WRITTEN QUESTION E-4126/00 by Ioannis Souladakis (PSE), Ulpu Iivari (PSE) and Michel Rocard (PSE) to the Commission. EU sanctions against the US.
Date: 2001-01-11
Institutions: European Parliament, Provisional data
Subjects: European undertaking, United States, administrative sanction, tax relief, trading operation

6.6.2001

EN

Official Journal of the European Communities

C 163 E/239

(2001/C 163 E/280)

WRITTEN QUESTION E-4126/00

by Ioannis Souladakis (PSE), Ulpu Iivari (PSE)
and Michel Rocard (PSE) to the Commission

(11 January 2001)

Subject: EU sanctions against the US

The trade dispute between the European Union and the United States over the system of tax breaks for
American exporters through the Foreign Sales Corporation is leading the European Commission to impose
sanctions of some $4 billion in order to offset the damage done to European companies by the US tax
breaks. Although the United States missed the first compliance deadline, the new law recently passed by
Congress continues to offer tax breaks to American companies similar to the old system. Although the
European Commission is still continuing to exert pressure on the United States, it intends to postpone the
application of sanctions until at least the middle of next year.

Does the sum of USD 4 billion cover the real damage suffered by European companies because of the

1.
unfair US tax-break system?

Does the European Commission intend to postpone the application of sanctions till the middle of

2.
2001?

3. What kind of and how many companies appear in the list of American undertakings subject to
sanctions?

Is there any other kind of pressure that the European Commission intends to apply in order to

4.
protect its companies in this instance?

Answer given by Mr Lamy on behalf of the Commission

(8 February 2001)

The sum of USD 4 billion corresponds to the amount of the subsidy given by the United States to its
induce the

1.
exporting companies and is therefore considered an appropriate countermeasure that will
United States to bring its legislation into conformity with the World Trade Organisation (WTO) rules.

The agreement on procedures reached by the Community and the United States at

2.
the end
of September 2000 provides that the Community will only impose countermeasures on the United States
if the WTO finds that the new American legislation continues to breach WTO rules. The Community has
always defended the position that sanctions can only be imposed after the WTO has ruled on the legality
of the measure. It is for the WTO to be (cid:145)judge and jury(cid:146), not for any one WTO party. The WTO process
will take some time: it is unlikely that the question of sanctions will come up before the autumn of 2001.

It is difficult to identify what and how many American companies are affected by the Community
3.
sanction list as the list of products presented by the Community to the WTO is preliminary and very
broad. Affected companies will be known once the final amount and the final list of products subject to
sanctions have been established.

4.
The Commission will continue to do everything to protect the rights and interests of Community
companies, as it has done during the Foreign Sales Corporation (FSC) proceedings. The Commission
considers that the full respect of the WTO dispute settlement procedures is the best way to ensure that
Community companies are protected.