WORLD TRADE  
ORGANIZATION  TN/RL/GEN/79 
16 November 2005 
 
 (05-5345) 
Negotiating Group on Rules Original:   English 
  
 
FURTHER CONTRIBUTION TO THE DISCUSSION ON THE 
FRAMEWORK FOR DISCIPLINES ON FISHERIES SUBSIDIES 
 
Paper from Brazil
 
 
   The following communication, dated 15 November 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)/ 281), also be circulated as a formal document. 
 
_______________ 
 
 
1. Brazil welcomes the broad discussion at the Negotiating Group on Rules (NGR) meeting in 
July 2005 on the Brazilian contribution to the discu ssion on the framework for disciplines on fisheries 
subsidies.  This submission constitutes an impr oved version of document TN/RL/GEN/56, so as to 
incorporate comments made by Members and to fu rther develop some of the suggested ideas put 
forward in the previous submission. In order to he lp focus the debates, the ideas put forward in the 
first part of the paper were tentatively translated into  legal draft and attached as an Annex.  This legal 
draft is a first attempt to develop possible lega l language for the future disciplines and does not 
constitute Brazil's final position on the matter.  2. We recall that in this proposal it is suggested  an approach on how the special and differential 
treatment for developing countries could be properl y captured under the future disciplines on fisheries 
subsidies.  The revisited Brazilian 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". 
 
  
                                                     
 
 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, as long as there is no capture fisheries involved.  In this proposal, aquaculture refers to  the business of raising marine or freshwater fish or 
shellfish under controlled conditions TN/RL/GEN/79 
Page 2  
 
 The definition of fisheries subsidies must incl ude any financial contribution 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.
3 
Any such governmental payment given to or on be half 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 fl eets to foreign EEZ fisheries or to quotas 
or any other rights established by an RFMO) should also be covered by the definition of 
fisheries subsidies.  Public service of fisher ies management should not, in principle, be 
defined as fisheries subsidy (stock assessments , regulatory enforcement, licensing, etc.).4 
(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.
5 
 
(a) subsidies to research activities undertaken to improve fisheries 
management or environmental protection; 
(b) subsidies for compliance with international safety or sanitary 
standards; 
(c) subsidies for the adoption of environmentally preferable gear or 
techniques. 
   
 
 
                                                     
 
3 Regarding subsidies to fisheries infrastructure, Brazil welcomes New Zealand’s valuable contribution 
(TN/RL/GEN/70).  Brazil is flexible regarding the best way to tackle the issue in the future disciplines on 
fisheries subsidies. Nonetheless, we see merit in ev aluating the possibility that categories (i) and (iii) of 
New Zealand’s proposal be considered “green subsidies”.  Assuming that the new rules will make it mandatory 
to notify all kinds of fisheries subsidies, those infrast ructure subsidies could be considered “green” under the 
assumption that they are not trade-distorting or producti on-distorting.  If those conditions are not fulfilled, the 
subsidy will fall under the prohibited category. 
 4 In document TN/RL/GEN/36, New Zealand suggests “that subsidies to management services should 
not be prohibited under new disciplines on fish subsidie s”.  Brazil is willing to discuss the scope of the concept 
of "public service of fisheries management", as well as whether subsidies under that concept should be 
considered "green" subsidies.  
5 This point was tackled by New Zealand in document TN/RL/GEN/70 under the heading “Subsidies to 
“conservation” and to “research and development””.  TN/RL/GEN/79 
 Page 3 
 
 
 (2) subsidies to small scale fishing6 and to artisanal fishing7, provided that such 
fisheries are not "patently at risk"8;  
(3) subsidies for capacity reduction9; 
(4) subsidies aimed at fishermen retraining, to facilitate movement of labor out of 
the fishery sector, to compensate for su spension of fishing activity and early 
retirement schemes. 
 Whenever any vessel and/or company of a Member is found to be engaged in IUU 
fishing according to any RFMO, the Member will dispose of a period of six (6) months to demonstrate that it took all neces sary steps to withdraw the licence of that 
vessel and/or company and that the vessel a nd its engine are definitively scrapped.  
                                                     
