WORLD TRADE  
ORGANIZATION  TN/RL/GEN/168 
24 September 2010 
 (10-4862) 
Negotiating Group on Rules Original:   English 
  
 
FISHERIES SUBSIDIES – ARTICLES I, II AND IV 
 
Communication from the Republic of Korea
 
  
 The following communication, dated 21 September 2010, is being circulated at the request of 
the Delegation of Korea.    
_______________ 
  
I. I
NTRODUCTION  
 
1. With this contribution, the Republic of Korea ("Korea") submits its textual proposal for certain provisions of the Annex VIII of the Agreement on Subsidies and Countervailing Measures  (the 
"SCM Agreement") to follow up with its previ ous conceptual proposal dated 24 November 2009.
1  
This textual proposal also reflects comments and suggestions from various Members that Korea has 
received since the submission of the conceptual propo sal.  Korea's textual proposal in this submission 
only addresses Articles I, II and IV of the Chair's Text.  We note, however, that the suggested changes of these articles may also entail subsequent or corr esponding changes in other articles of the Chair's 
Text.  Korea also plans to submit its textual proposal  for the other articles in due course if that is 
deemed necessary. 
 
II. B
ASIC OBJECTIVES OF THE KOREA 'S TEXTUAL PROPOSAL  
 
2. Korea seeks to achieve following ob jectives in this textual proposal: 
 
• Achieving the Goal of the Fisheries Subsidies Discipline :  Korea aims to ensure to 
achieve the goal of the fisheries subsidies negotiations by introducing a framework which fosters Members' measures that help conserve fish stocks, penalizes Members' 
measures that adversely affect fish stoc ks, and eliminates unintended loopholes in the 
Chair's Text; 
• Enhancing the Effectiveness of the Fisheries Management System :  In particular, 
Korea aims to introduce a framework in  which the importance of the Fisheries 
Management System ("FMS") is adequately  recognized and in which Members are 
provided with appropriate and practical incentiv es to put an effective FMS in place;   
• Maintaining Consistency with the SCM Agreement :  Korea also aims to ensure that 
the provisions to be included in the Anne x do remain consistent with the basic 
principles and jurisprudence of the SCM Agreement; 
                                                     
 
1 Framework of the Discipline of Fisheries Subsidies , Communications from the Republic of Korea, 
TN/RL/W/245 (24 November 2009). TN/RL/GEN/168 
Page 2  
 
  • Clarifying Terms in the Chair's Text :  Korea aims to clarify, to the extent possible, 
some of the ambiguous terms contained in the Chair's Text so as to preempt unnecessary disputes over interpretation of the Annex in the future;  and 
• Balancing Members' Interest in the Prospective Regime :  Finally, Korea aims to 
introduce a fisheries subsidies regime in which all Members' interests are fairly reflected and in which all Members share equitable burden in the administration of 
the Annex without allowing certain Members to take advantage of the new regime to 
disproportionally benefit from commercial gains. 
III. E
XPLANATIONS ON THE KEY ELEMENTS OF THE KOREA 'S TEXTUAL PROPOSAL  
 
3. In order to achieve above objectives, Kor ea has made following specific changes to the 
Chair's Text.  First, Korea has moved certain prohibite d subsidies in Article I of the Chair's Text to a 
new article providing for actionable subsidies and made  them subject to an adverse effect test.  Korea 
has also brought Article IV of the Chair's Text stipulating "General Disciplines on the Use of Fisheries Subsidies" into the same new article.  Th is new article is now Article II of Korea's textual 
proposal as attached.  Korea has main tained the title of the new articl e as "General Di sciplines on the 
Use of Fisheries Subsidies" as, in its view, this te rm also covers the new actionable subsidy subject to 
an adverse effect test as proposed by Korea. 
 4. Korea has then restructured Article II of th e Chair's Text regarding general exceptions which 
has now become Article III of the attached Korea' s textual proposal.  Kore a has tried to categorize 
respective grounds for general exceptions in a more organized fashion.  These changes and rationales 
behind them are set forth in detail below. 
 
