Korea - Measures Affecting Trade in Commercial Vessels

On 21 October 2002, the European Communities requested consultations with Korea on certain measures establishing subsidies to its shipbuilding industry which, according to the European Communities, are inconsistent with Korea’s obligations under the SCM Agreement. These measures are as follows: - Corporate restructuring subsidies in the form of debt forgiveness, debt and interest relief and debt-to-equity swaps, provided through government-owned and government-controlled banks; - Special taxation on in-kind contribution and the special taxation on spin-off scheme provided in the Special Tax Treatment Control Law which establishes two tax programmes limited to companies under corporate restructuring and provided tax concessions to Daewoo; - Pre-shipment loans and advance payment refund guarantees provided by the state-owned Export-Import Bank of Korea (“KEXIM”) to all Korean shipyards