WORLD TRADE  
ORGANIZATION  TN/RL/GEN/56 
4 July 2005 
 (05-2880) 
Negotiating Group on Rules Original:   English 
  
 
CONTRIBUTION TO THE DISCUSSION ON THE FRAMEWORK 
FOR DISCIPLINES ON FISHERIES SUBSIDIES 
 
Paper from Brazil
 
 
  The following communication, dated 30 June 2005,  is being circulated at the request of the 
Delegation of Brazil.  
 The submitting delegation has requested that th is paper, which was submitted to the Rules 
Negotiating Group as an informal document (JOB(05)/ 139), also be circulated as a formal document. 
 
_______________ 
 
1. Brazil welcomes the broad discussion at the Negotiating Group on Rules (NGR) meeting in 
April 2005 on the Brazilian contribution to th e discussion on the framework for disciplines on 
fisheries subsidies. Although this submission repr oduces the last section of document TN/RL/W/176, 
some changes and improvements were introduced so as to incorporate comments made by Members and to further develop some of the suggested ideas put forward by Brazil.  
2. We recall that Brazil’s proposal of 31 March 2005 sought to suggest an approach on how the 
special and differential treatment for developing c ountries could be properly captured under the future 
disciplines on fisheries subsidies. The Br azilian proposal consists of the following: 
 (i) Definition of Fisheries Subsidies.
 Except for inland fisheries1, all capture fisheries2 subsidies 
programmes should be included in the definition of "fisheries subsidies". The definition of 
fisheries subsidies must include all financial contributions or income  or price support by a 
government ─ as defined in Article 1 of the ASCM ─ that are given to or on behalf of fishing 
interests. Any such governmental payment given to  or on behalf of fishing interests shall be 
considered "specific" within the meaning of Article 2 of the ASCM.  Moreover, subsidies 
granted for the purchase of foreign access rights (government-to-government payments for 
access by their domestic fleets to foreign EEZ fisheries) should also be covered by the 
definition of fisheries subsidies. Public ser vice of fisheries management should not, in 
principle, be defined as fisheries subsidy (stock assessments, regulatory enforcement, 
licensing, etc.)3.  
                                                      
1 In this proposal, inland fisheries refer to fisheries in internal waters of any country. That is to say, all 
waters, other than lawfully claimed archipelagic waters, landward of the baseline from which the territorial sea 
is measured. 
2 Since the disciplines required to address subsidie s to aquaculture would diff er in important aspects 
from those proposed for capture fisheries, they are not part of this proposal. In this proposal, aquaculture refers 
to the business of raising marine or freshwater fish or shellfish under controlled conditions 
3 In document TN/RL/GEN/36, New Zealand suggests “that subsidies to management services should 
not be prohibited under new disciplines on fish subsidies”.  Brazil is willing to discuss the scope of the concept TN/RL/GEN/56 
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 (ii) Classification of Fisheries Subsidies.
  Brazil favours the approach of classifying fisheries 
subsidies based both on their design and effects, according to the context in which they are 
provided: 
(a) "Green Box"  (non-actionable subsidies) - There should be an exhaustive list of non-
actionable fisheries subsidies, provided th at they do not have trade-distorting or 
production-distorting effects through enhanc ing capacity and overfishing. Subsidies 
that do not meet those conditions or do not fall within the exhaustive list should be considered prohibited subsidies.  In this regard, Members may wish to di scuss the following non-exhaustive list of 
examples of subsidies that could be considered non-actionable: 
(1) subsidies that are aimed at improving conservation and the sustainable use of 
fisheries resources: 
 
(a) subsidies to research activities undertaken to improve fisheries 
management or environmental protection; 
(b) subsidies for compliance with safety or sanitary standards; 
(c) subsidies for the adoption of environmentally preferable gear or 
techniques. 
 
(2) subsidies to small scale fishing
4 and to artisanal fishing5, provided that such 
fisheries are not "patently at risk"6;  
(3) subsidies for capacity reduction7; 
                                                                                                                                                                     
