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ABBREVIATIONS

ACFA : Advisory Committee on Fisheries and Aquaculture

CFP : common fisheries policy

EEZ : exclusive economic zone

EFF : European Fisheries Fund

FAO : the UN’s Food and Agricultural Organisation

FAS : fleet adaptation scheme

FEAP : fishing effort adjustment plan

GT : gross tonnage

ICES : International Council for the Exploration of the Seas

IUU : illegal, unreported and unregulated fishing

kW : kilowatts

MAGP : multiannual guidance programme

MSY : maximum sustainable yield

OECD : Organisation for Economic Cooperation and Development

OP : operational programme

STECF : Scientific, Technical and Economic Committee for Fisheries

TACs : total allowable catches

UNCLOS : United Nations Convention on the Law of the Sea

GLOSSARY

EU-10 : The 10 Member States which joined the EU in 2004.

EU-12 : The 12 Member States of the EU in 1992.

EU-15 : The 15 Member States of the EU in 1995.

Fishing capacity : Fishing capacity is a vessel’s gross tonnage (GT) and power in kilowatts (kW), as defined in Articles 4 and 5 of Council Regulation (EEC) No 2930/86 [9999]. "GT" actually measures a vessel’s enclosed volume, and "kW" measures the maximum engine power available for propulsion.

Fishing effort adjustment plan (FEAP) : Public aid for decommissioning fishing vessels is granted under the European Fisheries Fund in the context of FEAPs prepared by Member States. An FEAP justifies measures for decommissioning specific types of fishing vessels — for example — cod recovery plans passed by the Council reduced fishing opportunities for cod, and several Member States’ FEAPs referred to these plans when targeting decommissioning schemes on cod fisheries.

Fishing mortality : Fishing mortality is the fraction of a fish stock that is removed each year because of fishing activities.

Fishing opportunity : A "fishing opportunity" is a quantified legal entitlement to fish, expressed in terms of catch and/or fishing effort.

Fish stock : A fish stock can be considered as the mass of a fishery resource. Such stocks are usually identified by their location. They can be, but are not always, genetically discrete from other stocks.

Maximum sustainable yield (MSY) : The maximum yield of a specified fish stock that may be fished year after year without harming the fish stocks. It is characterised by a level of fishing mortality that will, on average, result in a stock size that produces the maximum sustainable yield [8888].

Multiannual guidance programme (MAGP) : From the start of the common fisheries policy (CFP) in 1983 until 2002, fishing capacity was managed by a series of MAGPs, with specific targets set by the Council for the reduction by Member States of fishing capacity.

Pelagic fish : Pelagic fish live near the water surface, as opposed to demersal fish, which live on or near the bottom.

Safe biological limits : Safe biological limits for a fish stock are defined by a minimum safe stock size and a maximum fishing mortality rate. The stock size is measured in terms of "spawning stock biomass" (SSB) which represents the total weight of spawning fish each year. If the stock is either below the minimum safe SSB or above the maximum safe fishing mortality rate, the stock is said to be outside safe biological limits [7777].

Total allowable catch : Total allowable catches (TACs) are catch limits that are set for most significant commercial fish stocks. TACs are proposed by the Commission on the basis of scientific advice on the state of the stocks concerned and decided on annually by the Council of Fisheries Ministers. Member States allocate their share of the TACs as fishing quotas to their fleets.

SUMMARY

I. The common fisheries policy (CFP) aims to promote sustainable fishing. This implies a balance between fish resources and the fishing fleet in order to avoid overexploitation of fish stocks.

II. For many years there has been a problem of overcapacity of the fishing fleet. This undermines both the sustainability of fish stocks and the long-term viability of the fishing sector. The reduction of fishing overcapacity has been a recurrent theme in previous reforms of the CFP. Nevertheless measures taken to date to reduce fishing overcapacity by adapting the fishing fleet to fishing resources have been unsuccessful.

III. The Court examined the framework for the measures to reduce fishing overcapacity and examined how these measures are designed and implemented by the Commission and the Member States.

IV. The Court found important weaknesses in the framework:

(a) the existing definitions of fishing capacity did not adequately reflect the ability of vessels to catch fish;

(b) fleet capacity ceilings had little real effect on adapting fishing capacity of the fleet to fishing opportunities;

(c) fishing overcapacity had not been defined or quantified;

(d) the ability to transfer fishing rights had not been considered.

V. The Court found important weaknesses in the design and implementation of measures to reduce fishing overcapacity:

(a) there were delays in implementation of projects and in setting up management and control systems;

(b) the sound design and correct implementation of Member States’ fishing effort adjustment plans was not assured;

(c) there was insufficient justification for objectives for reducing fishing capacity; this increased the risk that fishing fleet overcapacity was not adequately targeted for reduction;

(d) investments on board fishing vessels funded by the European Fisheries Fund (EFF) could increase the ability of individual vessels to catch fish;

(e) the EU fishing fleet register was not correctly updated with details of fishing vessels scrapped with public aid;

(f) the selection criteria for fishing vessel decommissioning schemes were not always well targeted and resulted in scrapping fishing vessels which had little impact on the targeted fish stocks;

(g) the public aid rates applied for decommissioning fishing vessels often did not take into account cost effectiveness on the basis of sufficient objective criteria;

(h) some Member States that applied the "fuel crisis regulation" had not obtained the required fishing fleet capacity reductions;

(i) reporting of efforts to reduce fishing overcapacity was inadequate.

VI. The Court recommends the Commission to take the initiative to develop actions to effectively reduce overcapacity of the fishing fleet, to address the above weaknesses.

VII. The Court recommends Member States to design and implement measures to adapt their fleet to fishing opportunities to take into account the implementation weaknesses identified at paragraph V above.

INTRODUCTION

THE COMMON FISHERIES POLICY (CFP) AND FISHING FLEET OVERCAPACITY

1. The CFP [1] aims to promote sustainable fishing. The CFP thus includes measures to avoid overfishing and to limit the size of the fishing fleet. In its April 2009 Green Paper [2] on the reform of the CFP, the Commission recognised that the 2002 reform had not achieved this objective and attributed this to chronic overcapacity of the fishing fleets.

2. The Court of Auditors’ Special Report No 3/1993 showed that fishing overcapacity was already a significant problem 20 years ago. Some of the issues raised by the report are still relevant today [3].

3. The Court of Auditors’ Special Report No 7/2007 [4] concluded that fishing fleet overcapacity was encouraging overfishing and was not being effectively reduced or accurately reported on by Member States. In addition, improvements in fishing technology were increasing the ability of the fleets to catch fish.

4. Fishing is one of the few activities where rights of access are often not formally valued (in contrast to farming or mining, for example). This can encourage fishers to overexploit resources and imperil their sustainability over the long term. In its April 2009 Green Paper, the Commission estimated that 88 % of fish stocks were being fished at unsustainable levels and that of these stocks, 30 % were outside safe biological limits. The UN’s Food and Agricultural Organisation (FAO) [5], the Commission [6], governmental and scientific sources [7] have frequently referred to the inherent risk of overfishing; and international law requires [8] states to manage fisheries sustainably and reduce fishing overcapacity.

5. Recent scientific findings, quoted by the Commission in its consultations [9] on fishing opportunities for 2011, showed improvements in the sustainability of fish stocks, while indicating continuing serious problems. Box 1 illustrates that despite some recent improvements, the situation of many fish stocks is still critical.