 
 6 Subsidies to small-scale fishing are to be considered non-actionable if: 
(a) the share of the fishery sector of the country granting the subsidies represents more than [X%] of its GDP, in 
accordance with the most recent data from the World Bank; or 
(b) granted to activities carried out by vessels with tota l length not exceeding 24 meters. All vessels with total 
length not exceeding 24 meters that ar e used for catching a specific specie sh all be considered part of the small-
scale fleet for that specific specie.  In addition: 
 (i) if the fishery is under the management of a RFMO:  
  (i.1) and if a country limit is set to a specifi c specie, the total catch of  the country small-scale 
fleet for that specific specie shall not exceed 10% of the limit set to the country for that specific specie 
by that RFMO; or 
  (i.2) and if no country limit is set to a specifi c specie, the total catch of  the country small-scale 
fleet for the specific species that ha ve no individual limits shall not exceed 5% of the limit set to the 
country by that RFMO for those specific species that have no individual limits; or 
  (i.3) and if a global limit is set to a specific specie, the total catch of  the country small-scale 
fleet for that specific specie shall not  exceed 0,5% of the global limit set to that specie by that RFMO; 
or 
 (ii) if the fishery is not under the management of a RFMO, the annual incr ease 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 competent international organization. Whenever the above-mentioned conditions (a) or (b) are not met, the entirety of the subsidies granted to the 
activities described in the first paragraph of this fo otnote is to be considered prohibited subsidies 
7 Subsidies to artisanal fishing are to be considered non-actionable if: 
I) granted to fisheries activities performed at an in-s hore basis with non-automatic net-retriever devices, 
provided that: 
    (a) the activities are carried out on an individual ba sis (including, but not necessarily, the family members); 
     (c) the basic scope of the activities encompasse s both family livelihood and a small profit trade; and 
     (d) there is no employer-employee relationship on the activities carried out; or 
Subsidies granted to fishermen associations shall fulfil the same conditions of this item in order to be considered 
non-actionable subsidies. 
II) granted to the maintenance of traditional fishing communities 
8 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. 
9 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 
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.  TN/RL/GEN/79 
Page 4  
 
 Additionally, the Member will dispose of  a period of twelve (12) months to 
demonstrate that it had taken all necessary steps to improve its management schemes in relation to IUU fishing.  If any of th e two conditions are not fulfilled, serious 
prejudice, in the sense of paragraph (c) of Ar ticle 5 of the ASCM, shall be deemed to 
exist regarding all non-actionable s ubsidies 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 example:   (1) the increase of fishing capacity or 
effort; (2) IUU fishing10; (3) the increase of the domestic supply of fish, threatening 
the sustainability of the fishing resource. One exception could be envisaged: short-term emergency relief and adjustment in case of natural disasters. Payments made by developed country governments for access to the EEZ fisheries resources of 
developing countries could be permitte d, subject to specific conditions. 
3. For the purpose of determining the country to wh ich the fisheries subsidy is considered to 
exist, the following rules shall apply:   
                                                     
 
 10 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 contravention 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 refe rs 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 refe rs 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, certain unregul ated 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/79 
 Page 5 
 
 
 (I) for fisheries that are subject to an RFMO: 
 
(a) the country to which are counted against the quota established by the RFMO shall 
be the country responsible for the fisher ies subsidy that has caused trade- or 
production-distorting effects; 
(a.1) in the case of government-to-govern ment payments, the country that has 
disbursed those payments shall be the count ry responsible for the fisheries subsidy 
that has caused trade- or production-distorting effects  
(II) for fisheries that are not subject to a RFMO: 
 
(a) if the vessel is registered and flying the flag of the country which the company is 
based at, and that company is in charge of  the activities conducted by the vessel, the 
country of the flag of the vessel shall be the country under investigation; or 
(b) if the vessel is chartered by a company based  in a country other than the vessel flag 
country and it is duly authorized to opera te, the country which the charterer company 
is based at shall be the co untry under investigation. 
 