1.
  RE-FORMULATING PROHIBITED SUBSIDIES  
(ARTICLE I OF KOREA 'S TEXTUAL PROPOSAL ) 
 
5. As explained in Korea's November 2009 proposal , one of the fundamental flaws of the Chair's 
Text in our view is its prohibition-oriented appro ach.  The disproportionate focus on the stockpiling of 
prohibited subsidies is not simply consistent with the basic principles of the SCM Agreement nor with 
the mandates of the Doha and Hong Kong Minister ial Declarations.  In fact, adding eight new 
prohibited subsidies in the prohibition list is a significant departure from the SCM Agreement where 
only two types of subsidies, based on clear consen sus among Members, have been traditionally 
denounced as prohibited subsidies with stringent penal ties.  Korea is not convinced whether the eight 
enumerated subsidies in the Chair's Text have secure d a similar level of consensus at this point.  We 
also note that the mandates from the Ministerial Declarations clearly stipulate prohibition as one, not all, of the new disciplines.
2 
 6. Nor are we persuaded that such a drastic departure would somehow help Members achieve 
the objectives of the Annex or that the administra tion of the Annex would become any simpler as 
some Members suggest.  As we mentioned in previ ous meetings, the "level of ambition" in this 
negotiation is highly dependent on the "level of c onsensus."  We fear that ambition without consensus 
would lead us nowhere in this new legal framework.  As far as the Chair's list of prohibited subsidies 
is concerned, in our view a critical m ass of consensus has yet to be formed. 
 
                                                     
 
2 For instance, the Hong Kong Ministerial Declaration states in paragraph 9 of Annex D, inter alia , that 
"... the Group should strengthen disciplines on subsidies in the fisheries sector, including  through the prohibition 
of certain  forms of fisheries subsidies that contribute to overcapacity and over-fishing."(emphasis added). 
  TN/RL/GEN/168 
 Page 3 
 
 
  7. This recognition has prompted Korea to consid er dividing Chair's prohibited subsidies into 
two categories;  those that seem to have garnered  sufficient consensus for outright prohibition and 
those that do not seem to have cleared that threshol d yet.  While the former remains in the prohibited 
subsidies category in Article I of Korea's textual pr oposal, the latter is now tr ansferred to Korea's new 
Article II as a new concept of actionable subsidies subject to an adverse effect test.  Korea has 
maintained four types of subsidies (shipbuildin g & facilities subsidies, fishing vessel transfer 
subsidies, access right transfer subsidies, and IUU fi shing subsidies) in paragraph 1 of Article I as we 
believe that they pose more manifest and undeniable harm to fish stocks than the other four through 
the creation of overcapacity and over-fishing over a long period of time.  Arguably all these remaining 
four subsidies constitute a long-term platform fo r fishing activities, thus for lingering overcapacity 
and over-fishing, as opposed to mere facilitation of fishing activities and rarely serve legitimate 
governmental purposes other than creation of overcapacity and over-fishing themselves.  In our view, these subsidies should be prohibited ex ante . 
 8. Korea also notes that this concept is c onsistent with the approach taken by the 
SCM Agreement which tends to divi de subsidies into two categories in evaluating the benefit from an 
alleged subsidy.  Thus subsidies that are c onferred on capital assets are regarded as so-called 
"non-recurring subsidies" the benefit of which is d eemed to exist during the period of depreciation for 
fixed capital assets.
3  On the other hand, subsidies confe rred on non-capital asset mainly for the 
purpose of covering business operating cost of a co mpany are regarded as "recurring subsidies" and 
their benefits are considered to exist only in the year of receipt.  This practice under the SCM 
Agreement concerning different effects of subsid ies should guide the Members in this fisheries 
subsidy negotiation as well.  In Korea's view, under th is jurisprudence the four subsidies in Article I 
of Korea's textual proposal may well be categorized  as non-recurring subsidies while the other four as 
recurring ones.4 
 
9. Paragraph 2 of Article 1 of Korea's textual proposal includes a provision which is basically 
the same as the one contained in paragraph 2 of Arti cle I of the Chair's Text.  We have included the 
term "manifestly" following the term "unequivoca lly" to convey the meaning that any claimed 
overfished condition should be objectively proved by relevant marine scientific data.  In the same 
spirit, we have also included a footnote that defin es the "overfished" condition.  We have also added 
the term "negatively" in front of the term "affecting"  so as to give additional clarity to the meaning of 
the term recognizing that the term "affecting" h as too broad coverage under the WTO jurisprudence. 
 10. Korea also take note of the need to di scuss introducing more precise rules for fishing 
activities taking place in particularly vulnerable mari time areas.  For instance, Korea is of the view 
that fishing activities in high seas are likely to pose a more significant threat to the global fish stocks 
than those in offshore as they take place outside ju risdictions of any particular Member and as they 
are usually undertaken on a commercial scale for comme rcial gains.  We note that this recognition of 
the nature  of such fishing may prompt the Member s to consider a norm that applies to all Members 
without exception.   
                                                     