BOX 1

INTERNATIONAL COUNCIL FOR THE EXPLORATION OF THE SEAS’ (ICES) ADVICE ON FISH STOCKS IN THE NORTH EAST ATLANTIC [10]

| 2005 | 2010 |

Stocks outside safe biological limits | 26 | 22 |

Stocks overfished | 32 | 28 |

Excess of total allowable catches (TACs) over levels needed to sustain catches (i.e. TACs set by Council at levels higher than recommended by official scientific advice) | 59 % | 34 % |

Stocks subject to advice to stop fishing | 12 | 14 |

Stocks where no scientific advice is available | 39 | 42 |

6. The Commission’s policy is to achieve fishing at "maximum sustainable yield" (see Glossary) levels by 2015 and it has instructed ICES to provide scientific advice on that basis.

7. Since 1995, there is a declining trend for EU fish catches (reduction [11] from over 7 million tonnes to 5 million tonnes in 2009). According to the Commission’s April 2009 Green Paper this decline is largely due to overfishing and forms part of a vicious circle involving fishing overcapacity and low economic performance of the fishing fleets.

8. Figure 1 underlines a constant trend of declining EU fish catches which threatens the sustainability of the fishing sector.

FIGURE 1

DECLINING EU FISH CATCHES

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Source: Eurostat database "catches: total all fishing areas".

EU EFFORTS TO REDUCE FISHING OVERCAPACITY

9. The CFP defines [12] fishing capacity in terms of vessel tonnage (gross tonnage (GT)) and power (kilowatts (kW)). A combination of factors including declining resources, fuel price shocks, improvements in technology, the use of decommissioning aid and business mergers and closures is reducing the size of the fishing fleets each year [13]. Figure 2 shows the extent of the decline since 1992.

FIGURE 2

DECLINING EU FISHING FLEETS

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Source: Annual reports by the Commission on efforts to balance capacity with fishing opportunities.

10. From the start of the CFP in 1983 until 2002, fishing capacity was restricted by a system of multiannual guidance programmes (MAGPs), with specific targets for the reduction of fishing capacity. The Commission concluded [14] in 2002 that MAGPs failed to halt effective increases in fishing capacity. MAGPs were discontinued in the reformed CFP in 2002. Since then, Member States are responsible for putting in place measures to adjust the fishing capacity of their fleets in order to achieve a stable and enduring balance between fishing capacity and fishing opportunities [15], respecting an overall maximum fleet capacity reference level and for operating a strict "entry–exit" regime whereby the entry of new vessels to the fishing fleet must be compensated by the withdrawal of existing vessels of equivalent tonnage and power. Furthermore, Member States’ capacity ceilings are reduced by any capacity removed from the fleet with public aid. Member States report annually on their efforts to balance capacity with fishing opportunities to the Commission, which in turn submits a report to the European Parliament and the Council, in addition to a more general report on the implementation of the EFF in the preceding year.

11. The EFF [16] provides 4,3 billion euro for the programming period 2007–13 in support of the CFP. Measures funded by the EFF are set out in operational programmes, which are prepared by Member States and approved by the Commission. Funding available includes 1,2 billion euro to adapt fishing fleets, which includes co-financing vessel decommissioning schemes provided that Member States prepare fishing effort adjustment plans (FEAPs). The FEAPs provide the justification for scrapping specific types of fishing vessels. The Commission had as a mid-term EFF target to reduce the capacity of the fishing fleets by 7 % (140000 GT) in terms of GT by 2010. The Annex gives summary information on implementation of the EFF as at the end of 2010.

12. The EFF also contributes to financing investments on board fishing vessels provided that the ability of the vessels to catch fish is not increased.

13. The significant increases in fuel prices in early 2008 led to Council Regulation (EC) No 744/2008 [17], which provided temporary measures up to 31 December 2010, to promote restructuring by Member States of their fishing fleets.

AUDIT SCOPE AND APPROACH

14. The objective of the audit was to examine whether EU measures effectively contributed to adapting the capacity of the fleets to available fishing opportunities.

15. The Court examined the following questions:

(a) Is the framework for the reduction of fleet capacity clear?

(b) Are specific measures well defined and implemented?

16. The audit was carried out at the Commission and in seven Member States (Denmark, Spain, France, Italy, Poland, Portugal and the United Kingdom [18]) selected on the basis of the size of their fishing fleets and the resources available for adapting their fishing fleets under the EFF.

17. The audit work was performed between May 2010 and November 2010. The audit examined:

(a) the Commission’s procedures for approving Member States’ operational programmes (OPs) and for supervising their subsequent implementation;

(b) Member States’ design and implementation of fishing effort adjustment plans, fishing vessel decommissioning schemes, modernisation schemes and compliance with fishing fleet capacity restrictions. This involved examining 126 projects which received 33,4 million euro financing by the EFF for scrapping and modernising fishing vessels between 2008 and the time of the audit;

(c) Member States’ procedures to implement capacity restrictions including the examination of 70 transactions on the EU fishing fleet register and Member States’ annual reports on their efforts to balance fishing capacity with fishing opportunities.

18. The criteria used by the Court to assess the management of the policy by the Commission and the Member States were based on the requirements of the basic CFP regulation. The Court also made use of criteria set out in relevant reports [19] of the Organisation for Economic Cooperation and Development (OECD). In addition the Court considered practices in Norway [20].

OBSERVATIONS

19. Despite the reduction in capacity of the fleets in terms of GT and kW and the efforts made to date to reduce fishing overcapacity, the Commission regards the remaining fishing fleet as still too big in terms of available fish resources. Member States’ fishing fleets can catch significantly higher quantities of fish than are consistent with keeping fish stocks at sustainable levels. As a result:

(a) fishers have the opportunity to catch more than their allocated quotas or rights with an increased risk of illegal, unreported and unregulated (IUU) fishing [21], and/or

(b) fishers cannot make full use of their expensive fishing vessels;

(c) this creates pressure on the Council, which often sets annual TAC quotas at levels which are above those proposed by the Commission, or recommended by scientific advice (see Box 1);

(d) monitoring and controlling the complicated rules for quotas and effort restrictions is made more difficult.

UNCLEAR FRAMEWORK

20. Problems with the framework of key definitions, limits and concepts relating to measures to bring fishing capacity into line with available fishing opportunities are set out in paragraphs 21 to 33. These compound problems with the design and implementation of specific measures as set out in paragraphs 34 to 73.

INADEQUATE DEFINITION OF FISHING CAPACITY

21. Fishing capacity as defined by GT and kW is a key concept used to monitor the size of Member States’ fishing fleets, and implement fishing effort controls and measures to adapt fishing fleets to fishing opportunities. The relative simplicity of the fishing capacity definition facilitates its use for these purposes. However, in order to match fleet capacity with fishing opportunities, the real ability of the fleets to catch fish is more important than formal measures of capacity. "GT and kW" are not reliable indicators of the ability of vessels to catch fish, especially considering the advances in fishing technology. Such advances were estimated by the Commission, in its mid-term review of the CFP of 2008, to increase the ability of fishing vessels to catch fish by around 3 % per year. This was estimated by the Court to result in an overall increase of 60 % over the 16-year period 1992 to 2008. While the capacity of the EU-12 fishing fleet in terms of GT and kW decreased by 29 % in the same period, the effective capability taking into account the impact of technological improvements, is estimated to have increased by 14 % [22].

22. Furthermore, the Commission considers that the engine power expressed in kW is not being properly measured in many cases [23].

