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|Short title: ||
(as cited in request for consultations)
|Request for Consultations received:
Summary of the dispute to date back to top
The summary below was up-to-date at
Complaint by the United States.
On 5 May 1998, the US requested consultations
with France in respect of prohibited subsidies provided by France. The
United States alleges that, based on unofficial English translations of
the relevant legislation and descriptions in secondary sources, it is
its understanding that under French income tax law, a French company may
deduct temporarily, certain start-up expenses of its foreign operations
through a tax-deductible reserve account. The US also believed that a
French company may establish a special reserve equal to ten percent of
its receivable position at year end for medium-term credit risks in
connection with export sales. The US contended that each of these
measures constitutes an export subsidy, and that the deduction for
start-up expenses constitutes an import substitution subsidy, and as such
both measures violate Article 3 of the SCM Agreement.
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