WORLD TRADE  
ORGANIZATION  TN/RL/GEN/79/Rev.3 
2 June 2006 
 
 (06-2650) 
Negotiating Group on Rules Original:   English 
  
 
POSSIBLE DISCIPLINES ON FISHERIES SUBSIDIES 
 
Paper from Brazil
 
 
Revision  
 
  The following communication, dated 1 June 2006, is being circulated at the request of the 
Delegation of Brazil.  
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1. Brazil welcomes the broad discussion at the Negotiating Group on Rules (NGR) meeting in 
May 2006 on the Brazilian contribution to the discussi on on the framework for disciplines on fisheries 
subsidies.  This submission constitutes an impr oved version of Document TN/RL/GEN/79/Rev.2, so 
as to incorporate comments made by Members and to  further develop some of the suggested ideas put 
forward in the previous submissions.  This legal draft is a work in progress and does not constitute 
Brazil’s final position on the matter.   
ANNEX VIII TO THE AGREEMENT ON SUBSIDIES AND  
COUNTERVAILING MEASURES 
 
Preamble 
 
Members, 
Recalling  the commitment at Doha to enhance the mutual supportiveness of trade and environment; 
Noting  the necessity to strengthen disciplines on subsidies in the fisheries sector; 
Conscious  of the negative effects of overcapacity and overfishing on the fisheries resources; 
Reaffirming  that provisions for special and differential (S&D) treatment are an integral part of the 
WTO Agreements; Determined  to strengthen all S&D treatm ent provisions with a view to making them more precise, 
effective and operational; Considering  the social and economic importance of the fisheries sector to developing country 
Members; 
Hereby agree  as follows: 
 TN/RL/GEN/79/Rev.3 
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  Article 1  
Definitions and coverage  
 
1.1 For the purpose of fisheries subsidies, the provisions of the Agreement on Subsidies and 
Countervailing Measures (ASCM) shall apply subj ect to the provisions of this Annex. 
 
1.2 This Annex shall not apply to inland fisheries
1 and to aquaculture2, provided that there is no 
wild capture fisheries involved3.  
 1.3 This Annex covers any subsidy ─ as defined in Article 1 of the Agreement on Subsidies and 
Countervailing Measures (ASCM) ─ given to or on behalf of fishing in terests (referred to as “fisheries 
subsidies”).  For the purpose of this  Annex, “fishing interests” are the interests of any company and/or 
person linked in fact or in law, directly or indirectly
4, to harvesting activities of wild capture fisheries. 
Fisheries subsidies shall encompass any subsidy programme and/or the disbursement made under 
such programme.  Any such fishery subsidy that is  not generally available shall be deemed to be 
specific in the sense of Article 2 of the ASCM. 
 
1.3.1 In case of a government-to-government payment for access by domestic fleets to 
foreign Economic Exclusive Zone5 fisheries or to quotas or any other rights established by 
any regional fishery management organization (“access rights”), a subsidy shall be deemed to exist if a benefit is conferred in the further transfer of those access rights from the paying 
government. 
 1.3.2 “Public services of fisheries resource management” shall not be considered a fishery 
subsidy
6.  
Article 2  
Prohibition 
 
2.1 Any fishery subsidy not falling within the sc ope of Articles 3 and 4 shall be prohibited. 
 
Article 3  
Exceptions 
 
3.1 The following fisheries subsidies shall be exem pted from the prohibition set out in Article 2: 
 
(a) subsidies providing a social safety net for fishermen:  
i. housing schemes;  
ii. early retirement schemes;  
iii. re-education, training or alternative employment assistance;  
                                                      
1 “Inland fisheries” are fisheries which are carried  out in freshwater or estuaries and whose target 
species are those that spend all or pa rt of their life-cycle th erein, as defined by the United Nations Food and 
Agriculture Organization (FAO). 
2 “Aquaculture” means the farming of aquatic orga nisms, including fish, mollusks, crustaceans and 
aquatic plants, as defined by the FAO. 
3 Such as wild capture fisheries used to fe ed raised fisheries or used for aquaculture. 
4 The term "directly or indirectly" is used in this Annex in the same sense as it is used in paragraph 1 of 
Article XVI of GATT 1994. 
5 As defined in Part V of the United Nations Convention of the Law of the Sea. 
6 “Public services” are all services  supplied in the exercise of gove rnmental authority.  A “service 
supplied in the exercise of govern mental authority” means any service which is supplied neither on a 
commercial basis nor in competition with other services suppliers.  “Public services  of fisheries resource 
management” are any governmental public service supplied with the objective of improving the management of 
fisheries resources.  TN/RL/GEN/79/Rev.3 
 Page 3 
 
