WORLD TRADE  
ORGANIZATION   
G/SCM/Q2/KOR/48 
23 April 2012 
 (12-2170) 
Committee on Subsidies and  
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Replies to Questions Posed by the UNITED STATES1 Regarding 
the New and Full Notification of KOREA2 
  
 The following communication, dated 20 April 2012, is being circulated at the request of the Delegation of Korea. 
 
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Question 1 
 
Support for Development of Deep-Sea Fishery 
 
Korea states that the policy objectives a nd purpose of the program is to "support the 
stable production and management of deep-sea  fishery".  Please elaborate as to how this 
program supports production and the management of deep-sea fishery. 
 
Reply 
 
 Due to the inherent nature of fishing ac tivities, deep-sea fishing industry faces seasonal and 
annual fluctuations in catches, making it hard fo r fishermen to secure stable conditions for the 
sustainable fishing operation.  In order to alle viate this difficulty, the Program of Support for 
Development of Deep Sea Fishery was introdu ced to provide necessary loans for fishermen. 
 
Question 2 
 
Support for Development of Deep-Sea Fishery 
 
Korea states that recipients of grants under this program are deep-sea fishing 
companies and overseas resource development comp anies.  Please explain the role undertaken 
in deep-sea fishing by overseas resource developm ent companies and how that role is different 
from deep-sea fishing companies.   
                                                      
1 G/SCM/Q2/KOR/44.    
2 G/SCM/N/220/KOR.   G/SCM/Q2/KOR/48 
Page 2 
 
 
  Reply 
 
 "Deep-sea fishing companies" are domestic co mpanies which operate with fishing vessels in 
the waters beyond national maritime jurisdiction unde r the permit issued by the Minister for Food, 
Agriculture, Forestry and Fisheries.  On the othe r hand, "overseas resources development companies" 
refer to domestic companies which invest in joint ve nture or other forms of companies incorporated in 
foreign countries in the business areas such as aquaculture or fishing.  
 
Question 3 
 
Support for Fishing Activities 
 
Korea states that one of the policy objectives of this program is to "relieve financial 
burdens" of recipients by providing loans at belo w market rates.  Therefore, please explain 
whether recipients must be facing financial ha rdship in order to qualify for assistance under 
this program.  
Reply 
  The applicants for this program do not have  to prove the existence of their financial 
hardships.  Nor does the government agency evalua te the extent of financial difficulty of each 
applicant.  However, it should be noted that th is program was originally designed to address the 
financial difficulties of fishermen for the stable  fishing operations and management considering 
fishermen's relatively low income and seas onal and annual fluctuations in catches. 
 
Question 4 
 
Support for Fishing Activities 
 
Korea states that loans are provided to coas tal and offshore fishery and to deep-sea 
fishery.  Please explain the difference between coastal and offshore fishery and offshore and 
deep-sea fishery as used by the administrators of this program. 
 
Reply 
 
 In general, "coastal fisheries" mean fisher ies which use fishing v essels with less than the 
threshold of 8 tonnages, authorized by the head s of the respective local governments.  "Offshore 
fisheries" mean fisheries which use fishing vessels with 8 tonnages or more, under the permit issued 
by the Minister for Food, Agriculture, Forestry an d Fisheries.  Costal and offshore fisheries are 
conducted within the national maritime jurisdictio n, while deep-sea fisheries are operated in the 
waters beyond national maritime jurisdiction. 
 
Question 5 
 
Support for Fishing Activities 
 
Korea states that loans are provided to c oastal, offshore and deep-sea fisheries;  
therefore, please provide the percentage of loans that during the reporting period were provided to (1) coastal fishery, (2) offsho re fishery, and (3) deep-sea fishery.    G/SCM/Q2/KOR/48 
 Page 3 
 
 
  Reply 
 
 It is difficult to calculate separate percentage  of loans that are provided to coastal, off-shore, 
and deep-sea fishery, respectively.  It is because clear-cut distinction of activities in coastal, off-shore 
and deep-sea fishery is practically hard.  Measuring the shares of the Support, less than one third was 
for coastal, off-shore and deep-sea fishery during the reporting period.  And the rest(more than 
two thirds) was for aquaculture, inland fishery, etc.   
 
Question 6 
 
Support for Old Fishing Vessels and Equipment Replacement 
 
Please explain whether loans under this progr am are provided to coastal, offshore and 
deep-sea fisheries.  In addition, please confirm th at the definition of coastal, offshore and deep-
sea fishery is the same as used under the Support for Fishing Activities program. 
 
Reply 
 
 It should be noted that only deep-sea fisheries ar e eligible to participate in this program.  The 
definitions of coastal, offshore and deep-sea fishery under this program are the same as those used in 
the Support for Fishing Activities Program.   
 
Question 7 
 
Support for Old Fishing Vessels and Equipment Replacement 
 
Please provide the percentage of loans that during the reporting period were provided 
to (1) coastal fishery, (2) off-shore fi shery, and (3) deep-sea fishery.    
 Reply 
 
 As reported above, Korea confirms that only the deep-sea fisheries are eligible for the 
program.   
 
Question 8 
 
Support for Vessel Decommissioning 
 
Under this program Korea provides grants  to support vessel decommissioning to 
maintain fleet size at a sustainable level for coastal and offshore fishing.  Please explain how 
Korea monitors the recipients of this program to  ensure that the grants provided under this 
program are not used to purchase new fishing v essels and to ensure that the recipients do not 
take advantage of assistance offered under othe r programs, such as the Support for Fishing 
Activities, to help support the purchase of new fishing vessels.   
 
Reply 
  The purpose of this program is to reduce the nu mber of licensed vessels to a fixed level in 
consideration of fisheries stock status according to  the Fisheries Act.  Under this program, Korea has 
not issued a new fishing license in the coastal and offshore waters since 2001 therefore the total 
number of 15,220 vessels had been scraped from 1994 to 2010.   G/SCM/Q2/KOR/48 
Page 4 
 
 
  Question 9 
 
Fuel-related Fishery Programs 
 
 Korea did not notify any fuel-related fishery  programs.  Please confirm that Korea does 
not maintain any type of fuel-related fisher y programs that provide benefits to fisheries, 
including any programs that would reduce the cost of fuel or taxes on fuel for fisheries.    
 
Reply 
  Please refer to the WTO document, G/SCM/Q2/KOR/37.    Question 10  Local Tax Reduction for Building and Acquisition of International Line Vessels and Deep Sea 
Fishing 
  Korea stated in 2007, (G/SCM/Q2/KOR/29), th at this program was scheduled to end on 
31 December 2009.  Please confirm that this pr ogram has ended and that it has not been 
replaced by another program. 
 Reply 
 
 The program was extended twice in 2009 and 2010 and is scheduled to end on 
31 December 2012.   
 Question 11 
 
Investment Funds and Loans to Korean Fisheries Industry 
 
 In 2010, Korea provided an update on a g overnment program to provide investment 
funds and loans to the Korean fisheries industry, as well as assistance being provided by the 
Ministry for Food, Forestry and Fisheries.  (See, G/SCM/Q2/KOR/37).  Please provide an 
update on the activities of this assistance program  for the period of Korea 's most recent subsidy 
notification. 
 
Reply 
 
 In 2010, the total earmarked budget of the inv estment fund and loans to the Korean fisheries 
industry was 1.39 trillion KRW, most of it disbursed accordingly.   
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