUTHO RITY,
Having regard to the Agreement on the European Economic Area1
, in particular to Articles 6 1 to 6 3 ,
Having regard to the Agreement between the EFTA States on the establishment of a Surveillance Authority and a Court of Justice2
, in particular Article 1 of
Protocol 3 thereof,
WHEREAS:
I. FACTS 1. The notification
By letter dated 3 May 1 9 9 4 , received by the EFTA Surveillance Authority 6 May 1 9 9 4 (Ref. 9 4 -7 1 5 5 A), the Norwegian Government notified, in accordance with Article 1 (3 ) of Protocol 3 to the Surveillance and Court Agreement, alterations of two existing regional aid schemes, by proposing higher aid intensities for their application within an area limited to four municipalities3 of Karasjok, Kautokeino, Porsanger and Tana in Finnmark. These regional aid schemes are administered by the county authorities, in this case the Cou nty Municipality of Finnmark, and the Norwegian Fund for Industrial and Regional
1 Hereinafter referred to as the EEA Agreement.
2 Hereinafter referred to as the Surveillance and Court Agreement. 3 Also referred to as Inner Finnmark
Development (SND)4. These schemes have been notified by the Norwegian Government as existing aid.
The EFTA Surveillance Authority, by letter dated 2 7 May 1 9 9 4 (ref. 9 4 -7 3 8 1 D), requested additional information from the Norwegian Government. The Norwegian Government provided additional information by letter dated 2 1 July 1 9 9 4 (ref. 9 4 1 1 5 2 8 A) received 2 9 July, fax of 2 4 August 1 9 9 4 (ref. 9 4 -1 2 3 6 3 A) and fax of -1 6 September -1 9 9 4 (ref. 9 4 --1 3 7 7 7 A).
2. The contents of the proposed measures
The notification proposes to introduce specific measures in Inner Finnmark by changing the application of two schemes under State Budget Chapter 2 4 2 5 , post 5 1 , Regional development grants. Budget allocations under Regional development grants may only be applied in areas designated for regional aid. This heading covers budget allocations to four different categories of aid measures which are considered by the Norwegian authorities to const itute separate regional aid schemes. The notification only concerns alterations in the implementing regulations for the application of underpost 5 1 .1 Investment grants and underpost 5 1 .2 Company Development Grants. An overview of State Budget Chapter 2 4 2 5 post 5 1 is displayed below.
State Budget Chapter 2425 post 51 Regional development grants
Underpost Scheme
5 1 .1 Investment grants
5 1 .2 Company development grants
5 1 .3 Interest rate support
5 1 .4 Company related interest rate support
It is proposed to introduce the higher applicable aid intensities referred to below, for the Investment grant scheme and the Company development grant scheme in the four municipalities of Kautokeino, Karasjok, Tana and Porsanger in the County of Finnmark for a period limited in time up to 3 1 December 1 9 9 8 . The proposed measures are part of a broad restructuring programme established to prepare the ground for alternative industrial activities due to the severe crisis in reindeer breeding.
The notification proposes to:
a) alter paragraph 1 of the regulation concerning the delimitation of the target area for regional development5
by supplementing it with para. 1 .1 which reads as follows:
4 Hereinafter referred to as SND
5 Kongelig resolusjon av 1 0 . desember, Forskrifter om avgrensningen av det geografiske
" Until 3 1 December 1 9 9 8 a distinct delimitation for investment grants will be applied when applications for grants to enterprises are considered in the municipalities of Kautokeino, Karasjok, Tana and Porsanger. In these cases investment grants may amount to a maximum of 6 0 per cent of the approved expenses."
The investment grants referred to above are primarily direct grants for investment under the Regional development grant scheme. Investment grants may, in certain cases, also be applied to cover reduced interest payments on loans for investment. Investment grants may cover costs related to the acquisition of buildings and equipment, but not land.
b) supplement Circular letter H-2 / 9 36 on Company development grants administered by SND and the county municipalities with a new paragraph 2 .6 .3 which reads as follows:
" Until 3 1 December 1 9 9 8 projects located in the municipalities of Kautokeino, Karasjok, Tana and Porsanger can normally receive grants amounting to 7 5 per cent of the approved basis for grants."
The approved basis of the grants referred to in Circular letter H-2 / 9 3 refers to costs concerning " soft investment" in development measures and training in individual or groups of firms and costs of surveys aimed at increasing knowledge on i.a. development of regions, industrial sectors, enterprises and the effects of regional policy measures.
