WORLD TRADE
ORGANIZATIONG/SCM/N/38/EEC/Add.12
21 December 1998
(98-5136)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English/
French
SUBSIDIES
New and Full Notifications Pursuant to Article XVI:1
of the GATT 1994 and Article 25 of the Agreement
on Subsidies and Countervailing Measures
EUROPEAN COMMUNITIES
Addendum
The following addendum to the notification of  the European Community relates to subsidy
programmes of Portugal .G/SCM/N/38/EEC/Add.12
Page 2
PORTUGAL
TABLE OF CONTENTS
Page
Regional Incentives System (SIR) ............................................................................................... ..3
Trade Modernization Support  Programme (PROCOM)................................................................4
International Development Support Programme for Trade and Services (PAIEP 2) ....................5Strategic Programme for the Revitalization and Modernization of Portuguese
Industry (PEDIP II)............................................................................................................ ............6
RETEX Operational Programme ...................................................................................................71. Aid for Shipbuilding a nd Ship Conversion.......................................................................8
2. State Aid to "Sid erurgia Nacional" ...................................................................................9
3. Energy Programme .........................................................................................................10G/SCM/N/38/EEC/Add.12
Page 3
SIR
1. Title
Regional Incentives System (SIR)
2. Objectives
The objective of this regional assistance programme, which covers all the country's less-
developed inland and coastal regions, is to contribute to the endogenous development of those regions
by improving their competitiveness and helping to create jobs and thereby reduce migration, while
promoting diversification of the production of goods and services.
3. Duration
The duration of the subsidy is 1994-1999.
4. Legislative authority
Decree Law No. 193/94, of 19 July
Council of Ministers Resolution No. 67/94, of 11 August
5. Year:   1997
Government expenditure programmed:  Esc 10,233,885 million
Grants and repayable joint financial participation:
- Amounts approved: Esc 17,152,927 million
- Amounts disbursed: Esc 11,679,269 millionG/SCM/N/38/EEC/Add.12
Page 4
PROCOM
1. Title
Trade Modernization Support Programme (PROCOM)
2. Objectives
To promote the sustainable development of the competitiveness of trade sector enterprises in
the context of a coherent strategy for the modernization of their activities.
3. Duration
The duration of the subsidy is 1994-1999.
4. Legislative authority
Decree Law No. 184/94 of 1 July 1994
Council of Ministers Resolution No. 33/96 of 3 April 1996
5. Year:   1997
Government expenditure programmed:  Esc 5,593,701 millionAmounts approved and disbursed:
(millions of Esc)
Approved Disbursed
Interest rate subsidy
Non-repayable subsidy 16,513,708 1,521,993G/SCM/N/38/EEC/Add.12
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PAIEP 2
1. Title
International Development Support Programme for Trade and Services (PAIEP 2)
2. Objectives
To promote the sustainable development of the competitiveness of trade and services
enterprises in the context of a coherent strategy for the modernization and globalization of their
activities.
3. Duration
The duration of the subsidy is 1994-1999.
4. Legislative authority
Decree Law No. 290/94 of 14 November 1994
Council of Ministers Resolution No. 121/94 of 15 December 1994
5. Year:  1997
Government expenditure programmed:  Esc 3,948,921 millionAmounts approved and disbursed:
(millions of Esc)
Approved Disbursed
Subsidy for repayable joint
financial participation at zero
interest rate6,122,592 1,995,761G/SCM/N/38/EEC/Add.12
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PEDIP II
1. Title
Strategic Programme for the Revitalization and Modernization of Portuguese
Industry (PEDIP II)
2. Objectives
Regional assistance programme to revitalize the sustained growth of the competitiveness of
Portuguese enterprises in order to enhance their capacity to respond to rapid technological and market
changes, while at the same time supporting the modernization, diversification and globalization ofdomestic industry.
3. Duration
The duration of the subsidy is 1994-1999.
4. Legislative authority
Decree Law No. 177/94 of 27 June 1994
Council of Ministers Resolution No. 50/94 of 1 July 1994
5. Year:   1997
Government expenditure programmed:  Esc 48,082,036 millionAmounts approved and disbursed:
(millions of Esc)
Approved Disbursed
Grants plus reimbursable
financial co-participation137,826,672 52,966,735G/SCM/N/38/EEC/Add.12
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RETEX
1. Title
RETEX Operational Programme
2. Objectives
Community Initiative Programme on regional aid with the aim of facilitating the
modernization of the industrial fabric in regions strongly dependant on the textiles and clothing sector.