of "public service of fisheries management", as well as whether subsidies under that concept should be 
considered "green" subsidies. 
 4 Subsidies to small-scale fishing are to be consider ed non-actionable if granted to activities carried out 
by vessels with total length not exceeding 24 meters an d with a total catch not over 250 tons per year. In 
addition: (a) if the fishery is under the management of a RFMO:  
 (a.1) and if a country limit is set to a specific speci e, the total catch of the country small-scale fleet for 
that specific specie shall not exceed 10% of the limit se t to the country for that specific specie by that 
RFMO; or 
 (a.2) and if no country limit is set to a specific speci e, the total catch of the co untry small-scale fleet for 
the specific species that have no individual limits shall not exceed 5% of the limit set to the country by that RFMO for those speci fic species that have no individual limits; or 
 (a.3) and if a global limit is set to a specific specie,  the total catch of the co untry small-scale fleet for 
that specific specie shall not exceed 0,5% of the global limit set to that specie by that RFMO; or 
(b) if the fishery is not under the management of a RFMO, the annual  increase of the volume catch by 
the country small-scale fleet for that specific specie shall not exceed  3% of the most  recent volume 
catch data reported to a compet ent international organization. 
 5 Subsidies to artisanal fishing are to  be considered non-actionable if: 
(a) granted to fisheries activities performed at an in -shore basis with non-automatic net-retriever 
devices; 
(b) granted to activities carried out on an individual basis (including, but not necessarily, the family 
members); 
(c) the basic scope of the activities encompasses both family livelihood and a small profit trade; and 
       there is no employer-employee relationship on the activities carried out. 
 6 For example, a fishery could be considered "patently at risk" if any of the following conditions apply: 
• the status of exploitation is “not known or uncertain” or is “overexploited,” “depleted,” or 
“recovering” according to the FAO; or 
• the status of exploitation or of the target species is deemed equivalent to the foregoing by a 
competent regional or international authority having jurisdiction over the fishery. 
7 In document TN/RL/GEN/41, the US suggested that “buyback and similar programmes designed to 
permanently remove overcapacity fro m fisheries are strong candidates fo r an exception to an expanded  TN/RL/GEN/56 
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 (4) subsidies aimed at fishermen retraining, to facilitate movement of labor out of 
the fishery sector and early retirement schemes. 
 If any vessel and/or company of a Member is found to be engaged in IUU fishing according to any RFMO, serious prejudice, in the sense of paragraph (c) of Article 5 
of the ASCM, shall be deemed to exist re garding all non-actionable subsidies granted 
by that Member. 
 
(b) "Red Box"
 (prohibited subsidies) – All remaining subsidies that do not fall within the 
"green box" shall be considered as prohibited subsidies, together with those subsidies 
that are already prohibited under the current disciplines in Article 3 of the ASCM. In 
other words, there would be a prohibition on  fisheries subsidies that, by reason both 
of their design and effects, cause, for exam ple: 1) the increase of fishing capacity or 
effort; 2) IUU fishing8; 3) the increase of the domestic supply of fish, threatening the 
                                                                                                                                                                     
prohibition of fisheries subsidies in the WTO, provided that appropriate programme conditions are attached”. In 
document TN/RL/GEN/47, Japan suggested that vessels “subject to the decommissioning programme must be 
scrapped including its engine and equipment in order to avoid the leakage of vessels and gears to other fisheries. 
In addition, the fishing licenses associated with the decommissioned vessels have to be withdrawn”. Brazil shares those views and is willing to discuss examples of  subsidies programmes designed to reduce capacity as 
well as the appropriate conditions attached to those programmes aimed at avoiding the return of removed 
overcapacity or an increase in capacity. 
 8 In document TN/RL/GEN/47, Japan notes that “overseas transfers of fishing vessels to non-CPCs of 
RFMOs could directly result in IUU fisheries and therefor e subsidies for those activities should be prohibited.  
Furthermore, the re-transfer to non-CPCs through CPCs of RFMOs is also problema tic.  Such a case can be 
prevented by establishing an appropriate bilateral arrangement between exporting and importing countries. 
Subsidies for overseas transfers of fishing vessels to CPCs of RFMOs might also be among the prohibited 
subsidies, unless such a bilateral arrangement exists”. In  order to stimulate discussions, Members could consider 
the basic definitions of “illegal,” “unreported,” and “unr egulated” fishing set out by the International Plan of 
Action (IPOA): 
 3.1 Illegal fishing refers to activities: 
3.1.1 conducted by national or foreign vessels in waters under the jurisdiction of a State, without the 
permission of that State, or in contravention of its laws and regulations; 
3.1.2 conducted by vessels flying the flag of States that are parties to a relevant regional fisheries management organization but operate in contraven tion of the conservation and management measures 
adopted by that organization and by which the States are bound, or relevant provisions of the applicable 
international law; or 
3.1.3 in violation of national laws or international obligations, including those undertaken by 
cooperating States to a relevant regional fisheries management organization. 
 3.2 Unreported fishing re fers to fishing activities: 
3.2.1 which have not been reported, or have been misreported, to the relevant national authority, in 
contravention of national laws and regulations; or 3.2.2 undertaken in the area of competence of a relevant regional fisheries management  organization 
which have not been reported or have been misreported, in contravention of the reporting procedures of 
that organization. 
 3.3 Unregulated fishing re fers to fishing activities: 
3.3.1 in the area of application of a relevant regional fisheries management organization that are 
conducted by vessels without nationality, or by those flying the flag of a State not party to that organization, or by a fishing entity, in a manner that is not consistent with or contravenes the 
conservation and management measures of that organization; or 
3.3.2 in areas or for fish stocks in relation to which there are no applicable conservation or management measures and where such fishing activities are conducted in a manner inconsistent with State 
responsibilities for the conservation of living marine resources under international law. 
3.4 Notwithstanding paragraph 3.3, cer tain unregulated fishing may take place in a manner which is not 
in violation of applicable international law, and may not require the application of measures envisaged 
under the International Plan of Action (IPOA). TN/RL/GEN/56 
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 sustainability of the fishing resource. One exception could be envisaged: short-term 
emergency relief and adjustment (a) in case of unforeseeable natural disasters and (b) to small scale fishermen suffering significant loss of income as a result of reductions in fishing caused by conservation measures. 
3. There shall be a period of 3 (three) years for Members to phase out and eliminate their 
subsidies programmes that will fall within the prohibit ed subsidies category, from a level to be agreed.  
From the entry into force of these rules, Memb ers will not be permitted to create new prohibited 
subsidies.  4. Notification requirements applicable to all fi shing subsidies should require detailed reporting 
about the actual uses of the subsidies, necessarily including information: 
 