Enterprises engaged in primary production in agriculture (including reindeer breeding), forestry and fishing as well as transport, the synthetic fibre industry, the textiles and clothing industries, the motor vehicle industry and the production of iron and steel in Inner Finnmark will be exempted from the application of both schemes referred to above.
The size of enterprises that are eligible for application of both schemes referred to above in Inner Finnmark is confined to SMEs, as defined in the Procedural and Substantive Rules in the Field of State Aid7
adopted by the Authority 1 9 January 1 9 9 4 , section 1 0 .2 . on State aid to small and medium -sized enterprises.
The Norwegian authorities have agreed to notify to the Authority individual awards of aid in the form of investment grants to investment projects in Inner Finnmark exceeding NO K 1 2 mill.(ECU 1 .5 mill.)8
where the aid intensity is
6 Rundskriv H-2 9 3 , S.nr. 9 3 / 2 9 0
7 Hereinafter referred to as State aid Guidelines 8 Fax dated 1 6 September 1 9 9 4 point a)
above the generally applicable aid ceiling for target zone A, Finnmark an d North Troms, currently 4 0 per cent of the approved basis.
The estimated annual budget for the part of Regional development grants to be allocated to Inner Finnmark for 1 9 9 5 is NO K 3 0 mill.9
. (ECU 3 .7 5 mill.).
3. The foreseen implementation of the proposed aid measures
The aid measures referred to above may either be awarded by SND or by the county municipalities of Finnmark depending on the size of a grant and total public involvement in the form of direct grants and credits awarded by either of the above mentioned institutions. Amounts exceeding certain limits may only be awarded by SND. For the period covering the restructuring programme (up to 3 1 December 1 9 9 8 ), these limits have been increased by 5 0 per cent in Inner Finnmark.
4. Geographical coverage
The four municipalities of Kautokeino, Karasjok, Tana and Porsanger fall within the geographical limitation of target zone A for regional aid. Target zone A covers the whole area of the county of Finnmark and four municipalities in the county of Troms, namely Kåfjord, Skjervøy, Nordreisa and Kvænangen.
The Norwegian authorities hold that target zone A fulfils the criteria proper to be recognized as an area eligible for regional aid in accordance with Article 6 1 (3 )(a) of the EEA Agreement, as regional statistics show that GDP/ PPS1 0
per capita index for Finnmark is 7 6 compared to the EU average (EU average= 1 0 0 ). The corresponding statistical value for North Troms is 5 3 per cent. It is expected by the Norwegian Government that the value for Finnmark, and the average value for target zone A as a whole will be well below 7 5 per cent of the EEA average once the EEA average is established1 1.
In addition to the very particular climatic and topographic conditions in this part of Norway, the population density in Finnmark and North Troms is 2 inh/ km2 . The Norwegian Government holds with reference to the factors mentioned above and to point 2 8 .1 .3 of the State aid Guidelines, that the situation in Inner Finnmark is to be regarded as virtually except ional.
The Norwegian authorities hold that the municipalities of Karasjok, Kautokeino, Tana and Porsanger, are equally exceptional in a European and Norwegian context due to the high percentage of Sami population1 2 in this area. The
9 Fax dated 1 6 September 1 9 9 4 point d)
1 0 Gross domestic product in purchasing power parities
1 1 Letter of 3 May 1 9 9 4 (ref.: 9 4 -7 1 5 5 A), Annex part b) Consistency with the EEA
Agreement
1 2 6 4 % of the population in Inner Finnmark are of Sami origin, with a distribution between
Norwegian authorities emphasise that the Sami population, characterized as an indigenous people, is now protected by ILO Convention No. 1 6 9 ; Indigenous and Tribal People in Independent Countries, ratified by Norway in June 1 9 9 0 . The protection of the Sami culture and Sami int erests includes the protection of their traditional occupations essential for Sami identity. In the spirit of the ILO Convention, the Restructuring Programme for Inner Finnmark is oriented towards traditional Sami industries and the protection of the future occupation of this particular economic activity. The Restructuring Programme represents according to the Norwegian authorities a way of avoiding some well known effects of collective action in reindeer breeding, namely the excessive use of grazing land.
