WORLD TRADE  
ORGANIZATION  G/SCM/N/155/EEC/Add.20
23 November 2007 
 (07-5178) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
New and Full Notification 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 Communities relates to subsidy 
programmes of Portugal .   
 
_______________ 
 G/SCM/N/155/EEC/Add.20 
Page 2  
 
  PORTUGAL  
 
TABLE OF CONTENTS 
 
 
Page  
 
I. PRIME - INCENTIVES PROGRAMME FOR THE MODERNIZATION OF 
ECONOMIC ACTIVITIES .....................................................................................................3  
II. SIRME – NATIONAL SCHEME OF INCENTIVES FOR ENTERPRISES RESTRUCTURE .................................................................................................................... ..4
 
III. BANK PROTOCOLS REGIME .............................................................................................5  
IV. REGIÃO AUTÓNOMA DA MADEIRA (2005/2006) ...........................................................9  
  G/SCM/N/155/EEC/Add.20 
 Page 3 
 
 
  I. PRIME - INCENTIVES PROGRAMME FOR THE MODERNIZATION OF 
ECONOMIC ACTIVITIES  
 
1. Title of the Program  
 
 PRIME - Incentives Programme for the Modernization of Economic Activities.   
 2. Period covered by the notification
 
  The present notification refers to the period 2000 - 2006.   
 
3. Purpose and objectives of the Program
 
  PRIME was created to stimulate Portuguese companies developing their activities in the 
industrial (building construction included), touris tic, commercial and services sectors, and to foster 
their productivity and competitiveness within the global market:   
 
- To reinforce Companies Competitiveness and th eir participation in the Global Market;   
- To foster potential Development Areas.   
 4. Background and Authority of the Program
 
 
 PRIME is financed within the European Co mmunity Support Framework for the eligible 
community structural interventions for objective nº1 of the structural funds during the period 2000-06.  The Program was initially approved by the European  Commission on July 11th of 2000 [Commission 
Decision C (2000) 1774] and had the last decision on December 28th of 2005 [Commission 
Decision C (2005) 6048].   
  At the national level, the Program is regulated by the Decree-Law n.º 70-B/2000 of May 5th.   
 5. Form of the subsidy
 
 
 The following subsidy modalities are:  Non-Re imbursable subsidies (Grants);  Reimbursable 
subsidies, that may be substituted by the payment of interests or other expenses of a bank loan of the 
same value;  Venture Capital Interventions.    6. Beneficiary and conditions of  the concession of the subsidy
 
 
 The beneficiaries of the Program are:    
- Companies within the industrial, constructi on, touristic, trade and services sectors and 
independent inventors;   
- Central and Local Public Administration, Areas and Committees of Tourism and Other Public 
Entities;   
- Entities of the Scientific and Technological System, Associative Entities and other Entities 
with specific competences in the development e ither of Areas of economic activity and/or of 
important territorial intervention;   
- Companies specialized in the development of the Venture Capital and Guarantee and 
Counter-guarantee funds directed exclusively to Micro Companies and SME.   
  The projects submitted by the beneficiaries of each Measure are evaluated according to a group of specific selection criteria previously establishe d.  Therefore, in case of positive appreciation, 
the subsidies are approved by the Minister of the Economy, and the payments made in line with the 
actual investment process.   G/SCM/N/155/EEC/Add.20 
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  7. Total and annual amount paid during the period 2000-2006
 
  Thousand Euros 
Public 
Expenditure  Structural 
Funds  National 
Expenditure  
Axis  
(1) = (2)+(3)  (2) (3) 
Axis 1 – Enterprise Stimulation  1.872.267 1.440.551  431.716 
Axis 2 – Qualification of Hu man Resources  178.121 133.637  44.484 
Axis 3 – Stimulation of Busi ness Environment 688.255 536.729  151.526 
Technical Assistance  32.529 23.546  8.983 
Total  2.771.172 2.134.463  636.709 
 
 Thousand Euros  
Public Expenditure Structural Funds  National 
Expenditure  Type of Aid  
(1) = (2)+(3) (2) (3) 
Regional Aid  1.386.244 1.039.683 346.561 
De Minimis Aid  259.539 191.838 67.701 
R&D Aid  21.946 13.617 8.330 
Training Aid  61.541 46.156 15.385 
State Aid Total  1.729.271 1.291.294 437.977 
Non State Aid  1.041.901 843.170 198.732 
Total  2.771.172 2.134.463 636.709 
 
 
8. Duration of the Program  
  The duration of the Program corresponds to the period 2000-2006.    9. Statistical data that allow the evalua tion of the effects of the subsidy on trade
 
 
 No statistical data is available to allow the evaluation of possible effects of the subsidies on 
trade.     However, it should be underlined that a large pe rcentage of the total subsidies is directed to 
SME in activities related with local markets (non tr adable goods), as well as to entities not involved in 
market transactions (e.g. non profitable organizations).   
 
