RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/W/481
6 February 2002
(02-0560)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
MEMBERS' DIFFICULTIES IN MAKING SUBSIDY NOTIFICATIONS,
AND THE PLANNED SUBSIDY NOTIFICATION SEMINAR
Reply to Questions in Document G/SCM/W/473
of 18 December 2001
Paper Submitted by Estonia
The following communication, dated 4 February 2002, has been received from the Permanent
Mission of Estonia.
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B. QUESTIONS CONCERNING DIFFICULTIES IN NOTIFYING
Q1. Does your government face resource constraints in trying to make subsidy notifications?
If so, what are the major bottlenecks in the notification system of your government?  Is the
problem primarily an insufficient number  of staff to handle the notifications, or is it more a
question of insufficiently trained  staff?
Reply
Estonia faces staff related resource constraints concerning the subsidy notifications.  The
main difficulties arise from the insufficient understanding of the rules of the Agreement on Subsidies
and Countervailing Measures.  Also, the government bodies responsible for notification of subsidies
have been subject to wide-scale reforms, in addition there has been loss of the trained personnel.
Q2. Depending on your answer to question 1, above, if the notification questionnaire format
could be simplified, would this make a difference to your government’s ability to make the
required subsidy notifications?
Reply
Simplification of the notification questionnaire would lessen the required work effort and
raise our ability to make subsidy notifications.
Q3. Balancing your government’s needs for as simp le a format as possible against its needs
to be able to understand other Members’ notifications when it reviews them, how much
simplification could be introduced without sacrificing transparency?G/SCM/W/481
Page 2
Reply
The requirement to provide data permitting an assessment of the trade effects of subsidies
could be considered to be simplified in nature.
Q4. Considering the notification format itself, and the concepts underlying it as found in
SCM Articles 1-3, in your government’ s experience, do individuals responsible for makingnotifications have difficulties understanding the requirements due to the language used in the
Agreement to define “subsidy”, “specificity”, etc. ?  For example, do these individuals believe
that subsidies are in the nature of cash grants  only, and do not encompass revenue foregone via
tax and duty incentives?  Could some sort of explanation be introduced into the questionnaire
format to make more clear the scope of measures that are subject to notification?  How might
such an explanation  be worded?
Reply
The officials responsible for making notifications understand the definition of subsidy and
specificity in the meaning of the SCM Agreement.
Q5. Does your government experience general pr oblems due to the formatting requirements
of the notification questionnaire?  In particular, does your government maintain any pre-
existing information that addresses the substance of the notification questionnaire, but does notcorrespond to the questionnaire’s format?  If so, what are the specific problems that your
government encounters when it tries to fo rmat the information as required by the
questionnaire?  If the information were to be notified in its pre-existing format, could it
nevertheless be keyed to the data elements of the subsidy questionnaire?
Reply
Estonia does not face problems with formatting requirements.  Also pre-existing formats do
not exist.
Q6. In reviewing other Members’ notifications, would your government find it problematic
to review information that was formatted in a way other than the way foreseen in the subsidy
questionnaire, but that comprehensively ad dressed the substantive elements of the
questionnaire?  How important would it be for this information to be keyed or coded to the
questionnaire format?
Reply
In general, the formats different from the questionnaire format could be acceptable.
However, since obtaining relevant information from the non-standard notifications presents a labour-
consuming task and considering our limited administrative capacity, Estonia strongly favours a firm
agreed format.
Q7. Does your government maintain any info rmation about its subsidy or incentive
programmes on official web sites?  How much wo uld your notification of subsidies be simplified
if such information could be submitted in its pre-existing format?  As a reviewer of
notifications, what sorts of limits should there be to the substitution of information from web
sites for completed notification questionnaires?  Would references to web sites be a usefulsupplement to substantive information provided in a notification?G/SCM/W/481
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Reply
The Ministry of Finance provides general information about all forms of state aid including
non-specific subsidies on its web site.  The information on official government web sites is often too
broad and doesn’t reflect all the aspects covered by the notification questionnaire.  Web sites could be
considered rather as a supplement than a substitute to the notifications.
