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Antigua Approaches WTO's Lamy In Push For 'Justice'

by Amanda Banks, Tax-News.com, London

02 August 2012


The government of Antigua and Barbuda has announced that it has approached the Director General of the World Trade Organization (WTO), Pascal Lamy, in an attempt to achieve a compromise with the United States on fair compensation for damage caused to the Antigua and Barbuda gambling sector as a result of the US Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006.

In a landmark decision in 2004, the WTO agreed that United States laws, including the UIGEA of 2006, criminalizing remote gambling services offered to American consumers were in violation of US international treaty obligations. However, to date, the government of Antigua and Barbuda has said that "it has been unable, despite sustained efforts, to either get the United States to comply with the WTO ruling or negotiate any reasonable compromise to settle the dispute".

Due to the structure of the Antiguan economy, its ability to impose sanctions upon the United States has been limited, as enforcement actions historically permitted in such cases are limited to trade sanctions. However, due to the inferior size of bilateral trade between Antigua and the US in comparison to lost gambling sector revenues, it is said that any such action would fail to compensate the nation in a meaningful way. In 2006, it was estimated that Antigua held a 25% market share in the American market.

In addition, despite the 2004 ruling, the UIGEA was used by US prosecutors on April 15, 2011, in its legal action against three offshore gambling operators, including two industry leaders at the time, Pokerstars and Full Tilt Poker, and another company Absolute Poker, based in Antigua, for providing gambling services to the US market.

The government of Antigua and Barbuda has announced that it is considering several options to achieve progress, and said it has appointed a team comprising ministers, ambassadors and legal experts to push for a meaningful resolution to the case. The government has also approached Lamy in the hopes that he would agree to relaunch the case under his auspices. It is hoped that with his support, new life could be given to deadlocked negotiations with United States representatives. The government reported that Lamy had responded cautiously to the proposal as the United States would have to agree to the process before the mediation effort could begin. Lamy said he was awaiting a substantive response from the United States on the matter.

The government's call for support from Lamy comes after meetings in June, led by Ambassador Colin Murdoch, the permanent secretary in Antigua and Barbuda's Department of Trade, Industry and Commerce, during which the nation sought to clarify certain issues relating to the mediation process. Murdoch reported that he had came away from meetings with Lamy with the view that the office of the WTO Director-General was engaged in a genuine effort to help resolve a difficult case that had pitted the world’s largest economy against one of the world’s smallest.

"Lamy appeared keen to preserve the legitimacy of the WTO dispute settlement system and to have the WTO play a positive role in the outcome," Murdoch said. "It remains to be seen whether the US will agree that an impartial voice in the room, not beholden to either side, can bring value-added to the process."

The government said it had not ruled out the possibility that the matter might be resolved on a bilateral basis with the United States, without the process needing WTO mediation, and confirmed further meetings with the United States Trade Representative in Washington had been scheduled for this month.

A comprehensive report in our Intelligence Report series examining the new possibilities that offshore e-commerce open up for business, and analysing the offshore jurisdictions that have led the way in offering professional e-commerce regimes for international business, with a particular focus on e-gaming, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report6.asp
TAGS: commerce | law | international financial centres (IFC) | World Trade Organisation (WTO) | offshore | internet | e-commerce | gambling | offshore e-gaming | Antigua and Barbuda | United States | trade

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