 
  iv. social security;  
v. life insurance; and/or 
vi. livelihood income support to compensate for unemployment or for the 
suspension of capture fishery activities. 
(b) subsidies to research activities aimed at improving fisheries management or 
environmental protection; 
(c) subsidies with environmental objectives:  
i. fisheries stock enhancement;  
ii. creation or maintenance of artificial reefs;  
iii. marine environment protection. 
(d) subsidies for the adoption of or co mpliance to multilateral standards;  
(e) subsidies to fishing port facilities and processing facilities for fisheries products; 
(f) subsidies in the further transfer of access rights from the paying government; and/or 
(g) subsidies for vessel capacity reduction programmes, provided that: 
i. the vessels subject to such programmes are scrapped or otherwise 
permanently and effectively prevented from being  used for fishing anywhere 
in the world; 
ii. the fish harvesting rights associated with such vessels, whether they are 
permits, licenses, fish quotas or any other form of harvesting rights, are permanently revoked and may not be reassigned; and 
iii.   the owners of such vessels, and the holders of such fish harvesting rights, are 
required to relinquish any claim associated with such vessels and harvesting 
rights that could qualify such owners and holders for any present or future 
harvesting rights in any fishery. 
 3.2 In case of natural or environmental disasters, th e prohibition of Article 2 shall temporarily not 
apply, so as to enable governments to provide shor t-term emergency relief and to implement recovery 
adjustment programmes.  Under no circumstance sha ll this exceptional provision be used to increase 
the aggregate gross tonnage, volume of fish hold a nd/or engine power of the subsidizing Member 
fishing fleets beyond the statu quo ante . 
 3.3 Fishery subsidies falling under Article 3.1 (c) to  (g) shall not result in any increase of the 
gross tonnage, volume of fish hold and/or engine pow er of the subsidizing Member fishing vessels, at 
an individual basis and as a fleet basis.   
Article 4 
Special and Differential Treatment of Developing Country Members  
 
4.1 In addition to the list provided for in Article  3.1, developing country Members shall be 
allowed to maintain or grant fisheries subsidies to:  
 (a) fishing activities related to the subsistence of the fishermen and their families
7, 
including the provision of goods and services by a government under the form of 
infrastructure, other than general infrastructure,  benefiting those fishermen and their families; 
(b) fishing vessel construction, repair or v essel modernization or gear acquisition or 
improvement; and/or  (c) fuel, bait, ice supplied for fishing activities. 
 
                                                     
 
7 Those activities are performed at an in-shore basis with non-automatic net-retriever devices, provided 
that (a) the activities are carried out by fishermen, on an individual basis or organized in associations, including, but not necessarily, the family members; (b) the basis scope of the activities encompasses both family livelihood 
and a small profit trade; and (c) there is no major empl oyer-employee relationship on the activities carried out.  TN/RL/GEN/79/Rev.3 
Page 4  
 
  4.2 Vessels constructed, repaired or modernized under the provisions of item (b) of the previous 
paragraph shall not receive any subs idies to variable costs (excludi ng subsidies provided for fuel) and 
shall not involve fisheries patently at risk
8. 
 4.3 Members shall ensure that each vessel cons tructed, repaired or modernized under the 
provisions of item (b) of paragraph 1 possesses a valid  fishing licence and is registered in a national 
registration system.   4.4 Developing country Members shall be allowed to maintain or grant fisheries subsidies 
designed to assist disadvantaged regions within their respective territory pursuant to a general 
framework of regional development
9 within eligible regions, provided  that the region is considered 
disadvantaged on the basis of neutral and objective criteria,  indicating that the region's difficulties 
arise out of more than temporary circumstances.  Such criteria  must be clearly spelled out in law, 
regulation, or other official document, so as to be capable of verification.  
Article 5 
Notification  
 
5.1 A fishery subsidy for which the provisions of Article 3.1 and 4.1 are invoked shall be notified 
in advance of its implementation to the Committee of Subsidies and Countervailling Measures.  Any such notification shall be made, mutatis mutandis , in accordance with the provisions of Articles 25 of 
the ASCM. 
 5.2 In addition, Members shall make every effort to notify the Committee about: 
 
(a) the conservation status of the fisheries ha rvested by the subsidised fishing vessels, 
according to the criteria established by the FAO; 
(b) whether the fishery in question is unde r management of a regional fisheries 
management organization, the nature of the monitoring and the quantitative limits applicable 
to the Member; (c) national fisheries management systems in place or fisheries management control 
measures adopted by the Member to prevent overfi shing, such as limited entry systems, catch 
quotas, limits on fishing effort or allocation of exclusive quotas to vessels, individuals and/or 
groups. 
 5.3 Upon request of a Member, any notification s ubmitted to the Committe e shall be examined 
with a view to determining whether the conditions set out in Article 3.3 have been fulfilled.  The 
examination shall be completed at the latest at the first regular meeting of the Committee following 
the notification of a fishery subsidy,  provided that at least 2  (two) months have elapsed between such 
notification and the regular meeting of the Committee.   5.4 The failure by the Committee to reach a conclusi on with regard the examination referred to in 
the previous paragraph shall be s ubmitted to binding arbitration.  Th e arbitration body shall present its 
conclusions to the Members within 120 days from the date when the matter was referred to the 
arbitration body.  The DSU shall apply to ar bitrations conducted un der this paragraph. 
 