(III)   in the case of IUU fishing:  
(a) the country found to be engaged in IUU fishing according to any RFMO shall the 
country responsible for the fisheries subsidy that has caused trade- or production-
distorting effects; 
(b) and if the vessel is chartered by a company based on a country other than the vessel’s 
flag country, the country which the charterer company is based at shall be the country 
responsible for the fisheries subsidy that has caused trade- or production-distorting 
effects; 
(c) and if the vessel is flying a flag of a non-compliance country, the country that has 
previously registered that vessel or the country on which the company who has asked 
for the registration in this non-compliance country is based shall be the country 
responsible for the fisheries subsidy that has caused trade- or production-distorting effects.  “Non-compliance country” is a country that does not comply with its 
obligations regarding jurisdiction and cont rol, according to international law, in 
respect of fishing vessels entitled to fly their flag. 
 4. 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.  5. 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 programme or disbursement; 
• 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.  TN/RL/GEN/79 
Page 6  
 
 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.
11 
Articles 8.3, 8.4 and 8.5 of the ASCM, amended as necessary, could be used in the future disciplines 
on transparency and notification. 
 
Special and differential treatment for developing country Members (“S&D Box”) 
6. The provisions of Article 27 of the ASCM should fully apply to fisheries subsidies.12  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 (except paragraph 1) and 7 of the ASCM13 
(“Amber Box”): 
 
(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; 
(b) subsidies to vessel modernization or gear acquisition or improvement. 
 
(2) Fuel, bait or ice supplied for fishing activities.
14 
(3) Payments received from other developi ng country governments for access to 
the EEZ fisheries resources of the developing country15; 
(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 (“Dark Amber box”): 
 
                                                     
 
 11 Brazil shares EC’s view expressed in document TN/RL/GEN/39 that any subsidy which is not 
notified would be presumed prohibited.  
12 Some of the current provisions of Article 27 may have to be refined in the light of what is being 
suggested in this proposal. 
 13 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 programme on production. The same point was 
raised by the Unites States in document TN/RL/W/169.   
 14 This point was tackled by New Zealand in document TN/RL/GEN/70 under the heading “Subsidies 
to “operational infrastructure””. 
15 The same issue was raised by Antigua and Barbuda, Belize, Fiji Islands, Guyana, the Maldives, 
Papua New Guinea, Solomon Islands, St Kitts and Nevi s under the item “revenue generation from access fees” 
(TN/RL/W/136) and by Antigua and Barbuda; Barbados; Dominican Republic; Fiji; Gr enada; Guyana; Jamaica; 
Papua New Guinea; St. Kitts and Nevis; St. Lucia; Solomon Islands; and Trinidad and Tobago under the item 
“Special and differential treatment for developing countries” (TN/RL/GEN/57).   TN/RL/GEN/79 
 Page 7 
 
 
 (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, the Member will dispose of a period of six (6) months to demonstrate that it took all necessary 
steps to withdraw the licence of that vessel and/or company and that 
the vessel and its engine are definitively scrapped.  Additionally, the Member will dispose of a period of twelve (12) months to demonstrate that it had taken all necessary steps to improve its management schemes in relation to IUU fishing.  If any of the two 
conditions are not fulfilled, serious prejudice, in the sense of 
paragraph (c) of Article 5 of the ASCM, shall be deemed to exist 
regarding all non-actionable subsidies granted by that 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 2(ii)(b ) above should be considered actionable subsidies 
for a period of 10 (ten) years. 
 7. 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. TN/RL/GEN/79 
Page 8  
 
 ANNEX VIII TO THE AGREEM ENT ON SUBSIDIES AND 
COUNTERVAILING MEASURES 
 
Article 1  
Definitions and coverage  
 
 1.1 For the purpose of fisheries subsidies, the provisions of the Agreement on Subsidies and 
Countervailling Measures (ASCM) shall apply subject to the provisions of this Annex.  
1.2 This Annex covers any subsidy ─ as defined in Article 1.1 of the ASCM ─ given to or on 
behalf, directly or indirectly, of fishing interests (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 to fisheries activities.  Any such fishery subsidy that is not generally available shall be deemed to 
be specific in the sense of Article 2 of the ASCM. 
 