 
3 Korea notes that most Members stipulate 10 year s as the period for capital asset depreciation for 
vessels and other water transportation equipment. 
4 Korea realizes that general port infrastructure may be regarded as fixed capital asset under this 
categorization.  But it should be noted that the SC M Agreement originally took the position that regional 
development subsidies do not even come to the purview of the SCM Agreement as no n-actionable subsidies.  
This non-actionable subsidy category is currently schedule d to be resurrected under the Chair’s Text with the 
apparent support of the Members.  As Korea explained in previous proposal of November 2009, most of the time port infrastructure is closely related to a regional development plan which may turn out to be a 
non-actionable subsidy.  Korea also notes that Article 1.1(a)(iii) of the SCM Agreement excludes general 
infrastructure subsidies which not infrequently include port infrastructure subsidies.  This special treatment of 
the general infrastructure subsidy under the SCM Agreemen t evidences that this subsidy is different from other 
capital asset subsidies and that it should belong to the actionable subsidy category. TN/RL/GEN/168 
Page 4  
 
  2.
  RESTRUCTURING OF ACTIONABLE SUBSIDIES  
(ARTICLE II OF KOREA 'S TEXTUAL PROPOSAL ) 
 
11. Then, Korea has created a new article, as Article II of its textual proposal, to restructure actionable subsidies.  We believe that this restru cturing of the actionable subsidies will be able to 
strike a balance between competing interests and positions among Members.  This article includes the 
four subsidies transferred from Article I and existing actionable subsidies of Article IV of the Chair's 
Text under the title of "General Discipline on the Use of Subsidies."  As noted above, the title of 
Article IV of the Chair's Text remains the same in  the new Article II of Korea's textual proposal. 
 
12. First, paragraph 1 of Article II of the Ko rea's textual proposal introduces a new actionable 
subsidy category requiring an adverse effect test.  As noted in the above section, four subsidies have 
been moved from Article I of the Chair's Text to this new article;  i.e., operating cost subsidies, port 
infrastructure subsidies, income support, and price support.  In our view, these four subsidies are not amenable to outright prohibition ex ante .  For instance, operating cost subsidies may help maintain 
fishing activities but they do not necessarily create new fishing capacity from scratch which will 
remain for an extended period of time.  Port infrast ructure subsidies may also  help maintain fishing 
activities but they do not necessarily create new fish ing capacity from scratch either.  Furthermore, 
port infrastructure establishment is usually closely re lated to regional development plans of Members.  
The same is also applicable to income support a nd price support:  they may help maintain fishing 
activities without necessarily creating new fishing capacity that lingers for a long period of time.  In 
short, all these subsidies may indeed facilitate fish ing activities, but they are distinguishable from the 
four prohibited subsidies in Article I, which by nature involve overcapacity and thus over-fishing.  
 13. Paragraph 2 of Article II then stipulates th e details of the adverse effect test.  Korea 
underscores that the adverse effect test is a science -based assessment to determine the impact of the 
alleged subsidies on fish stocks and to evalua te any preventive or mitigating effect of any 
applicable FMS.  In the paragraph Korea also seek s to clarify that when multiple factors are found to 
have contributed to the adverse effect, those caused by other factors should not be attributed to the 
challenged subsidy.   14. Paragraph 2 also includes an incentive for Memb ers that have effective FMS in place.  In our 
view, it is the enhancement of the effectiveness of the FMS, not the blanket prohibition of all subsidy 
measures, that will help conserve the fish stocks in the long run.  In this spirit, Korea suggests that a 
reviewing panel favorably consider the existence of an  effective FMS in its adverse effect analysis.  In 
Korea's view this provision is closely related to Article V of the Chair's Text (Fisheries Management) 
laying out various requirements for FMS.  Thus, if a responding Member proves that a viable FMS is 
in place, a reviewing panel should accord an approp riate evidentiary weight to the circumstances. 
 15. In fact, several studies from various intern ational organizations, including the OECD and 
UNEP, have found the linkage between the FMS and fi sh stocks to be empirically relevant.  If the 
fundamental objective of the fisheries subsidies ne gotiation is to "conserve" fisheries resources as 
opposed to "penalize" certain non-abiding Members, the focus of the Annex should be shifted from 
the current listing of prohibited subsidies to the intr oduction of a system that can foster viable FMS.  
In this respect, Korea finds relevant the U.S. text ual proposal that clarifies administration of FMS in 
Article V of the Chair's Text.
5 
 16. Finally, paragraph 3 of Article II incorporates Ar ticle IV of the Chair's Text.  In Korea's view, 
the actionable subsidies under the title of "General Discipline" in Article IV of the Chair's Text 
addresses a different situation and serves a different  purpose than actionable subsidies subject to the 
                                                     
