WORLD TRADE  
ORGANIZATION  TN/RL/GEN/79/Rev.2 
21 April 2006 
 (06-1861) 
Negotiating Group on Rules Original:   English 
  
 
POSSIBLE DISCIPLINES ON FISHERIES SUBSIDIES 
 
Paper from Brazil
 
 
Revision  
 
  The following communication, dated 20 April 2006,  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/Rev.2), also be circulated as a formal 
document.  
_______________ 
 
 
1. Brazil welcomes the broad discussion at the Negotiating Group on Rules (NGR) meeting in 
March 2006 on the Brazilian contribution to the discussion on the framework for disciplines on fisheries subsidies.  This submission constitutes an improved version of Document TN/RL/GEN/79/Rev.1, so as to incorporate comments made by Members and to further develop some 
of the suggested ideas put forward in the previous subm issions.  In order to help focus the debate, this 
proposal contains only suggested legal draft. 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 over-fishing 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 countries; TN/RL/GEN/79/Rev.2 
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  Hereby agree  as follows: 
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 shall not apply to inland fisheries, understood as any fishery in the internal waters 
of a Member. “Internal waters” mean all waters on the landward side of the baseline of the territorial sea, as defined by Articles 8 and 50 of the United Nations Convention on the Law of the Sea 
(UNCLOS), including rivers and lakes. 
 
1.3 This Annex shall not apply to aquaculture, provided that there is no capture fisheries 
involved1.  “Aquaculture” means the business of raising marine or freshwater fish or shellfish under 
controlled conditions.  
 
1.4 This Annex covers any subsidy ─ as defined in Article 1of the ASCM ─ given to or on behalf 
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, directly or 
indirectly
2, to harvesting activities of capture fisheri es. 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. 
 
1.4.1 Any government-to-government payment for access by domestic fleets to foreign 
Economic Exclusive Zone (as defined in Pa rt V of UNCLOS) fisheries (“foreign access 
rights”) or to quotas or any other rights established by any regional fishery management 
organization is specifically covered by the defin ition of fisheries subsidies provided for in 
paragraph 1.4 above.  
 
1.4.2 The provision of goods and services by a government under the form of 
infrastructure, other than general infrastructure, benefiting fishing interests shall be subject to 
the provisions of this Annex.  
 1.4.3 “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 financial c ontributions in relation to programmes which 
provide services or benefits to fishing interests or fishing communities. 
 
                                                     
 
1 Such as capture fisheries used to feed raised fish eries or any captured fry or  larvae (immature fish or 
shellfish at a post-larval stage, includin g fingerlings, parr, smolts and elvers). 
2 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.  TN/RL/GEN/79/Rev.2 
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  Article 2  
Prohibited subsidies  
 
2.1 In addition to those subsidies already prohibited under Article 3 of the ASCM, any fishery 
subsidy not falling within the scope  of Articles 3, 4 and 7 of this  Annex shall be considered a 
prohibited subsidy. 
 2.2 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 increase the aggregate gross tonnage, volume of fish hold and/or engine power 
of fishing vessels beyond the statu quo ante . 
 2.3 The same remedies provided for in Article 4 of  the ASCM shall apply to subsidies falling 
under this Article. 
 
Article 3  
Non-Actionable Subsidies 
 
3.1 The following fisheries subsidies shall be considered as non-actionable: 
 
(a) subsidies to early retirement schemes or unemployment relief; 
(b) subsidies for fishermen re-education, training or alternative employment assistance; 
(c) subsidies to research activities aimed at improving fisheries management or 
environmental protection; 
(d) subsidies for buyback and decommissioning of fishing vessels, provided that such 
subsidies require and ensure that engines and equipments are not re-employed in the 
fishing activities. Moreover, fishing licenses associated with such vessels have to be 
withdrawn; 
(e) subsidies to artisanal fishing
3, including the provision of goods and services by a 
government under the form of infrastructur e, other than general infrastructure, 
benefiting artisanal fishing. 
 
