WORLD TRADE  
ORGANIZATION  G/SCM/N/95/EEC/Add.12 
15 December 2003 
 (03-6595) 
Committee on Subsidies and 
Countervailing Measures Original:   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/95/EEC/Add.12 
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PORTUGAL 
 
 
 
TABLE OF CONTENTS 
  
Page
 
 
1. Operational Programme for the Economy .................................................................................3 
2. IMIT – Initiative for the Modernization of the Textile Industry..............................................4 3. RETEX Operational Programme................................................................................................6  
4. Regional Incentives System (SIR)............................................................................................ ....7 
5. Strategic Programme for the Revitaliz ation and Modernization of Portuguese  
 Industry (PEDIP II)........................................................................................................... ...........8 
6. International Development Support Program me for Trade and Services (PAIEP 2)............8 
 
Please note:  1 EURO = Esc 200.482  
 
  G/SCM/N/95/EEC/Add.12 
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1. Operational Programme for the Economy 
1. Title of the programme  
  Operational Programme for the Economy. 
 
2. Period covered by the notification
 
  The present notification refers to the years 2001-2002.  
3. Purpose and objectives of the programme
 
  The Operational Programme for the Economy w as created to stimulate Portuguese companies 
developing their activities in the industrial (includi ng building construction), tourism, commercial and 
services sectors and to foster their productivity and competitiveness within the global market: 
 
• To reinforce companies' competitiveness and their participation in the global market; 
 
• To foster potential development areas. 
 
4. Background and authority for the programme
 
  The Operational Programme for the Economy is  financed within the European Community 
Support Framework for eligible community struct ural interventions under Objective 1 of the 
Structural Funds during the period 2000-06. Th e Programme was approved by the European 
Commission on 11 July 2000 [Commission Decision C (2000) 1774 of 11 July 2000].   At the national level, the Programme is regulated by Decree-Law No. 70-B/2000 of 
5 May 2000. 
 5. Form of the subsidy
 
  Subsidy modalities are as follows:  non-reim bursable subsidies (grants);  reimbursable 
subsidies that may be substituted by the payment of interest or other expenses  related to a bank loan 
of the same value;  and venture capital interventions.  6. Subsidy benefici aries and conditions
 
  The beneficiaries of the Programme are: 
 
• Companies within the industrial, construction, tourism, trade and services sectors and 
independent investors; 
 
• central and local public administration, tourism areas and committees and other 
public entities; 
 
• scientific and technological system entities, associative entities and other entities with 
specific competences in the development eith er of areas of economic activity and/or 
of major territorial intervention; 
 G/SCM/N/95/EEC/Add.12 
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 • companies specialized in the developmen t of venture capital and guarantee and 
counter-guarantee funds directed exclusively to micro-companies and SMEs. 
  The projects submitted by the beneficiaries of each measure are evaluated according to a group of previously established specific selection criteria.  The subsidies for positively evaluated 
projects are approved by the Minister of Econom y and payments made in line with the current 
investment process.  7. Total and annual amount paid during the years 2001 and 2002
 
 
 Period: 2001  Period: 2002  Period: 2000-2002  
AXIS Public 
Expenditure Structural 
Funds National 
Expenditure Public 
Expenditure Structural 
Funds National 
Expenditure Public 
Expenditure Structural 
Funds National 
Expenditure 
 (1)=(2)+(3) (2) (3) (4)=(5)+(6) (5) (6) (7)=(8)+(9) (8) (9) 
Act on the 
factors that make 
companies 
competitive 66,757 50,068 16,689 260,860 195,645 65,215 327,617 245,713 81,904
Promote the 
strategic areas for 
development 19,838 14,572 5,266 153,094 100,088 53,006 172,932 114,660 58,272
Improve the 
corporation 
environment 26,441 18,104 8,337 117,589 83,389 34,201 144,030 101,493 42,538
Technical 
Assistance 619 465 155 7,811 5,858 1,953 8,430 6,323 2,108
Total 113,655 83,209 30,447 539,354 384,980 154,375 653,009 468,189 184,822
 
8. Duration of the programme  
  The duration of the Programme corresponds to the period 2000-2006.  9. Statistical data permitting an assessmen t of the trade effects of the subsidy
 
 
 No statistical data permitting an assessment of the possible trade effects of the subsidies are 
available.   However, it should be underlined that a large pe rcentage of the total subsidies is directed to 
SMEs engaged in activities related to local mark ets (non-tradable goods), as well as to entities not 
involved in market transactions (e.g., non-profit organizations). 
 
2. IMIT – Initiative for the Modernization of the Textile Industry 
1. Title of the subsidy programme
 
 
 “IMIT” - Iniciativa para a M odernização da Indústria Têxtil” 
 2. Period covered by the notification
  
  The years 2001-2002. 
 
3. Policy objective and purpose of the subsidy
 
  To improve the competitiveness of and to modernize the Portuguese textile and clothing manufacturing sectors.  G/SCM/N/95/EEC/Add.12 
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4. Background and authority for the subsidy  
 
 Legal basis: 
  - Council of Ministers Resolution (RCM) Series No. 96-A/95 (D.R. 231/95, I-B Series, 
Suppl.2., 6 Oct. 1995);  RCM No. 116/98 (D.R. 217/98, I-B Series, 19 Sept. 1998);  RCM No. 104/99 (D.R. 216/99, I-B Series, 15 Sept. 1999); and RCM No. 7/00 (D.R. 9/00, II Series, 12 Jan. 2000). 
 