II. SIRME – NATIONAL SCHEME OF INCENTIVES FOR ENTERPRISES 
RESTRUCTURE 
 
1. Title of the Programme
 
  SIRME – Sistema de Incentivos à Modernização Empresarial.    2. Period covered by the notification
 
 
 2005-2006.    G/SCM/N/155/EEC/Add.20 
 Page 5 
 
 
  3. Policy objective and/or purpose of the subsidy  
  Modernization, industrial restructuring a nd financial consolidation of enterprises.   
 4. Background and authority of the subsidy
 
 
 IAPMEI – Instituto de Apoio às Pequenas e Mé dias Empresas e ao i nvestimento – National 
Institute to SME and Investment.    5. Legislation under which it is granted
 
 
 Resolução Conselho de Ministros  nº 40/98 19th February.  Dossier State Aid N 8/2000.   
 6. Form of the subsidy and budget expenditure
 
 
  MEUROS 
 Expenditure 
2005 1,8653 
2006 1,12 
 
7. To whom and how the subsidy is provided  
  Companies and enterprises with social and in dustrial difficulties demanding restructuring and 
emergency financial aid.   
  
III. BANK PROTOCOLS REGIME 
 1. Title of the subsidy progra mme, if relevant, or brief descr iption or identification of the 
subsidy  
  Bank Protocols Regime - Partnership be tween the Portuguese Tourism Board and the 
financial system.    
2. Period covered by the notification
 
  2006.    3. Policy objective and / or purpose of the subsidy
 
 
 The objective of the credit line is to provide financial support to economically and financially 
viable tourism projects that will make an unequivoc al contribution to increasing the quality, diversity 
and competitiveness of the Portuguese tourism offe r, and which require complementary financial 
support regardless of whether or not the projects ha ve already benefited from national or community 
support within the framework of other incentive schemes.   
 4. Background and authority for the subsidy (inc luding identification of the legislation under 
which it is granted)  
  The present support scheme results, exclusivel y, from the protocols signed between the 
Portuguese Tourism Board and several adhering credit institutions, which were aimed to respond to G/SCM/N/155/EEC/Add.20 
Page 6  
 
  the needs and legitimate concer ns of economic agents in order to assure a high level of 
competitiveness within the market.    5. Form of the subsidy (i.e., grant, loan, tax concession, etc.)
 
 
 Financial support under the form of a ref undable subsidy, with the following financial 
conditions:    
Financing  
Maximum Amount Minimum 
Amount  Equity Capital  Applicable Interest Rates  
Amount:  up to 75% of the 
total investment cost with a 
maximum limit of € 6 million per operation (1) € 100.00 (3) Minimum:  25% 
of the total 
investment cost Bank - 6-month Euribor + 
a maximum 2.5% spread 
ITP - 40%-60% of 6-month Euribor (5) 
Proportion:  50% ITP + 50% Bank (2)    
 
(1) In the case of investment projects inserted within a PITER, the maximum amount of financing 
corresponds to € 8 million.   
 (2) In the case of non-SMEs, the amount will be distributed in the proportion of 75 per cent by the Bank and 25 per cent by the ITP.    
(3) This amount does not apply to Beach Support Facilities projects, where there is no minimum 
limit.    (4) The applicable interest rate will be rounde d up to the nearest eighth of a decimal point.   
 (5) The financing portion supported by the ITP w ill be remunerated at 40 per cent of Euribor in 
the case of anchor projects inserted within PITER, or projects aimed at the creation of golf courses, 
marinas, leisure activities, conference centres, them e parks, thermal spas, centres for nautical sports 
and leisure activities, horse-riding and mountain-ba sed leisure activities and equipment for tourism 
snow resorts or beach support facilities.    
6. To whom and how the subsidy is provided (w hether to producers, to exporters, or others; 
 
through what mechanism;  whether a fixed or fluctuating amount per unit;  if latter, how 
determined)  
  The subsidy is provided to all entities, irrespec tive of their nature and juridical statute, and 
namely corporate bodies undertaking economically and financially viable investments.   
 
