G/SCM/Q2/EU/27  
2 April 2013  
(13-1691)  Page: 1/4  
Committee on Subsidies and Countervailing Measures  Original: English/Spanish  
 
  SUBSIDIES 
REPLIES TO QUESTIONS POSED BY THE UNITED STATES1 REGARDING 
THE NEW AND FULL NOTIFICATION OF THE EUROPEAN UNION2 
 
The following communication, dated 7 March 2013, is being circulated at the request of the Delegation of the European Union. 
 
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 SPAIN 
 
Fisheries – Pilot Projects  
 
Question 1 
 Program C in the Fisheries section has a limitation on its program objective, 
which provides that the program shall not increase the fishing capacity of vessels. 
Does the "Pilot Projects" program have a si milar limitation? Are there any provisions 
within this program to prevent the increase of  fishing capacity for recipients of aid under 
this program? 
 
Reply 
 
Pilot projects eligible for subsidies are regulated by Article 41 of Council Regulation (EC) 
No. 1198/2006 of 27 July 2006 and Article 19 of Commission Regulation (EC) No. 498/2007 of 26 March 2007. Article 19 of Commission Regulation (EC) No 498/2007 explicitly states that no 
support shall be granted to pilot projects for exploratory fishing. 
 De Minimis
3; State Aid4 and Block Exemption5 Funding 
 
Question 2 
 According to publically available informatio n, it is our understanding that Spain was 
permitted to provide " de minimis " funding to its fisheries sector (up to €30,000 per 
company over a period of three fiscal year s) as well as funding under State Aid and 
Block Exemption rules. Please describe th e programs under which funds are provided 
and, if any of the programs have no t been notified, please explain why. 
 
                                               
1 G/SCM/Q2/EU/21. 
2 G/SCM/N/220/EEC/Add.25. 
3 Commission Regulation (EC) 875/2007 on the applic ation of Articles 87 and 88 of the EC Treaty 
to de minimis  aid in the fisheries sector and amending Regulation (EC) 1860/2004, Official Journal, L 193/6. 
4 See, for example, http://ec.europa.eu/competition/state_ aid/studies_reports/expenditure.html  
5 See, for example, 
http://ec.europa.eu/fisheries/state_aid/block_exemption_information/xf7_2009_es.pdf  G/SCM/Q2/EU/27 
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  Reply 
 
The programs that have received funding are those aimed at improving sector productivity. 
Following an increase in the cost of vessel inputs, it was decided that companies would be granted 
aid amounting to two months of social security contributions for each worker on the fishing vessel. 
Aid was last provided in 2008.  
European Agricultural Guarantee Fund (EAGF) Compensation for Fisheries 
 Question 3  
According to publicly available information, the owners and operators of fishing vessels 
in the Canary Islands may off-set up to 100% of the costs of transporting fishery 
products to continental Europe, as well as additional costs related to marketing the 
products. Pursuant to Council Regulation No. 791/2007, the EAGF provides 
compensation for this purpose up to EUR 5,844,076 annually for the Canary Islands.
6 
Please describe how the program works. Please explain why this program has not 
been notified. 
 Reply 
 
Entities meeting the requirements established in th e Order of the Regional Ministry of Agriculture, 
Livestock, Fisheries and Water of the Governme nt of the Canary Islands of 19 January 2012 
providing for Community aid to compensate for th e additional costs incurred in the marketing of 
certain fishery products from the Canary Islands during the 2011 season (as provided for in 
Council Regulation (EC) No. 791/2007 of 21 May 2007 introducing a scheme to compensate for the additional costs incurred in the marketing of cert ain fishery products from the outermost regions 
the Azores, Madeira, the Canary Islands, French  Guiana and Réunion) and approving the basis on 
which such aid is to be made available ( http://www.gobcan.es/boc/2012/024/ ), will receive the 
following amounts of compensation: 
 
GROUP DESCRIPTION VOLUME 
(MT) MAXIMUM 
AMOUNT 
(€/MT) TOTAL (€) 
A1 AQUACULTURE PRODUCTS Aquaculture products 1,157  1,300 1,504,100 
B1 
PELAGIC 
SPECIES LAREE TUNA Tuna marketed by air 1,700  950 1,615,000 
B2 Tuna marketed by sea in the 
raw state 453 500 226,500 
B3 Skipjack 712  220 156,640 
B4 SWORD 
FISH Swordfish 174  550 95,700 
B5 SMALL Sardines and mackerel 
for freezing 200 240 48,000 
C1 BOTTOM-DWELLERS Cephalopods and demersal 
species 8,202  268 2,198,136 
 
Aid will be granted through a non-competitive app lication process. Should the allocation under the 
call for applications for aid be insufficient, a pro rata system will be applied, while respecting the euro/tonne amount indicated above. 
 
