Source: EURLEX
Language: en
Format: md

### **`COMMISSION OP THE EUROPEAN COMMUNITIES`**

```
                          C0M(92) 222 final

                          Brussels, 25 May 1992

                   Proposal for a

                   COUNCIL DECISION

         concerning the conclusion of an Agreement between
             the European Economic Community and

               the United States of America

              on trade in large civil aircraft

               (presented by the Commission)

```

```
               EXPLANATORY MEMORANDUM

  By decision of 4 February 1991, the Council authorised the
  Commission to open negotiations both with the United States of
  America and with other Parties to the 6ATT Agreement on Trade in
  Civil Aircraft in order to conclude new arrangements governing

  trade in civil aircraft.

2. In accordance with this decision and with the detailed negotiating
  directives adopted by the Council and in consultation with the 113
  Committee, the Commission held negotiations with the United States
  which on 31 March 1992 resulted in the enclosed agreement.

  The enclosed agreement corresponds closely with all points in the
  negotiating directives. In particular the scope of the agreement
  has been limited to large civil aircraft. In this regard, since it
  was not possible to reach a satisfactory definition in terms of
  seating capacity, explicit reference is made to aircraft produced
  in the Community by the Airbus consortium. Moreover, the
  Commission considers that a balanced set of disciplines has been
  introduced covering both indirect and direct support.

  In Article 12 of the Agreement, both the United States and the
  Community re-affirm their determination to achieve revision of the
  GATT Civil Aircraft Agreement. As foreseen in the above-mentioned
  Council decision, the Commission now expects this multilateral
  process to be launched immediately in conjunction with the United

  States Government.

```

```
            PROPOSAL FOR A COUNCIL DECISION

       concerning the conclusion of an Agreement between
             the European Economic Community

       and the Government of the United States of America

            on trade in large civil aircraft

THE COUNCIL OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Economic
Community, and in particular Article 113 thereof,

Having regard to the proposal from the Commission,

Whereas the Agreement negotiated between the European Economic
Community and the Government of the United States of America on trade
in large civil aircraft in Brussels on 31 March 1992 should be
approved,

HAS DECIDED AS FOLLOWS:

                   Article 1

The Agreement between the European Economic Community and the
Government of the United States of America on trade in large civil
aircraft is hereby approved on behalf of the Community.

The text of the Agreement is attached to this Decision.

                   Article 2

The President of the Council is hereby authorised to designate the
person empowered to sign the above Agreement in order to bind the
Community.

Done at Brussels For the Council

                               The President

```

```
               AGREEMENT

          CONCERNING THE APPLICATION

   OF THE GATT AGREEMENT ON TRADE IN CIVIL AIRCRAFT

Between the European Economic Community (hereinafter
referred to as "the EC") and the Government of the United
States of America (hereinafter referred to as "the US") on
trade in large civil aircraft,

Recognising the need to promote a more favourable
environment for international trade in large civil aircraft
and to reduce trade tensions in the area,

Recognising that the disciplines in the GATT Agreement on
Trade in Civil Aircraft should be strengthened with a view
to progressively reducing the role of government support,

Recalling the principles and objectives agreed upon by
representatives of the US and of the EC at their meeting
held in London on 27 October 1987,

In pursuit of their common goal of preventing trade
distortions resulting from direct or indirect government
support for the development and production of large civil
aircraft and of introducing greater disciplines on such
support and of encouraging the adoption of such disciplines
multilaterally within the GATT,

Noting their intention to act without prejudice to their
rights and obligations under the GATT and under other
multilateral agreements negotiated under the auspices of the
GATT,

THE EC AND THE US HAVE AGREED:

```

```
Article 1

Government-Directed Procurement, Mandatory Sub-contracts and
Inducements

With respect to issues concerning Article 4 of the GATT
Agreement on Trade in Civil Aircraft ("Aircraft Agreement"),
the Parties agree to act in conformity with the
interpretative note to Article 4 of the Aircraft Agreement
contained in Annex I of this Agreement.

Article 2

Prior Government Commitments

Government support to current large civil aircraft
programmes, committed prior to the date of entry into force
of this Agreement, is not subject to the provisions of this
Agreement except as otherwise provided below. The terms and
conditions on which such support is granted shall not be
modified in such a manner as to render it more favourable to
the recipients; however, de minimis modifications shall not
be deemed inconsistent with this provision.

Article 3

Production Support

As of entry into force of this Agreement, Parties shall not
grant direct government support other than what has already
been firmly committed for the production of large civil
aircraft. This prohibition shall apply both to existing and
to future programmes.

Article 4

Development Support

4.1 Governments shall provide support for the development
   of a new large civil aircraft programme only where a
   critical project appraisal, based on conservative
   assumptions, has established that there is a reasonable
   expectation of recoupment, within 17 years from the
   date of first disbursement of such support, of all
   costs as defined in Article 6(2) of the Aircraft
   Agreement, including repayment of government supports
   on the terms and conditions specified below.

