Index: Python/compile.c
===================================================================
--- Python/compile.c	(revision 43166)
+++ Python/compile.c	(working copy)
@@ -4950,11 +4950,11 @@
 	PyCodeObject *co;
 	if (!com_init(&sc, filename))
 		return NULL;
-	if (flags && flags->cf_flags & PyCF_SOURCE_IS_UTF8) {
-		sc.c_encoding = "utf-8";
-	} else if (TYPE(n) == encoding_decl) {
+	if (TYPE(n) == encoding_decl) {
 		sc.c_encoding = STR(n);
 		n = CHILD(n, 0);
+	} else if (flags && flags->cf_flags & PyCF_SOURCE_IS_UTF8) {
+		sc.c_encoding = "utf-8";
 	} else {
 		sc.c_encoding = NULL;
 	}