WORLD TRADE  
ORGANIZATION  TN/RL/GEN/114/Rev.1 
2 June 2006 
 
 (06-2643) 
Negotiating Group on Rules Original:   English 
  
 
FISHERIES SUBSIDIES: 
FRAMEWORK FOR DISCIPLINES 
 
Communication from Japan;  the Republic of Korea;  and the Separate
 
Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
 
Revision  
  
 The following communication, dated 1 June 2006, is being circulated at the request of at the 
request of the Delegations of Japan;  the Republic of  Korea;  and the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu.  
_______________ 
  
 This proposal is a revision of the textual proposal co-sponsored by Japan, the Republic of 
Korea, and the Separate Customs Territory  of Taiwan, Penghu, Kinmen and Matsu 
(TN/RL/GEN/114).  This proposal aims to present elaborated conditions for vessel construction and 
modification subsidies in Annex VIII of the propo sal (TN/RL/GEN/114).  Therefore, revisions are 
being made only on Annex VIII and no ot her provisions have  been changed.  
  The revised Annex VIII features the following two main changes:   
(1) 50 % reduction of (i) gross tonnage, (ii) volum e of fish hold, and (iii) engine power 
becomes mandatory, with an aim to promote fishing capacity reduction.   
(2) Increase of gross tonnage is possible only in  case of modification, not construction, with 
an aim to prevent possible circumventions.   
  With this revision, the co-sponsors believe that  this proposal can contribute to the resolution 
of the issue of over fishing capacity.   
 TN/RL/GEN/114/Rev.1 
Page 2  
 
  New Disciplines on Fisheries Subsidies: 
 
Proposed Amendments to the Agreement on Subsidies and Countervailing Measures  
 
Article 1  Definition of a Subsidy  
1.1(a)(1) (iii) 
 (add following footnote)  
For the sake of clarity, creation and implementation of fisheries res ources management measures do not 
constitute services stipulated  in this sub-paragraph. 
 
Article 3  Prohibition 
 
3.1    Except as provided in the Agreement on Ag riculture, the following subsidies, within the 
meaning of Article 1, shall be prohibited: 
 
(a) (no change)  
(b) (no change) 
 (c) following fisheries subsidies provi ded for capture fisheries at sea: 
 
(i) subsidies for the construction of fish ing vessels, unless all the conditions set 
forth in Annex VIII are satisfied; 
 
(ii) subsidies for the modification of fishin g vessels, unless all the conditions set 
forth in Annex VIII are satisfied; 
 (iii) subsidies for shipbuilding yards contingent upon the construction of fishing 
vessels; 
 (iv) subsidies for overseas transfers of fish ing vessels to non-participants of 
regional fisheries management organizati ons (referred to in this Article as 
“RFMOs”)
1; and 
 
1 The term “non-participants of regional fisheries management organizations” means 
the countries or entities who are neither contracting parties nor cooperating non-
contracting parties, entities  or fishing entities of any one of the RFMOs. RFMOs 
mean sub-regional or regional fisheries ma nagement organization s or arrangements. 
 
(v) subsidies relating to illegal, unr eported and unregulated fishing2.  
 
2 The term “illegal, unreported and unregul ated fishing” shall be interpreted in 
accordance with the definition set out in paragraph 3 of the International Plan of 
Action to Prevent, Deter and Eliminate Il legal, Unreported and Unregulated Fishing 
of the United Nations Food and Agricultural Organization (FAO). 
 
Article 8  Identification of Non-Actionable Subsidies  
8.1 Notwithstanding the provisions of Parts III and V, the following subsidies shall be understood 
as having no, or at most minimal, trade distorting effects or negative effects on fisheries 
resources management, and thus  considered non-actionable: 
 
(a) subsidies for the fishing vessel decommissioning provided that the vessel is scrapped 
and its fishing license is withdrawn; 
  TN/RL/GEN/114/Rev.1 
 Page 3 
 
 
  (b) subsidies for fisheries stock enhancemen t and marine environment protection; 
 (c) subsidies for research and development for sustainable fisheries; 
 (d) subsidies for unemployment relief, early retirement or re-education, retraining and 
alternative employment assistance of fishermen; 
 (e) subsidies for social safety net for fishermen; 
 (f) subsidies for small-scale and artisanal fisheries
3; and 
 
3 Small-scale and artisanal fisheries in this Agr eement shall be interpreted as activities carried 
out by fishing vessels with total length not exceeding (X) meters. 
 