FLEET CAPACITY CEILINGS BECOMING INCREASINGLY IRRELEVANT

23. As the capacity of the European fishing fleet in terms of GT/kW has actually been decreasing for many years (paragraph 9) the ceilings applying to Member States ("reference levels" and "exit–entry ceilings") have become irrelevant. By the end of 2009 the fishing fleet capacity in GT in the EU represented 73 % of the reference levels and 90 % of the "entry–exit" ceiling, representing a gap of 565000 tonnes and 198000 tonnes respectively. These gaps have widened as the size of the fleet decreases. The fishing fleet capacity limits therefore no longer have a significant impact in terms of adapting fishing fleet capacity to available fishing opportunities. The limits no longer impose real restrictions on Member States’ fleet management policies; the Member States’ fishing fleets could be almost 200000 GT bigger and still comply with the rules (see Figure 3).

FISHING OVERCAPACITY HAS NOT BEEN DEFINED AND QUANTIFIED

24. The adaptation by Member States of fishing capacity to fishing opportunities is one of the cornerstones of the CFP and the EFF. However, the concept of fishing overcapacity is not addressed in the CFP and EFF regulations. There has not been a formal assessment of the level of overcapacity of the Member States’ fishing fleets since 1995, when it was estimated at 40 %. This lack of definition and of quantification creates general problems in identifying fishing overcapacity, deciding whether or how to reduce it and assessing the performance of those actions.

FIGURE 3

THE REDUCING RELEVANCE OF THE FISHING FLEET CAPACITY CEILINGS

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Source: Annual Commission reports on Member States’ efforts to balance fleet capacity with fishing opportunities.

25. There are examples of fleets [24] which represent exceptions to these general problems, whose capacity in terms of GT and kW greatly exceeds that necessary to harvest the available quota (for example certain large-scale pelagic fisheries in the north-east Atlantic) but which can operate profitably while targeted fish stocks remain within sustainable limits.

INADEQUATE RULES FOR THE TREATMENT OF FISHING RIGHTS WHEN FISHING VESSELS ARE DECOMMISSIONED WITH PUBLIC AID

26. The CFP regulation [25] provides for the withdrawal of the fishing licence and "fishing authorisations as defined in the relevant regulations" when fishing vessels are decommissioned with public aid. In addition the vessel’s underlying capacity in terms of GT and kW is reduced from the total fishing capacity ceilings.

27. While the fishing licence and capacity of a specific vessel may be withdrawn, this does not affect the fishing quotas allocated to Member States. These quotas cannot be permanently withdrawn as Member States may reallocate them to individual fishing vessels in the way they decide and Member States may operate transferable quota systems.

28. There is not a clear definition of which fishing rights (authorisations and licences) need to be withdrawn when fishing vessels are decommissioned with public aid. This requirement of the CFP regulation to withdraw fishing rights is contradicted by the annual TAC regulations which allow for reallocation of fishing rights related to such fishing vessels in certain cases [26]. Some Member States allow certain fishing rights to be transferred to other fishing vessels or other fishers (for example, Denmark and Spain) whereas others cancel them (for example, France and Poland).

29. Where Member States allow beneficiaries of public aid for fishing vessel decommissioning to transfer associated fishing rights or quotas, this provides the beneficiaries with additional resources to contribute to restructure their remaining fishing activities or to pursue other interests. This is in addition to the public aid co-financed from the EFF for decommissioning their vessel. The EFF regulation does not refer to the possibility of recognising these additional resources, when setting rates of public aid for fishing vessel decommissioning.

30. Other policy instruments can be used to restructure fishing fleets and reduce fishing capacity. The ability to transfer fishing rights can provide an incentive for restructuring fishing fleets and contribute to reductions in fishing overcapacity. For example, the fishing capacity of the Danish fishing fleet was reduced by 27 % between 2003 and 2009 [27], mostly without the use of public aid for fishing vessel decommissioning. This was encouraged by the introduction of transferable quota systems to most of the fishing fleet. Fishing capacity was reported [28] to be largely in balance with fishing opportunities.

31. In the United Kingdom the implementing body for Scotland introduced in 2010 a fishing vessel decommissioning scheme with public aid which required beneficiaries to transfer fishing rights to other fishing vessels.

32. The Court noted that fishing licence transfer schemes are used by the Norwegian authorities to adjust fishing capacity to fishing opportunities, rather than the CFP approach of fishing capacity ceilings and public aid for fishing vessel decommissioning.

33. The practices of Denmark, Norway and Scotland relate to specific fisheries which are different from the mixed fisheries which exist in other EU waters and reflect choices made by those states to manage their specific fishing sectors. They nevertheless indicate that fishing rights transfer schemes, which are not expressly included in the CFP, can be used to provide incentives for reducing fishing overcapacity.

POOR DESIGN AND IMPLEMENTATION

34. The fishing capacity of the fishing fleet was reduced by 138427 GT between 1 January 2007 and 31 December 2009, which already largely achieved the Commission’s mid-term EFF target (see paragraph 11). However fish stocks remain at reduced levels, the target of fishing at maximum sustainable yields has not been reached and despite reductions in capacity in terms of GT and kW, real fishing capacity is increasing. Member States have therefore failed to put in place effective measures to match the fishing capacity of their fishing fleets to fishing opportunities as required by the CFP. Under the shared management arrangements which apply in this area, Member States are responsible for implementation and the Commission has little ability to influence the way in which they do so. The Commission’s monitoring did not avoid this failure. The following sections outline factors which the Court considers to contribute to this failure.

35. Member States incurred delays in implementing capacity adjustment measures, which were not based on sound performance objectives and plans. Some investments on board increased the fishing ability of individual fishing vessels. Decommissioning schemes were not adequately designed or implemented and there was inadequate reporting of results.

SIGNIFICANT DELAYS IN IMPLEMENTATION OF THE EFF BY THE MEMBER STATES

36. By the end of 2010, implementation of the EFF in terms of expenditure certified by Member States amounted to 645 million euro, or 15 % of the amount available from 2007 to 2013 [29]. Most of this amount was declared in 2010 and 292 million euro was still not paid by the Commission as at 31 December 2010. The delays were mainly caused by a combination of the following factors:

(a) late issuing of operational programmes;

(b) priority being given to finalising the Financial Instrument for Fishery Guidance;

(c) late establishment of management and control systems acceptable to the Commission services, before which interim payments cannot be made. Approval was granted for the management and control systems of 11 Member States only in 2010, including the three Member States (Spain, Poland and Italy) with the highest EFF budgets. By the end of 2010, the systems of Belgium, Romania and the United Kingdom still had to be approved (see Figure 4).

FIGURE 4

DELAYS IN IMPLEMENTATION OF THE EFF

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Source: Commission’s database for fund management ("SFC 2007").

37. Significant delays in the implementation of planned measures in Italy (notably the decommissioning of fishing vessels) were attributed by the Italian authorities to the need to implement management and control systems acceptable to the Commission.

WEAK FISHING EFFORT ADJUSTMENT PLANS (FEAPS)

38. FEAPs constitute the main instrument [30] to implement reductions in the fishing effort. They should be justified, notably by reference to recovery plans, fisheries agreements, management plans or national decommissioning schemes. The EFF regulation provides support for the adaptation of the Community fishing fleet and makes available public aid for owners of fishing vessels and fishers affected by Member States’ FEAPs. There is no provision that national FEAPs should be reviewed or approved by the Commission.

39. The EFF regulation does not sufficiently define the content of FEAPs in order to ensure that they are adequately targeted and reduce fishing effort. There are no rules for the following key issues:

(a) whether a single FEAP should be prepared by a Member State, or whether FEAPs are required for each fishery subject to publicly funded decommissioning schemes;

(b) whether national decommissioning schemes can be considered as FEAPs;

(c) whether recovery plans and management plans already adopted by the Council when the Member State’s operational programme was approved need to be included in the FEAP;

(d) to what extent FEAPs should result in adapting fishing fleet capacity to fishing opportunities.