5 The Restructuring Programme for Inner Finnmark
The Restructuring Programme for Inner Finnmark is established by Parliament decision for a limited period of 5 years up to 3 1 December 1 9 9 8 . The background for the establishing the programme is the severe crisis in reindeer breeding. Excessive grazing explains why a substantial reduction in the reindeer livestock is necessary. A substantial reduction in the total livestock of reindeer is regarded by the Norwegian authorities to be imperative to avoid dr amatic enduring effects on the very fragile grazing land in the future.
The restructuring measures directed towards reindeer breeding aim at reducing the total livestock of reindeer, currently 1 5 7 5 0 0 , by an indicative minimum reduction in the range of 3 0 -4 0 .0 0 0 reindeer, in order to achieve a sustainable balance between the total number of reindeer and the available resources of grazing land. The number of persons involved in reindeer breeding will be reduced accordingly.
The long-term objective of the Restructuring Programme is to " strengthen and expand the economic base in the Sami settlement areas in general and to widen the material basis for the Sami culture in general"1 3.
The Restructuring Programme is supervised by a programme board with broad representation1 4
. The programme board was constituted on 9 July 1 9 9 3 . The mandate of the programme board is to propose measures for the implementation of the programme, follow up the development of the programme and report on the status, development and results of the programme.
An interim board which has supervised the work in the initial phase has developed a Framework Plan1 5
for the establishment of the Restructuring Programme. The Framework Plan outlines 4 broad areas of priority:
- Structural policy measures directed at reindeer breeding activities - Development of alternative industrial activities
- Education and training - Social policy measures
The Framework Plan points at improved processing of reindeer meat based products, tourism activities with a Sami profile and development of Sami handicraft products as indicative priority areas for new establishment of industrial activities;
1 3 St.meld. nr. 2 8 (1 9 9 1 -9 2 ), page 9 2
1 4 Representation from the 4 municipalities of Inner Finnmark, The County Municipality of
Finnmark, the County Labour Market Board of Finnmark, the Sami Parliament, the Ministry of Labour and Local Government, the Ministry of Industry and Energy, the Ministry of Church Affairs, Education and Research and the Ministry of Agriculture
1 5 Rammeplan for omstillingsarbeidet i Indre Finnmark 1 9 9 3 -9 7 , Finnmark Fylkeskommune
II. APPRECIATION
The foreseen measures refer to the application of aid schemes for regional development notified as existing aid to the EFTA Surveillance Authority, which constitute aid in the meaning of Article 6 1 (1 ) of the EEA Agreement. Both the acceptance and rejection of applications and the determination of the amounts are assessed and decided on in each individual case by either the responsible authorities of the County Municipality of Finnmark or SND, which are the competent aid granting authorities of funds allocated to Regional development grant schemes. The aid schemes are funded through the State Budget. Thus, the aid will be granted by the State through State resources. It should be borne in mind that all aid granted by regional or local bodies of States, whatever their status and description, is covered by the provisions of Article 6 1 (1 ) of the EEA Agreement1 6
. The Regional development grant schemes foresee aid awards in favour of certain undertakings or the production of certain goods. By relieving them of some of their costs, which they normally would have to bear themselves, such aid gives financial advantages and improves their competitive situation. Since the production of the favoured undertakings may be in competition with that of undertakings in other States participating in the EEA, such aid is liable to distort intra-EEA trade.
Consequently, the EFTA Surveillance Authority is obliged to assess whether any of the exemption clauses under Article 6 1 (2 ) and (3 ) are applicable in order to exempt the aid measure from the general prohibition of aid under Article 6 1 (1 ).
Act 9 7 of 3 July 1 9 9 2 of the SND, Royal Decree of 2 3 O ctober 1 9 9 2 , Royal Decree of 1 8 December 1 9 9 2 and Circular letter H-2 / 9 3 form the basic legal framework for aid granted under the Regional development grant schemes. Individual projects qualify for aid only if the criteria for individual awards and intensities of aid as stipulated in the implementing regulations are fulfilled.
When assessing the objectives pursued and the maximum aid intensities foreseen in the proposed alterations of the implementing regulations both for investment grants and for company development grants, it is recalled that both existing aids and the system of regional aid in Norway are currently under examination by the Authority.
The regional development grant schemes are to be classified under the notion of " existing aid" , which includes "old or "pre-EEA" aid, i.e. aid schemes in operation at the time of entry into force of the EEA Agreement...."1 7. Individual awards of aid
1 6 See ECJ, 1 4 O ctober 1 9 8 7 , Case 2 4 8 / 8 4 , Germany/Commission (1 9 8 7 ) ECR 4 0 1 3 with
regard to Article 9 2 of the EC Treaty.
under such schemes may be paid out until decided otherwise in accordance with the established procedure in existing aid cases1 8
.
