AOC Aon Corp.

Discriminatory Taxes Leave Multinationals with Little Recourse CHICAGO, March 10 /PRNewswire-FirstCall/ -- What impact will DP World's decision to drop its plans to enter into an agreement to run several U.S. ports have on American businesses located in countries with strong cultural and business ties to Dubai? Perhaps none. But Aon Trade Credit experts say there is increasing evidence of countries selectively imposing burdensome and arbitrary regulations on western multinational corporations. (Logo: http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO ) Bryan Squibb, managing director, Aon Trade Credit U.S., says that in the 70s and early 80s there was a trend toward governments' privatizing a company's assets. In those years, he says there were so many radical changes in leadership throughout the world that it was fashionable for the incoming government to blame the outgoing administration for that country's problems. So the previous government's business deals often came under fire. Oil and gas companies from the US and UK were frequent targets, he says. Squibb says there's evidence that a variation of that trend from 20 years ago is now threatening some North American and European companies. "When countries arbitrarily impose these discriminatory taxes it's a form of international blackmail. Multinationals have no recourse," he says. "We've seen arbitrary taxes imposed amounting to anywhere from 3-25% of a company's revenues from that particular country. The taxes appear out of nowhere and the shareholder ultimately pays. It erodes the predictability of a company's earnings." Squibb describes one instance when after a multinational corporation had built its facility in a country and amassed 2-3 years of earnings, the local government suddenly and arbitrarily declared the land beneath the company's local offices property of the state. The company had the option of absorbing the cost of dismantling and relocating its operations, or paying the locally imposed regulatory tax. "Most companies," Squibb says, "pay the tax." This is more insidious than the government confiscation that took place years ago, Squibb says. "Confiscation gets press coverage," he says, "but if a local government sticks on a tax it doesn't get much attention." Squibb says political risk insurance may cover these occurrences, but it's still unsettling for the company on the receiving end of these arbitrary rulings. "It's a bluff game, a balancing act," he says, "the last thing you want in year five of your country business plan is the imposition of a tax that takes down your margin." Contacts: Al Orendorff (312) 381-3153 http://www.aon.com/newsroom Aon Corporation (NYSE:AOC) ( http://www.aon.com/ ) is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. The company employs approximately 47,000 professionals in its 500 offices in more than 120 countries. Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions. This press release contains certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors. Potential factors that could impact results include: general economic conditions in different countries in which we do business around the world, changes in global equity and fixed income markets that could affect the return on invested assets, fluctuations in exchange and interest rates that could influence revenue and expense, rating agency actions that could affect our ability to borrow funds, funding of our various pension plans, changes in the competitive environment, our ability to implement restructuring initiatives and other initiatives intended to yield cost savings, our ability to execute the stock repurchase program, changes in commercial property and casualty markets and commercial premium rates that could impact revenues, changes in revenues and earnings due to the elimination of contingent commissions, other uncertainties surrounding a new compensation model, the impact of investigations brought by state attorneys general, state insurance regulators, federal prosecutors, and federal regulators, the impact of class actions and individual lawsuits including client class actions, securities class actions, derivative actions, and ERISA class actions, the cost of resolution of other contingent liabilities and loss contingencies, and the difference in ultimate paid claims in our underwriting companies from actuarial estimates. Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results, is contained in the Company's filings with the Securities and Exchange Commission. http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO http://photoarchive.ap.org/ DATASOURCE: Aon Corporation CONTACT: Al Orendorff of Aon Corporation, +1-312-381-3153 Web site: http://www.aon.com/ http://www.aon.com/newsroom

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