WT/DS487/7  
 
20 February 2017  
(17-0938) Page: 1/2 
  Original: English  
 
 UNITED STATES – CONDITIONAL TAX INCE NTIVES  
FOR LARGE CIVIL AIRC RAFT  
NOTIFICATION OF AN OTHER APPEAL BY THE EUROPEAN UNION  
UNDER ARTICLE 16.4 A ND ARTICLE 17 OF THE  UNDERSTANDING ON RUL ES 
AND PROCEDURES GOVER NING THE SETTLEMENT OF DISPUTES (DSU),  
AND UNDER RULE 20(1) OF THE WO RKING PROCEDURES FOR  APPELLATE REVIEW  
The following communication, dated 17 January  2017, from the d elegation of the European Union , 
is being circulated to Members.  
 
_______________  
 
Pursuant to Articles 16.4 and 17.1 of the DSU and Art icle 4.8 of the SCM Agreement , the 
European  Union hereby notifies to the Dispute Settlement Body its decision to appeal to the 
Appellate Body certain issues of law covered in the Panel Report and certain legal interpretations 
developed by the Panel in the dispute United States – Conditional Tax Incentives for Large Civil 
Aircraft  (WT/DS487). Pursuant to Rule 23(1) of the Working Procedures for Appellate Review , the 
European Union simultaneously files this Notice of Other Appeal with the Appellate Body 
Secre tariat.  
 
For the reasons to be further elaborated in its submissions to the Appellate Body, the 
European  Union appeals, and requests the Appellate Body to reverse, modify or declare moot and 
of no legal effect, the findings, conclusions and recommendations  of the Panel, with respect to the 
following errors of law and legal interpretations contained in the Panel Report1: 
 
1. The Panel erred in the interpretation of Article 3.1(b) of the SCM Agreement  by requiring the 
complaining Member to demonstrate that the m easure at issue "per se and necessarily 
exclude{s}" the use of imported goods, and on that basis, finding that the First Siting 
Provision,2 set out in Section 2 of Washington State Engrossed Substitute Senate Bill 5952 
("ESSB 5952"), does not make the subs idies subject to that condition de jure  contingent on 
the use of domestic over imported goods.3 
2. The Panel erred in the application of Article 3.1(b) of the SCM Agreement in finding that the 
First Siting Provision does not make the subsidies subject to that  condition4 de jure  
contingent on the use of domestic over imported goods.5 
                                                
1  Paragraph numbers provided in footnotes to the following description of the Panel's errors are 
intended  to indicate the primary instance of the errors.  
2  See Panel Report, paras. 7.28 -7.30 (defining "First Siting Provision "). 
3  Panel Report, paras. 7.290, 7.291, 7.294, 7.296, 7.297, 8.1(1)(b)(i). The subsidies subject to the First 
Siting Provision are the  following: (a) reduced business and occupation (B&O) tax rate for the manufacture and 
sale of commercial airplanes; (b) B&O tax credit for pre -production development for commercial airplanes and 
components; (c) B&O tax credit for property taxes on commerc ial airplane manufacturing facilities; 
(d) exemption from sales and use taxes for certain computer hardware, software, and peripherals; (e) 
exemption from sales and use taxes for certain construction services and materials; (f) exemption from 
leasehold exc ise taxes on port district facilities used to manufacture superefficient airplanes; and  (g) 
exemption from property taxes for the personal property of port district lessees used to manufacture 
superefficient airplanes. See Pane l Report, paras. 7.15, 7.28.  
4  See footnote 3, above.  
5  Panel Report, paras. 7.294, 7.296, 7.297, 8.1(1)(b)(i).  WT/DS487/7  
 
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  3. The Panel erred in the interpretation of Article 3.1(b) of the SCM Agreement  by requiring the 
complaining Member to demonstrate that the measure at issue "per se and necessarily 
exclude{s} " the use of imported goods, and on that basis, finding that the First Siting 
Provision, considered alone, does not make the subsidies subject to that condition6 de facto  
contingent on the use of domestic over imported goods.7 The European Union re quests the 
Appellate Body to consider this appeal only if it does not find (in accordance with the appeals 
described in paragraph 1 or 2, above) that the First Siting  Provision, considered alone, 
makes the subsidies subject to it de jure  contingent on the use of domestic over imported 
goods in violation of Article 3.1(b).  
4. The Panel failed to make an objective assessment under Article 11 of the DSU in finding that 
the F irst Siting Provision, considered alone, does not make the subsidies subject to that 
condition8 de facto  contingent on the use of domestic over imported goods, within the 
meaning of Article 3.1(b) of the SCM Agreement .9 The European Union requests the 
Appellate Body to consider this appeal only if it does not find (in accordance with the appeals 
described in paragraph 1 or 2, above) that the First Siting Provision, con sidered alone, 
makes the subsidies subject to it de jure  contingent on the use of domestic over imported 
goods in violation of Article 3.1(b).  
5. The Panel erred in the interpretation of Article 3.1(b) of the SCM Agreement  by requiring the 
complaining Member to demonstrate that the measure at issue "per se and necessarily 
exclude{s} " the use of imported goods, and on that basis, finding that the Second Siting 
Provision,10 set out in Sections 5 and 6 of ESSB 5952, considered alone or together with the 
First Siti ng Provision, does not make the B&O tax rate reduction (in respect of the 777X) 
de jure contingent on the use of domestic over imported goods.11  
6. The Panel erred in the application of Article 3.1(b) of the SCM Agreement  in finding that the 
Second Siting Pro vision, considered alone or together with the First Siting Provision, does 
not make the B&O tax rate reduction (in respect of the 777X) de jure  contingent on the use 
of domestic over imported goods.12  
7. The Panel failed to make an objective assessment under Article 11 of the DSU, in finding 
that the Second Siting Provision, considered alone or together with the First Siting Provision, 
does not make the B&O tax rate reduction (in respect of the 777X) de jure  contingent on the 
use of domestic over imported good s, within the meaning of Article 3.1(b) of the 
SCM Agreement .13 In particular, the Panel's findings lacked a sufficient evidentiary basis.  
 
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6  See footnote 3, above.  
7  Panel Report, paras. 7.291, 7.330, 7.342 -7.345.  
8  See footnote 3, above.  
9  Panel Report, paras. 7.330, 7.342 -7.345.  
10 See Panel Report, para s. 7.32 -7.33 (defining "Second Siting Provision "). 
11 Panel Report, paras. 7.305 -7.311, 7.315 -7.317, 8.1(b)(ii) -(iii). 
12 Panel Report, paras. 7.305 -7.311,  7.315 -7.317, 8.1(b)(ii) -(iii). 
13 Panel Report, paras. 7.305 -7.311, 7.315 -7.317, 8.1(b)(ii) -(iii).