40. The lack of provision for Commission review of FEAPs and the insufficient rules on their content increase the risk that actions to balance fishing capacity with fishing opportunities are not adequate. Box 2 presents weaknesses in the implementation of FEAPs in France, Poland, Spain and the United Kingdom.

WEAK PERFORMANCE INDICATORS IN THE OPERATIONAL PROGRAMMES

41. Suitable performance indicators are a basic requirement of any public policy, to focus actions on objectives and to enable an assessment of whether objectives are being met. The EFF regulations [31] provide that Member States’ operational programmes (OPs) should have indicators making it possible to measure progress, including specific targets at priority axis level. Box 3 presents the capacity reduction targets of the Member States audited by the Court.

BOX 2

INSUFFICIENT IMPLEMENTATION OF FISHING EFFORT ADJUSTMENT PLANS

(a) In France, the FEAP was not a published document. Owners of fishing vessels representing 84 % of the fishing capacity of the French metropolitan fishing fleet of 2007 were eligible to apply for public aid for decommissioning. No evaluation of the amount of the overcapacity by targeted fishing fleet segment was provided to justify the increase from the OP to the FEAP (see Box 3 point (b)).

(b) In Poland, the increase in the fishing capacity reduction target for the cod fishing fleet from 3095 GT in the OP to 6000 GT in the FEAP was not sufficiently explained. The subsequent fishing vessel decommissioning scheme was open to fishing vessels from the Baltic Sea fleet which can catch any kind of fish. The annual report on the Polish fishing fleet for 2009 did not assess cod fishing capacity removed (as opposed to total capacity removed).

(c) Spain did not publish formal FEAPs. Instead it considered national fishing vessel decommissioning schemes as sufficient justification. However, there was not a formal justification for the fishing vessel decommissioning schemes in terms of linking fishing capacities with available fishing resources, or in identifying required levels of fishing effort.

(d) In the United Kingdom, the FEAP for England targeted vessels under 10 metres. The FEAP did not assess the imbalance between fishing capacity and fishing opportunities but cannot have a significant impact on this imbalance, as the under 10-metre fleet represents less than 1 % of the quotas for the targeted fish stocks allocated to the English fleet.

BOX 3

FISHING FLEET CAPACITY (GT) REDUCTION TARGETS IN OPERATIONAL PROGRAMMES (OP) 2007–13

| Planned capacity reduction | Target capacity after EFF | Note |

Member State | Base capacity | % reduction | GT reduction |

Denmark | 87342 | 15 % | 13101 | 74241 | (a) |

Spain | 480761 | 16 % | 78670 | 402091 | |

France | 194000 | 21 % | 40648 | 153352 | (b) |

Italy | 184493 | 10 % | 17920 | 166573 | |

Poland | 42510 | 14 % | 6000 | 36510 | (c) |

Portugal | 106890 | 9 % | 10030 | 96860 | |

United Kingdom | 212844 | 10 % to 15 % | 21284 – 31926 | 191560 – 180918 | (d) |

(a) A 15 % reduction in the number of vessels was expected to be attained by fleet restructuring facilitated by licence transfer schemes, without public aid.

(b) An initial reduction target of 8 %, or 15520 GT was increased by the FEAP to 40648 GT. Total public funding for decommissioning was increased from 66 million euro to 150 million euro and the rate of EFF co-financing was reduced from 40 % to 20 %.

(c) The reduction is targeted on the cod fishing fleet, which had a capacity of 10316 GT. An initial reduction target of 30 %, or 3095 GT, was increased by the FEAP to 6000 GT.

(d) A reduction in capacity was foreseen, but no target was set.

Source: Member States’ operational programmes and fishing effort adjustment plans.

42. Box 4 presents weaknesses in the establishment of capacity reduction targets in Spain, Poland, Portugal and the United Kingdom.

FUNDING PROJECTS ON BOARD WHICH MAY INCREASE THE ABILITY TO CATCH FISH

43. The EFF regulation [32] provides that subsidies to investments on board fishing vessels may concern improvements of safety on board, working conditions, hygiene, product quality, energy efficiency and selectivity, provided that they do not increase the ability of the vessels to catch fish. No public aid shall be granted for the construction of fishing vessels nor for the increase of fish holds.

44. There is a potential contradiction in providing funding for investments on board fishing vessels and at the same time requiring these investments not to increase the ability to catch fish. Moreover the prohibition of subsidies to investments which increase fishing ability is not clearly defined and varies depending on the language version of the EFF regulation. The Commission has not issued sufficient guidance on the interpretation of this regulatory requirement.

BOX 4

INSUFFICIENT JUSTIFICATION FOR TARGETS OF REDUCING FISHING CAPACITY

(a) See Box 2 point (b) for Poland.

(b) In Portugal, the OP did not provide sufficient justification for the target in terms of balancing fishing capacity with available fishing opportunities.

(c) In Spain, the OP’s target of removing 78670 GT did not systematically take into account the specific situation of different fish stocks. It therefore does not allow an evaluation of whether fishing fleet decommissioning schemes have contributed to reducing overcapacity by fishing fleet segment.

(d) In the United Kingdom, the OP envisaged a reduction in capacity, but no target was set. This makes it difficult to assess performance.

45. In practice some eligible investments on board a vessel could increase its ability to catch fish. For example, investments in energy-efficient engines and improvements in working and safety conditions can make it faster for fishing vessels to get to fishing grounds and can make fishers more productive. The effect of such EFF-funded investments on any increase in the ability to catch fish is difficult to quantify, due to other relevant factors such as changes in fishing authorisations, changes in weather conditions and other non-funded investments on board.

46. All of the Member States audited checked that on-board investment projects funded by the EFF did not increase fishing capacity in terms of GT and kW. However, as the example in Box 5 illustrates, the Member States did not adequately check whether these investments increase the ability of the vessels to catch fish.

47. In Portugal and Denmark, applicants for EFF aid for on-board investment projects often indicated that catches would increase, although for the projects examined by the Court in Denmark there was no evidence of such an increase.

BOX 5

INVESTMENTS ON BOARD INCREASING THE ABILITY TO CATCH FISH

One of the modernisation projects audited in the United Kingdom concerned a project to replace the normal propeller by a nozzle propulsion system, resulting in an increase of the vessel’s speed. The skipper informed the auditors that the speed increase had resulted in higher fish catches.

FISHING FLEET REGISTER NOT CORRECTLY UPDATED WITH DETAILS OF FISHING VESSELS SCRAPPED WITH PUBLIC AID

48. The fishing fleet register is a basic reference for the application of the rules of the CFP, including compliance by Member States with fishing fleet capacity reference levels and ceilings. Under-reporting of fishing vessels decommissioned with public aid has the effect of inflating these reference levels and ceilings (notwithstanding the fact that these ceilings are already so high that their effect is limited — see paragraph 23). The Court found errors in the fishing fleet register data recorded by France and the United Kingdom concerning vessels decommissioning with EFF aid.

49. By the time of the audit in 2010, 65 fishing vessels had been decommissioned in the United Kingdom with aid from the EFF. However, three of these 65 vessels still appear as active (i.e. not decommissioned) on the fishing fleet register. The 62 vessels recorded as having exited the fishing fleet were incorrectly shown as not having benefited from public aid (the corresponding tonnage amounted to 452 GT).

