The United States is appealing
The United States is appealing an October ruling by the World Trade Organization that “foreign sales corporations” are an illegal export subsidy. Many American companies reduce US taxes on their export earnings by 15 to 30% by running the exports through an offshore entity called a “foreign sales corporation,” or “FSC.” For example, crossborder leases of US-made equipment are sometimes set up as FSC leases to reduce taxes on the rental income to the US lessor. The World Trade Organization ruling calls on the United States to withdraw the FSC subsidy by October 1, 2000 at the latest. Approximately one in every four dollars in US exports is run through a FSC.