                                                     
 
 8 A fishery is to be considered "patently at ri sk" if the status of exploitation is considered 
“overexploited”, “depleted”, or “recovering” according to the FAO. 
 9 A “general framework of regional development” mean s that regional subsidy programmes are part of 
an internally consistent and generally applicable regi onal 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.  TN/RL/GEN/79/Rev.3 
 Page 5 
 
 
  5.5 By the end of the transitional period provided for in Article 11.2 of this Annex, Members 
shall have in place a national system of registry of  all vessels duly authorized to operate under their 
flag and shall notify the Committee  of the gross tonnage, volume of fish hold and engine power of 
each fishing vessel duly authorized to operate under their flag.  The notification requirement of this paragraph does not apply to Article 4.1(a). 
 
Article 6  
Monitoring 
 
6.1 Once a fishery subsidy notified under Article 5. 1 is implemented, it shall remain an exception 
to the prohibition of Article 2 unless its implementati on results in a violation of the conditions set out 
in Articles 3 and 4.  Alleged violations of the sai d conditions shall be demonstrated by any Member 
that has reasons to believe that this programme has resulted in those viol ations. In the case alleged 
violations are from a developed country subsidiz ing Member, it falls on the government of this 
developed country Member the burden of demonstrating that the fishery subsidy is not in violation of 
the said conditions. 
 
Article 7 
Dispute Settlement  
 
7.1 If the dispute under this Annex involves scientific or technical questions related to fisheries, 
the panel may seek advice from fisheries experts chosen  by the panel in consultation with the parties 
to the dispute.  To this end, the panel may, when it deems it appropriate, establish an advisory 
technical fisheries experts group, or consult the FAO or other relevant international organization, at 
the request of either party to the dispute or on its own initiative.  
7.2 Nothing in this Annex shall impair the rights of Members under other international 
agreements, including the right to resort to the g ood offices or dispute settlement mechanisms of other 
international organizations or established under any international agreement.   
 
Article 8 
Prevention of circumvention  
 
8.1 Members shall not have recourse to rules of orig in (preferential or non-preferential), the flag 
of a vessel and access rights, among others, as a means to undermine the objectives set out in the 
preamble and to circumvent their obligations under this Annex.  
Article 9 
Review 
 
9.1 The Committee shall review the implementation and operation of this Annex 5 (five) years 
from the date of the entry into force of this A nnex, taking into account the objectives set out in the 
preamble.  In this regard, the Committee shall, as appropriate, request information from persons and 
organizations with expertise in fisheries manage ment, conservation and stock assessment, such as the 
FAO and regional fisheries management organizations. 
 
Article 10 
Least-Developed country Members 
 
10.1 For least-developed country Members, the prohibitions set out in Article 3 of the ASCM and 
in Article 2 of this Annex shall not apply for a pe riod of 10 (ten) years. If a least-developed country 
Member deems it necessary to apply such subsidi es beyond the 10-year period, it shall not later than 
one year before the expiry of this period ente r into consultation with the Committee, which will TN/RL/GEN/79/Rev.3 
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  determine whether an extension of this period is ju stified, after examining all the relevant economic, 
financial and development needs of the least-d eveloped country Member in question.  If the 
Committee determines that the extension is justif ied, the least-developed country Member concerned 
shall hold annual consultations w ith the Committee to determine the necessity of maintaining the 
subsidies.  If no such determination is made by  the Committee, the least-developed country Member 
shall phase out those fisheries subsidies within 3 (t hree) years from the end of the last authorized 
period.  
Article 11 
Transitional provisions  
 
11.1 Any fisheries subsidy which has been established within in the territory of a Member before 
the date of the entry into force of this Annex sh all be notified to the Committee in no latter than 
90 days.  
11.2 From the entry into force of this Annex, there shall be a period of 3 (three) years for 
developed country Members and a period of 5 (fi ve) years for developing country Members to 
gradually phase out and eliminate fisheries subsidie s that do not fall within Articles 3 and 4.  The 
starting point of the reduction shall be the 2003-2005 average of the fisheries subsides prohibited under Article 2.  Members shall not be allowed to  adopt new prohibited subsidies or to extend the 
scope of any existing prohibited subsidy programme. 
 
 
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