 
5 See Fisheries Subsidies-Articles I.2, II, IV and V , Communication from the United States, 
TN/RL/GEN/165 (22 April 2010), at 8-9.  TN/RL/GEN/168 
 Page 5 
 
 
  adverse effect test being proposed by paragraph 1 of Article II of th e Korea's textual proposal.  While 
the general discipline under Article IV of the Chai r's Text addresses the situation where a Member's 
specific fishing right or interest under a fisheri es agreement is infringed upon by another Member, the 
actionable subsidy subject to the adverse effect test  concerns the situation where a Member's subsidy 
programs cause adverse effect to fish stocks without re ference to fishing right or interest.  So, in our 
view, these two actionable subsidies address two different situations. 
 17. Having said that, however, both of them also share a commonality as actionable subsidies by requiring additional conditions to be satisfied befo re being regulated, which differentiates them from 
the ex ante  prohibited subsidies in Article I.  This prompted Korea to collapse these two actionable 
subsidies in the same article in its textual proposal.   
 18. In the same paragraph, Korea also notes the in clusion of the term "over-fishing" in addition to 
"overcapacity."  We tried to reflect the fact that those two terms are used together in the actionable 
subsidies of Article II of Korea's textual proposal and that regulating over-fish ing is more important 
than or at least equally important as regulating ove rcapacity when it comes to conservation of fish 
stocks.  
3.
  RESTRUCTURING OF GENERAL EXCEPTIONS  
(ARTICLE III OF THE KOREA 'S TEXTUAL PROPOSAL ) 
 19. Finally, in Article III, Korea has attempted to restructure Article II of the Chair's Text to make 
the general exceptions list more consistent and logical.  Korea notes that, unlike what its title 
connotes, Article II of the Chair's Text adopted a narrow and limited exception approach.  Korea is 
concerned that such an approach may lead to the deprivation of a Member's authority to carry out 
some of the key functions of the government based  on socio-economic consideration.  At the same 
time, there are governmental measures that need to be encouraged to achieve the goals of the fisheries 
subsidies discipline:  they are subsidies for (1 ) the enhancement of the safety of the crews and 
employees;  (2) the adoption of gear for selective fishing techniques;  (3) the adoption of other techniques aimed at reducing the environmental impact of marine wild capture fishing;  
(4) implementation and compliance with fisheries ma nagement regimes;  and (5) support measures for 
fishworkers in exchange for their suspension of fishing activities.   
 
20. Korea has attempted to accommodate all these instances in the general exceptions category in 
a systematic fashion so that they are not abused  as loopholes for the fisheries subsidies norms while 
they do not overly constrain the legitimate aut hority of Members' governments in formulating and 
administering various policies to facilitate the achie vement of the Annex or to achieve their socio-
economic considerations. 
 21. Particularly, Korea included in sub-para graph (4) of paragraph (b) Members' support 
measures that are provided to their fishworkers on the condition that they temporarily suspend their 
fishing activities.  In our view, this "subsidy no t to fish" apparently helps Members achieve the 
objectives of the Annex and should be  permitted as such.  We have also clarified that if such support 
measures are offered in exchange for a temporary suspension, they should be permitted only during 
the pendency of the suspension.  We note that perm anent cessation of fishing activities by fishworkers 
can be covered by sub-paragraph (2 ) of paragraph (c) of the article. 
 22. In paragraph (c), Korea proposes to intr oduce a new introductory provision regarding 
Members' authority to adopt measures based on leg itimate socio-economic consideration.  As a new 
item under the paragraph, Korea also proposes to  include governmental support programmes for 
impoverished fishing households whose livelih ood has been traditionally dependent on the 
governmental programmes and whose livelihood will be  seriously threatened in the absence of such 
programmes.  In Korea's view, preserving the fish ing activities by impoverished fishing households TN/RL/GEN/168 
Page 6  
 
  taking place in a small scale is closely related to the achievement of important socio-economic 
objectives of Members.  At the same time, we realiz e that this exception could turn into an unintended 
loophole or seriously undermine achieving the objective of the Annex unless specific outer parameters are imposed.  As such, we included in items (i) to (iii) requirements to invoke this exception.  More 
specifically, item (iii) is designed to impose quan titative limitation for a Member to invoke this 
particular exception. 
 23. In sub-paragraph (4), we also include d a general exception for a production de-coupled 
income support of a Member, which is offered to he lp sustain the livelihood of fisheries households 
but does not in any way contribute to the increase of the catch or production.   
 
