The European Commission (EC) is drafting legislation to exercise sanctions against non-European Union airlines subsidised by their governments, singling out the USA for specific mention. The concept as it stands is that, before the EC would consider action, an EU airline or airline group would have to quantify the harm the sanctions were causing. Transport commissioner Loyola de Palacio has welcomed the proposal's clearance in principle by the European Council. Air transport is not covered by World Trade Organisation rules, and the EC says the proposed law - which may enter into force in 2004 - "fills a legal vacuum". The commission is vague about sanctions, mentioning only "the imposition of duties" proportionate to the subsidy.
Source: Flight International