1.2.1 Any government-to-government payment for access by domestic fleets to foreign 
Economic Exclusive Zone (“EEZ”) fisheries (“foreign access rights”) or to quotas or any other rights established by any Regional Fishery Management Organization (RFMO) are specifically covered by the definition of fisheries subsidies provided for in paragraph 1.2 above. 
 
1.2.2 “Public services of fisheries resource management” shall not be considered a fishery 
subsidy. “Public services” are all services supplie d in the exercise of governmental authority.  
A “service supplied in the exer cise of governmental 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 mana gement of fisheries resources, provided that 
those public services do not involve expenditu res or revenue foregone in relation to 
programmes which provide services or benefits to fishing interests or fishing communities. 
 
1.2.3 Notwithstanding Article 1.1 (iii) of the AS CM, the provision of goods and services by 
a government under the form of general infrastruct ure shall be regarded as specific fisheries 
subsidies, and shall therefore be subject to the provisions of this Annex,  if it is demonstrated 
that such subsidies have trade- and/or production-distorting effects. 
 1.3 For the purpose of this Annex, “production-di storting effects” include any negative effect a 
fishery subsidy may have on the sustainability of fi shing resources.  For fisheries that are subject to 
RFMOs, a “negative effect to the sustainability of fishing resources” mean s any violation of the 
quotas or other rights established by those RFMOs.  For fisheries that are not subject to RFMOs, a “negative effect to the sustainability of fishi ng resources” means an annual increase of the volume 
catch for a specific specie exceeding 3% of the most recent volume catch data published by a competent international organization (a n RFMO or a multilateral organization). 
 
1.4 This Annex shall not apply to inland fisheries, understood as any fishery in the internal waters 
of a Member.  “Internal waters” mean all waters, other than lawfully claimed archipelagic waters, 
landward of the baseline from which the territorial sea is measured.  
1.5 This Annex shall not apply to aquaculture, provided that there is no capture fisheries 
involved.  “Aquaculture” means the business of raisi ng marine or freshwater fish or shellfish under 
controlled conditions.  If capture fisheries are i nvolved in aquaculture, any governmental actions 
involved with capture fisheries are subject to the disciplines of this Annex.  TN/RL/GEN/79 
 Page 9 
 
 
  
1.6 For the purpose of this Annex, fisheries subs idies shall encompass any subsidy programme 
and/or the disbursements made under such programme.  
 
Article 2  
Non-Actionable Subsidies 
 
 2.1 The following subsidies shall be considered as non-actionable, provided that they have no 
trade-distorting or production-distorting effects: 
 
(a) subsidies that are designed to improve conser vation and the sustainable use of fisheries 
resources.  The following subsidies shall be c onsidered to fall within the scope of this 
sub-paragraph: 
 
i. subsidies to research activities undertaken to improve fisheries management or 
environmental protection; 
ii. subsidies for compliance with internationa l safety or sanitary standards;  or 
iii. subsidies for the adoption of environmen tally preferable gear or techniques 
according to multilateral standards. 
 
    
 
     
 
    
 
     
 
    
 