50. By the same time, 155 fishing vessels had been decommissioned in France with aid from the EFF. While these vessels were all recorded as decommissioned in the fleet register, 87 were incorrectly shown as not having benefited from public aid (the corresponding tonnage amounted to 5357 GT).

WEAKNESSES IN DESIGN AND IMPLEMENTATION OF MEMBER STATES’ VESSEL DECOMMISSIONING SCHEMES

POOR TARGETING

51. Publicly funded fishing vessel decommissioning schemes need to be well targeted by Member States, using FEAPs, at fisheries where there is evidence of fishing overcapacity. There should be appropriate criteria for selecting the specific fishing vessels for decommissioning, to ensure that they are actively engaged in the fishing activities which are subject to the FEAP and fishing vessel decommissioning scheme. The eligibility criteria used by France and Poland were not well targeted.

52. In France, the main eligibility criterion for most of the fishing vessel decommissioning schemes was the possession of a special fishing permit for the targeted fishery (fishing vessels may possess permits for different fisheries). Data on catches of the species targeted by the fishing vessel decommissioning schemes were not required and fishing vessels that landed very few fish from the targeted species could therefore be decommissioned with public aid. Two of the 10 projects audited concern the general cod fishing decommissioning scheme. One of these projects only landed insignificant quantities of cod before it was decommissioned:

DECOMMISSIONED VESSEL IN FRANCE WHICH LANDED LITTLE OF THE TARGETED FISH STOCK

| Total fish landed 2007–08 (kg) | Cod (kg) | % |

Vessel 1 | 562944 | 7935 | 1,4 % |

53. The main eligibility criterion of the Celtic Sea cod fishing decommissioning scheme was that cod, whiting, monkfish and megrim [33] should represent at least 25 % of the value of the catches of the vessel in 2006 and 2007. As a result, fishing vessels were eligible for decommissioning even if they landed very little cod. Three of the 10 projects audited concerned this scheme and landed insignificant quantities of cod:

DECOMMISSIONED FISHING VESSELS IN FRANCE WHICH LANDED LITTLE OF THE TARGETED FISH STOCK

| Total fish landed 2006–08 (kg) | Cod (kg) | % |

Vessel 1 | 446894 | 512 | 0,1 % |

Vessel 2 | 173513 | 437 | 0,3 % |

Vessel 3 | 406201 | 1536 | 0,4 % |

54. The only Polish fishing vessel decommissioning scheme aims to adapt the cod fishing fleet to available resources. Most Polish fishing vessels in the Baltic are capable of catching cod, although many target pelagic fish stocks instead. The fishing vessel decommissioning scheme does not have any eligibility criteria relating to fishing gear or fish catches, which means that practically all fishing vessels of the Polish fishing fleet are eligible for vessel decommissioning with public aid, even vessels which have little impact on cod fishing.

GRANTING PUBLIC AID FOR DECOMMISSIONING INACTIVE FISHING VESSELS

55. A significant risk in providing public funds for scrapping fishing vessels is that subsidies are paid for fishing vessels which would cease activity anyway ("deadweight"). This risk can be reduced by careful design of scheme rules by Member States e.g. requiring that eligible fishing vessels have been at sea for a minimum number of days or that the fishing vessel is active before the application. The Court found that this risk was not avoided.

56. In France, one of the eligibility conditions for public aid for fishing vessel decommissioning was that the vessel had to have a valid navigation licence at the time of the public aid decision. This condition was not fulfilled for one of the 10 projects audited (see Box 6).

BOX 6

DECOMMISSIONING AN INACTIVE FISHING VESSEL IN FRANCE

The French authorities accepted in June 2008 the application for public aid for decommissioning a fishing vessel with its navigation licence having expired in July 2006. The fishing vessel was inactive throughout 2007, because it would have required major refitting in order to be able to obtain the navigation licence. Decommissioning aid of 1284534 euro was paid, of which 513813 euro was funded by the EFF.

57. In Spain, one of the eligibility conditions for aid for fishing vessel decommissioning was that the fishing vessel must either have been fishing for at least 90 days in each of the two years before the application date or must have been fishing for at least 120 days in the year before the application date. Two of the 10 projects audited concern vessels which were inactive although, in the first case, the above eligibility condition was fulfilled (see Box 7).

BOX 7

DECOMMISSIONING INACTIVE FISHING VESSELS IN SPAIN

(a) The Spanish authorities accepted an application of June 2008 for the decommissioning of a fishing vessel which was inactive since September 2007 following a severe fire which occurred while the vessel was in South America. The beneficiary provided evidence that the vessel had been fishing for over 120 days in the year before the application date. The fishing vessel was scrapped in Uruguay. Decommissioning aid of 1611641 euro was paid, of which 983101 euro was funded by the EFF.

(b) The Spanish authorities accepted an application of July 2008 for the decommissioning of a fishing vessel which was inactive since May 2007. The beneficiary provided evidence that the vessel had been fishing for over 120 days in 2006, but did not provide evidence that the vessel was active in 2007, the year before the application date. Decommissioning aid of 780794 euro was paid, of which 468477 euro was funded by the EFF.

58. In the United Kingdom, in order to be eligible for the fishing vessel decommissioning scheme operated in England, a fishing vessel had to have a fishing licence and be seaworthy. These conditions were not fulfilled for two of the 10 projects audited (see Box 8).

INSUFFICIENT JUSTIFICATION FOR RATES OF PUBLIC AID

59. Establishing the level of public aid for fishing vessel decommissioning schemes is one of the key factors affecting the outcome and cost of the scheme: if rates are set too low, there may be insufficient participants in the scheme; if rates are too high, the public costs may be inflated and the available budget will be absorbed by fewer fishing vessels. The EFF regulation provides that Member States may consider the cost effectiveness of aid rates on the basis of objective criteria, such as the market or insurance value of the fishing vessel, its turnover, its age and fishing capacity.

BOX 8

DECOMMISSIONING INACTIVE FISHING VESSELS IN ENGLAND

(a) The English authorities received in January 2009 an application for the decommissioning of a fishing vessel, the licence of which had been transferred by the applicant to another of his vessels in July 2008. Following the advice of the English authorities, the vessel was licensed again for 9 days before the licence was finally surrendered. Decommissioning aid of GBP 14000 (16588 euro) was paid, of which GBP 5600 (6635 euro) was funded by the EFF.

(b) The English authorities accepted an application of January 2009 for the decommissioning of a fishing vessel which was not seaworthy since August 2008, as its engine needed replacement. Decommissioning aid of GBP 171865 (203623 euro) was paid, of which GBP 68746 (81452 euro) was funded by the EFF.

60. Most Member States set public aid rates by reference only to the vessel’s fishing capacity in terms of GT, with public aid based on a fixed element and a variable element linked to the vessel’s GT. Exceptions were the fishing vessel decommissioning scheme for England, where public aid rates were based on a tendering procedure; and Portugal, where sales, quota uptake and the state of targeted fish resources were considered.

61. While for most Member States, the practice of only referring to vessel fishing capacity in terms of GT had the advantage of being transparent and simple to administer, it did not sufficiently take into account specific characteristics of applicants’ fishing vessels and in particular their impact on the fish resources targeted by the fishing vessel decommissioning scheme. Furthermore the public aid rates did not specifically take into account the possibility that exists in some Member States for applicants for fishing vessel decommissioning schemes to sell their fishing rights (see paragraph 29).

62. Similar public aid rates were paid by the Member States audited. Box 9 gives the amounts of public aid payable for sample fishing vessel sizes.