Customs Duty Exemptions on Fishery Products to the Canary Islands  
Question 4 
 According to publicly available information, fishery products may be imported into the 
Canary Islands free of customs duties. Specifically, Council Regulation No. 645/2008 
suspends the Common Customs Tariff duties on imports into the Canary Islands of 
                                               
6 Council Regulation (EC) No. 791-2007 of 21 May 2007 on introducing a scheme to compensate for the 
additional costs incurred in the marketing of certain fishery products from the ou termost regions the Azores, 
Madeira, the Canary Islands, French Guiana and Réunion, Official Journal L 176/1. G/SCM/Q2/EU/27 
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  various fishery products between the years 2007 and 2013.7 The benefits for 
Canarian companies from this special customs regime are estimated to be 
around EUR 10 million every year in import du ties on seafood products. Please describe 
how the program works. And explain why the program has not been notified. 
 
Reply 
 
The following information is provided without prej udice of the WTO status of the measures referred 
to by the US. The Canary Islands belong to the Outermost Regions of the European Union, for which special measures may be foreseen, pursuant to Article 349 TFEU, in order to overcome the economic disadvantages these regions suffer due to their geographical and economic situation. 
With regard to the Canary Islands, this exceptional geographical situation in relation to the sources 
of supply of certain fishery products, which are essential for domestic consumption, entails additional costs for operators and consum ers. This natural handicap can be remedied, 
inter alia , by temporarily suspending customs duties on imports of the products in question 
from third countries within Community ta riff quotas of an appropriate volume. 
 
The current measures, implemented with Co uncil Regulation (EC) 645/2008 of 8.7.2008, 
will expire on 31.12.2013. They consist of two tariff quotas for a volume of 15.000 tonnes each, 
at 0% duty. The first quota covers Combined Nomenclature (CN) headings 03.03 "Fish, frozen, excluding" and 03.04 "Fish fillets and other fish meat", while the second is for headings 03.06 
"Crustaceans" and 03.07 "Molluscs and aquatic invert ebrates". The measures are very limited in 
scope as the products imported through these tariff quotas are intended exclusively for the market of Canary Islands market. 
 
The estimated value of non-collected import is €7.9 million. Nevertheless the actual revenue foregone tends to be significantly lower since full or Most Favoured Nation (MFN) duties do not 
apply across all imports. In fact most of the EU imports of fish products enter the EU at lower, 
preferential, duty rates by virtue of unilateral instruments such as the Generalised System of Preferences (GSP), or owing to trade agreements. It is estimated that, for fish products, the effective overall EU average duty is less than 3%, while the average full (MFN) duty is 10.9%. 
 
Full details on these measures can be found in Council Regulation (EC) No. 645/2008 of 8 July 2008 on opening and providing for the administration of autonomous Community tariff 
quotas on imports of certain fishery products in to the Canary Islands, Official Journal L 180/1 
available at www.eur-lex.eu.  
With regard to the products imported through these quotas it should be noted that US exporters 
have taken advantage of these measures as fish products from the US have been imported into the Canary Islands at no duty.  
Direct Subsidies to the Spanish National Fleet 
 Question 5 
 
According to the 2011 Annual Economic Report on the EU Fishing Fleet (STECF-11-16)
8, 
the Spanish national fleet received direct su bsidies in the amount of EUR 62.8 million in 
2009. Could Spain please indicate which su bsidy programs this reported amount 
accounts for? If any such programs have  not been notified previously, please 
explain why.  
                                               
7 Council Regulation (EC) No. 645/2008 of 8 July 2008 on opening and providing for the administration 
of autonomous Community tariff quotas  on imports of certain fishery pr oducts into the Canary Islands, 
Official Journal L 180/1. 
8 2011 Annual Economic Report on the EU Fishing Fleet (STECF-11-16). Scientific, Technical and 
Economic Committee for Fisheries (STECF), http://stecf.jrc.ec.europa.eu/documents/43805/256769/11-
11_STECF+11-16+-+2011+AER+on+the+EU+fishing+fleet_JRC67866.pdf  G/SCM/Q2/EU/27 
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  Reply 
 
The amount EUR 62.8 million refers to de minimis  aid and EFF aid under measures 1.2 (Temporary 
cessation of fishing activities) and 1.5 (Socio-economic compensation). 
 
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