    TN/RL/GEN/79 
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 (b) subsidies to small scale fishing
16 and to artisanal fishing17, provided that such fisheries are 
not "patently at risk"18;  
(c) subsidies for capacity reduction (buyback , decommissioning among others), provided 
that, in addition to the conditions set out in the caput  of this paragraph, such subsidies 
require and ensure that engines and equipm ents are not re-employed in the fishing 
activity. Moreover, fishing licenses associated  with the decommissioned vessels have to 
be withdrawn; 
(d) subsidies aimed at fishermen retraining; 
(e) subsidies to facilitate movement of labor out of the fishery sector; 
(f) subsidies to compensate for suspension of fishing activity; and 
(g) subsidies to early retirement schemes. 
 2.2 Whenever any vessel and/or company of a Memb er is found to be engaged in “illegal, 
unreported and unregulated fishing” (“IUU fishing”
19) according to any RFMO, such Member shall 
demonstrate, within a period of 3 (three) months from the release of the report by any such RFMO, 
that: (a) it took all necessary steps to withdraw the license of that vessel and that the vessel and its 
engine are definitively scrapped or otherwise dism antled;  and/or (b) in the case of a company found 
to be engaged in IUU fishing, it took all necessary steps to withdraw the licence(s) of that company 
and that the vessel(s) and its(their) engine of th at company are definitively scrapped or otherwise 
                                                      
 16 Subsidies to small-scale fishing are to be considered non-actionable if: 
(a) the share of the fishery sector of the country granting the subsidies represents more than [X%] of its GDP, in 
accordance with the most recent data from the World Bank; or 
(b) granted to activities carried out by vessels with tota l length not exceeding 24 meters. All vessels with total 
length not exceeding 24 meters that ar e used for catching a specific specie sh all be considered part of the small-
scale fleet for that specific specie.  In addition: 
 (i) if the fishery is under the management of a RFMO:  
  (i.1) and if a country limit is set to a specifi c specie, the total catch of  the country small-scale 
fleet for that specific specie shall not exceed 10% of the limit set to the country for that specific specie 
by that RFMO; or 
  (i.2) and if no country limit is set to a specifi c specie, the total catch of  the country small-scale 
fleet for the specific species that ha ve no individual limits shall not exceed 5% of the limit set to the 
country by that RFMO for those specific species that have no individual limits; or 
  (i.3) and if a global limit is set to a specific specie, the total catch of  the country small-scale 
fleet for that specific specie shall not  exceed 0,5% of the global limit set to that specie by that RFMO; 
or 
 (ii) if the fishery is not under the management of a RFMO, the annual incr ease 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 competent international organization. 
Whenever the above-mentioned conditions (a) or (b) are not met, the entirety of the subsidies granted to the 
activities described in the first paragraph of this fo otnote is to be considered prohibited subsidies. 
 17 Subsidies to artisanal fishing are to be considered non-actionable if: 
(I) granted to fisheries activities performed at an in-s hore basis with non-automatic net-retriever devices, 
provided that: 
     (a) the activities are carried out on an individual basis (including, but not necessarily, the family members); 
     (b) the basic scope of the activities encompasses both family livelihood and a small profit trade; and 
     (c) there is no employer-employee relationship on the activities carried out; or 
Subsidies granted to fishermen associations shall fulfil the same conditions of this item in order to be considered 
non-actionable subsidies. 
(II) granted to the maintenance of traditional fishing communities. 
 18 A fishery is to be considered "patently at risk" if any of the following conditions apply: 
• the status of exploitation is considered “not known or uncertain”, “overexploited”, “depleted”, or 
“recovering” according to the Food and Agriculture Organization (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. 
 19 According to the definition set out by the International Plan of Action (IPOA) of the FAO.  TN/RL/GEN/79 
 Page 11 
 
 
 dismantled.  Additionally, the Member shall demons trate, within a period of 6 (six) months from the 
release of the report by any such RFMO, that it had taken all necessary steps to improve its management schemes in relation to IUU fishing.  If any of the two conditions is not fulfilled, serious 
prejudice, in the sense of Article 6 of the ASCM, shal l be deemed to exist re garding all non-actionable 
fishery subsidies granted and maintained by that Member. 
 