(g) subsidies for access fee to fisheries re sources in the EEZs of other countries. 
 Necessary modification needs to be made on Article 8.3 – 8.5 and Article 31 of the current SCM 
Agreement.  
  Article 27  Special and Differential Treatment of Developing Country Members 
 27.1 – 27.15   (no change) 
 27.16 The prohibition under sub-paragraphs (i), (ii) a nd (iii) of paragraph 1(c)  of Article 3 shall not 
apply to: 
 
(a) developing country Members re ferred to in Annex VII. 
 (b) other developing country Members whose pr oduction of marine capture fisheries is 
not more than (X) % of that of the world (or the total gross tonnage of production is 
not more than (X) million metric tons) in the latest (two to five) consecutive years 
based on the most recent data available fro m the FAO on the date of entry into force 
of paragraph 1(c) of Article 3 for such Member.  
 
27.17 Any other developing country Members not refe rred to in paragraph 16(a) or 16(b) shall 
phase out the subsidies specified in sub-paragraphs  (i), (ii) and (iii) of paragraph 1(c) of 
Article 3 within the (seven to ten) years since th e date of entry into force of paragraph 1(c) of 
Article 3 for such Member. 
 27.18 Should developing country Members referred to in paragraph 16(b) have increased their 
production of marine capture fisheries to more th an (X) % of that of the world (or the total 
gross tonnage of production is more than (X ) million metric tons) for (two to five) 
consecutive years based on the most recent da ta available from the FAO, the subsidies 
specified in sub-paragraphs (i), (ii) and (iii) of  paragraph 1(c) of Artic le 3 shall be phased out 
within (seven to ten) years since the date of en try into force of paragraph 1(c) of Article 3 for 
such Member or (two to five) years from the da te of the publication of such data, whichever 
comes later. 
 At this moment, new paragraph is put at the end of current paragraph 15 for convenience. 
Overall structure of Article 27 will be reviewed at later stage.  
  TN/RL/GEN/114/Rev.1 
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  Article 28  Existing Programmes  
 
28.1 (no change) 
 28.2 (no change) 
 
28.3 Subsidy programmes which have been establis hed within the territory of any Member and 
which fall under sub-paragraphs (i ), (ii) and (iii) of paragraph 1(c) of Article 3 shall be: 
 
(a) notified to the Committee not later than 90 da ys after the date of entry into force of 
paragraph 1(c) of Article 3 for such Member and in every two years thereafter; and 
 (b) brought into conformity with the provisions  of this Agreement within (six) years of 
the date of entry into force of paragraph 1(c) of Article 3 for such Member and until then shall not be subject to Part II. 
 At this moment, new paragraph is put at the end of current paragraph 2 for convenience. 
Overall structure of Article 28 will be reviewed at later stage.  
  
ANNEX VIII 
CONDITIONS FOR VESSEL CONSTRUCTION AND MODIFICATION SUBSIDIES 
REFFERED TO IN SUB-PARAGRAPHS (i) AND (ii) OF PARAGRAPH 1(c) OF ARTICLE 3 
 
 Unless all of the following conditions are sa tisfied, subsidies for vessel construction or 
modification shall be prohibited.  
 
1. A system where a government of a Member cont rols the number of fish ing licenses is in place 
and under such system: 
 
- each fishing vessel obtains a license from the government, and - each fishing vessel to be constructed or modified possesses a valid fishing license or 
is confirmed to obtain license after the construction or modification. 
 
2 (a) In case of vessel construction, vessel(s) ar e withdrawn in exchange for the new vessel 
to be constructed.  In addition, each of the following items of the new vessel is reduced by at least 50 % of (the sum of) th at of the vessel(s) to be withdrawn: (i) 
gross tonnage, (ii) volume of fish hold, and (iii) engine power. 
 
 (b)  In case of vessel modification, neither (i) gross tonnage, (ii) volume of fish hold, nor 
(iii) engine power increases as a result of the modification. 
 
Footnote: Increase of the gross tonnage of a vessel afte r modification is exceptionally deemed to satisfy the 
conditions of the paragraphs 2(a) and 2(b) of this A nnex, provided that the purpose of the modification is 
the improvement of safety or the working conditions of  the crew and that neither the volume of fish hold 
nor the engine power increases as a result of modification.  
 
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