3.2 The same remedies provided for in Article 9 of  the ASCM shall apply to subsidies falling 
under this Article.  
Article 4  
Actionable Subsidies  
 
4.1 No Member should cause, through the use of any fishery subsidy referred to in paragraphs 3 
and 4 below, adverse effects to the interests of other Members.   4.2 For the purpose of this Annex, any fishery subsid y shall not cause the adverse effects (a), (b) 
or (c) set out in Article 5 of the ASCM nor sha ll it result in (d) any increase in the gross tonnage, 
volume of fish hold and/or engine power of fishing vessels.  
                                                     
 
3 Artisanal fishing shall be defined as the fishing activities related to the subsistence of the fisherman 
and his family.  Those activities are performed at an in-shore basis with non-automatic net-retriever devices, 
provided that (a) the activities are carri ed out on an individual basis, incl uding, 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 employer-employee relationship on the activities carried out. Artisanal fishing shall also 
include fishing activities related to traditional fishing communities. TN/RL/GEN/79/Rev.2 
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  4.3 Adverse effects in the sense of item (d) of the pr evious paragraph shall be deemed to exist in 
the case of fisheries subsidies granted:   
(a)  for the adoption of multilateral standards, gears or techniques; 
 (b)  to improve safety or working conditions of  the crew, according to  multilateral standards; 
 (c)  to compensate for suspension of capture fishing activities; 
(d)  to fishing port facilities; (e)  to processing facilities for fisheries products; (f)  to small-scale fishing
4 that do not involve fisheries “patently at risk”5. 
 
4.4 In the case of government-to-government pa yments for access to foreign EEZ fisheries 
resources or to foreign quotas or any other rights established by any regional fisheries management 
organisation, the Member buying the access shall be responsible for not causing adverse effects in the 
sense of Article 4.2 above and shall not use those pa yments to circumvent its obligations under this 
Annex, according to Article 5 below. 
 
4.5 The same remedies provided for in Article 7 of  the ASCM shall apply to subsidies falling 
under this Article. 
 
Article 5  
Prevention of circumvention  
 
5.1 Members shall not have recourse to rules of orig in (preferential or non-preferential), the flag 
of a vessel and government-to-government payments  (as defined in Article 1.4.1 of this Annex), 
among others, to undermine the objectives set out in th e preamble and to circumvent their obligations 
under this Annex. 
 
Article 6 
Notification and monitoring  
 
6.1 All fishery subsidies shall be no tified. Any subsidy at a national level which is not notified, or 
reported on, shall be rebutably presumed prohibited in  the sense of Article 2 of this Annex. It is 
recognized that notification shall not prevent any Member from challenging any fishery subsidies in 
accordance with the provisions of the Dispute Settlement Understanding (D SU) and other covered 
Agreements.  6.2 Members shall ensure that their notifications  contain at least the following information: 
 
(a)  identification of fisheries in which s ubsidized fishing takes place under a given 
subsidy programme or disbursement; 
(b)  the status of the fisheries in question;  
(c)  the subsidy amounts;  
(d)  whether the fishery is under management by a regional fisheries management 
organization, the nature of the monitoring and the quantitative limits applicable to the 
Member.  
                                                     
 
4 Small-scale fishing shall be defined as the fishing activities carried out on a commercial basis and 
encompasses activities carried out by vessels with engine power up to 10bhp or volume of fish hold below X 
tons. 
 5 A fishery is to be considered "patently at ri sk" if the status of exploitation is considered 
“overexploited”, “depleted”, or “rec overing” according to the Food and Ag riculture Organization of the United 
Nations (FAO).  TN/RL/GEN/79/Rev.2 
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  6.3 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.6 
 
