TAX CONFERENCE

The recently enacted "American Jobs Creation Act" gives significant tax breaks to a number of U.S. industries--including shipping.

MARINE LOG and BLANK ROME will present a senior level seminar CHANGES IN U.S. TAXATION OF SHIPPING INCOME in Stamford, Conn. on April 5 & 6, 2004

Make sure you know how the new tax rules work!


March 8, 2005

WTO rules in subsidy squabble

The World Trade Organization yesterday gave South Korea three months to halt certain shipbuilding subsidies following a complaint by the European Union against the world's leading shipbuilding nation.

However, the WTO's dispute settlement panel rejected a claim that EU yards had suffered "serious prejudice" because of the various loans, debt restructurings and other means used to bail out the Daewoo, Halla (now Samho) and Daedong (now STX) yards.

The settlement panel said it had decided to "uphold the EU's claim that Korea has provided prohibited subsidies" via the Korean export-import bank Kexim.

The Kexim subsidies in question took the form of pre-shipment loans and advance payment refund guarantees that South Korean shipbuilders offered clients.

The EU took its complaint to the WTO in 2002 after European shipbuilders said South Korea had heavily subsidized its shipbuilding industry in the wake of the Asian financial crisis of 1997.

The ruling will have little impact on the Korean yards since the pre-shipment loans and advance payment refund guarantees expired as of the end of last year.

You can access the WTO panel's findings at http://www.wto.org/english/tratop_e/dispu_e/273r_a_e.pdf

Today, the Korean Shipbuilders' Association (KSA) issued a report predicting that South Korean shipbuilders will maintain their lead in the global market for the next decade, controlling over 40 percent of new orders around the world.

KSA said the industry's annual output will grow to 16.7 million tons in 2015 from 15.14 million tons last year. Its share of the global market is forecast to jump to 40.13 percent in 2015 from 38.5 percent last year.

Korean yards are expected to control about 60 percent of the market for container ships and 65 percent of the market for LNG tankers by 2015, the association said.

KSA forecast global demand for new ships will grow to 38.8 million tons this year from 37.2 million tons last year. Global demand may increase at an annual rate of 1.7 percent to reach 41.6 million tons in 2015,

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