- either income per capita, or household income per capita, or GDP per capita, which must not be above 85 % of the average for the territory of the country of origin or export concerned,

- unemployment rate, which must be at least 110 % of the average for the territory of the country of origin or export concerned;

as measured over a three-year period; such measurement, however, may be a composite one and may include other factors.

For the purpose of the first subparagraph:

(a) a 'general framework of regional development' means that regional subsidy programmes are part of an internally consistent and generally applicable regional development policy and that regional development subsidies are not granted in isolated geographical points having no, or virtually no, influence on the development of a region;

(b) 'neutral and objective criteria' means criteria which do not favour certain regions beyond what is appropriate for the elimination or reduction of regional disparities within the framework of the regional development policy. In this regard, regional subsidy programmes shall include ceilings on the amount of subsidy which can be granted to each subsidized project. Such ceilings must be differentiated according to the different levels of development of eligible regions and must be expressed in terms of investment costs or the cost of job creation. Within such ceilings, the distribution of subsidy shall be sufficiently broad and even to avoid the predominant use of a subsidy by, or the granting of disproportionately large amounts of subsidy to, certain enterprises.

This provision shall be applied in the light of the criteria set out in Article 3 (2) and (3).

4. Subsidies to promote adaptation of existing facilities to new environmental requirements imposed by law and/or regulation which result in greater constraints and financial burden on firms shall not be subject to countervailing measures, provided that the subsidy:

(a) is a one-off non-recurring measure; and

(b) is limited to 20 % of the cost of adaptation; and

? Does not cover the cost of replacing and operating the subsidized investment, which must be fully borne by the firms; and

(d) is directly linked to and proportionate to a firm's planned reduction of nuisances and pollution, and does not cover any manufacturing cost savings which may be achieved; and

(e) is available to all firms which can adopt the new equipment and/or production processes.

For the purpose of the first subparagraph the term 'existing facilities' means facilities having been in operation for at least two years at the time when new environmental requirements are imposed.

Article 5

Calculation of the amount of the countervailable subsidy