US Official Indicates EU's March Sanctions Deadline Unlikely To Be Met

by Ulrika Lomas, Tax-News.com, Brussels

02 February 2004

The United States Ambassador to the European Union, Rockwell Schnabel, revealed to a German daily newspaper last week that Congress is unlikely to meet the EU’s March deadline for the repeal of the Extra-Territorial Income Exclusion Act.

In an interview with Die Welt which appeared in the paper’s Friday edition, Schnabel said that lawmakers were currently in the process of approving measures to remove the offending subsidies given to US exporters. “However, we won't have done this by March 1, the deadline set by the EU," the ambassador warned.

Whilst reports have indicated that Congressional aides believe either the House or the Senate could have approved new legislation before March 1, it is unlikely that both chambers will reach an agreement with each other on the final draft by this date.

“The US will find a solution but we need more time," Schnabel explained. "We hope the EU can find a way to avoid retaliation.”

The EU has committed itself to imposing a 5% tariff on $4 billion of US imports from March 1st, which will increase in 1% increments on a monthly basis until the legislation at issue has been repealed.

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