6.4 Upon request of a Member, the Secretariat shall review a notification made pursuant to 
paragraph 2 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 Articl es 3, 4 and 7 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. 
 6.5 Upon the request of a Member, the determ ination by the Committee referred to in 
paragraph 4, 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 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.  6.6 By the end of the transitional period provided for in Article 8 of this Annex, all Members 
shall have in place a national system of registry of  all vessels duly authorized to operate under their 
flag and shall notify the Secretariat of the gross t onnage, volume of fish hold and engine power of all 
fishing vessels duly authorized to operate under their flag.  
Article 7  
Special and Differential Treatment of Developing Country Members  
 7.1 Notwithstanding the provisions of Article 2 of th is Annex and in addition to the provisions of 
Article 4 of this Annex, developing  country Members shall be allowed: 
(i) to maintain or grant fisheries subsidies to: 
(a) fishing vessel construction or repair; and/or (b) vessel modernization or gear acquisition or improvement; and/or 
(c) fuel, bait or ice supplied for fishing activities; and/or 
(d) assist disadvantaged regions within the territory of a Member.  
(ii) to receive government-to-government payments for access to its EEZ fisheries resources or to its quotas or any other ri ghts established by any regional fisheries 
management organisation, as defined in Article 4.4 of this Annex. 
 
7.2 Subsidies provided for in items (a), (b) and/or (c) of the previous paragraph shall not involve 
fisheries patently at risk.  7.3 In connection with the subsidies provided for in items (a) and/or (b): 
(i) they shall not be actionable by reason of ite m (d) of Article 4.2 of this Annex; and 
(ii) the country Member shall ensure that each vessel constructed or modernized 
possess a valid fishing licence and is registered in a national registration system. 
                                                     
 
 6 It is recognized that nothing in this notifica tion provision requires the provision of confidential 
information, including confidential business information. TN/RL/GEN/79/Rev.2 
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7.4 In the case of (d) in paragraph 1,  developing country Members shall be allowed to maintain or 
grant fisheries subsidies designed to assist disadva ntaged regions within their respective territory 
pursuant to a general framework of regional development
7 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 disadvant aged on the basis of neutral and objective 
criteria8, 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 measur ement 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. 
 7.5 There shall be no presumption of adverse effect s for fishery subsides granted by developing 
country Members under Article 4.3 of this Annex.  
 7.6 Developing country Members shall update th e Committee of Subsidies and Countervailing 
Measures with its notifications every 2 (two) year s. Least-developed country Members shall update 
the Committee of Subsidies and Countervailing Measur es with its notifications every 5 (five) years. 
 
7.7 The same remedies provided for in Article 7 of  the ASCM shall apply to subsidies falling 
under this Article.  
Article 8  
Transitional provisions  
 
8.1 From the entry into force of this Annex, there shall be a period of 3 (three) years for Members 
to gradually phase out and eliminate fisheries subsid ies that fall within Article 2 of this Annex and 
that are not currently prohibited according to Artic le 3 of the ASCM.  The starting point of the 
reduction shall be the 2003-2005 average of the fish eries subsides prohibited under Article 2 of this 
Annex. Members shall not be allowed to adopt new prohibited subsidies or to extend the scope of any 
existing prohibited subsidy programme, in accordance to Article 2 of this Annex. 
 
                                                     
 
 7 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.  
8 “Neutral and objective criteria” m eans 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/Rev.2 
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  8.2 From the entry into force of this Annex, there shall be a period of 5 (five) years for 
developing country Members to gradually phase out and eliminate fisheries subsidies that fall within 
Article 2 of this Annex and that are not currently  prohibited according to Article 3 of the ASCM. The 
starting point of the reduction shall be the 2003-2005 average of the fisheries subsides prohibited under Article 2 of this Annex. Members shall not be  allowed to adopt new prohibited subsidies or to 
extend the scope of any existing prohibited subsid y programme, in accordance to Article 2 of this 
Annex.  8.3 For least-developed country Members, fisheries subsidies that are prohibited under Article 3 
of the ASCM and those referred to in Article 2 of this Annex shall be considered actionable fisheries 
subsidies for a period of 10 (ten) years. If a l east-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 least-developed 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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