RESTRICTED
WORLD TRADE G/SCM/N/3/CHE
L/7611/Add.19
17October 1995
ORGANIZATION(95-3121)
Original: French Committee onSubsidies andCountervailing Measures
SUBSIDIES
Notifications Pursuant toArticle XVI:1 oftheGATT 1994
andArticle 25oftheAgreement onSubsidies and
Countervailing Measures
SWITZERLAND
Thefollowing communication, dated 25September 1995, hasbeenreceived fromthePermanent
Mission ofSwitzerland.
Inview ofthedecision taken bytheCONTRACTING PARTIES oftheGATT 1947 on
AvoidanceofProceduralandInstitutionalDuplication(L/7582,dated13December1994)thisnotification
isdeemed tobealsoanotification under Article XVI:1 oftheGATT 1947.
_______________G/SCM/N/3/CHE
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Ihavepleasure inenclosing herewith theSwiss Notification pursuant toArticle XVI:1 ofthe
GATT 1994 andArticle 25oftheWTO Agreement onSubsidies andCountervailing Measures.
SUBSIDIES
Notifications Pursuant toArticle XVI:1 oftheGATT 1994 andArticle 25of
theAgreement onSubsidies andCountervailing Measures
SWITZERLAND
Inview ofthedecision taken bytheCONTRACTING PARTIES oftheGATT 1947 on
Avoidance ofProcedural andInstitutional Duplication (L/7582, dated 13December 1994), this
notification isdeemed tobealsoanotification under Article XVI:1 oftheGATT 1947.
_______________
Period Covered: 1992 to1994
TheSwiss Government notifies below thesubsidies granted intheindustrial sector during the
financial years 1992,1993 and1994. Inviewoftheirlimited financial impact, these subsidies have
hadverysmall economic repercussions. Thefirsttwoarepartofastructural adjustment policy strategy.
TheSwiss Office forDevelopment ofTrade (OSEC) isapermanent institution.
Acommon characteristic ofthesubsidies istheirgeneral purpose. They arenotdesigned to
promote aspecific product orcategory ofproducts. Itistherefore impossible tobreak down thetotal
amount ofasubsidy byunits ofproduction. Hence, inwhat follows noattempt hasbeenmade to
calculate amounts perunit.
I. FINANCIAL ASSISTANCE TOAREAS WHOSE ECONOMY ISTHREATENED
1. Nature andextent ofthesubsidy
(i) Background andauthority
Inorder toreduce theuniformity ofcertain regional economic structures, soastoavoid, if
possible, dependence oftheemployment market onasingle industry (forexample, watch and
clock-making), theConfederation gives additional financial assistance toencourage thecarrying out
ofeconomic projects intheprivate sector designed tocreate andmaintain diversification ofemployment
inareas whose economy isthreatened.
(ii) Incidence
ThisFederal assistance isintended tobenefit theareas whose economy isthreatened. Such
areas areconsidered tobe:
(a) those whose economy iscentred onasingle industry; and
(b) those inwhich there hasbeen, orisexpected tobe,agreat reduction inthenumber
ofjobs,orwhich havesevere unemployment, orwhich arethreatened withimminent
unemployment.G/SCM/N/3/CHE
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Federal assistance maybegranted toallartisanal orindustrial undertakings, Swiss orforeign,
forprojects which, inareas having athreatened economy, make itpossible:
(a) tocontinue todevelop theirproducts ortoadopt newmanufacturing processes and
newdistribution programmes inorder toadapt tothetrend ofthemarket andthe
possibilities itoffers;
(b) tostartupthemanufacture andmarketing ofnewproducts.
Financial assistance isallocated intheform of:
(a) sureties toguarantee investment loans;
(b) contributions totheservicing ofloans granted bybanks;
(c) taxreductions.