 
Article 3  
Prohibited subsidies  
 3.1 In addition to those subsidies already prohibited under Article 3 of the ASCM, any fishery 
subsidy not falling within the scope of Articles 2 and 5 of this Annex shall be considered as a 
prohibited subsidy.  3.2 In case of natural disasters, the prohibition of paragraph 1 above could be temporarily 
suspended, so as to enable governments to provide  short-term emergency relief and to implement 
recovery adjustment programmes.  Under no circum stance shall this exceptional suspension of the 
prohibition be used to justify increased fishing cap acity beyond the existing fishing capacity before 
the natural disaster occurred.  3.3 Payments made by governments of deve loped country Members to governments of 
developing country Members for buying access to EEZ fisheries resources of such developing country 
Member or to the quotas or any other rights established by any RFMO to such developing country Member shall not fall under the prohibition of paragr aph 1 above.  In such cases, and subject to the 
disciplines of Article 4 of this Anne x, serious prejudice in the sense of  Article 6 of the ASCM shall be 
deemed to exist. 
 
3.4 The same remedies provided for in Article 4 of  the ASCM shall apply to subsidies falling 
under this Article. 
 
 
Article 4  
Prevention of circumvention  
 
4.1 Rules of origin (preferential or non-preferential), the flag of a vessel and government-to-
government payments (as defined in Article 1.2.1 of this Annex), among others, shall not be used as a 
means to circumvent Members obligations and r esponsibilities under the provisions of this Annex.  
For this purpose, and subject to the provisions of this Annex, the following rules shall apply with 
regard to the identification of the country Member  responsible for the fisheries subsidy that has 
caused trade- or production-distorting effects: 
 (a) for fisheries that are subject to an RFMO: 
i. the country to which are counted against the quota established by the RFMO shall 
be the country responsible for the fisher ies subsidy that has caused trade- or 
production-distorting effects;  
i.1 in the case of government-to-government payments (as defined in 
Article 1.2.1 of this Annex), the country that has disbursed those payments shall be the country resp onsible for the fisheries subsidy 
that has caused trade- or production-distorting effects; 
    TN/RL/GEN/79 
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 (b) for fisheries that are not subject to an RFMO: 
i. if the vessel is registered in and flying the flag of the country on which the 
company is based, and that company is in charge of the activities conducted by 
the vessel, the country of the flag of th e vessel shall be the country responsible 
for the fisheries subsidy that  has caused trade- or production-distorting effects; or 
ii. if the vessel is chartered by a company based in a country other than the vessel 
flag country and it is duly authorized to  operate, the country which the charterer 
company is based at shall be the country responsible for the fisheries subsidy that 
has caused trade- or production-distorting effects. 
(c) in the case of IUU fishing: 
i. the country found to be engaged in IUU fishing according to any RFMO shall the 
country responsible for the fisheries subs idy that has caused trade- or production-
distorting effects; 
ii. and if the vessel is chartered by a comp any based on a country other than the 
vessel’s flag country, the country which th e charterer company is based at shall 
be the country responsible for the fisher ies subsidy that has caused trade- or 
production-distorting effects; 
iii. and if the vessel is flying a flag of a non-compliance country, the country that has 
previously registered that vessel or the country on which the company who has asked for the registration in this non-co mpliance country is based shall be the 
country responsible for the fisheries subs idy that has caused trade- or production-
distorting effects. “Non-compliance country” is a country that does not comply 
with its obligations regarding jurisdictio n and control, according to international 
law, in respect of fishing ve ssels entitled to fly their flag. 
 A company is based on one country if it has legal domi cile in that country and if the company is duly 
authorized to operate in that country. 
  