 - Decision No. 61-A/B/C/D/E/F/G/H/95 (D.R. 240/95, I-B Series, Suppl.3, 17 Oct. 
1995); Decision No. 22/99 (D.R. 97/99, I-B Series, 26 April 1999); Decision No. 63/99, I-B Series, 23 Nov. 1999). 
 
5. Form of the subsidy
 
 
 Cash grants, reimbursable loans at zero interest rate and grant interest.  6. To whom and how the subsidy is provided
 
 
 Recipients: 
 
 - Industrial companies in the textile and clothing sectors (Refs. 17, 181 and 182 of the 
Portuguese Economic Activities Classification - C.A.E.); 
  - Associations of entrepreneurs; 
 
 - Non-lucrative organizations (official or private) providing "fashion and design" 
services). 
 
 Subsidy allocation: 
  Subsidies are granted to industrial enterp rises and/or applicant organizations on a case-by-
case basis.  They are granted by the Portuguese Ministry of Economy on application and paid according to the progress of the approved project. 
 
7. Total amount or annual am ount budgeted for the subsidy
 
 
 Incentives awarded in 2001 (approved projects) : 
(EUR thousand) 
 Community Funds 
(75%) National Budget 
(25%) Total 
Grant interest   6,712   2,238   8,950 
Cash grants   30,559   10,186   40,745 
Reimbursable loans   10,357   3,453   13,810 
  Total Grant   63,505 
 G/SCM/N/95/EEC/Add.12 
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 Incentives awarded in 2002 (approved projects)
: 
(EUR thousand) 
 Community Funds 
(75%) National Budget 
(25%) Total 
Grant interest   15,406   5,139   20,555 
Cash grants   25,314   8,438   33,752 
Reimbursable loans   20,710   6,903   27,613 
  Total Grant   81,920 
 
8. Duration of the subsidy and/or any other time limits attached to it  
  The initiative was implemented in 1995 and remained available until the end of 1999. 
 
9. Trade effects of the subsidy
 
 
 No specific economic studies have been carried  out. Evaluation data for this item are not 
available.  
3. RETEX Operational Programme 
1. Title
 
 
 RETEX Operational Programme  
 2. Objectives
 
 
 Community Initiative Programme on regional aid with a view to facilitating the 
modernization of the industrial fabric in regions  which are strongly dependent on the textile and 
clothing sector.  3. Duration of the subsidy
 
 
 This subsidy system was in force from 1993 to 1999. 
 4. Legislative authority
 
 
• Decision No. 264/93 ("Despacho Normativo") of 11 September 1993; 
 
• Decision No. 265/93 ("Despacho Normativo") of 11 September 1993; 
 
• Decision No. 266/93 ("Despacho Normativo") of 11 September 1993. 
 5. Amount of the subsidy
 
  Year:  2001 
  G/SCM/N/95/EEC/Add.12 
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  Amounts approved/disbursed: 
         (Esc million) 
  Approved   Disbursed  
   Risk Capital Fund   0   0 
   Reimbursable co-participation *   1,156,703   1,156,703 
   Non-repayable subsidy   3,775,954   3,962,372 
 
 * 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. 
 
 Government expenditure programmed:  None   Programme completed on 31 December 2001.  
 
4. Regional Incentives System (SIR) 
1. Title
 
  Regional Incentives System (SIR)  
2. Objectives
 
  The objective of this regional assistance programme, which covers all of the country's less-developed inland and coastal regions, is to contri bute 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 of the subsidy
 
  This subsidy system was in force from 1994 to 1999. 
 
4. Legislative authority
 
  Decree-Law No. 193/94 of 19 July 1994;  
 Council of Ministers Resolution No. 67/94 of 11 August 1994. 
 
5. Amount of the subsidy
 
  Year:  2001  
 Amounts approved/disbursed: 
          (Esc million) 
 Approved  Disbursed  
Non-repayable subsidy + 
Reimbursable co-participation   
0  
1,515,921 
 
 Government expenditure programmed:   None 
  Programme completed on 31 December 2001.   G/SCM/N/95/EEC/Add.12 
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 5. Strategic Programme for the Revitalizat ion and Modernization of Portuguese 
Industry (PEDIP II) 
1. Title
 
 
 Strategic Programme for the Revitaliza tion 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.  3. Duration of the subsidy
 
 
 This subsidy system was in force from 1994 to 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. Amount of the subsidy
 
 
 Year:  2001 
  Amounts approved/disbursed:          (Esc million) 
 
 Approved   Disbursed  
  Non-repayable subsidy + 
  Reimbursable co-participation    
 30,508,193  
 30,197,386 
  Government expenditure programmed:   None 
  Programme completed on 31 December 2001.  
 
6. International Development Support Programme for Trade and Services (PAIEP 2) 
1. Title
 
 
 International Development Support Prog ramme for Trade and Services (PAIEP 2) 
 
2. Objectives  
 
 To promote the sustainable development of the competitiveness of trade and service 
enterprises in the context of a coherent strategy  for the modernization and globalization of their 
activities.   G/SCM/N/95/EEC/Add.12 
 Page 9 
 
 
 3. Duration of the subsidy  
  This subsidy system was in force from 1994 to 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. Amount of the subsidy
 
 
 Year:  2001 
  Amounts approved/disbursed: 
         (Esc million) 
 
 Approved   Disbursed  
Non-repayable subsidy + 
Reimbursable financial co-participation at zero 
interest rate    
  521,628 
   
  521,628 
 
 Government expenditure programmed:   None 
 
 Programme completed on 31 December 2001.  
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