 In the case of construction, adaptation or exte nsion projects, these should contribute towards a 
valorisation and diversification of the existing offer, in order to satisfy market  insufficiencies in the 
respective region or to diminish seasonality and in crease the length of stay and average revenue per 
tourist.  In the event of remodelling projects, these should involve investments aimed at the 
enhancement, modernisation a nd promotion of the respective real-estate ventures.    G/SCM/N/155/EEC/Add.20 
 Page 7 
 
 
   The investment projects must be asso ciated to the following units:   
 a) Hotel establishments (except for projects to build  or adapt buildings in order to install 1 or 
2 star hotels, motels and 2nd and 3rd category pensions
1, together with apartment-hotels when 
these are intended, partly or in full, for fr actioned sales or are operated in a time sharing 
regime2);   
 b) Tourism Villages (except for projects to build or adapt buildings for this purpose when these 
are intended in part or in full for fractioned sales or are operated in a time sharing regime);   
 
c) Tourism Apartments (except for projects to build or adapt buildings for this purpose or 
remodelling projects unless they are intended for at  least 10 apartments in the same building, 
operated by a single entity);   
 d) Public campsites;   
 
e) Tourism in rural areas;    f) Nature tourism;    g) Beach support facilities in concessioned beaches;   
 
h) Restaurant and bar establishments;    i) Tourism entertainment venues and activities with a declaration of interest for tourism by the 
Directorate-General for Tourism;   
 
j) Travel agencies;    k) Rent-a-car (only technological modernisation projects);    l) Infrastructures and equipment items that, as a result of a co-operation between companies and 
with the objective to reduce respective costs, are aimed at common and concerted provision of 
services related to the activity of projects cove red, in particular launderettes, reservation 
centres and sewage water treatment stations.   
  The beneficiaries should be legally constituted,  have the necessary legal capacity to pursue 
tourism activities, comply with the legal conditions required for exercise of the respective activity, in 
particular possess a license as a tourism entertainment company or travel agency  whenever the project 
is aimed, respectively, at tourism entertainmen t venues or travel agencies, maintain organised 
accounts in accordance with the National Charter A ccounts, and have all payments to the tax 
authorities, social security and the Po rtuguese Tourism Board in order.   
 
 The investment projects should also comply w ith eligibility requirements, such as have prior 
approval or licensing (when th is is legally required), present a declaration on interest for tourism, if 
necessary, be suitably financed, and contribute to  promote the company´s economic and financial 
                                                     
 
1 Projects aimed at the remodelling of 1 and 2 star hotels, motels or 2nd and 3rd category pensions are 
only eligible if they are aimed at the re-cla ssification of the respective establishments.   
2 Projects aimed at the remodelling or extension of apartment hotels and Tourism villages that have 
been, or may be, subject to time-sharing sales or operated in a time-sharing regime, financing will only be provided for investment expenses corresponding to accommodati on units dedicated to tourism use which are not 
operated under the aforementioned regime and investment expenses related to the communal areas of the 
respective establishments in the proportion of the said  tourism units within the overall establishment.   G/SCM/N/155/EEC/Add.20 
Page 8  
 
  position.  The project must also involve an investment amount that makes it possible to comply with 
the eligibility condition of the credit line, related to the minmum financing amount of 100.000 euros.   
  For the purposes of calculation of the financi ng to be granted, cons ideration will only be 
made of those investment expenses that form an in tegral part of the project and which combined in 
order to attain its objectives.   
 The maximum financing periods are the ones that follow:    
Projects Maximum 
period Maximum 
repayment-
holiday 
Construction or adaptation of buildings in order to install hotel establishments, except for apartment-
hotels 15 years 4 years 
Remodelling and extension of hotel 
establishments, except for apartment-hotels; construction or adaptation of  buildings in order to 
install apartment-hotels; construction or extension 
of the real-estate ventures specified in paragraphs 
b), d), e), f) and i) of the item "Eligible projects"   10 years 3 years 
Other projects 6 years 2 years 
 