Article 5  
Special and Differential Treatment of Developing Country Members  
 5.1 Developing country Members shall be allowed to  maintain or grant the following fisheries 
subsidies, to the extent that such s ubsidies are subject to the disciplines with  Articles 5 and 6 of the 
ASCM:  
(a) Subsidies which increase fishing capacity or effort of Members that are part of a RFMO. 
Those subsidies should not allow the enhanc ement 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: 
i. subsidies to fishing vessel construction or repair; and 
ii. subsidies to vessel modernization or gear acquisition or improvement. 
(b) Fuel, bait or ice supplied for fishing activities; 
(c) Payments made by developing country Members to the government of an other 
developing country Member for access to its EEZ fisheries resources or to its quotas or any other quantitative limits established by any RFMO, subject to the disciplines of 
Article 4 of this Annex; 
  TN/RL/GEN/79 
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 (d) Assistance to disadvantaged regions within th e territory of a Member given pursuant to a 
general framework of regional development20 within eligible regions provided that: 
i. each disadvantaged region must be a clearly designated contiguous geographical 
area with a definable economic and administrative identity; 
ii. the region is considered as disadvantaged  on the basis of neutral and objective 
criteria21, 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; 
iii. the criteria shall include a measurement of economic development which shall be 
based on at least one of the following factors: 
i.1 one of either income per capita or household income per capita, or 
GDP per capita, which must not be above 85 per cent of the average for the territory concerned; 
ii.1 unemployment rate, which must be at least 110 per cent of the 
average for the territory concerned; 
as measured over a three-year period;  such measurement, however, may be a 
composite one and may include other factors. 
 
5.2 Serious prejudice in the sense of Article 6 of the ASCM shall be deemed to exist in the case 
of: 
 
(a) subsidies benefiting any vessel and/or comp any not operating under the limits and/or 
quotas 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, the Member shall de monstrate, within a period of 6 (six) months 
from the release of the report by any such RF MO, that: a) it took all necessary steps to 
withdraw the license of that vessel and that  the vessel and its engine are definitively 
scrapped or otherwise dismantled; and/or b) in the case of a company found to be engaged in IUU fishing, it took all necessary steps to withdraw the license(s) of that company and that the vessel(s) and its(their) engine of that company are definitively 
scrapped or otherwise dismantled.  Additionall y, the Member shall demonstrate, within a 
period of 12 (twelve) months from the release of the report by any such RFMO, that it 
had taken all necessary steps to improve its  management schemes in relation to IUU 
fishing.  If any of the two conditions is not fulfilled, serious prejudice, in the sense of 
Article 6 of the ASCM, shall be deemed to  exist regarding all non-actionable fishery 
subsidies granted and maintained by  that developing country Member; 
(c) subsidies granted to any vessel and/or company involved with the exploitation of fisheries 
"patently at risk"; or 
(d) subsidies granted to a fleet or a company to cover operating losses. 
 
                                                     
 
 20 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.  
21 “Neutral and objective criteria” means criteria which do not favour certain regions beyond what is 
appropriate for the elimination or reduction of regi onal disparities within the framework of the regional 
development policy.  In this regard, regional subsidy programmes shall include ceilings on the amount of assistance which can be granted to each subsidized project.  Such ceilings must be differentiated according to 
the different levels of development of assisted regions and must be expressed in terms of investment costs or 
cost of job creation.  Within such ceilings, the distribution of assistance shall be sufficiently broad and even to avoid the predominant use of a subsidy by, or the granting of disproportionately large amounts of subsidy to, 
certain enterprises. TN/RL/GEN/79 
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 5.3 Notwithstanding the provisions of paragraph 2, serious prejudice shall not be found if the 
subsidizing Member demonstrates that the subsidy in  question has not resulted in any of the effects 
enumerated in Article 6 of the ASCM.  5.4 The same remedies provided for in Article 7 of  the ASCM shall apply to subsidies falling 
under this Article. 
 
 
Article 6  
Notification  
 
6.1 Any fishery subsidy shall be notified.  Any subsid y at a national level which is not notified, or 
reported on, shall be presumed prohibited in the sense of  Article 3 of this Annex.  It is recognized that 
notification shall not prevent any Member from chal lenging any fishery subsidies in accordance with 
the provisions of the Dispute Settlement Unde rstanding (DSU) and othe r covered Agreements. 
 