BOX 9

PUBLIC AID RATES FOR FISHING VESSEL DECOMMISSIONING IN SELECTED MEMBER STATES [34]

Member States | Public aid (000 euro) for sample fishing vessel sizes |

10 GT | 100 GT | 500 GT |

Denmark | 123 | 553 | 1631 |

Spain | 118 | 527 | 1556 |

France | 112 | 457 | 1397 |

Italy — vessels fishing for red tuna | 168 | 753 | 2223 |

Italy — other vessels | 112 | 502 | 1482 |

Poland | 117 | 529 | 1542 |

Portugal | 101 | 452 | 1334 |

United Kingdom (England) | 131 | N/A | N/A |

LIMITED EFFECT OF THE "FUEL CRISIS REGULATION"

63. Council Regulation (EC) No 744/2008 "the fuel crisis regulation" introduced temporary rules and higher funding for fishing vessel decommissioning and investments on board to respond to significant increases in fuel prices, for fleet segments where the energy costs represented on average at least 30 % of the production costs. "Fleet segments" were not defined by the regulation, so that Member States could implement fleet adaptation scheme (FAS) with flexibility to reflect their different fleet structures.

64. In order to benefit from the temporary rules, Member States had to create one or more FASs.

65. In Denmark, one FAS involving several fleet segments was created. The fleet segments could be as small as one vessel.

66. Of 40 original fishing vessels in the Danish FAS, 34 were decommissioned with aid and six were modernised between 2009 and 2010. Beneficiaries were required to invest at least the amount of any public aid received for fishing vessel decommissioning in modernisation or the construction/import of new fishing vessels. The construction of six new fishing vessels and four imported fishing vessels was partially financed in this way. Although direct funding for the construction of fishing vessels is not permitted by the EFF, the effect of these transactions, taken as a whole, was that EFF funding indirectly contributed to the construction of new vessels. This was against the objectives of the EFF regulation. The Danish authorities considered that their FAS achieved a capacity reduction of 43 % in terms of GT, from 11555 GT to 6639 GT. The claimed initial capacity of 11555 GT however consisted of ships with a capacity of 5742 GT together with 5813 GT "capacity rights" (rights that could be used to buy or import vessels). The calculation of 43 % was based on the assumption that, as the fishing capacity rights were used by the beneficiaries to buy or import fishing vessels with the same capacity, the acquired fishing vessels did not actually increase fishing capacity. However as a result of the FAS, the tonnage of the actual vessels increased from 5742 GT to 6639 GT.

67. In metropolitan France, two FASs were implemented. Of 36 original fishing vessels with a capacity of 4407 GT, 18 were decommissioned and 18 were modernised. The French authorities considered that these FAS schemes achieved a capacity reduction of 33 %, or 1480 GT. However, 10 of the 18 vessels decommissioned, with a capacity of 1213 GT, had already been accepted under previous EFF-funded fishing vessel decommissioning schemes. The Court considers that the real effect of the FAS in terms of actual vessel fishing capacity was a reduction of 267 GT (1480 GT – 1213 GT), which represents a reduction of only 6 % of the total fishing capacity.

68. In the United Kingdom (England), engine improvements were considered eligible when only improving fuel efficiency by 5 %.

INADEQUATE REPORTING BY MEMBER STATES

69. The CFP regulation [35] provides that, each year, the Commission shall present to the European Parliament and Council a summary of the results of Member States’ efforts to achieve a sustainable balance between fishing capacity and fishing opportunities, accompanied by opinions of the Scientific, Technical and Economic Committee for Fisheries (STECF) and the Advisory Committee on Fisheries and Aquaculture (ACFA). The Commission’s summary is based on a yearly report from each Member State. The Commission’s implementing [36] regulation specifies the minimum information to be included in Member States’ annual reports. In March 2008 the Commission services issued guidelines containing technical, biological and economic indicators to be used by Member States in these reports.

70. The annual summary reports prepared by the Commission and opinions of STECF and ACFA, conclude each year that while Member State fleet reports are improving, they remain insufficient. The reports were often not provided within the prescribed deadlines and most of them were not drawn up in accordance with the Commission’s guidelines of March 2008. The most recent available summary report [37] of the Commission for 2008 concluded that the majority of the reports do not give enough information to enable the Commission to analyse the efforts made to achieve a balance between the fishing capacity of the fishing fleet and available fishing opportunities.

71. The CFP regulations did not sufficiently specify Member States’ annual reporting requirements and Member States which prepared inadequate fleet reports suffered no adverse consequences. By contrast, if Member States submit incomplete annual EFF implementation reports the Commission can interrupt interim payments under Article 83 of the EFF regulation.

72. Although most annual fleet reports of the Member States visited by the Court gave extensive information on Member States’ fishing activities and fishing capacity, the reports of France, Poland, Portugal and Spain do not allow a conclusion to be drawn on the balance between the fishing capacity of their fishing fleets and available fishing opportunities. These Member States did not apply the Commission’s guidelines of March 2008. The United Kingdom uses other technical indicators to assess the balance between fishing capacity and fishing opportunities, but did not explain how its system of capacity entitlements created rights to capacity [38]. Italy and Denmark adequately applied the Commission guidelines and produced annual reports which sufficiently examined the balance between fishing capacity and fishing resources.

73. Because of inadequate reporting by Member States there is no clear overview at EU level on the balance between fishing capacity and fishing opportunities. This complicates the identification of suitable policies to reduce fishing overcapacity and makes it difficult to assess the performance of those policies.

CONCLUSIONS AND RECOMMENDATIONS

CONCLUSIONS

74. Overcapacity of the fishing fleet continues to be one of the main reasons for the failure of the CFP in assuring a sustainable fishing activity. Although the reduction of fishing overcapacity has been a recurrent theme in previous reforms of the CFP, current measures have failed. This indicates that either a new approach to tackling the problem needs to be adopted, and/or existing measures have to be better enforced.

THE FRAMEWORK FOR THE MEASURES TO BALANCE FISHING CAPACITY WITH AVAILABLE FISHING OPPORTUNITIES IS UNSATISFACTORY

75. The CFP does not have adequate rules for key issues related to overcapacity of the fishing fleet:

(a) given constant technological developments, the existing definitions of fishing capacity no longer adequately reflect the ability of fishing vessels to catch fish (paragraphs 21 and 22);

(b) ceilings do not impose real restrictions on fishing fleet capacity (paragraph 23);

(c) although the alignment of fishing capacity to fishing opportunities is one of the cornerstones of the CFP and the EFF, fishing overcapacity has not been defined or quantified. This complicates the design of measures to reduce it and makes it difficult to assess the performance of those measures at Member State level (paragraphs 24 and 25);

(d) there are not sufficiently clear rules for the treatment (cancellation/transfer/sale) of fishing rights when fishing vessels are scrapped with public aid. Furthermore, the role of fishing rights in aligning fishing capacity to fishing opportunities is not specified by the regulations (paragraphs 26 to 33).

THE DESIGN AND IMPLEMENTATION OF MEASURES TO BALANCE FISHING CAPACITY WITH AVAILABLE FISHING OPPORTUNITIES IS UNSATISFACTORY

76. Member States have not fulfilled their obligation under the CFP of putting in place effective measures to match fishing capacity to fishing opportunities, and the Commission’s monitoring and supervision of the Member States did not prevent significant implementation problems. The design of some measures is also unsatisfactory.

(a) There were delays in implementing EFF-funded projects and in setting up management and control systems (paragraphs 36 and 37).

(b) Fishing effort adjustment plans did not provide a sound basis to adapt the capacity of fishing fleets to available fishing opportunities (paragraphs 38 to 40).