24. Sub-paragraph (5) includes exception for natura l disaster relief effort which is originally 
included in the introductory provision of paragraph 1 of Article 1 of the Chair's Text.  In our view, 
Members' natural disaster relief efforts are also  closely related to the socio-economic policy 
consideration and thus should be  more properly categorized as one of the grounds for general 
exceptions rather than an excepti on to the scope of Article I. 
 
IV. C
ONCLUSION  
 
25. Korea is open to any comments and suggesti ons of the Members regarding this textual 
proposal.  Again, the main objective of Korea in submitting this textual proposal is to revive the 
momentum of this crucial negotia tion and to bring Members' attention to some of the important 
structural issues of the fisheries subsidies negotiations.  26. Korea sincerely hopes that its contributi on could assist not only the Negotiating Group on 
Rules but also each Member participating in the negotiations in evaluating various pending issues 
from new perspectives, exploring new avenues to  address these pending issues and agreeing upon  
practical and manageable norms on fisheries subsidies.    
*** 
 [Attachment 1:  Article Comparison Table] 
 
[Attachment 2:  Korea's Textual Proposal] 
  TN/RL/GEN/168 
 Page 7 
 
 
  ATTACHMENT 1 :  ARTICLE COMPARISON TABLE  
 
 
ARTICLES IN 
CHAIR'S TEXT CORRESPONDING ARTICLES IN 
KOREA'S TEXTUAL PROPOSAL COMMENT 
Article I Article I Restructured 
N/A Article II Newly inserted and combined with 
Article IV of the Chair's Text 
Article II Article III Restructured 
Article III Article IV * 
Article IV Article II Not changed and moved to Article II 
of Korea's textual proposal 
Article V Article V * 
Article VI Article VI * 
Article VII Article VII * 
Article VIII Article VIII * 
 
* May also entail subsequent or corresponding changes 
 TN/RL/GEN/168 
Page 8  
 
  ATTACHMENT 2 
FISHERIES SUBSIDIES 
 
Article I 
 
Prohibition of Certain Fisheries Subsidies
1 
 
 
I.1 Except as provided for in Articles III and IV, the following subsidies within the meaning of 
paragraph 1 of Article 1, to the extent they are speci fic within the meaning of paragraph 2 of Article 1, 
shall be prohibited: 
  (a) Subsidies the benefits of which are conf erred on the acquisition, construction, repair, 
renewal, renovation, modernization, or any other modification of fishing vessels
2 or 
service vessels3, including subsidies to boat building or shipbuilding facilities4 for 
these purposes. 
  (b) Subsidies the benefits of which are conferred on transfer of fishing or service vessels 
to third countries, including through the creation of joint enterprises with third 
country partners. 
 
 (c) Subsidies arising from the further transfer, by a payer Member government, of access 
rights that it has acquired from another Memb er government to fisheries within the 
jurisdiction of such other Member.
5 
  (d) Subsidies the benefits of which are conferred on any vessel  engaged in illegal, 
unreported or unregulated fishing.
6 
 I.2 In addition to the prohibitions listed in paragr aph 1, any subsidy referre d to in paragraphs 1 
and 2 of Article 1 the benefits of which are conferred on any fishing vessel or fishing activity
7 
negatively affecting fish stocks8 that are in an unequivocally an d manifestly overfished condition9 
shall be prohibited. 
                                                      