The alteration of an existing scheme shall be notified to the Authority in accordance with Article 1 (3 ) of Protocol 3 of the Surveillance and Court Agreement before it is put into effect. In general such an alteration would require the Authority to assess the compatibility of a scheme as a whole with the EEA Agreement, unless the particularities of the amendment allows a separate assessment and thus can be decided upon independently. In the latter case a decision by the EFTA Surveillance Authority may be taken which is limited to certain proposed alterations of existing aid schemes, without prejudging the future position of the Authority on other aspects of either the aid schemes in question or the system of regional aid in an EFTA State.
6. Assessment
To start with, it is noted that the application in Inner Finnmark of the regional development schemes referred to in the notification is limited to small and medium-sized enterprises as defined in section 1 0 .2 . of the State Aid Guidelines. In addition, enterprises engaged in certain sectors, notably primary production in agriculture (including reindeer breeding), forestry and fishing and also aid to transport, synthetic fibres industries, textiles and clothing industries, motor vehicle industries and the production of iron and steel, are exempted from application of the aid schemes in Inner Finnmark.
Regarding the objective of regional development for the municipalities of Karasjok, Kautokeino, Tana and Porsanger, it is concluded that the criteria stipulated in the implementing regulations for the schemes in question allow the Authority to assume that it is ensured that individual awards of aid under the schemes will contribute to promote the economic development of Inner Finnmark. In addition, it is recognized that a broad range of other support measures are foreseen in the Restructuring Programme and that the Framework Programme for the restructuring of Inner Finnmark indicates priority areas for industrial development based on local skills and resources.
As part of the exceptional circumstances concerning the case, it is recognized that the four municipalities of Inner Finnmark, Karasjok, Kautokeino, Tana and Porsanger are equally exceptional in a European and Norwegian context due to the high percentage of Sami population in the area. The Sami population is characterized as an indigenous people now protected by the ILO Convention No. 1 6 9 ; Indigenous and Tribal People in Independent Countries. The protection of the Sami culture and Sami interests includes the protection of their traditional occupations essential for Sami identity. The Restructuring Programme for Inner Finnmark is oriented towards traditional Sami industries and t he
protection of the future occupation of such economic activities. Persons with a Sami heritage constitute a high percentage of the total population in Inner Finnmark.
The four municipalities in Inner Finnmark are extremely sparsely populated, with population densities between 0 .9 6 (Porsanger) and 0 .3 3 (Kautokeino) inh/ km2 . The respective aerial lines to the regional administrative and commercial centre of Tromsø are between 1 8 0 and 3 5 7 km.
The total population of all four municipalities amounts to 1 3 ,5 1 61 9. Labour force statistics2 0
indicate an unemployment rate of 6 .9 per cent, with an additional 8 .6 per cent on labour market measures. A relatively large part of the population counted as per cent of labour force, 1 0 ,52 1 per cent, are on early retirement or retraining schemes for reasons of disability to participate in the labour market. It may therefore be concluded that Inner Finnmark is experiencing severe problems of under-employment.
The most important fields of economic activity2 2
measured by percentage of total employment2 3 are the public sector (4 1 .7 to 4 9 per cent), the agricultural sector including reindeer breeding (5 .2 to 2 2 .2 per cent) and the hotel, restaurant and retail service sector (1 2 .2 to 1 7 .3 per cent), while the manufacturing sector is less developed (3 .7 to 7 .6 per cent).
Eligibility for regional aid under Article 6 1 (3 )(a)
Investment grants, up to 6 0 per cent of the eligible costs2 4 as proposed by the Norwegian Authorities may only be authorized in regions eligible for region al aid under Article 6 1 (3 )(a)2 5
.
Inner Finnmark, is a sub-region to target zone A, Finnmark and North Troms, which covers the most northern parts of Norway along the Russian, Finnish and Swedish border as one continuous area. It is recognized that the geographical, topographical and climatic conditions of target zone A, in addition to other relevant factors related to the nature of regional problems, i.a. low population density, a sparse pattern of settlement and remote location, are of a similar nature throughout the territory of Finnmark and North Troms. Although the total population is only 9 6 ,3 9 0 inhabitants (2 .2 per cent of the total Norwegian population) it may in view of the exceptional circumstances, taking into account
1 9 1 .1 . 1 9 9 2 2 0 February 1 9 9 3 2 1 1 9 9 0
2 2 Source: Kommunehefte, Folke- og boligtelling 1 9 9 0
2 3 Figures in bracket refer to lowest and highest values observed in either of the four
municipalities.