6.2 Members shall ensure that their notifications  contain at least the following information: 
 
(a) identification of fisheries in which subsid ized fishing takes place under a given subsidy 
programme or disbursement; 
(b) the status of the fisheries in question;  
(c) subsidy amounts on a per vessel, per fleet, and per fishery basis;  
(d) specific description of how subsidies are actually applied;  
(e) whether the fishery is under management by a RFMO, the nature of the monitoring, the 
quantitative limits applicable to th e Member and the RFMO website; and 
(f) identification of specific companies receiving subsidies. 
 
6.3 Notifications shall include information about st eps taken to ensure that the notified subsidy 
does not contribute to IUU fishing activities.  6.4 Members shall also provide the Committee of  Subsidies and Countervailing Measures with 
yearly updates of such notifications, in particul ar by supplying information on global expenditure for 
each programme, and on any modification of the prog ramme.  Other Members shall have the right to 
request information about individual cases of subsidization under a notified programme.
22 
 6.5 Upon request of a Member, the Secretariat shall review a notification made pursuant to 
paragraph 4 and, where necessary, may require a dditional information from the subsidizing Member 
concerning the notified programme under review.  Th e Secretariat shall report its findings to the 
Committee.  The Committee shall, upon request, promptly  review the findings of the Secretariat (or, if 
a review by the Secretariat has not been requested, th e notification itself), with a view to determining 
whether the conditions and criteria laid down in Arti cles 2 and 5 of this Annex have not been met.  
The procedure provided for in this paragraph shall be completed at the latest at the first regular 
meeting of the Committee following the notification of  a subsidy programme, provided that at least 2 
(two) months have elapsed between such notificatio n and the regular meeting of the Committee.  The 
review procedure described in this paragraph shall also apply, upon request, to substantial 
modifications of a programme notified in the yearly updates.  6.6 Upon the request of a Member, the determ ination by the Committee referred to in 
paragraph 5, or a failure by the Committee to make  such a determination, as well as the violation, in 
individual cases, of the conditions set out in a notified programme, shall be submitted to binding 
                                                     
 
 22 It is recognized that nothing in this notifica tion provision requires the provision of confidential 
information, including confidential business information.  TN/RL/GEN/79 
 Page 15 
 
 
 arbitration.  The arbitration body shall present its  conclusions to the Members within 120 days from 
the date when the matter was referred to the arb itration body.  The DSU shall apply to arbitrations 
conducted under this paragraph.   
Article 7  
Transitional provisions  
 
7.1 From the entry into force of this Annex, there shall be a period of 3 (three) years for Members 
to phase out and eliminate fisheries subsidies that fa ll within the meaning of Article 3 of this Annex 
and that are not currently prohibited according to Ar ticle 3 of the ASCM, from a level to be agreed.  
Members shall not be allowed to adopt new prohibited subsidies or to extend the scope of any existing 
prohibited subsidy programme, in accord ance to Article 3 of this Annex. 
 7.2 From the entry into force of this Annex, there shall be a period of 5 (five) years for 
developing country Members to phase out and elimin ate fisheries subsidies that fall within the 
meaning of Article 3 of this Annex and that are not  currently prohibited according to Article 3 of the 
ASCM, from a level to be agreed. Members shall not be allowed to adopt new prohibited subsidies or 
to extend the scope of any existi ng prohibited subsidy programme, in accordance to Article 3 of this 
Annex.  
7.3 For least-developed country Members, fisheries subsidies that are prohibited under Article 3 
of the ASCM and those referred to in Article 3 of this Annex shall be considered actionable fisheries 
subsidies for a period of 10 (ten) years.  If a least-developed country Member deems it necessary to apply such subsidies beyond the 10-year period, it sha ll not later than one year before the expiry of 
this period enter into consultation with the Committ ee, which will determine whether an extension of 
this period is justified, after examining all the re levant economic, financial and development needs of 
the developing country Member in question.  If  the Committee determines that the extension is 
justified, the least-developed country Member c oncerned shall hold annual consultations with the 
Committee to determine the necessity of maintaining the subsidies.  If no such determination is made 
by the Committee, the least-developed country Me mber shall phase out those fisheries subsidies 
within 3 (three) years from the end of the last authorized period. 
 
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