1 For the purpose of this Agreement, any subsidy referred to in this Annex shall be attributable to the 
Member conferring it, regardless of the flag(s) of the vesse l(s) involved or the application of rules of origin to 
the fish involved. 
2 For the purposes of this Agreement, the term "f ishing vessels" means vessels used for marine wild 
capture fishing and/or on-board processing of the products thereof. 
3 For the purposes of this Agreem ent, the term "service vessels" means vessels used to tranship the 
products of marine wild capture fishing from fishing ve ssels to on-shore facilities;  and vessels used for at-sea 
refuelling, provisioning and other servicing of fishing vessels. 
4 For the purpose of this Agreement, the term " boat building or shipbuilding facilities" means facilities 
for fishing vessels and/or service vessels as defined in footnotes 2 and 3 above. 
5 Government-to-gove rnment payments for access to marine fisheries shall not be deemed to be 
subsidies within the meaning of this Agreement. 
6 The terms "illegal fishing", "unreported fishing" and "unregulated fishing" shall have the same 
meaning as in paragraph 3 of the International Plan of Action to Prevent, Deter and Eliminate Illegal Unreported 
and Unregulated Fishing of the United Nations Food and Agricultural Organization.   
7 For the purpose of this Agreement, the term "fishing activity" means any activity related to fishing for 
marine wild capture stocks, as well as any operation in support of such fishing including harvesting, landing, 
processing, transshipping at sea or in port, refueling, resupplying and transporting. 
8 For the purpose of this Agreement, the term "f ish stock" means fish that a regional fisheries 
management organization treats as a unit for purposes of conservation and management.  In the absence of any  TN/RL/GEN/168 
 Page 9 
 
 
  Article II 
 
General Discipline on the Use of Subsidies  
 
II.1 Except as provided for in Articles III and IV , no Member shall provide following subsidies 
within the meaning of paragraph 1 of Article 1, to the extent they are specific within the meaning of 
paragraph 2 of Article 1, that cause adver se effects to fish stocks through overcapacity10 and 
over-fishing11: 
  (a) Subsidies the benefits of which are c onferred on operating costs of fishing or service 
vessels (including licence fees or similar char ges, fuel, ice, bait, personnel, social 
charges, insurance, gear, and at-sea support);  or of landing, handling or in- or near-port processing activities for products of marine wild capture fishing;  or subsidies to cover operating losses of such vessels or activities. 
 
 (b) Subsidies in respect of, or in the form of, port infrastructure or other physical port 
facilities exclusively or predominantly for activities related to marine wild capture 
fishing (for example, fish landing facilities, fish storage facilities, and in- or near-port fish processing facilities), provided that the ma in beneficiary of the infrastructure or 
facilities is not the general public of a Member. 
 
 (c) Income support for natural or legal persons  engaged in marine wild capture fishing. 
  (d) Price support for products of marine wild capture fishing.  II.2 An enquiry to determine the existence of  overcapacity and over-fishing caused by the 
subsidies in paragraph 1 shall be based on objective examination of a ll relevant facts including marine 
scientific evidence. The enquiry shall be conducte d through a science-based assessment to determine 
impact of the subsidies on fish stocks and/or an y preventive or mitigating effect of an applicable 
fisheries management system.   (a) When multiple factors are determined to have caused the alleged overcapacity and 
over-fishing, those caused by other factors mu st not be attributed to the challenged 
subsidy. 
                                                                                                                                                                    
 
relevant consideration of the issue by a regional fisheries management organization, a "fish stock" means fish, 
identified on the basis of geographical and scientific charac teristics, that can be reas onably treated as a unit for 
purposes of conservation and management. 
9 For the purpose of this Agreement, the term "fish stocks that are in an unequivocally and manifestly 
overfished condition" means the following: 
(a) Fish stocks within the jurisdiction of a Member that are designated by the Member, based on 
sufficient scientific evidence, to be in such condition; 
(b) Fish stocks designated by Regional Fisheries Management Organizations and Arrangements, 
among fish stocks falling under their respective competence, to be in such condition; or 
(c) Fish species listed in the Appendices I or II of the Convention on International Trade in 
Endangered Species of Wild  Fauna and Flora (CITES). 
10 For the purpose of this Agreement, the term "overc apacity" means that the fish ing capacity at issue is 
greater than a desirable level of fishing capacity ( i.e., target level) which may be either a long-term target 
sustainable yield, as reflected in the short-term in a total allowable catch (T AC), or a related long-term target for 
fixed inputs employed in fishing activity for the fishery in question. 
11 For the purpose of this Agreement, the term "overfi shing" is normally expressed in terms of fishing 
mortality levels, that is, in terms of how many fish are killed during a certain reference period.  Thus overfishing 
exists when total fishing mortality (h arvesting) is at a rate that exceeds the maximum level that the stock can 
withstand on a sustainable basis ( i.e. the maximum sustainable yield). TN/RL/GEN/168 
Page 10  
 
