In the recent Boeing panel report, the panel decided in the context of the fiscal regime of the State of Washington that “it is not necessary for the Panel to resolve the issue of whether revenue to be foregone in the future constitutes a financial contribution for the purposes of the threat of serious prejudice analysis” (at 7.154) . Therefore, it would not rely upon tax abatements to be received post-2006 in assessing the European Communities' present serious prejudice case.
However, a few pages later, the panel concluded in the context of a tax reduction introduced in the City of Everett and without even a word about the issue of revenue foregone in the future, that revenue foregone post 2006 by this City is a financial contribution since it “ constitutes the foregoing of revenue otherwise due under Article 1.1(a)(1)(ii) of the SCM Agreement.” (At 7.332)
My impression is that this ruling is somewhat incoherent. There are not in the SCM Agreement two definitions of a financial contribution, one for serious prejudice analysis and one for determining the existence of a subsidy. How is it possible for the panel to say that it is not resolving an issue and then immediately after doing the contrary without even saying a word about what it is really doing?