```

```
4.2 As of entry into force of this Agreement, direct
   government support committed by a party for the
   development of a new large civil aircraft programme or
   derivative shall not exceed:

   a) 25 per cent of that programme's total development
      cost as estimated at the time of commitment (or of
      actual development costs, whichever is lower);
      royalty payments on this tranche shall be set at
      the time of commitment of the development support
      so as to repay this support at an interest rate no
      less than the cost of borrowing to the government
      within no more than 17 years from first
      disbursement, plus

   b) 8 per cent of that programme's total development
      cost as estimated at the time of commitment (or of
      actual development costs, whichever is lower);
      royalty payments on this tranche shall be set at
      the time of commitment of the development support
      so as to repay such support at an interest rate no
      less than the cost of borrowing to the government
      plus 1 per cent within no more than 17 years from
      first disbursement.

  These calculations shall be made on the basis of the
   forecast of aircraft deliveries in the critical project
  appraisal.

4.3 Royalty payments per aircraft shall be calculated at
   the time of commitment of the development support to be
   repaid on the following basis:

   a) 20 per cent of aggregate payments calculated in
      accordance with Article 4.2 above are payable on
      the basis of the delivery of a number of aircraft
      corresponding to 40 per cent of forecast
      deliveries;

   b) 70 per cent of aggregate payments calculated in
      accordance with Article 4.2 above are payable on
      the basis of the delivery of a number of aircraft
      corresponding to 85 per cent of forecast
      deliveries.

```

```
Article 5

Indirect Government Support

5.1 Parties shall take such action as is necessary to
   ensure that indirect government support neither confers
   unfair advantage upon manufacturers of large civil
   aircraft benefiting from such support nor leads to
   distortions in international trade in large civil
   aircraft.

5.2 As of entry into force of the Agreement, identifiable
   benefits to the development or production of any of the
   products covered by this Agreement, net of recoupment,
   derived from indirect support shall not exceed in any

   one year:

   a) 3 per cent of the annual commercial turnover of the
     civil aircraft industry in the Party concerned for
     the products covered by this Agreement, or

   b) 4 per cent of the annual commercial turnover of any
     one firm in the Party concerned for the products
     covered by this Agreement.

5.3 Benefits from indirect support shall be deemed to arise
   when there is an identifiable reduction in costs of
   large civil aircraft resulting from government-funded
   research and development in the aeronautical area
   performed after the entry into force of this Agreement.

   Where it can be demonstrated that the results of
   research and development have been made available on a
   non-discriminatory basis to large civil aircraft
   manufacturers of the Parties, benefits deriving from
   such technologies shall be excluded from the
   calculation in paragraph 5.2. However, identifiable
   benefits may result when large civil aircraft
   manufacturers are responsible for, or have early access
   to, the conduct or results of such research.

   If a Party has reason to believe that other indirect
   supports provided by a government are resulting in
   identifiable reductions in the costs of large civil
   aircraft, the Parties shall consult with a view towards
   quantifying such reductions and including them in the
   calculation described above.

```

```
   Benefits from indirect support resulting from the
   technology obtained through government-funded research
   and development or through other government programmes
   shall normally be calculated in terms of the reduction
   in the cost of research and development and in the
   reduction in the cost of the production equipment or
   production process technology.

Article 6

General Purpose Loans

Parties shall assume no liability for specific loans that
aircraft manufacturers make or make available, through
direct loans, guarantees, or otherwise, to airlines, other
than through official export credit financing consistent
with the Large Aircraft Sector Understanding of the OECD
Understanding on Official Export Financing.

Article 7

Equity Infusions

Equity infusions are excluded from the scope of this
Agreement. Equity infusions will not, however, be provided
in such a manner as to undermine the disciplines in the
Agreement.

Article 8

Transparency

8.1 To the extent necessary to ensure effective
   implementation of this Agreement, Parties shall
   exchange on a regular, systematic basis, all public
   information of a kind governments make available to
   their respective national elected assemblies relating
   to matters covered by this Agreement and its Annexes.
   Such public information will include at minimum the
   total amount of government support for new development
   projects and its share of total development costs,
   aggregate data on disbursements and repayments relating
   to direct government supports for commercial aircraft
   programmes, the annual commercial turnovers of the
   civil aircraft industry as specified in Article 8.5 b
   and the aggregate amounts of identifiable indirect
   benefits received by large civil aircraft
   manufacturers.

