ADVISORY/Recent WTO Decision Regarding FSC Repeal Act Favors E.U.; Export Assist Available for Comment on Mounting Tension Over Trade Dispute Between U.S. and E.U as August 13 WTO Deadline Approaches.

News/Assignment Editors

ADVISORY...for Monday (August 13)

--(BUSINESS WIRE)

Expert source: Available for commentary on E.U./U.S. dispute, WTO ruling, and what all of this means for U.S. exporters is Joseph Englert, president of Export Assist, a leading export finance and FSC management company.

Mr. Englert has consulted to the U.S. Department of Commerce since 1993 and teaches trade finance seminars for the Foreign Commercial Service Division, International Trade Administration and the Office of Import Administration. Mr. Englert is an advisor to the U.S. Small Business Administration, Office of International Trade.

Situation:

On August 13, the WTO will finalize its decision regarding the legality of the "FSC Repeal and Extraterritorial Income Exclusion Act." In November 2000, under pressure from the WTO to end tax subsidies for U.S. exporters, President Clinton signed "The Act" into law.

This act repeals the tax incentive for U.S. exporters to process their exports through FSCs. FSCs are companies that are incorporated primarily in the approved jurisdictions of Barbados, Bermuda or the Virgin Islands. They were authorized in 1984, enabling U.S. exporters to reduce the tax burden on income from foreign exports.

While the FSC Repeal Act of 2000 did abolish FSCs for most U.S. exporters, it created a new vehicle for U.S. exporters to account for export income through the Extraterritorial Income Exclusion (ETI). The E.U. maintains that ETI continues to provide unfair tax advantages to U.S. exporters, and voiced its objections to the WTO.

On June 26, 2001, the WTO ruled on the side of the E.U., rejecting the U.S. tax incentive legislation that continued tax advantages for U.S. exporters. If Congress does not revise the legislation to the satisfaction of the WTO and the E.U., the E.U. may impose trade sanctions of approximately $4 billion on the U.S. (Wall Street Journal, 5/21/01.)

In a recent article in the Virgin Islands Daily News, Mr. Englert declared that we may be on the brink "of the largest trade war in history."

Export Assist:

Export Assist, headquartered in San Francisco, provides FSC transition management and worldwide export finance services, including: outsourced credit and treasury department functions for U.S. export companies; FSC management; and Foreign Economic Processing for both FSC and Extraterritorial Income clients.

Export Assist offers a training course in export finance services to institutional lenders throughout the U.S., in partnership with Ex-Im Bank, the official export credit agency of the U.S. Government. Export Assist is the first company in the private sector to partner with Ex-Im Bank. Export Assist has more than 2,000 export customers nationwide, including more than 20 percent of the Fortune 500 companies and one-third of the Dow Jones Industrials.

Contact:

For more information on the FSC Repeal Act and the recent WTO rulings regarding it, please visit http://www.exportassist.com.

Journalists interested in interviewing Mr. Englert should contact:

Todd Lane -- 415-957-1705 [e-mail]

Caroline Bhalla -- 415-957-1705 [e-mail]