RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/W/491
11 February 2002
(02-0661)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
MEMBERS' DIFFICULTIES IN MAKING SUBSIDY NOTIFICATIONS,
AND THE PLANNED SUBSIDY NOTIFICATION SEMINAR
Reply to Questions in document G/SCM/W/473
of 18 December 2001
Paper Submitted by the European Communities
The following communication, dated 8 February 2002, has been received from the Permanent
Delegation of the European Commission.
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B. QUESTIONS CONCERNING DIFFICULTIES IN NOTIFYING
Q1. Does your government face resource constraints in trying to make subsidy notifications?
If so, what are the major bottlenecks in the notification system of your government?  Is the
problem primarily an insufficient number  of staff to handle the notifications, or is it more a
question of insufficiently trained  staff?
Reply
While the EC faces certain resource constraints with respect to the number of staff (rather
than trained staff), the fact that responsible staff have other pressing priorities is more significant.
Nevertheless, the EC regards this exercise as important and therefore devotes the necessary resources
to it.
Q2. Depending on your answer to question 1, above, if the notification questionnaire format
could be simplified, would this make a difference to your government’s ability to make the
required subsidy notifications?
Reply
It would not make a significant difference.
Q3. Balancing your government’s needs for as simp le a format as possible against its needs
to be able to understand other Members’ notifications when it reviews them, how much
simplification could be introduced without sacrificing transparency?
Reply
In our view, transparency must not be sacrifi ced through overly simplifying the notification
format.  The format must provide for all informat ion which allow Members to identify the scheme,G/SCM/W/491
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understand its operation and beneficiaries and assess its potential trade effects. The aim should not be
to reduce the information to be notified but only to simplify its presentation.
Q4. Considering the notification format itself, and the concepts underlying it as found in
SCM Articles 1-3, in your government’ s experience, do individuals responsible for makingnotifications have difficulties understanding the requirements due to the language used in the
Agreement to define “subsidy”, “specificity”, etc. ?  For example, do these individuals believe
that subsidies are in the nature of cash grants  only, and do not encompass revenue foregone via
tax and duty incentives?  Could some sort of explanation be introduced into the questionnaire
format to make more clear the scope of measures that are subject to notification?  How might
such an explanation be worded?
Reply
We did not face such difficulties..
Q5. Does your government experience general pr oblems due to the formatting requirements
of the notification questionnaire?  In particular, does your government maintain any pre-
existing information that addresses the substance of the notification questionnaire, but does not
correspond to the questionnaire’s format?  If so, what are the specific problems that your
government encounters when it tries to fo rmat the information as required by the
questionnaire?  If the information were to be notified in its pre-existing format, could itnevertheless be keyed to the data elements of the subsidy questionnaire?
Reply
The EC does not face severe problems with the current formatting requirements.
Q6. In reviewing other Members’ notifications, would your government find it problematic
to review information that was formatted in a way other than the way foreseen in the subsidy
questionnaire, but that comprehensively ad dressed the substantive elements of the
questionnaire?  How important would it be for this information to be keyed or coded to the
questionnaire format?
Reply
The formatting would need to allow for a mean ingful review of the information which must
be required.  While this may also be achieved in a way which deviates from the agreed format (e.g. by
referring under one heading to a clearly identified text produced under another heading), sufficientwork on the presentation of information would be required.  For example, a simple notification of the
relevant legislation would not be sufficient.
Q7. Does your government maintain any info rmation about its subsidy or incentive
programmes on official web sites?  How much wo uld your notification of subsidies be simplified
if such information could be submitted in its pre-existing format?  As a reviewer of
notifications, what sorts of limits should there be to the substitution of information from web
sites for completed notification questionnaires?  Would references to web sites be a useful
supplement to substantive information provided in a notification?
Reply
Reference to web sites could certainly be a useful supplement concerning information on
legal basis and operation of scheme..  However, this information would have to be reproduced in full
in a WTO document.  A simply reference would not suffice since web sites are, by definition, subjectG/SCM/W/491
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to change.  Such an approach would  result in uncertainty on what actually constitutes the information
to be reviewed.
Q8. Concerning General Rule 6, which requires that  notification of subsidies provided “to
specific products or sectors” be organized on a product- or sector-specific basis, does this rulepose problems for your government when notifying subsidies that are provided on a horizontal,
rather than a product- or sector-specific basis?   What are the specific steps and difficulties in
preparing sector- or product-specific informatio n for subsidies provided on a horizontal basis?
Reply
If subsidies are provided on a horizontal basis, they are normally not susceptible to be
presented in on a product- or sector-specific basis.  Indeed, often they are only provided for reasons of
transparency. If subsidies are provided by reference to sectors or products, they are normally
categorized as such in the notifications of the EC and its Member States.
Q9. Does this rule present problems for notifi cation of subsidies that are provided on a
product- or sector-specific basis (e.g., some agricultural subsidies)?
Reply
No.
Q10. Would a redrafting of General Rule 6 to refer to subsidies "provided on the basis of
specific products or sectors" help to resolve this  problem?  (The idea would be to clarify that
programme-based information, rather than product- or sector-specific information would be
required for subsidies provided on a horizontal basis, which product- or sector-specificsubsidies would continue to need to be notified on that basis.)
Reply
We would be willing to explore this possibility.
Q11. Would such a redrafting pose problems for the review of subsidy notifications, and if so,
what would those problems be?
Reply
We do not see any severe problems.
Q12. To what extent does the general requirement to provide statistical information on the
trade effects of notified subsidies (chapeau of  item 9) impede or delay the presentation of
subsidy notifications?
Reply
This requirement, even though it is often difficult to meet, in particular for horizontal
subsidies, does in our experience generally not impede or delay subsidy notifications.
Q.13 To what extent does the need to compile the specific kinds of statistical information
referred to in items 9(a) and 9(b) impede or delay the presentation of subsidy notifications?G/SCM/W/491
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Reply
Same reply as to question 12. If such information is available in the first place, it can
normally easily provided for different time periods.
Q14. How important is this statistical informat ion about other Members’  subsidies to your
government when reviewing subsidy notificati ons?  Could these reporting requirements be
made less stringent in some manner?  If so, how?
Reply
If such information can be provided, it can be of considerable importance in the review
process.
Q15. Does your government find, in preparing s ubsidy notifications, that there is conceptual
overlap or redundancy in some of the information elements as currently drafted?
Reply
No.
Q16. If your government believes there to be overlap, how might this be eliminated?  What
drafting improvements might be introduced to clarify such situations, while preserving the
substantive requirements of Article 25 from which the questionnaire is drawn?
Q17. Do the requirements to provide information on the policy objective or purpose of the
subsidy, its background and authority, and to whom and how it is provided pose significantdifficulties to your government in preparing its subsidy notifications?  How might these
requirements be simplified?
Reply
They do not pose difficulties.
Q18. Does the requirement to furnish an explanation where a particular element of
information cannot be provided pose particular difficulties to your government in preparing its
notifications?  If so, is there a way to simplify this requirement while preserving its substantive
content?
Reply
It does not pose particular difficulties.
Q19. Is there sufficient flexibility in item 7 of the subsidy questionnaire (information on the
amounts of subsidies provided) for your government to be able to notify such information
without undue difficulty?  If not, is there a way to simplify this requirement while preserving its
substantive content?
Reply
The wording provides sufficient flexibility.
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