WORLD TRADE
ORGANIZATIONG/SCM/N/48/EEC/Add.12
17 December 1999
(99-5463)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English/
French
SUBSIDIES
Updating Notification Pursuant to Article XVI:1 of the GATT 1994
and Article 25 of the SCM Agreement
EUROPEAN COMMUNITIES
Addendum
The following addendum to the notification of the European Community relates to subsidy
programmes of Portugal .
_______________G/SCM/N/48/EEC/Add.12
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PORTUGAL
TABLE OF CONTENTS
 Page
SUBSIDIES ………………………………………………………………………………………….3
1. Regional Incentives System (SIR)........................................................................................32. IC - PME..................................................................................................................... ...........3
3. Trade Modernization Support Programme (PROCOM)..................................................54. RETEX Operation al Programme........................................................................................5
5. Strategic Programme for the Revitalization and Modernization of Portuguese
Industry (PEDIP II)............................................................................................................ ..6
6. International Development Support Programme for Trade and Services (PAIEP 2)....77. IMIT - Initiative for the Modernization of the Textile Industry ......................................8
8. Energy programme............................................................................................................. ..9
9. Shipbuilding and ship conversion..................................................................................... 10G/SCM/N/48/EEC/Add.12
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1. Regional Incentives System (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 1994Council of Ministers Resolution No. 67/94, of 11 August 1994
5. Amount of the subsidy
Year:  1998
Government expenditure programmed:  Esc 11,007,000 millionGrants and repayable joint financial participation- Amounts disbursed: Esc 12,685,162 million
- Amounts approved: Esc 19,173,516 million
6. Trade effects
N/A.
2. IC - PME
1. Title
“IC - PME/Iniciativa Comunitária PME”
2. Period covered by the notification
The year 1998.
3. Policy objective and purpose of the subsidy
To adapt Portuguese SMEs to the new competitive conditions and environment of the
common market.G/SCM/N/48/EEC/Add.12
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4. Background and authority for the subsidy
Legal Basis:
- Decree-Law No. 172/97 (D.R. No. 162 - I Series A - 16/07/97);
- Decree-Law No. 178/ 98 (D.R. No. 151 - I Series A - 03/07/98);
- Resolution of the Council of Ministers N o. 128/97 (D.R. No. 176/97 - I Series B -
01/08/98);
- Resolution of the Council of Ministers N o. 129/97 (D.R. No. 176/97 - I Series B -
01/08/98);
- Resolution of the Council of Ministers N o. 76/98 (D.R. No. 151/98 - I Series B -
03/07/98);
- Edict  (“Dispachos Normativos”) (MPAT+MT SS) No. 348/98 (D.R. No. 119/98 - II Series
- 23/05/98).
5. Form of the subsidy
Cash grants and/or reimbursable loans at zero interest rate.
6. To whom and how the subsidy is provided
Recipients:
Regime “A” - All legal SME’s (European definition) of the Civil Construction/Building
Sectors:  Portuguese Classifica tion of Economic Activities/C.A.E.:
- Division 45 of Section F;
Regime “B” - All legal SME’s (European definition) of Industrial, Commerce and Services
Sectors:  Portuguese Classifica tion of Economic Activities/C.A.E.:
- Sections C, D, G, group 634 of Section I, Divisions 72, 73 and 74 of Section K and
Divisions 90 and 92.1 of Section O;
Subsidy allocation:
Subsidies are granted to enterprises on a case-by-case basis and they are paid by IAPMEI
according to the progress of the approved project.
7. The total amount or the annual amount budgeted for the subsidy
Incentives given out during 1998 (approved projects):
- Cash grants: Esc 2,111,100,000
- Reimbursable loans:
- Total: Esc 2,111,100,000
8. Duration of the subsidy and/or any other time limits attached to it
The initiative was implemented in 1997 and will remain available until 2000.G/SCM/N/48/EEC/Add.12
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9. Trade effects of the subsidy
No specific economic studies have been carried out.  Data for this item not available.
3. Trade Modernization Support Programme (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 of the subsidy
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. Amount of the subsidy
Year:  1998Government expenditure programmed:  Esc 3,815,617 millionAmounts approved and disbursed:
(millions of Esc)
Approved Disbursed
Interest rate subsidy
Non-repayable subsidy 16,355,803 1,964,713
6. Trade effects of the subsidy
N/A.
4. RETEX Operational Programme
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 dependent on the textiles and clothing sector.G/SCM/N/48/EEC/Add.12
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3. Duration
The duration of the subsidy is 1993-1999.
4. Legislative authority
Decisions ("Despachos normativos") Nos. 264, 265, 266 of 11 September 1993
5. Amount of the subsidy
Year:  1998
Government expenditure programmed:
(millions of Esc)
Risk Capital Fund 2,916,779
Reimbursable co-participation 4,375,169
Non-repayable subsidy 3,173,215
Amounts approved/disbursed
(millions of Esc)
Approved Disbursed
Risk Capital Fund 3,099,469
Reimbursable co- participation*10,980,288 3,743,962
Non-repayable subsidy 5,556,845 1,855,325
6. Trade effects of the subsidy
N/A.
5. Strategic Programme for the Revitalization and Modernization of Portuguese Industry
(PEDIP II)
1. Title
Strategic Programme for the Revitalization and Modernization of Portuguese
Industry (PEDIP II)
2. Objectives
Assistance programme to revitalize the sustaine d 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 of domestic
industry.