3. Duration
The duration of the subsidy was 1993-1997.
4. Legislative authority
Decisions Nos. 264, 265, 266 of 11 September 1993
5. Year:   1997
Government expenditure programmed:
(millions of Esc)
Risk Capital Fund 1,225,365
Repayable participation 2,241,316
Non-repayable subsidy 4,623,546
(millions of Esc)
Amounts approved/disbursed
Approved Disbursed
Risk Capital Fund
Repayable participation*633,383 143,528
Non-repayable subsidy 5,696,606 3,392,916
                                                     
*Repayable financing at zero interest rate for an amount not exceeding 40 per cent of the total financing
necessary, with a ceiling of Esc 150 million.  The duration is three to six years.G/SCM/N/38/EEC/Add.12
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1. Aid for shipbuilding and ship conversion
1. The notification concerns 1997.
2. See information under point 6.3. Decree Law No. 296/89 of 4 September establishing assistance arrangements for metal-hulled
shipbuilding and ship conversion (notified and approved by the European Commission in accordance
with the 7
th Directive (90/684/EEC), on aid to shipbuilding.
4. Decree Law No. 296/8l9 provides for the grant of non-repayable subsidies.
5. Operational assistance for national shipyards leading to joint participation in shipbuilding or
ship conversion costs and compensation for losses.  This aid is subject to a common maximum ceiling
established annually by the European Commission, expressed as a percentage value of the contract
before aid which, in 1995, was 9 per cent for building ships of a contract value of more than
ECU 10 million and 4.5 per cent for ships with a contract value of less than that amount and for shipconversion.
6. The total amount of subsidies allocated in 1997 was Esc 2,187 million.7. Decree Law No. 296/89 of 4 September entered into force on 5 September 1989 and is of
indefinite duration.
8. Statistical data not available.G/SCM/N/38/EEC/Add.12
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2. State aid to "Siderurgia Nacional"
1. This notification concerns 1997.
2. Aid for financing the plan for the restructuring of the "Sidegurgia Nacional" steel company.3. Decision of the European Commission 94/2 57/ECSC of 12 April 1994, in accordance with
Article 95 of the ECSC Treaty and the Commission Decision of 27 November 1994 in the context of
the Community Steel Aid Code.
4. The aid is in the form of capital reinforcement, debt relief and subsidies.
5. Aid granted to the "Siderurgia Nacional" steel company.
6. The total amount of aid authorized amounts to Esc 60,120 million (under Article 95/ECSC)
amd Esc 5,925 million (under the Steel Aid Code).
In 1995, the total amount of aid authorized in accordance with Article 95/ECSC was reached.
In 1997, Esc 2,250 million were allocated under the Community Steel Aid Code.
7. The aid has been authorized with a view to enabling the enterprise to become viable by the
end of 1997.
8. Sales trends (long and flat products) and markets.
1995 1996 1997
KT % KT % KT %
Portugal 634.3 74.2 834.4 84 903.2 83.9
EU
(excluding
Portugal)174.2 20.4 110.6 11 147.3 13.7
Other
countries47.6 5.4 49.6 5 25.4 2.4
Total 856.1 100 994.6 100 1,075.9 100G/SCM/N/38/EEC/Add.12
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3. Energy Programme
1. Title of the subsidy programme
Energy programme
2. Period covered by the notification
1997
3. Policy objective and/or purpose of the subsidy
To reduce the oil dependency by promoting the natural gas, fostering the use of renewable
energy resources and promoting energy efficiency in all sectors of the economy activity.
These energy objectives will have major impacts in the improvement of the Portuguese
economic competitiveness and will reduce energy environment impacts.
4. Background and authority for the subsidy
Legal basis:  Community decision No. C (94) 376 and government law DL No. 196/94.
5. Form of the subsidy
Grants and Zero Interest Rate Loans.
6. To whom and how the subsidy is provided
Subsidies can be granted to enterprises and municipalities according to the specific legislation
applied to each measure.  Subsidies are granted by the Ministry of Economy after the application has
been submitted to the approval of an Energy Committee.  Subsidies are paid according to the progress
of the project.
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