   (b) The examination of possible impact of th e subsidies on fish stocks shall include all 
relevant factors and indices having a bearing on  the state of the fish stocks or fishing 
activities in question, including increase of  the catch by the alleged recipients, 
increase of the individuals or entities engage d in fishing activities, increase of the 
sales volume and profits of the fish stocks, actual or potential decline in the fish 
stocks, and the amount of the subsidy in both absolute and relative terms.  This list is 
not exhaustive, nor can one or several of these factors be decisive. 
  (c) The existence of overcapacity and ove r-fishing shall be determined taking into 
account available pertinent information from various sources including Members 
concerned and relevant intern ational organizations.  Such information shall include 
the status of the subsidizing Member's im plementation of internationally-recognized 
best practices for fisheries management and conservation as reflected in the relevant provisions of international instruments aime d at the sustainable use and conservation 
of marine species, such as, inter alia , the Agreement for the Implementation of the 
Provisions of the United Nations Convention on the Law of the Sea of 10 December 1982 Relating to the Conservation and Manage ment of Straddling Fish Stocks and 
Highly Migratory Fish Stocks ("Fish Stocks Agreement "), the Code of Conduct on 
Responsible Fisheries of the Food and Agriculture Organization ("Code of 
Conduct "), the Agreement to Promote Compliance with International Conservation 
and Management Measures by Fishing Vessels on the High Seas ("Compliance 
Agreement "), and technical guidelines and plans of action (including criteria and 
precautionary reference points) for the implementation of these instruments, or other related or successor instruments. 
  (d) Bearing in mind that an effective fisheries management system satisfying the 
conditions set out in Article V may mitigate  or disprove the alleged adverse effect, 
the panel reviewing a dispute under this Artic le shall duly take into consideration the 
existence, effectiveness and reliability of the fisheries management system 
established and maintained by a respondi ng Member.  The responding Member shall 
bear the burden of proof regarding the exis tence, effectiveness and reliability of the 
fisheries management system. 
 
II.3 No Member shall cause, through the use of an y subsidy referred to in paragraphs 1 and 2 of 
Article 1, depletion of or harm to, or creati on of overcapacity and over-fishing in respect of, 
(a) straddling or highly migratory fish stocks who se range extends into the EEZ of another Member;  
or (b) stocks in which another Member has identifiable fishing interests, including through 
user-specific quota allocations to individuals a nd groups under limited access privileges and other 
exclusive quota programmes.  The ex istence of such situations shall be determined taking into account 
available pertinent information, including from othe r relevant internationa l organizations.  Such 
information shall include the status of th e subsidizing Member's implementation of 
internationally-recognized best pr actices for fisheries management and conservation as reflected in the 
relevant provisions of international instruments aimed at the sustainable use and conservation of 
marine species, such as, inter alia , the Fish Stocks Agreement , the C ode of Conduct , the Compliance 
Agreement , and technical guidelines and plans of ac tion (including criteria and precautionary 
reference points) for the implementation of these instruments, or other related or successor instruments.  
  TN/RL/GEN/168 
 Page 11 
 
 
  Article III 
 
General Exceptions  
 
 Notwithstanding the provisions of Articles I and II, and subject to the provision of Article V, 
following subsidies shall be permitted: 
  (a) Subsidies exclusively for improving fi shing or service vessel and crew safety, 
provided that: 
 
 (1) such subsidies do not involve new vessel construction or vessel acquisition; 
  (2) such subsidies do not give rise to an y increase in marine wild capture fishing 
capacity
12 of any fishing or service vessel, on the basis of gross tonnage, 
volume of fish hold, engine power, or on any other basis, and do not have the 
effect of maintaining in operation any such vessel that otherwise would be 
withdrawn;  and  
  (3) the improvements are undertaken to  comply with safety standards.  
  (b) Subsidies exclusively for facilitating the achievement of the objectives of this Annex 
by supporting:   
 
 (1) the adoption of gear for selective fishing techniques
13; 
  (2) the adoption of other techniques aime d at reducing the environmental impact 
of marine wild capture fishing;   
  (3) the adoption of measures to ensure  compliance with fisheries management 
regimes aimed at sustainable use and conservation (e.g., installing devices for Vessel Monitoring Systems, adopting electronic catch reports, or deploying observers);  or 
 
 (4) the adoption of measures to sustai n the livelihood of fishworkers on the 
condition that they suspend the fishing activity if the duration of the measures is confined to the period of actual suspension; 
 
  provided that the subsidies do not give rise to any increase in the marine wild 
capture fishing capacity of any fishing or  service vessel, on the basis of gross 
tonnage, volume of fish hold, engine powe r, or on any other basis, and do not 
have the effect of maintaining in operation any such vessel that otherwise would be withdrawn. 
 