FortheConfederation tobeabletoguarantee uptoonethird (onehalfinexceptional
circumstances) ofthetotalcostofaproject, thefollowing conditions must besatisfied:
- thecapital invested bytheundertaking itself must cover areasonable proportion of
thetotalcostoftheproject;
- abank must advance, ontheusual terms offered onthemarket, thecredits needed
tofinance theproject, andgiveaninterest ratereduction ofatleastonequarter ofthe
usual commercial rateontheguaranteed partoftheloan.
Surety obligations maybecontracted for10years atthemost.
Theparticipation oftheConfederation inservicing theguaranteed partofloans, andthetax
reductions provided forintheabove-mentioned Federal Order, aredependent uponequivalent measures
bythecantons.
(iii) Amount ofsubsidy
Under theOrder, surety obligations contracted bytheConfederation may notexceed
SwF300million. Inaddition, tofinance thecontribution toloanservice aprogramme credit of
SwF50million hasbeenopened.
Assistance bytheConfederation hasbeenasfollows:
(SwFmillion)
1992 1993 1994
Total amount ofcredits guaranteed 14.7 17.4 38.7
Effective provision tocover losses 3.5 3.7 2.9
Contribution toloanservice 4.3 4.3 3.1
Subsidies toinformation services 0.5 0.4 0.7
Number ofcases 18.0 17.0 35.0G/SCM/N/3/CHE
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(iv) Estimated amount perunit
Seeintroduction.
2. Effects ofthesubsidy
Owing totheirnature, these measures willproduce theirfulleffects onlyinthemedium and
longterm. Itmayalready benoted, however, thattheyhavehelped tomaintain several hundred jobs
andtocreate about 4,000 jobsinareas whose economy isthreatened.
3. Guarantees andloanservice contributions inmountain regions (Federal Lawencouraging credit
guarantees inmountain regions of25June1976)
Thepurposes ofthismeasure aretofacilitate access tocapital forsmall- andmedium-sized
enterprises andtopromote regional development. TheFederal Government contributes tothelosses
oftheSwiss Guarantee Co-operative (90percent) anditsextraordinary expenses. Inaddition, the
Federal Government makes acontribution toloanservice ofupto40percentoftheinterest payable.
Theamount oftheprincipal tobeguaranteed must notexceed SwF500,000.
Theamounts ofthese contributions areasfollows:
Guarantees
Number ofcases Amount ofguarantee Losses onguarantee
1992 55 SwF19.6million 4.0
1993 64 SwF23.5million 5.0
1994 52 SwF17.3million 1.9
Loan Service Contributions
Number ofcases Guarantee amount
1992 40 SwF1.3million
1993 20 SwF1.3million
1994 27 SwF0.8million
II. PROMOTION PROGRAMMES AND ENCOURAGEMENT OFAPPLIED RESEARCH
1. Nature andextent ofthesubsidy
(i) Background andauthority
These programmes fallinthecategory ofsupply-side measures. They consist essentially of
advanced vocational training programmes oflimited length andsupport forresearch aimed atpractical
goals.G/SCM/N/3/CHE
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1. Federal Order of23June 1989 onmeasures toimprove training andtheextension and
dissemination ofknow-how intheareasofbuilding renovation, rational utilization ofelectricity
andrenewable energy resources. Federal Order of23June1989 onthefinancing ofthe
Construction andEnergy Action Programme. Federal Council Order of27February 1991
onthestrengthening ofthePACER andRAVEL promotion programmes (commitment
appropriations totalling SwF55.1million fortheperiod 1990-1995).
- Advanced training inbuilding renovation;
- Advanced training inrational utilization ofelectricity (RAVEL);
- Advanced training inrenewable energy resources (PACER).
2. Federal Order of5December 1985andof16September 1991onthefunding ofapplied research
and development during theperiods 1986-1991 (commitment appropriation of
149.1 million francs) and1992-1995 (commitment appropriation of150million francs).
3. Federal Order of16December 1987 onthefunding oftechnological cooperation inEurope
fortheperiod 1988-1991 (commitment appropriation of80million francs). Federal Order
of16September 1991 onthefunding oftechnological cooperation under theEUREKA
programme during theperiod 1992-1995 (commitment appropriation of50million francs).