```

```
8.2 Furthermore, with regard to prior government
   commitments for large civil aircraft programmes
   described in Article 2, a complete list of such
   commitments by the Parties to this Agreement already
   disbursed or committed shall be separately provided,
   including information on the type of repayment
   obligation and the planned period of repayment. Annual
   disbursements and repayments relating to these
   programmes on an aggregate basis shall also be notified
   to the other Party for each government providing these
   supports. In addition, a Party shall notify the other
   Party to this Agreement of any changes which render the
   terms and conditions of such support commitments more
   favourable to the recipient, including: changes in the
   repayment period; failure to repay the support; or
   reduction of the scheduled repayments.

8.3 Furthermore, with regard to future large civil aircraft
   programmes, Parties shall provide, at the time of
   government commitment, the following specific
   information in relation to development support for each
   of the governments providing such support:

      the total amount of government support;

      the share of government support as a percentage of
      estimated total development cost;

   - the anticipated return to the government;

      the planned period of repayment of government
         support; and

      the forecast number of planes on which the
      calculations made in accordance with Article 4.2

      are based.

8.4 In the course of the consultations provided for under
   Article 11 of this Agreement, Parties shall exchange
   information on government commitments and support for
   each of the governments providing such support
   including but not limited to:

   - any changes which render the terms and conditions
    more favourable to the recipient, including: changes
     in the repayment period; failure to repay the
     support; or reduction of the scheduled repayments;
    and

```

```
   - annual disbursements and repayments on a per
    programme basis for new programmes launched in
    accordance with Article 4. Such information will be
    provided at the first regular consultation taking
    place at least twelve months after the end of the
    year in which the disbursements and repayments are
    made.

8.5 In the course of consultations under Article 11,

   a) Parties will on an annual basis provide
      information on new government-funded research and
      development undertaken or initiated during the
      previous year and on ongoing research and
      development projects in the aeronautical area,
      including per programme details on those projects
      in which large civil aircraft manufacturers
      participate. This shall include information on
      the area of activity and the amount of government
      funding for such projects.

   b) Parties will provide information on identifiable
      benefits derived from indirect supports for each
      large civil aircraft programme.

   This will include recoupment per programme received
   from large civil aircraft manufacturers. The following
   specific information will be provided on an annual
   basis for each of the governments providing such
   support:

      1) the annual commercial turnover of the civil
        aircraft industry in the Party concerned in
        relation to products covered by the Agreement;

      2) the annual commercial turnover in relation to
        products covered by the Agreement of each firm
        in the Party concerned which manufacturers
        products covered by the Agreement; and

      3) the total amount of indirect benefits as
        defined in Article 5.2 for the civil aircraft
        industry in relation to the products covered
        by the Agreement and for each firm involved in
        the manufacture of such products.

8.6 If a Party considers that additional information
   directly relevant to the implementation of the
   provisions of this Agreement is necessary, such
   information will be provided upon duly motivated
   request.

```

```
8.7 Parties shall upon duly motivated request provide at
   the time of commitment of new development support non   proprietary information on the critical project
   appraisal in so far as this relates to the provisions
   of Article 4.1.

8.8 Any information not in the public domain, which a Party
   may provide, shall at the request of the Party
   providing the information, be considered as
   proprietary. A recipient government shall take all
   measures necessary to ensure that information thus
   designated not be disclosed to anyone outside that
   government even after expiry or termination of the
   present Agreement. In addition, proprietary
   information shall not be used in possible trade
   disputes except for the purposes of confidential
   internal government discussion and decisions in
   relation to the implementation of the Agreement.

8.9 Parties shall, unless otherwise indicated, exchange the
   information specified above on an annual basis. Any
   disagreement concerning information to be provided
   pursuant to this Article shall be resolved through
   consultations under Article 11.

8.10 Parties shall provide information on new infusions of
   equity or changes in equity positions by governments
   into firms engaged in civil aircraft production,
   including the amount and type of equity provided.

8.11 Parties will encourage firms engaged in the manufacture
   of large civil aircraft to increase the public
   disclosure of disaggregated financial results of their
   civil aircraft operations through the separation of
   reporting on military and civilian aircraft operations
   and the adoption of lines of business financial
   reporting. These disaggregated financial results would
   at a minimum be expected to include information on
   sources and uses of funds including specific
   information on revenue, operating income, net assets,
   capital investment and government equity infusions.

8.12 Nothing in this Agreement shall be construed to require
   any contracting Party to furnish any information the
   disclosure of which it considers contrary to its
   essential security interests.