 (c) Subsidies exclusively for operating and administering governmental programmes 
which aim to achieve Members' legitima te socio-economic policy objectives by 
supporting:   
                                                     
 
12 For purposes of this Agreement, the term "fishing capacity" means the ability to harvest fish, as 
determined on the basis of generally accepted methods for assessing such ability, including standards and 
guidance developed by the UN Food and Agriculture Or ganization and relevant international organizations. 
13 For the purpose of this Agreement, the term "sel ective fishing techniques" means gear modifications 
or methods of fishing that reduce the mortality or incidental take of non-target fisheries or other marine species, 
or otherwise reduce negative impact on ecosystems. TN/RL/GEN/168 
Page 12  
 
   (1) re-education, retraining or redeployment of fishworkers
14 into occupations 
unrelated to marine wild capture fishin g or directly associated activities;   
  (2) early retirement or permanent cessation of employment of fishworkers as a 
result of government policies to reduce marine wild capture fishing capacity 
or effort;   
  (3) maintenance of livelihood of im poverished fishworkers whose economic 
sustenance will be threatened in th e absence of governmental programs, 
provided that: 
 
 (i) the fishing activities take place on an inshore basis or within the EEZ 
of the Member providing the subsidies or within the EEZ of an adjacent Member who has provided access rights to fishworkers of the former Member regarding the fishery in question;   
 
 (ii) the fishing activities cover most of the household living expenses of 
fishworkers and constitute a predom inant source of income for such 
household;  and 
  (iii) the amount of the annual total catch of a Member claimed to fall 
under this sub-paragraph does not exceed [X]% of the annual total 
catch of the Member arising from the whole fishing activity in the base year. 
  (4) decoupled income support schemes fo r fishworkers and fishing communities 
provided that they are not related to catch or production increase, or 
productivity enhancement, and are introdu ced only to achieve social welfare 
objectives;  or 
  (5) the relief of a particular natural disaster, provided that they are directly 
related to the effects of that disaster, are limited to the affected geographic 
area, are time-limited, and in the case of reconstruction subsidies, only 
restore the affected area, the affected fi shery, and/or the affected fleet to its 
pre-disaster state, up to a sustainable level of fishing capacity as established through a science-based assessment of the post-disaster status of the fishery.   
 
 (d) Subsidies exclusively for vessel decommissioning or capacity reduction programmes, 
provided that: 
 
 (1) the vessels subject to such programmes are scrapped or otherwise 
permanently and effectively prevented fr om being used for fishing anywhere 
in the world; 
 
 (2) the fish harvesting rights associated  with such vessels, whether they are 
permits, licences, fish quotas or any other form of harvesting rights, are permanently revoked and may not be reassigned; 
 
 (3) the owners of such vessels, and the hol ders of such fish harvesting rights, are 
required to relinquish any claim associated with such vessels and harvesting 
                                                     
 
14 For the purpose of this Agreement, the term "fis hworker" means an individual employed in marine 
wild capture fishing and/or directly associated activities.   TN/RL/GEN/168 
 Page 13 
 
 
  rights that could qualify such owners and holders for any present or future 
harvesting rights in such fisheries;  and 
 
 (4) the fisheries management system in place includes management control 
measures and enforcement mechanisms designed to prevent overfishing in 
the targeted fishery.  Such fisher y-specific measures may include limited 
entry systems, catch quotas, limits on fishing effort or allocation of exclusive quotas to vessels, individuals and/or groups, such as individual transferable quotas. 
 
 (e) User-specific allocations from Member s' governments to individuals and groups 
under limited access privileges
15 and other exclusive quota programmes. 
 [Note:  Korea's Textual Proposal submitted with this  contribution only addresses Articles I, II, and IV 
of the Chair's Text and does not change Articles III, V, VI, VII, or VIII of the Chair's Text. ] 
 
 
__________  
                                                     
 
15 For the purpose of this Agreement, the term "l imited access privilege" means the allocation to an 
individual or a group of individuals of the privilege to harvest a certain amount of fish, commonly expressed as a percentage of the total allowable catch of a fishery th at may be received by, or he ld for the exclusive use of, 
that individual or group.