2 4 Equal to 5 7 NGE (Net grant equivalent). 2 5 State aid Guidelines Section 2 8 .1 .
the wide geographical area2 6 be considered as a region, which can be examined for eligibility under Article 6 1 (3 )(a).
The Norwegian authorities hold that target zone A, Finnmark and North Troms, is eligible for regional aid under Article 6 1 (3 )(a). Its GDP/ PPS per capita for this region taken as whole, arrives at only 7 12 7
per cent of the EEA average (according to calculations undertaken by the State Aid and Monopolies Directorate).
In accordance with the established practice on the Community side, a region (normally NUTS level II region) may be eligible for regional aid under Article 6 1 (3 )(a), if its GDP/ PPS per capita is 7 5 per cent or lower compared to the EEA average. This practice is reflected in part VI of the State Aid Guidelines. As both the data provided by the Norwegian authorities and the calculations of the State Aid and Monopolies Directorate show that this criterion is fulfilled, it may be concluded that the four municipalities of Inner Finnmark are located within a region eligible for regional aid under Article 6 1 (3 )(a) of the EEA Agreement. Aid intensities
The current applicable aid intensity for the Investment grant scheme is 4 0 per cent of investment costs related to investment in buildings and equipment. The current implementing regulations for investment grants do not distinguish between SMEs and larger enterprises. However, the application of the Investment grant scheme and the Company development grant scheme in Inner Finnmark will be confined to SMEs2 8. Although the currently applicable aid intensity is also relatively high, it is recognized that even with the application of such high aid intensities over a number of years, i.a. employment in the manufacturing industry in Inner Finnmark still only occupies a total of 3 3 3 persons. This observation clearly indicates a particularly unfavourable environment for attracting inward investment.
It may therefore be acknowledged that the marginal effect of increasing the aid intensities for investment grants applicable only to SMEs up to 6 0 per cent of the eligible costs, in particular when limited to relatively small scale investment projects, should not give rise to unjustified effects on competition and trade. The proposed aid intensity should provide a sufficiently strong incentive for establishment of alternative industrial activities within a limited period of 5 years to compensate for a reduced level of activity in reindeer breeding. The proposed aid intensity is therefore considered to be appropriate in view of the kind, intensity and urgency of regional problems in Inner Finnmark.
2 6 5 2 ,7 9 1 sq. km land, approx. 2 0 per cent larger than the whole of Denmark 2 7 3 year average 1 9 9 0 -1 9 9 2 ; Eurostat and O ECD
The approved basis for the Company development grant scheme (Bedriftsutviklingstilskudd) reflects the indicative list of eligible cost categories to be recognized as eligible for soft aid2 9
in the form of consultancy help, training and dissemination of knowledge to SMEs. The proposed aid intensity of 7 5 per cent is well above the generally accepted ceiling of 5 0 per cent (gross), to which higher aid intensities may be justified in exceptional circumstances3 0
. In the case at hand the exceptional circumstances do not only refer to the disadvantageous geographical circumstances, but also particular difficulties for industrial development in Inner Finnmark, notably the low level of education for persons engaged in reindeer breeding and the limited range of established industrial activities in the manufacturing sector. The broad participation in the programme board and the range of measures foreseen, i.a. the involvement of the labour market authorities in the Restructuring Programme, let expect that the foreseen measures will contribute to the objective of regional development.
It is established with reference to the Framework Plan for Inner Finnmark, that formal education beyond obligatory primary education is virtually non -existent within the reindeer breeding industry. Persons laid off or leaving the reindeer breeding industry may therefore not easily be recruited in the public sector or in the service sectors. With particular reference to the low level of activity in the manufacturing sector, it is recognized that an increased incentive in the form of company development grants for i.a. training and consultancy services to already established SMEs may be necessary, to support recruitment of additional staff in established SMEs.
It has been recognized that the priority areas for new establishment of industrial activities indicated in the Framework plan, i.a. improved processing of reindeer meat based products, tourism activities with a Sami profile and development of Sami handicraft products, normally are carried out on a limited scale.
