The World Trade Organization ruled Friday that the European Union may impose record sanctions of some $4 billion on U.S exports, creating a major incentive for Washington to abandon special tax breaks for U.S. companies. Read the full text of the World Trade Organization ruling . The $4 billion sanction threat -- 20 times the amount imposed in any previous WTO disputes -- is a major victory for the EU over what it calls the "huge illegal export subsidy" provided to U.S. exporters. But EU officials have indicated that they will hold off on imposing the sanctions if the U.S. changes its tax policies and comes into compliance with WTO rules. "We are satisfied by today's decision that makes the cost of non-compliance with the WTO crystal clear," Trade Commissioner Pascal Lamay said in a statement issued by the European Commission. The U.S. tax break program, known as "Foreign Sales Corporations," allows U.S. companies with foreign interests to exempt between 15 and 30 percent of their export income from U.S. taxes. Approved by Congress in 2000, the provision allows major U.S. exporters such as Boeing, Microsoft and Disney to pay less tax, making their products cheaper and giving them an advantage over foreign competitors. The EU asked the WTO for the right to retaliate on $4.043 billion worth of goods, based on the amount of damage done to EU companies struggling to compete with U.S. corporations taking advantage of the tax breaks. A special panel of trade arbitrators decided on the sanctions figure after a series of starts and stops on the case since January. http://www.pbs.org/newshour/updates/wto_08-30-02.html