Q8. Concerning General Rule 6, which requires that  notification of subsidies provided “to
specific products or sectors” be organised on a product- or sector-specific basis, does this rule
pose problems for your government when notifying subsidies that are provided on a horizontal,
rather than a product- or sector-specific basis?   What are the specific steps and difficulties in
preparing sector- or product-specific informatio n for subsidies provided on a horizontal basis?
Reply
Preparing information on a product- or sector-specific basis and on horizontal basis does not
constitute a comprehensive problem for Estonian  government institutions.  According to the
Competition Act, all government bodies providing subsidies are required to submit detailed reports on
the amount, purpose, receiver, etc. data on the subsidies granted.  The reports are submitted to the
Ministry of Finance and the subsidy notification is prepared on the basis on the reports by the
Ministry of Economic Affairs.
Q9. Does this rule present problems for notifi cation of subsidies that are provided on a
product- or sector-specific basis (e.g., some agricultural subsidies)?
Reply
No.
Q10. Would a redrafting of General Rule 6 to refer to subsidies "provided on the basis of
specific products or sectors" help to resolve this  problem?  (The idea would be to clarify that
programme-based information, rather than product- or sector-specific information would be
required for subsidies provided on a horizontal basis, which product- or sector-specific
subsidies would continue to need to be notified on that basis.)
Reply
As stated above (see answer to question no. 8), the General Rule 6 does not pose problems to
Estonian authorities responsible for notification of subsidies.
Q11. Would such a redrafting pose problems for the review of subsidy notifications, and if so,
what would those problems be?
Reply
The redrafting would complicate the comparison between new and previous notifications.
However, if the redrafting of the rule would facilitate the members’ ability to notify and result inincreased number of notifications, then the redrafting should be carried out.
Q12. To what extent does the general requirement to provide statistical information on the
trade effects of notified subsidies (chapeau of item 9) impede or delay the presentation of
subsidy notifications?G/SCM/W/481
Page 4
Reply
The requirement to provide statistical information hinders the presentation of subsidy
notifications considerably.
Q13. To what extent does the need to compile the specific kinds of statistical information
referred to in items 9(a) and 9(b) impede or delay the presentation of subsidy notifications?
Reply
For the reason of the limited scope of Estonian subsidy programmes, it is often nearly
impossible to provide the statistical information or to provide it in full coverage.  The relevant legal
acts stipulate the requirement of the transmission of data in a form which precludes the possibility of
direct or indirect identification of the respondents.
Q14. How important is this statistical information about other Members’ subsidies to your
government when reviewing subsidy notificati ons?  Could these reporting requirements be
made less stringent in some manner?  If so, how?
Reply
Statistical information about subsidies is important and the only measure which enables to
draw conclusions about the extent of the subsidy a nd its possible trade effects.  In order to simplify
the requirement of item 9, the Members could consider making the requirement of statisticalinformation to apply on a group of subsidy programmes instead of requiring statistical information on
each individual subsidy programme.
Q15. Does your government find, in preparing s ubsidy notifications, that there is conceptual
overlap or redundancy in some of the information elements as currently drafted?
Reply
No.
Q16. If your government believes there to be overlap, how might this be eliminated?  What
drafting improvements might be introduced to clarify such situations, while preserving the
substantive requirements of Article 25 from which the questionnaire is drawn?
Reply
N.A.
Q17. Do the requirements to provide information on the policy objective or purpose of the
subsidy, its background and authority, and to whom and how it is provided pose significant
difficulties to your government in preparing its subsidy notifications?  How might these
requirements be simplified?
Reply
No.
Q18. Does the requirement to furnish an explanation where a particular element of
information cannot be provided pose particular difficulties to your government in preparing itsG/SCM/W/481
Page 5
notifications?  If so, is there a way to simplify this requirement while preserving its substantive
content?
Reply
No.
Q19. Is there sufficient flexibility in item 7 of the subsidy questionnaire (information on the
amounts of subsidies provided) for your government to be able to notify such information
without undue difficulty?  If not, is there a way to simplify this requirement while preserving its
substantive content?
Reply
The scale of flexibility is sufficient.
C. QUESTIONS PERTAINING TO THE SUBSIDY NOTIFICATION SEMINAR
NB:  The notification seminar is being planned for fall 2002 rather than spring 2002 as
originally discussed.  It is planned to hold the seminar in Geneva, to ensure the maximum
possible participation by all Members.