```

```
Article 9

Exceptional Circumstances

9.1 Where, as a result of an unforeseen, exceptional
   situation, the survival of a significant proportion of
   the civil aircraft manufacturing activities in one of
   the Parties [1] and the continued financial viability of
   the company or the division of a company responsible
   for such civil aircraft manufacture are put in
   jeopardy, that Party may derogate temporarily from the
   disciplines laid down in this Agreement. In this
   context, the disaggregated financial results of civil
   aircraft operations will be reported publicly by that
   company or division [2] . This derogation may not be
   invoked, however, in respect to the disciplines
   applying to the launch of new civil aircraft programmes
   as specified in Article 4.

9.2 The Party concerned shall provide notice of its
   intentions to the other Party and an opportunity for
   prior consultations unless it is prevented from doing
   so for legal reasons and shall in any event notify the
   other Party immediately of its reasons for invoking
   this Article and fully disclose the specific measures
   which it has taken, including the amount and nature of
   the measures, and their expected duration.

9.3 Specific measures taken by a Party in accordance with
   this Article:

   a) shall be limited in scope and duration to the
      extent strictly necessary to remedy the
      difficulties referred to in paragraph 1;

   b) shall be designed to return as quickly as possible
      the beneficiary company to commercial viability;

   c) shall take due account of the possible
      implications for other large civil aircraft
      manufacturers and shall avoid depressing prices on
      the world market for civil aircraft by the
      manufacture of inventory for which no firm order
      exists.

```

1 For the purposes of this paragraph, "Parties" shall be deemed to include any of the individual Member
States of the EC.

2 These disaggregated financial results would at a minimum include information on sources and uses of
funds including specific information on revenue, operating income, net assets, capital investment and
government equity infusions.

```
                 10

9.4 If, after consultations pursuant to Article 11, a Party
   determines that the action taken under this Article
   significantly undermines the objectives of this
   Agreement, it shall have the right to suspend some or
   all of the provisions of this Agreement or to terminate
   it within 15 days of the conclusion of consultations.

Article 10

Avoidance of Trade Conflicts and Litigation

10.1 Parties shall seek to avoid any trade conflict on
   matters covered by the present Agreement [3] .

10.2 They will not self-initiate action under their national
   trade laws with respect to government supports granted
   in conformity with this Agreement for as long as this
   Agreement is in force. However, nothing in this
   paragraph shall prevent a Party from abrogating this
   Agreement on grounds of non-compliance by the other
   Party.

10.3 In order to avoid trade conflict they will strongly
   encourage private parties to request the use of the
   provisions of Article 11 to resolve any disputes on
   matters covered by this Agreement. If, however,
   private petitioners request that action be taken under
   national laws on matters covered by this Agreement, the
   petitioners' government will immediately inform the
   other Party and offer to enter into consultations in
   accordance with Article 11. The Party against whom
   such action is brought shall have the right either to
   suspend the application of some or all the provisions
   of the present Agreement or to terminate the Agreement
   15 days after the conclusion of consultations.

10.4 In the conduct of any investigations of trade
   allegations concerning products covered by this
   Agreement that have been initiated under national trade
   laws as the result of private petitions, Parties shall,
   consistent with their law take account of
   representations concerning compliance with the terms of
   this Agreement.

```

? Action with respect to "matters covered by the present Agreement" refers to trade actions relating to
direct and indirect government support as defined by this Agreement. It does not include actions relating
to dumping, intellectual property protection, or anti-trust or competition laws.

```
                 11

Article 11

Consultations

11.1 Parties shall consult regularly and, in any case, at
   least twice a year, to ensure correct functioning of
   the Agreement.

11.2 A Party may request consultations on any development
   related to the functioning of the present Agreement.
   Such consultations shall be held not later than 30 days
   following the date on which the request is received.

11.3 Parties agree to seek to resolve any disputes within
   three months of the date of the initial request for
   consultations. Consultations will not be deemed to be
   concluded for the purposes of Articles 8 and 9 of this
   Agreement before this three-month period has expired.

Article 12

GATT Agreement on Trade in Civil Aircraft

12.1 The Parties shall propose jointly to other signatories
   of the Aircraft Agreement that disciplines along the
   lines of those laid down in the present Agreement and
   the interpretative note given in Annex I be
   incorporated into the aforementioned GATT Agreement.
   The Parties shall also propose that the improved
   dispute settlement provisions agreed in the Uruguay
   Round be used to resolve any dispute arising out of the
   implementation of the new Aircraft Agreement.

12.2 The Parties shall make their utmost efforts to ensure
   that these or similar disciplines are incorporated into
   the Aircraft Agreement or adopted by key signatories at
   the earliest possible date, and also to expand the
   coverage of the disciplines provided by this Agreement
   to all of the products covered in the Aircraft
   Agreement.

12.3 If multilateralisation has not been achieved in one
   year, the Parties shall review the question of the
   continued application of this bilateral Agreement.

