The European Union on Thursday said it was seeking authorisation from the World Trade Organisation to slap sanctions on the US worth $12 billion a year for illegal subsidies to Boeing. A European Commission statement said the EU sought permission from the Geneva-based WTO's Dispute Settlement Body "to allow the imposition of countermeasures against the US."

The $12-billion amount was "based on estimates of the damages suffered by the EU due to unfair and biased competition from the US industry," it added.

The EU asked for the matter to be discussed at a DSB meeting on October 23.

An EU source said the 27-nation block had committed early this year not to apply sanctions without prior approval from the WTO. Thursday's request to obtain this approval was "likely to take one to two years", the source added.

Boeing and its European rival Airbus have been at odds since 2004 over the issue of government subsidies, with both having won and lost complaints filed against the other at the WTO.

The EU executive said its request to apply penalties "follows the EU's assessment that the US had not lived up to its obligation to remove its illegal subsidies in the aircraft sector."