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The drug policy of Portugal was put in place in 2001, and was legally effective from July 2001. The new law maintained the status of illegality for using or possessing any drug for personal use without authorization. However, the offense was changed from a criminal one, with prison as possible punishment, to an administrative one if the amount possessed was no more than a ten-day supply of that substance.

In April 2009, the Cato Institute published a White Paper about the "decriminalization" of drugs in Portugal, paid for by the Marijuana Policy Project  Data about the heroin usage rates of 13-16-year-olds from EMCDDA were used to claim that "decriminalization" has had no adverse effect on drug usage rates. However, drug-related pathologies - such as sexually transmitted diseases and deaths due to drug usage - have decreased dramatically. In 1999, Portugal had the highest rate of HIV amongst injecting drug users in the European Union. The number of newly diagnosed HIV cases among drug users has decreased to 13.4 cases per million in 2009 but that is still high above the European average of 2.85 cases per million. There were 2,000 new cases a year, in a country of 10 million people. 45% of HIV reported AIDS cases recorded in 1997 originated among IV drug users, so targeting drug use was seen as an effective avenue of HIV prevention. The number of heroin users was estimated to be between 50,000 and 100,000 at the end of the 1990s. This led to the adoption of The National Strategy for the Fight Against Drugs in 1999. A vast expansion of harm reduction efforts, doubling the investment of public funds in drug treatment and drug prevention services, and changing the legal framework dealing with minor drug offenses were the main elements of the policy thrust.

Harm reduction