 The applications are presented to the credit in stitutions adhering to the credit line, and must 
include (i) document confirming approval of the architectural project, when legally required, 
accompanied by a copy of the respective binding opin ions, (ii) declaration of interest for tourism, 
whenever this is necessary, (iii) utilisation license for existing real- estate venues, (iv) copy of the 
descriptive summary of the project, specification of  the nature of the company (SME or non-SME), 
(v) itemised list of the investment and respective fi nancing sources, (vi) and other elements that may 
prove necessary in order to verify compliance with  the general and specific eligibility conditions of 
projects and companies.     The bank would be responsible for the recep tion of the applications, the verification of 
compliance with all the requirements, the setting of  the financing conditions, the definition of the 
guarantees to be provided by companies, the submis sion to Institute Tourism Board of the process of 
the respective financing operation already approved  by the bank, and for the submission to the 
Institute Tourism Board, also for approval, of the draf t version of the financing contract to be signed.  
The Tourism Institute Board would, then, verify th e project's eligibility within the framework of the 
credit line, issue a final decision on each project, appr ove the terms of a draft version of the financing 
contract to be signed and collaborate with the bank in management of the credit and supervision of 
each project.    7. Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount 
budgeted for that subsidy (indicating, if possible,  the average subsidy per unit in the previous 
year).  Where provision of per unit subsidy information (for the year covered by the 
notification, for the previous year, or both) is not possible, a full explanation)  
  The total amount budgeted was 60 million euros.   
  G/SCM/N/155/EEC/Add.20 
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  8. Duration of the subsidy and / or any other ti me limits attached to it, including date of 
inception / commencement  
  The subsidy was established for a two-year period – 2005 / 2006.   
 
 Projects must be presented before the start of execution, and expenses made prior to the date 
of application would not be considered – except for advances for the purposes of a deposit up to a 
maximum of 50 per cent, and expenses related to studies and projects, and acquisition of land and 
buildings undertaken less than 1 y ear before the date of application,  or in duly justified cases less than 
2 years before.   
 
 Reimbursements of the financing granted may be  made on a monthly, quarterly, six-monthly 
or annual basis, and the respective plan should foresee the simultaneous payment of capital and 
interest instalments, which may take one of the follo wing modalities:  fixed instalments of capital plus 
interest or fixed capital instalments to which the respective interest shall be added.   
 
9. Statistical data
 
  Statistics of consumption are included.     IV. REGIÃO AUTÓNOMA DA MADEIRA (2005/2006) 
 
1. Title of the Programme
 
  SIPPE-RAM - Incentive measures for small investment projects (Madeira).   
 
2. Period covered by the notification
 
  Seven years – 2006/2007.    3. Policy objective and/or purpose of the subsidy
 
 
 Creation or development of enterprises, re newing technical and technological capacities to 
improve competitiveness and productivity.    4. Background and authority of the subsidy
 
 
 IDE/RAM - Instituto de Desenvolvimento Empres arial (Enterprise Development Institute).   
 5. Legislation under which it is granted
 
  Decreto Regional  n.º21/2000/M, 21st August and Decreto Regional  nº22/2004/M, 
12
th August (Regional legislation - RAM).   
 6. Form of the subsidy and budget expenditure
 
  Non-reimbursable and/or reim bursable subsidy.  Subventions co-financed 50 per cent FEDER 
and 50 per cent Regional Budget.   
 7. To whom and how the subsidy is provided
 
  Micro and SME in trade, industry, tourism and services.   
 G/SCM/N/155/EEC/Add.20 
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  8. Total amount
 
   Euros 
Incentive Granted 
Activity 
(Sectors) Incentive 
approved 
(2000-2006) 2000-2006 2005 2006 
Trade 13.770.983,12 6.403.879,17 1.352.770,58 1.735.059,24
Building Industry 1.979.453,90 416.979,21 192.950,99 58.166,32
Manufacturing 5.614.262,23 2.493.413,43 343.524,40 881.610,55
Services 4.757.375,19 3. 006.298,52 635. 038,57 319.209,24
Transports 247.870,56 66.250,18 66.250,18 0,00
Tourism 16.576.179,58 5.235.728,38 1.204.955,13 869.993,50
Total 42.946.124,58 17.622.548,89 3.795.489,85 3.864.038,85
 
 
 
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