4. Federal Order of20March 1990 onthefinancing ofspecial measures forthepromotion of
newcomputer-integrated manufacturing methods (CIM action programme, commitment
appropriation of102million francs) (fortheyears 1990-1995).
5. Federal Order of30September 1991 onthefinancing ofspecial measures forthepromotion
ofnewmicro-electronics technology (commitment appropriation of150million francs) (for
theyears 1992-1997).
(ii) Incidence
Acentral characteristic oftheadvanced training programmes isthattheyarejointly prepared
bybusiness, higher educational establishments andtheGovernment. They areoften carried outby
associations. They aimattherapid dissemination oftechnological know-how.
Research aimed atpractical goals ispromoted onthebasis offinancial support forprojects
drawn upjointly bythebusiness andscientific communities. TheConfederation makes itsfinancial
contribution, usually representing halfthecostofaproject, tothehigher educational establishments.
Undertakings profit onlyindirectly fromthesubsidies through asupply ofbetter-skilled labour
andresearch results. Subsidies arenotpaidtoundertakings.
(iii) Amount ofsubsidy
Theamount ofthesubsidies granted is(inmillions offrancs):
1992 1993 1994
94.9 100.1 117.5G/SCM/N/3/CHE
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(iv) Estimated amount perunit
Seeintroduction.
2. Effects ofthesubsidy
Evaluation ofthequantitative effects ofthesubsidy ontrade
Themeasures areaimed above allatimproving general conditions, anditistherefore impossible
toquantify theireffects. Inview oftheirsmall financial impact, theireffects ontrade canonlybe
veryslight.
III. CONTRIBUTION TOTHE SWISS OFFICE FOR DEVELOPMENT OFTRADE (OSEC)
1. Nature andextent ofthesubsidy
(i) Background andauthority
TheSwiss Office forDevelopment ofTrade (OSEC) isaprivate-law institution inwhich trade,
industry andtheFederal authorities havejoined together todevelop andexpand theeconomic relations
between Switzerland andforeign countries, andtopromote theexport ofSwiss products andservices,
withaviewtomaintainingfullemploymentand,ingeneral,promotingawarenessofSwitzerlandabroad.
Thelegalbases arelaiddown intheFederal Lawof6October 1989allocating acontribution
totheSwiss Office forDevelopment ofTrade.
(ii) Incidence
Theactivities ofOSEC areasfollows:
TheaimofOSEC istopromote Swiss foreign trade, inparticular through activities inthe
following areas:
1. information ontheSwiss export economy;
2. information andadvice onforeign markets;
3. putting together trading partners andbusiness opportunities;
4. organization abroad ofexport promotion events.
OSEC canperform other tasksandprovide other services toassist theSwiss export economy.
OSEC isfinanced by:
1. thereceipts from services andproducts sold;
2. members 'contributions;
3. contributions from theConfederation andother public-law bodies;
4. anyother receipts.G/SCM/N/3/CHE
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OSEC 'sfinancial commitments areonlyguaranteed byitscompany assets; members arenot
subject toadditional securities andtheyhavenoclaim overtheassociations 'assets.
(iii) Amount ofsubsidy
Thetotalcontribution (inSwiss francs) allocated bytheConfederation totheSwiss Office for
Development ofTrade wasasfollows:
1992 1993 1994
10 8 8
(iv) Estimated amount perunit
Seeintroduction.
2. Effect ofsubsidy
AstheactivitiesoftheSwissOfficeforDevelopmentofTrade(OSEC)aredesignedtoencourage
Swiss exports ingeneral, itisimpossible toquantify theireffects.
IV. AGRICULTURAL SUBSIDIES
Theinformation relating toagricultural subsidies maintained bySwitzerland willbenotified
totheCommittee onAgriculture under therelevant provisions oftheWTO Agreement onAgriculture.