World Trade
Organization
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G/SCM/Q2/KOR/47
24 April 2012
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(12-2171)
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Committee on Subsidies
and Countervailing Measures
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Original: English
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SUBSIDIES
The following communication, dated 20 April 2012, is being circulated at the request of the Delegation of Korea.
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Support for Farm Machinery Manufacturing
This programme aims to assist off-season manufacturing of farm machinery and to help machinery manufacturers meet the high demand for farm machinery during the farming seasons. It is also designed to promote manufacturing and supply of high quality agricultural machinery made in Korea by providing financial resources to production facility establishments of machinery required for automization and modernization of agricultural facilities and machinery.
Question 1
Can Korea please provide details of the eligibility criteria and guidelines for access to this programme?
Reply
This program aims to provide assistance to the farm machinery manufacturers when they purchase raw materials or construct production facilities. Eligibility for Raw Materials Support is determined by various criteria including average sales of the most recent two years, sales figures of eco-friendly farm machinery and R&D investment. Eligibility for Production Facility Support is determined by financial, technical and administrative capacity of the manufacturers.
FISHERIES
A. Support for Development of Deep-Sea Fishery
Question 2
Grants are provided to a "cooperative fund" to compensate for the lower interest rates provided. What is the nature of the cooperative fund? Is this a government agency or industry cooperative?
Reply
The cooperative fund is operated and administered by the National Federation of Fisheries Cooperatives, an industry cooperatives funded and operated by member fishermen.
B. Support for Fish Products Processing Development
Question 3
Are the grants and loans for capital purposes? Are these grants/loans discretionary and what are the eligibility criteria?
Reply
The grants under this program are for purchasing, constructing or installing capital goods, while the loans are for supporting operating costs. It is not discretionary to select among eligible applicants for the assistance and such selection is strictly enforced according to the statutory eligibility requirements. The eligibility criteria include the followings: obtaining fishing license, presenting business feasibility, securing construction site for the fishery product processing facilities, providing sufficient collaterals to pay principal and interest in accordance with the terms and conditions of the programs.
C. Support for Fishing Activities
Question 4
Are the loans discretionary and what are the eligibility criteria?
Reply
The financing under this program is not provided based on discretion. An applicant must demonstrate the satisfaction of all statutory eligibility requirements, such as the possession of a valid aquaculture license or a fishing permit, or the proof that he or she has engaged in the reported fishery. In addition, an ordinary credit evaluation is also performed by the fisheries cooperatives which operate and administer the loans.
D. Support for Aquaculture Fishery Development
Question 5
Are the loans discretionary? The notification notes that the terms of a grant for expenses depends on the business type. Could Korea please elaborate on the criteria.
Reply
The loans under this program are not provided based on discretion. The commonly-shared criteria include persons or entities to hold a valid license or permit under the Fisheries Act, to provide business feasibility, to get credit evaluation. As for an example of the individual sub-programs, there are a grant program for purchasing eco-friendly mixed feed and a loan program for improving run-down aquaculture facilities.
F. Support for Vessel Decommissioning
Question 6
How is the amount of grant determined, that is, how is the value of the vessel determined?
Reply
The amount of assistance under this program consists of two parts: the compensation for the loss of fishing opportunities and the compensation for the current price of the vessel and fishing gears. The amount of compensation for the loss of fishing opportunities is equal to the accumulated amount of average incomes of the relevant vessels for the past three years. For the price compensation, the current price of the vessel and fishing gears are determined by an appraiser duly designated by the Minister for Food, Agriculture, Forestry and Fisheries or the heads of respective local governments.