(c) Four of the seven Member States examined in the audit had set inadequate targets for reducing capacity. This increases the risk that fishing fleet overcapacity is not adequately targeted for reduction (paragraphs 41 and 42).

(d) Subsidised investment on board fishing vessels may in practice increase their ability to catch fish (paragraphs 43 to 47).

(e) The fishing fleet register was not correctly updated with details of fishing vessels scrapped with public aid. This overstated the fishing fleet capacity ceilings (paragraphs 48 to 50).

(f) The eligibility and selection criteria for fishing vessel decommissioning schemes were not well targeted. This resulted in scrapping fishing vessels which had little if any impact on the targeted fish stocks (paragraphs 51 to 58).

(g) The public aid rates used for decommissioning fishing vessels generally did not take into account their cost effectiveness on the basis of sufficient objective criteria (paragraphs 59 to 62).

(h) The application of the "fuel crisis regulation" had not obtained the required fishing fleet capacity reductions (paragraphs 63 to 68).

(i) The rules under which Member States report on their efforts to balance fishing capacity with fishing opportunities are inadequate and lack clarity. This is one of the reasons for the incomplete and inadequate reporting by most Member States, with the consequence that it is impossible to derive conclusions regarding fishing overcapacity (paragraphs 69 to 73).

RECOMMENDATIONS

77. In order to reduce overcapacity of the fishing fleet and to contribute to the achievement of a sustainable fishing sector, the Court makes the following recommendations.

RECOMMENDATION 1

The Commission should take the necessary initiatives, including considering whether amendments to the basic regulations are necessary, in order to:

(a) better define fishing capacity and overcapacity and consider more relevant robust measures to facilitate actions to balance fishing capacity with fishing opportunities;

(b) set effective limits for fishing fleet capacity;

(c) ensure that the design and implementation of FEAPs effectively target required reductions in fishing effort;

(d) clarify how fishing rights should be treated when decommissioning fishing vessels with public aid;

(e) clarify whether fishing right transfer schemes have a role in reducing fishing overcapacity;

(f) establish whether the scheme of public aid for on-board investments needs to be reconsidered in light of the difficulties in avoiding investments which increase fishing ability and, if the scheme is to continue, clarify which investments on board are eligible for public aid and which are not;

(g) place unambiguous obligations on Member States to ensure that the fleet register is correctly updated, and that reports on their efforts to balance fishing capacity with fishing opportunities provide the required information and are of suitable quality.

RECOMMENDATION 2

When implementing CFP measures related to adapting the fishing capacity of their fishing fleets to available fishing resources, Member States should:

(a) take corrective action to eliminate delays in implementation of the EFF;

(b) ensure that any measures to aid investments on board are strictly applied and do not increase fishing ability;

(c) ensure that the fishing fleet register is kept up to date;

(d) ensure that selection criteria for fishing vessel decommissioning schemes are designed to have a positive impact on the sustainability of the targeted fish stocks and avoid providing public aid for decommissioning inactive fishing vessels;

(e) ensure that public aid rates for decommissioned fishing vessels take into account their cost effectiveness on the basis of sufficient objective criteria;

(f) use the Commission’s guidelines when producing annual reports on their efforts to achieve a sustainable balance between fishing capacity and fishing opportunities and give reasoned conclusions on the state of that balance.

This report was adopted by Chamber I, headed by Mr Olavi ALA-NISSILÄ, Member of the Court of Auditors, in Luxembourg at its meeting of 28 September 2011.

For the Court of Auditors

+++++ TIFF +++++

Vítor Manuel da Silva Caldeira

President

[9999] Council Regulation (EEC) No 2930/86 of 22 September 1986 defining characteristics for fishing vessels (OJ L 274, 25.9.1986, p. 1).

[8888] Source: Communication from the Commission to the Council and the European Parliament "Implementing sustainability in EU fisheries through maximum sustainable yield" (COM(2006) 360 final of 4 July 2006).

[7777] Source: International Council for the Exploration of the Seas.

[1] Council Regulation (EC) No 2371/2002 of 20 December 2002 on the conservation and sustainable exploitation of fisheries resources under the common fisheries policy (OJ L 358, 31.12.2002, p. 59).

[2] Green Paper on the reform of the common fisheries policy (COM(2009) 163 final of 22 April 2009).

[3] For example, the level of overcapacity of the fishing fleet was estimated at 40 % and aid for vessel decommissioning schemes was not sufficiently targeted.

[4] Following the Court of Auditors’ Special Report No 7/2007 a new control regulation came into force in 2010 (Council Regulation (EC) No 1224/2009 establishing a Community control system for ensuring compliance with the rules of the common fisheries policy (OJ L 343, 22.12.2009, p. 1)).

[5] For example, FAO fisheries circular 994 of 2004 "Measuring and appraising capacity in fisheries. Framework, analytical tools and data aggregation".

[6] Commission staff working document on rights-based management tools in fisheries (SEC(2007) 247 of 26 February 2007).

[7] For example, M. Sissenwine and D. Symes, "Reflections on the common fisheries policy" , report to the European Commission, July 2007.

[8] For example, the 1982 United Nations Convention on the Law of the Sea (Unclos) gives signatory coastal states the right to determine fishing rights in their exclusive economic zone (EEZ), which stretches 200 miles from the coast, and requires them to ensure that the maintenance of living resources is not endangered by exploitation: Article 61 of the UN Convention on the Law of the Seas, 10 December 1982, 1833 UNTS 396. The convention entered into force 16 November 1994.In 1999 the UN’s FAO adopted an action plan for the management of fishing capacity which provided that states should efficiently manage fishing capacity by 2005, including the limitation and progressive reduction of capacity in affected fisheries.

[9] Consultation on fishing opportunities for 2011 (COM(2010) 241 final of 17 May 2010).

[10] According to Eurostat, catches from this region represent over 70 % of all catches by EU fishing fleets.

[11] Source: Eurostat.

[12] Article 3(n) of Council Regulation (EC) No 2371/2002.

[13] But see paragraph 21.

[14] Report from the Commission to the Council and the European Parliament on the intermediate results of the multiannual guidance programme for the fishing fleets at 30 June 2002 (COM(2002) 483 final of 3 September 2002).

[15] Chapter III of Council Regulation (EC) No 2371/2002.

[16] Council Regulation (EC) No 1198/2006 of 27 July 2006 on the European Fisheries Fund (OJ L 223, 15.8.2006, p. 1).

[17] Council Regulation (EC) No 744/2008 of 24 July 2008 instituting a temporary specific action aiming to promote the restructuring of the European Community fishing fleets affected by the economic crisis (OJ L 202, 31.7.2008, p. 1).

[18] The audit covered implementation in England and Scotland.

[19] For example, Reducing fishing capacity — Best practices for decommissioning schemes, OECD, 2009.

[20] Norway was selected as the EU and Norway share some fish stocks, and Norway alone catches around half as much fish as the entire EU fleet.

[21] IUU fishing activities are estimated to represent 19 % of worldwide catches, or 10 billion euro and constitute a serious threat to sustainable fisheries. The IUU regulation to combat IUU fishing came into force in 2010: Council Regulation (EC) No 1005/2008 of 29 September 2008 establishing a Community system to prevent, deter and eliminate illegal, unreported and unregulated fishing (OJ L 286, 29.10.2008, p. 1).

[22] Estimated by the Court on the basis that older vessels leave the fleet first: Increase in fishing ability of the 1992 fleet remaining in 2008 = (160 % × (100 % – 29 %)) – 100 %.

[23] The rules regarding the measurement of engine power were reinforced by the new control regulation.

[24] Source: North Sea Regional Advisory Council.