Q1. Concerning the number and nature of pa rticipants in the seminar, how many
individuals in your government have day-to-day responsibility for gathering information about
subsidies and for preparing and submitting subsidy notifications based on that information?  Ifmore than one, please describe the differen ces in these individuals ’ responsibilities.
Reply
There are three officials responsible for the notifications.  Statistics on subsidies are collected
by the official of the Ministry of Finance, subsidies as a measure of foreign trade policy are kept
under review by the official of the Ministry of Economic Affairs, the official of Ministry ofAgriculture is responsible for agricultural subsidies and the notification under the Agreement of
Agriculture.
Q2. Would it be sufficient for your government to have two participants in the seminar?  If
not, why not, and how many participants would be optimal from your government’s point of
view?
Reply
The Estonian Government would like to send 3 officials to the seminar.  It is extremely
important for the officials of Ministry of Economic Affairs and Ministry of Agriculture to attend the
seminar as they are the main 2 officials involved in preparing the notification.  Since the notification
is drafted on the basis of the statistical information collected by the Ministry of Finance, we consider
it important that an official of the Ministry of Finance is included as a participant as well.
Q3. Would two days be a sufficient/appropriate length for the seminar?  If not, what would
be more appropriate?
Reply
Yes.G/SCM/W/481
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Q4. Would the following schedule be appropriate:  First session:  detailed presentation of the
basic definitions in Articles 1, 2 and 3 of the SCM Agreement, and presentation of the subsidy
notification obligations in the light of these definitions.  Second session:  Presentations by
Members concerning the specific problems they experience in preparing subsidy notifications.
Third session:  Information-sharing and brainstorming among Members as to possible practical
solutions for the identified problems (ways to coordinate and streamline gathering and
formatting of subsidy information).  Fourth session:  Follow-up steps to ensure that information
shared and lessons learned would be retained and implemented.  (It has been emphasized thatto be effective, such follow-up should be immediate and intensive.)  Ideas suggested to date have
included establishment of informal contacts am ong capital-based officials, planning of future
focused technical assistance activities, etc.
Reply
Yes.
Q5. Does your government normally send capital-based representatives to the Committee’s
regular meetings?  If not, why not?
Reply
Yes.
Q6. Does your government view this subsidy noti fication seminar as an important event in
improving its ability to understand the subsidy rules, and to make subsidy notifications in a
complete and timely manner?  (That is, does your government view the seminar as a priority
event for its participation?)  Does your government  plan to send capital-based participants to
the seminar?  If so, how many and what are their functions?  If not, why not?
Reply
The expectations of the seminar are high.  The awareness and the competence of government
officials dealing with subsidy notifications are expected to rise considerably.  Estonia plans to send 3
capital-based participants to the seminar.
Q7. In the view of your government, would financial sponsorship only of participants from
least-developed country Members be appropriate?  If not, why not?  What other objective
criteria for eligibility for financial sponsorship could be developed that might be more
appropriate?
Reply
Depending on the availability of financial resources, the support should cover other countries,
too.  The eligible countries should be the ones having difficulties with meeting the notification
requirements.
Q8. If your government would be prevented from sending participants to the seminar due to
financial constraints, what is the minimum level of financial sponsorship that would make it
possible to send participants (e.g., airfare only, airfare and subsistence for the days in Geneva,
etc.)?G/SCM/W/481
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Reply
As a minimum, the cost of the airfare should be covered.
Q9. Assuming that it is not possible to finance the seminar out of existing trust funds in the
WTO (a possibility currently being explored), and assuming a total budget of approximately
CHF 225,000, would your government consider making  a donation to finance it?  If so, how
much would your government be in a position to contribute?
Reply
Estonia is currently not considering making a donation to finance the seminar.
Q10. If the seminar were financed by earmarked contributions from individual Members,
and there were a surplus in the budget for the seminar (due to fewer than expected participants
from Members eligible for financial sponsorship,  however they might be identified), how should
any such surplus be disposed of?  Two possible  options have been discussed (i) returning the
surplus to the sponsors on a pro-rata basis; or (ii) making the surplus available on a first-come,
first-served basis to other developing countr y Members.  Are there other, more appropriate,
options?
Reply
The seminar is expected to result in an increased ability of Members to make subsidy
notifications.  This goal could be best achieved by using the option (ii).
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