                                                     
*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/48/EEC/Add.12
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3. Duration
The duration of the subsidy is 1994-1999.
4. Legislative authority
Decree Law No. 177/94 of 27 June 1994Council of Ministers Resolution No. 50/94 of 1 July 1994
5. Amount of the subsidy
Year:  1998Government expenditure programmed:  Esc 2,335,684 millionAmounts approved and disbursed:
(millions of Esc)
Approved Disbursed
Grants plus reimbursable
financial co-participation163,571,731 59,232,015
6. Trade effects of the subsidy
N/A.
6. International Development Support Programme for Trade and Services (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 1994Council of Ministers Resolution No. 121/94 of 15 December 1994
5. Amount of the subsidy
Year:   1998G/SCM/N/48/EEC/Add.12
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Government expenditure programmed:  Esc 6,577,808 million
Amounts approved and disbursed:
(millions of Esc)
Approved Disbursed
Subsidy for reimbursable
financial co-participation at
zero interest rate6,292,390 1,015,332
6. Trade effects of the subsidy
N/A.
7. IMIT - Initiative for the Modernization of the Textile Industry
1. Title of subsidy programme
“IMIT – Initiative for the Modernization of the Textile Industry"
2. Period covered by the notification
The year 1998
3. Policy objective and purpose of the subsidy
To improve the competitiveness and to modernize the Portuguese textile and clothing
manufacturing sectors.
4. Background and authority for the subsidy
Legal basis:
- Resolution of Council of Ministers No. 96-A/95 (DR 231/95-I B Series, 2ºSuppl.,
6 October 1995);
- Decisions No. 61-A/B/C/ D/E/F/G/H/95 (DR 240/95 -I B Series 3ºSuppl.,
17 October 1995).
5. Form of the subsidy
Cash grants and/or reimbursable loans at zero interest rate.
6. To whom and how the subsidy is provided
Recipients:- Industrial companies of the textile and clothing sectors (Ref. 17, 181 and 182 of the
Portuguese Economic Activities Classification /C.A.E.);
- Associations of Entrepreneurs, Chambers of Commerce;G/SCM/N/48/EEC/Add.12
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- Non-lucrative organizations (official or private) providing services in “fashion and
design”).
Subsidy allocation:
Subsidies are granted to industrial enterprises and/or applicant organizations on a case-by-
case basis.  Subsidies are granted by Portuguese Ministry of Economy on application and they are
paid according to the progress of the approved project.
7. The total amount or the annual amount budgeted for the subsidy
Incentives given out during 1997 (approved projects):
   -   Cash grants: Esc   6,801,500,000   -   Reimbursable loans: Esc 17,600,500,000
   -   Total: Esc 24,402,000,000
8. Duration of the subsidy and/or any other time-limits attached to it
The initiative was implemented in 1995 and will remain available until 1999.
9. Trade effects of the subsidy
No specific economic studies have been carried out.  Data for this item not available.
8. Energy Programme
1. Title of the subsidy programme
Energy Programme
2. Period covered by the notification
1998
3. Policy objective and/or purpose of the subsidy
To reduce oil dependency by promoting natural gas, fostering the use of renewable energy
resources and promoting energy efficiency in all sectors of economy activity.
These energy objectives will have major impacts on the improvement of Portuguese
economic competitiveness and will reduce energy environment impacts.
4. Form of the subsidy
Grants and zero interest rate loans.G/SCM/N/48/EEC/Add.12
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5. The total amount or the annual amount budgeted for the subsidy (indicating if possible, the
average subsidy per unit in the previous year)
The total amount of the commitments by Energy Programme in 1998 was:
UNIT: 10 ECU
Measures Community
Grants
FEDERState budget Total
Measure 1 - Natural Gas 52,745 2,584 55,329
Measure 2 - Renewables 20,370 0 20,370
Measure 3 - Energy Efficiency 5,834 1,944 7,778
Total 78,949 4,528 83,477
6. Duration of the subsidy and/or any other limits attached to it
Measure 1 Grants:  no time limits;
Measure 2 Zero interest rate loans:  3 years granted period and 9 years reimbursement
period;
Measure 3 Grants:  No time limits;
Zero interest rate loans:  2 years granted period and 5 years reimbursementperiod.
7. The trade effects of the subsidy
No effects on international trade.
9. Shipbuilding and ship conversion
1. Title
Aid for shipbuilding and ship conversion
2. Period
The notification concerns 1998.
3. Objective
See information under point 6.
4. Legal basis
Decree Law No. 296/89 of 4 September establishing the aid regime for metal-hulled
shipbuilding and ship conversion (notified and approved by the European Commission in accordance
with the 7th Directive (90/684/EEC)), on aid to shipbuilding.
5. Form of the subsidy
Decree Law No. 296/89 provides for the grant of non-repayable subsidies.G/SCM/N/48/EEC/Add.12
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6. To whom the subsidy is provided
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 contractbefore aid which, in 1998, 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 ship
conversion.
7. Amount of the subsidy
The total amount of subsidies allocated in 1998 was Esc 1,148 million.
8. Duration of the subsidy
Decree Law No. 296/89 of 4 September entered into force on 5 September 1989 and is of
indefinite duration.
9. Trade effects of the subsidy
Statistical data not available.
State aid to the fisheries sector ended on 31 December 1999 because there were no candidates
in 1998.
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