Lastly, it has been taken into account that enterprises engaged in primary production in agriculture (including reindeer breeding), forestry and fishing as well as transport, the synthetic fibre industry, the textiles and clothing industries, the motor vehicle industry and the production of iron and steel, are excluded from application of the schemes in Inner Finnmark.
Additional notification and reporting obligations
The estimated annual budget, NO K 3 0 mill. (ECU 3 .7 5 mill.) for 1 9 9 5 , that may be expected to be made available under regional development grant schemes for awards of aid in Inner Finnmark is considered as relatively limited. It is also considered that individual projects benefiting from the applicable high intensities in most cases will be on a very small or minor scale. Still, the potentially available funding either through the County Municipality of Finnmark
2 9 State aid Guidelines, Section 1 0 .4 .3 , first sentence 3 0 State aid Guidelines, Section 1 0 .4 .3 , third sentence
or SND is considerable, taking into account that the above authorities hold discretionary powers to re-allocate resources between regions falling under their respective competence.
Therefore it has been agreed with the Norwegian authorities that individual projects where total investment exceeds ECU 1 .5 million and where the aid intensities exceed the applicable aid ceiling for target zone A, currently 4 0 per cent of the eligible costs, are to be notified individually to the Authority. A simplified annual report is to be submitted for the application of both schemes in Inner Finnmark.
Conclusion
The criteria and the intensities foreseen for the application of the Regional development grant schemes in Inner Finnmark, for investment grants and company development grants reflect the criteria set out in the rules for region al aid under Article 6 1 (3 )(a) in section 2 8 .1 and the rules on aid for consultancy help, training and dissemination of knowledge to SMEs in point 1 0 .4 .3 of the State Aid Guidelines. Aid awards under these objectives may therefore be justified with reference respectively to aid to promote the development of areas where the standard of living is abnormally low or with serious under -employment as stipulated under Article 6 1 (3 )(a) and aid to facilitate the development of certain economic activities without adversely affecting trading conditions between the Contracting Parties to an extent contrary to the common interest as stipulated under Article 6 1 (3 ) (c) of the EEA Agreement.
Therefore it is concluded that aid in the form of investment grants up to 6 0 per cent for buildings and equipment and company development grants up to 7 5 per cent of the approved basis in the four municipalities of Kautokeino, Karasjok, Tana and Porsanger qualify for exemption under, respectively, Article 6 1 (3 )(a) and Article 6 1 (3 )(c) of the EEA Agreement.
HAS ADOPTED THIS DECISION:
1 . The EFTA Surveillance Authority has decided not to raise objections to the proposed alterations of the implementing regulations concerning the application of the regional development grant schemes in the four municipalities of Karasjok, Kautokeino, Tana and Porsanger in Inner Finnmark as notified in letters dated 3 May 1 9 9 4 (ref. 9 4 -7 1 5 5 A), 2 1 July 1 9 9 4 (ref. 9 4 -1 1 5 2 8 A), fax of 2 4 August 1 9 9 4 (ref. 9 4 -1 2 3 6 3 A) and fax of 1 6 September (ref. 9 4 -1 3 7 7 7 A), for a period of time limited to 3 1 December 1 9 9 8 .
2 . The Norwegian Government is obliged to notify individually to the Authority all awards of aid to investment projects in the four municipalities referred to above which exceed ECU 1 .5 mill. in cases when the aid intensity
exceeds the generally applicable aid ceiling for target zone A, Finnmark and North Troms, currently 4 0 per cent of the eligible investment costs.
3 . The Norwegian Government is obliged to submit a separate simplified annual report on the application of both the Investment grant scheme and the Company development grant scheme under Chapter 2 4 2 5 post 5 1 Regional development grants (Distriktsutviklingstilskudd) of the State Budget in the four municipalities of Kautokeino, Karasjok, Tana and Porsanger (in accordance with chapter 3 0 of and Annex IV to the Procedural and Substantive Rules in the Field of State Aid) to the EFTA Surveillance Authority.
4 . This decision only refers to the particular application of the above mentioned Regional development grant schemes in the municipalities of Karasjok, Kautokeino, Tana and Porsanger and does not prejudge the future position of the Authority with respect to further examination of existing aid measures and/ or the system of regional aid in Norway.
Done at Brussels, 2 8 September 1 9 9 4
For the EFTA Surveillance Authority
Knut Almestad,
President of the EFTA Surveillance Authority
Heinz Zourek College Member