• regarding the identification of fisheries in  which subsidized fishing takes place under 
a given subsidy program; 
• about the status of the fisheries in question; 
• about subsidy amounts on a per vessel, per fleet, and per fishery basis; 
• and specific description of how subsidies are actually applied; 
• whether the fishery is under management by  a RFMO, the nature of the monitoring, 
the quantitative limits applicable to the Member and the RFMO website; and 
• identification of specific enterprises receiving subsidies. 
 
It should also be required that notifications include information about steps taken to ensure that the 
notified subsidy does not contribute to IUU fishing ac tivities. Any subsidy at a national level which is 
not notified, or reported on, would be presumed prohibited
9.  Articles 8.3, 8.4 and 8.5 of the ASCM, 
amended as necessary, could be used in the futu re disciplines on transparency and notification. 
 Special and differential treatment for developing country Members 
5. The provisions of Article 27 of the ASCM should fully apply to fisheries subsidies
10. Since 
those provisions are not entirely appropriate to a ddress the specific needs of developing country and 
least developed country Members in the fishin g sector and taking into account social and 
environmental criteria, Brazil proposes that: 
 
(i) The following fisheries subsidies should be permitted to developing country 
Members, according to Articles 5, 6 (e xcept paragraph 1) and 7 of the ASCM11: 
 
(1) Subsidies which increase fishing capacity or  effort of Members that are part 
of a RFMO. Those subsidies should not allow the enhancement of the 
Member’s fishing capacity beyond the sustainable level of exploitation 
defined by the limits established under the RFMO. Specifically, those 
subsidies must fall within one or more of the following exhaustive list: 
 
(a) subsidies to fishing vessel  construction or repair; 
                                                      
9 Brazil shares EC’s view expressed in document TN/RL/GEN/39 that any subsidy which is not 
notified would be presumed prohibited. 
10 Some of the current provisions of Article 27 may have to be refined in the light of what is being 
suggested in this proposal. 
11 Brazil is open to discuss any possible amendment that may be needed in those articles, in order to 
cope with the specificities of the fishing sector. For in stance, the current definition of "adverse effects" may 
have to be clarified, in order to capture the impacts of a subsidy program on production. The same point was 
raised by the Unites States in document TN/RL/W/169.  TN/RL/GEN/56 
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 (b) subsidies to vessel modernization or gear acquisition or improvement. 
 
(2) Fuel, bait or ice supplied for fishing activities. 
(3) Payments received from other govern ments for access to the EEZ fisheries 
resources of the developing country12; 
(4) Assistance to disadvantaged regions within the territory of a Member 
pursuant to a general framework of regional development in the sense of 
Article 8.2 (b) of the ASCM.  
 (ii) Serious prejudice in the sense of paragraph (c) of Article 5 of the ASCM shall be 
deemed to exist in the case of: 
 
(a) subsidies benefiting any vessel a nd/or company not operating under 
the rules and/or limits established by a RFMO to a Member; 
(b) any vessel and/or company is found to be engaged in IUU fishing 
according to any RFMO. In this situation, serious prejudice shall be 
deemed to exist regarding all ac tionable subsidies granted by the 
developing country Member; 
(c) subsidies granted to any vessel and/or company involved with the 
exploitation of fisheries "patently at risk"; 
(d) subsidies granted to a fleet or an enterprise to cover operating losses. 
 
(iii) the following special and differential tr eatment should be accorded to least-developed 
country Members: 
 
(1) "red box" subsidies that are prohibited under Article 3 of the ASCM and those 
listed in paragraph 21.(ii) (b) above should be consid ered actionable subsidies 
for a period of 10 (ten) years. 
 6. There shall be a period of 5 (five) years for developing country Members to phase out and 
eliminate their subsidies programmes that will fall within the prohibited subsidies category, from a 
level to be agreed. 
 
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12 The same issue was raised by Antigua and Barbuda, Belize, Fiji Islands, Guyana, the Maldives, 
Papua New Guinea, Solomon Islands, St Kitts and Nevis under the item “revenue generation from access fees” 
(TN/RL/W/136)