Antigua Hits Out At US Inaction Over WTO Gaming Ruling

by Mike Godfrey, Tax-News.com, Washington

20 March 2006

Antigua and Barbuda’s Ambassador to the WTO, Dr. John W. Ashe, responded with disappointment to a US statement made last Friday in Geneva at a meeting of the WTO’s Dispute Settlement Body over the countries' internet-gaming dispute.

A ruling by the WTO Appellate Body in April 2005 upheld one of Antigua and Barbuda's complaints over US prohibitions, which prevented US banks and major internet search engines from doing business with gambling firms on the island. The WTO has given the US until April, 2006, to implement its ruling.

Dr Ashe said that the US statement provided little in the way of useful information as to when and how the United States would come into compliance with the WTO's recommendations and rulings.

Continued Dr Ashe: 'With an implementation deadline approaching on 3 April 2006, less than three weeks from now, we might be forgiven, Sir, for having some anxiety at a complete lack of information from the United States on this most important matter facing the small and delicate economy of Antigua and Barbuda.'

This is our first experience with dispute resolution at the WTO, but we had perhaps naively expected that the United States would wish to engage with our government on devising an equitable solution to our dispute that would take into account the benefits accorded Antigua under the recommendations and rulings, but also reasonably and comprehensively address the concerns raised by the United States during the course of the dispute as its justification for prohibiting the provision of services from Antigua to American consumers. To our great disappointment, and in spite of our numerous attempts on our part, the United States has shown absolutely no interest in engaging with us in this regard.'

'The official silence from Washington on this matter that is deeply troubling. What is equally troubling is what has actually been happening in the United States since we won our hard-fought and costly dispute. Legislation has indeed been introduced in the United States Congress addressing the difficult topic of remote and Internet gambling. In fact, two bills have been introduced separately in the Congress which are substantively quite similar. This legislation, one bill entitled the "Unlawful Internet Gambling Enforcement Act of 2005" and another entitled the "Internet Gambling Prohibition Act," is the only legislation introduced into the Congress since the determination of the "reasonable period of time" in our case.'

' Unfortunately, each proposal is about as directly contrary to the recommendations and rulings of the DSB as could possibly be imagined. Not only do these bills do nothing to provide Antiguan operators with any access whatsoever to the vast American gambling market, but in fact each would further entrench the anti-GATS nature of United States gambling law by expressly exempting from its application domestic Internet gambling on horse racing, Internet gambling conducted by Native American tribes and, most significant of all, Internet gambling that occurs entirely within the border of a particular state. We have maintained all along that the American prohibition was really based upon the cross-border nature of the services rather than any true "evils" associated with "remote" gambling-and this pending legislation emphatically confirms we were correct.'

'In addition to this legislation, WTO members should know that the ubiquitous American-based money transfer service-Western Union this January ceased providing money transfer services to and from Antigua and Barbuda. Ironically then, our country, with a strong, tightly regulated and overseen financial services sector, an enviable record of mutual assistance in cooperating with other countries around the globe to detect, deter and prevent financial crimes-and the only country to confront the United States over its anti-competitive gaming practices-is one of the very, very few countries in the entire world to which you cannot send or from which you cannot receive funds via Western Union.'

'And finally, we all know of the difficult questions facing many countries-particularly developing countries-when considering the costs and benefits of signing on to a multi-national trade organisation such as the WTO. In Antigua, we have voluntarily complied with the demands of trading partners, including particularly the United States, based upon our commitments to our trading partners under the various WTO trade agreements. Some of these things have clearly had an adverse impact on our own efforts to enrich and achieve some autonomy in our small economy. But we have been encouraged by the dominant economies on this planet that this multi-lateral set of agreements would accrue to the benefit of all of us. That we could compete with larger economies and, in the case of a dispute, achieve a fair and balanced hearing which would provide us with a meaningful remedy despite our limited global economic consequence.'

'It is with great concern that we learn that the United States Trade Representative has used our weakness as an express reason why gaming and other interests in the United States should not be concerned about our victory at the WTO. As reported on a website of an interest group in the United States, the USTR assured the participants at a conference held late last year that "as they see it, the most Antigua can do is to levy tariffs on US imports equal to the 'damage' done by the US failure to comply with the WTO ruling. Antigua is a tiny economy and imports little from the US. Imposing additional duties would simply make American goods more expensive there. Further, at the same meeting, USTR representatives were quoted as saying that "if the WTO does not agree [with American compliance efforts], the issue will likely be litigated for at least another year." '

'We believe that the time has come for the United States to demonstrate whether it is willing to be a responsible stakeholder in the WTO-whether the WTO agreements are to work for all of us, equally, or whether the WTO is indeed a "one-way street" for the large economies to further enrich themselves at the expense of lesser ones. It is one thing to play by the rules on a purely literal basis, and quite another to play by the rules in order to attain the objectives the rules were designed to achieve.'

The tiny Caribbean jurisdiction, where several online gaming firms are based, had argued that by seeking to legally prevent US citizens from accessing online gambling services such as those offered by many companies in Antigua and Barbuda, the government of the United States was contradicting service sector commitments that it made when the WTO was formed in 1995.

US federal laws bar the placing of bets across state lines by electronic means, preventing Antiguan online gambling companies from accessing US customers.

"As of today, with less than two months remaining on an 11-month and two week compliance period, to our knowledge no legislation has been introduced into the Congress that would seek to bring the United States into compliance," Antigua's ambassador to the WTO, John Ashe, wrote in February in a letter to the US trade representative, Rob Portman.

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