In January 2009, the government of Portugal announced a change in its trade finance instruments.



  • 1 harmful
  • 0 neutral
  • 0 liberalising
Inception date: 12 Jan 2009 | Removal date: open ended

Trade finance

On 12 January 2009, Portugal introduced a short term export credit insurance scheme. The reported objective of the scheme is toaddress market failures in the credit insurance market. Due to thefinancial crisis, private export credit insurance was said to be more expensive andsometimes unavailable to certain firms, with potential implications fortheir export activities. Within two years, the number of insurance firmsdecreased from 3709 to 2290 (par. 11) while the insurance portfoliodecreased from EUR 30.6 billion to EUR 15.9 billion (par. 11, letterfrom the EC to Portugal, Brussels 23.11.2011).
Under the new scheme, the state takesthe role of a credit insurance agency. With respect to the marketconditions, the EC stated that 'exporters and trading companiessubscribing to the scheme pay a premium which is lower than the marketpremium'(par. 38).
The EC argues that 'as the schemeapplies to exports, including for other Member States, the measureclearly affects trade flows between Member States, as it facilitates theexercise of an export activity by beneficiaries (par. 51). Furthermore, the EC notesthat "the scheme also affects trade insofar as it covers domestictransactions. It is well established case-law that where aid granted by aMember State strengthens the position of a company compared with othercompeting companies in intra-Union trade, the latter should beconsidered affected by that aid".
A state measure in the GTA database isassessed solely in terms of the extent to which its implementationaffects the extent of discrimination against foreign commercialinterests. On this metric, the state aid proposed here is discriminatory