```

```
                12

Article 13

Final Provisions

13.1 This Agreement shall enter into force on the date of
   its acceptance by both Parties.

13.2 This Agreement may be amended by mutual consent of the
   Parties to take into account any new situation which
   may arise including possible amendments to the Aircraft
   Agreement.

13.3 One year after the entry into force of this Agreement,
   either party may withdraw from the Agreement. If a
   Party wishes to withdraw from the present Agreement it
   shall notify the other Party in writing of its
   intentions. The withdrawal shall take effect 12 months
   after the date on which the notification was received.

```

```
                 13

                       ANNEX I

INTERPRETATION OF ARTICLE 4 OF THE

GATT AGREEMENT ON TRADE IN CIVIL AIRCRAFT

BY SIGNATORIES OF THE AGREEMENT

Article 4 of the GATT Agreement on Trade in Civil Aircraft
("the Agreement") deals with three specific issues:

   government^directed procurement (paragraph 2)

   mandatory sub-contracts (paragraph 3)

   inducements (paragraph 4)

ARTICLE 4-1

Paragraph 4.1 states the general principle, applicable
throughout Article 4, that purchasers of civil aircraft [4 ]
should be free to select suppliers on the basis of
commercial and technological factors.

ARTICLE 4.2 (Government-Directed Procurement)

This paragraph states that "signatories shall not require
airlines, aircraft manufacturers, or other entities engaged
in the purchase of civil aircraft, nor exert unreasonable
pressure on them, to procure civil aircraft from any
particular source, which would create discrimination against
suppliers from any signatory".

This means that signatories must abstain from imposing
preference policies in favour of or against the suppliers of
one or more signatories.

Unreasonable government pressure relating to the selection
of suppliers by airlines, aircraft manufacturers or other
entities engaged in the purchase of civil aircraft
("purchasers") is also prohibited. "Unreasonable pressure"
is any action favouring products or suppliers, or which
influences procurement decisions in a manner which creates
discrimination against suppliers from any other signatory.

```

4 For the purpose of the Annex, "civil aircraft" is defined as in Article 1 of the GATT Agreement on
Trade in Civil Aircraft.

```
                 14

The signatories agree that the following are examples of
practices which are not considered as exerting unreasonable
pressure:

   the participation of government or former government
   representatives on the boards of wholly or partly
   government-owned purchasers but only if they act in the
   best commercial interest of the purchaser concerned,
   and do not influence procurement decisions in a manner
   which creates discrimination against suppliers from any
   other signatory.

   government decisions concerning safety and
   environmental considerations.

ARTICLE 4.3 (Mandatory Sub-Contracts)

The first sentence states that "signatories agree that the
purchase of products covered by the Agreement should be made
only on a competitive price, quality and delivery basis".
This means that signatories will not intervene to obtain
favoured treatment for particular firms and that they will
not interfere with the selection of vendors in a situation
where vendors of different signatories are competing.

By emphasising that the only factors which should be
involved in purchase decisions are price, quality and
delivery terms, the signatories agree that Article 4.3 does
not permit Government-mandated offsets. Further, they will
not require that other factors, such as subcontracting, be
made a condition or consideration of sale. Specifically, a
signatory may not require that a vendor must provide offset,
specific types or volumes of business opportunities, or
other types of industrial compensation.

Signatories shall not therefore impose conditions requiring
subcontractors or suppliers, to be of a particular national
origin.

The second sentence of this paragraph states that "in
conjunction with the approval or awarding of procurement
contracts for products covered by this Agreement a signatory
may... require that its qualified firms be provided with
access to business opportunities on a competitive basis and
on terms no less favourable than those available to the
firms of other signatories." This means that a signatory
may require that the manufacturer not discriminate against
the signatory's qualified firms with respect to any bid
opportunities and to the evaluation of any competitive bids
made by those firms.