[25] Article 11(3) of Council Regulation (EC) No 2371/2002.

[26] For example, Annex IIA, point 10; Annex IIB, point 9; and Annex IIC, point 9 to Council Regulation (EC) No 40/2008 (OJ L 19, 23.1.2008, p. 1); Annexes IIB and IIC to Council Regulation (EC) No 43/2009 (OJ L 22, 26.1.2009, p. 1) and Council Regulation (EU) No 53/2010 (OJ L 21, 26.1.2010, p. 1).

[27] The reduction in terms of GT was from 107578 GT in 2003 to 78821 GT in 2009.

[28] Annual report for 2009 of the Danish authorities on their efforts to balance fishing capacities with fishing opportunities, April 2010.

[29] Implementation of measures to adapt the fishing fleets amounted to 385 million euro, or 31 % of the amount available from 2007 to 2013.

[30] EFF vademecum, Commission Document EFFC/10/2007 of 26 March 2007.

[31] Article 20(1)(c) of Regulation (EC) No 1198/2006; Annex I, Part A, point 4 to Commission Regulation (EC) No 498/2007 (OJ L 120, 10.5.2007, p. 1).

[32] Article 25(2) of Regulation (EC) No 1198/2006.

[33] These other species were included because Celtic Sea cod is a mixed fishery and other species may be captured in the trawls at the same time as the cod.

[34] Source: Member States’ operational programmes and decommissioning schemes. The amount for England is an average, as aid rates were based on applicants’ tenders. Only a rate for "10 GT" is provided as the largest vessel scrapped with aid in England was 15 GT (no vessels had been scrapped with public aid from the EFF in Scotland by the time of the audit). Exchange rates for Denmark, Poland and the United Kingdom as at 31 December 2010.

[35] Article 14(1) of Council Regulation (EC) No 2371/2002.

[36] Article 13 of Commission Regulation (EC) No 1438/2003 of 12 August 2003 laying down implementing rules on the Community fleet policy defined in Chapter III of Council Regulation (EC) No 2371/2002 (OJ L 204, 13.8.2003, p. 21).

[37] Annual report from the Commission to the European Parliament and the Council on Member States’ efforts during 2008 to achieve a sustainable balance between fishing capacity and fishing opportunities (COM(2010) 60 final of 25 February 2010).

[38] At 4 October 2010, these entitlements represented 81891 kW and 21957 GT.

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ANNEX

IMPLEMENTATION OF THE EUROPEAN FISHERIES FUND AS AT 31 DECEMBER 2010

| EFF BUDGET | EFF Priority Axis 1 budget (measures to adapt fishing fleets) | EFF implementation certified by Member States to 31.12.2010 | EFF Priority Axis 1 implementation certified by Member States to 31.12.2010 |

| million euro | million euro | million euro | million euro | % of budget |

Member State | Public aid | EFF | National | Public aid | EFF | National | Public aid | EFF | National | Public aid | EFF | National | Public aid | EFF | National |

Belgium | 48 | 26 | 22 | 18 | 12 | 6 | 11 | 8 | 3 | 10 | 7 | 3 | 56 % | 58 % | 50 % |

Bulgaria | 107 | 80 | 27 | 11 | 8 | 3 | 4 | 3 | 1 | 0 | 0 | 0 | 0 % | 0 % | 0 % |

Czech Republic | 36 | 27 | 9 | 0 | 0 | 0 | 4 | 3 | 1 | 0 | 0 | 0 | - | - | - |

Denmark | 238 | 134 | 104 | 54 | 40 | 14 | 41 | 29 | 12 | 22 | 20 | 2 | 41 % | 50 % | 14 % |

Germany | 247 | 156 | 91 | 13 | 8 | 5 | 38 | 26 | 12 | 1 | 0 | 1 | 8 % | 0 % | 20 % |

Estonia | 113 | 85 | 28 | 20 | 15 | 5 | 19 | 14 | 5 | 6 | 5 | 1 | 30 % | 33 % | 20 % |

Ireland | 66 | 42 | 24 | 46 | 35 | 11 | 37 | 27 | 10 | 37 | 27 | 10 | 80 % | 77 % | 91 % |

Greece | 274 | 208 | 66 | 98 | 77 | 21 | 41 | 39 | 2 | 8 | 8 | 0 | 8 % | 10 % | 0 % |

Spain | 2071 | 1132 | 939 | 764 | 439 | 325 | 402 | 202 | 200 | 237 | 132 | 105 | 31 % | 30 % | 32 % |

France | 557 | 216 | 341 | 179 | 66 | 113 | 172 | 50 | 122 | 136 | 38 | 98 | 76 % | 58 % | 87 % |

Italy | 849 | 424 | 425 | 323 | 161 | 162 | 81 | 60 | 21 | 55 | 42 | 13 | 17 % | 26 % | 8 % |

Cyprus | 39 | 20 | 19 | 10 | 5 | 5 | 12 | 6 | 6 | 3 | 1 | 2 | 30 % | 20 % | 40 % |

Latvia | 167 | 125 | 42 | 35 | 26 | 9 | 30 | 22 | 8 | 19 | 14 | 5 | 54 % | 54 % | 56 % |

Lithuania | 71 | 55 | 16 | 17 | 14 | 3 | 14 | 11 | 3 | 5 | 4 | 1 | 29 % | 29 % | 33 % |

Hungary | 47 | 35 | 12 | 0 | 0 | 0 | 5 | 4 | 1 | 0 | 0 | 0 | - | - | - |

Malta | 11 | 8 | 3 | 3 | 2 | 1 | 1 | 1 | 0 | 1 | 0 | 1 | 33 % | 0 % | 100 % |

Netherlands | 121 | 49 | 72 | 45 | 17 | 28 | 33 | 10 | 23 | 28 | 8 | 20 | 62 % | 47 % | 71 % |

Austria | 10 | 5 | 5 | 0 | 0 | 0 | 5 | 3 | 2 | 0 | 0 | 0 | - | - | - |

Poland | 979 | 734 | 245 | 225 | 169 | 56 | 50 | 37 | 13 | 50 | 37 | 13 | 22 % | 22 % | 23 % |

Portugal | 326 | 246 | 80 | 75 | 63 | 12 | 51 | 42 | 9 | 29 | 27 | 2 | 39 % | 43 % | 17 % |

Romania | 308 | 231 | 77 | 13 | 10 | 3 | 17 | 13 | 4 | 2 | 1 | 1 | 15 % | 10 % | 33 % |

Slovenia | 29 | 22 | 7 | 3 | 2 | 1 | 2 | 2 | 0 | 0 | 0 | 0 | 0 % | 0 % | 0 % |

Slovakia | 19 | 14 | 5 | 0 | 0 | 0 | 3 | 2 | 1 | 0 | 0 | 0 | - | - | - |

Finland | 92 | 39 | 53 | 8 | 3 | 5 | 20 | 9 | 11 | 1 | 1 | 0 | 13 % | 33 % | 0 % |

Sweden | 105 | 55 | 50 | 23 | 14 | 9 | 28 | 16 | 12 | 17 | 10 | 7 | 74 % | 71 % | 78 % |

United Kingdom | 247 | 138 | 109 | 74 | 40 | 34 | 12 | 6 | 6 | 6 | 3 | 3 | 8 % | 8 % | 9 % |

Total | 7177 | 4306 | 2871 | 2057 | 1226 | 831 | 1133 | 645 | 488 | 673 | 385 | 288 | | | |

Implementation (%) | | | | | | | 16 % | 15 % | 17 % | | | | 33 % | 31 % | 35 % |

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