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Passed into law in 1934, Section 891 emerged from a dispute between the U.S. and France over taxation practices. At the time, American companies faced double taxation on dividends distributed by their French subsidiaries, while French companies enjoyed immunity from similar taxation. The Treaty signed in 1932 sought to rectify these disparities, but with France's delayed ratification, the U.S. resorted to Section 891 as a mechanism to pressure compliance. The threat worked; the treaty was ratified shortly thereafter, and Section 891 faded into obscurity until recent concerns resurfaced regarding European tax practices.