```

```
                  15

Article 4.4 (Inducements)

This paragraph states that "signatories agree to avoid
attaching inducements of any kind to the sale or purchase of
civil aircraft from any particular source which would create
discrimination against suppliers from any signatory".

This means that signatories shall refrain from the use of
negative or positive linkages between the sale or purchase
of civil aircraft and other government decisions or policies
which might influence such sale or purchase whenever there
is a competition between suppliers of signatories. The
following is an agreed illustrative, non-exhaustive list of
such prohibited inducements:

   rights and restrictions relating to the airline
   industry such as landing or route rights.

- general economic programmes and policies, such as
   import policies, measures aiming at changes in
   bilateral trade imbalances, policies on alien workers
   or debt rescheduling.

- development assistance programmes and policies, such as
   grant aid, loans and infrastructure financing; it is
   understood that the use of such assistance for the
   purchase of civil aircraft does not fall under this
   category to the extent that the granting of these funds
   is not conditional on such purchase taking place.

- defence and national security policies and programmes.

Without prejudice to Article 4.3, this also means that
signatories shall not intervene in any way, nor exert any
direct or indirect pressure on other governments or any
entity involved in procurement decisions, including the
establishment of any link of a negative or positive
character between decision concerning the procurement of
civil aircraft and any other issue or action in any other
area which might affect the interest of the importing
country .

ARTICLE 4.2 and 4.4 (Political Representations)

All participants of signatories in the domestic political
decision-making process shall not take any action, including
but not limited to political representations, pressure or
inducements to other governments or foreign airlines, which
would be contrary to Article 4 as interpreted in this Annex.
Signatories shall draw the participants' attention to this
interpretation of Article 4, and shall also use their best
efforts to assure that the participants do not take such
action.

```

```
                  16

                       ANNEX II

For the purposes of the present Agreement the following
definitions shall apply:

1. "large civil aircraft"

   With respect to such aircraft produced in the US by
   existing manufacturers of large civil aircraft and in
   the European Community by the Airbus consortium, or
   their successor entities, all aircraft, as defined in
   Article 1 of the GATT Agreement on Trade in Civil
   Aircraft, except engines as defined in Article 1.1(b)
   of the Aircraft Agreement, that are designed for
   passenger or cargo transportation and have 100 or more
   passenger seats or its equivalent in cargo
   configuration.

2. "derivative" means an aircraft model the major design
   elements of which are derived from a prior aircraft
   model.

3. "total development cost" as referred to in Article 4.2.

   The following cost items, incurred prior to the date of
   certification, are those which may be taken into
   account in assessing the "total development cost"
   referred to in Article 4.2.

      preliminary design

      engineering design

      wind-tunnel, structural, system and
      laboratory tests

         engineering simulators

      equipment development work, except for work
      directly financed by equipment and engine
      manufacturers

      flight tests, including associated ground support,
      and analysis necessary to obtain certification

      documentation required for certification

```

```
                  17

   - the cost of manufacture of prototypes and test
      aircraft, including spares and such modifications
      as may be necessary to obtain certification, less
      the estimated fair market value of flight aircraft
      after refurbishment

   - jigs and tools, except machine tools, for use
      on specific programmes.

4. "production"

   All manufacturing, marketing and sales activities other
   than those described under point 3 above with the
   exception of official export credit financing
   consistent with the Large Aircraft Sector Understanding
   of the OECD Understanding on Official Export Financing.

5. "indirect government support"

   Financial support provided by a government or by any
   public body within the territory of a Party for
   aeronautical applications, including research and
   development, demonstration projects and development of
   military aircraft, which provide an identifiable
   benefit to the development or production of one or more
   specific large civil aircraft programmes.

6. "direct government support" means any financial support
   provided by a government or by any public body within
   the territory of a Party which is provided:

   (1) for specific large civil aircraft programmes or
      derivatives or

   (2) to specific companies to the extent that large
      civil aircraft programmes or derivatives directly
      benefit.

7. "royalty payment" means repayment of a certain
   predetermined amount of development support per
   aircraft delivered.

```

**ISSN 0254-1475**

### **COM (92) 222 final**

# **DOCUMENTS**

## **EN 07**

### **Catalogue number: CB-CO-92-232-EN-C** **ISBN 92-77-44492-4**

**Office for Official Publications of the European Communities**

**1^2985** **Luxembourg**