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Antigua Makes 'Final Appeal' To US In Gambling Spat

by Jason Gorringe, Tax-News.com, London

01 April 2013


At the World Trade Organization's Dispute Settlement Body's (DSB) March 26, 2013 meeting, Dominica, on behalf of Antigua and Barbuda, warned that the territory would resort to imposing the compensatory measures granted by the WTO on January 28, 2013, involving the sale of US-copyrighted items without the payment of rights usage, if an alternative resolution with the United States fails to be agreed.

The case between Antigua and Barbuda and the United States dates back to a ruling in the Caribbean territory's favor in 2004. The WTO concurred with Antigua and Barbuda's argument that United States' legislation prohibiting the provision of overseas online gambling services contravened the nation's commitments under the General Agreement on Tariffs and Trade (GATT).

Given the diminutive size of trade flows between the two countries, however, Antigua and Barbuda has said it has been unable to obtain meaningful compensation for the damage caused by the United States' laws through conventional trade measures.

Frustrated with the lack of progress over several years of negotiations with the United States, Antigua and Barbuda applied to the World Trade Organization for an alternative to obtain compensation, and in January 2013 the WTO agreed that Antigua and Barbuda could sell US-copyrighted merchandise, worth USD21m per year, without paying for rights usage.

Due to the controversial nature of the measures agreed, Antigua and Barbuda has yet to implement the compensation package, and had requested that the United States cooperate towards an amicable solution in earnest.

However, Antigua and Barbuda has indicated that it may soon abandon hope of a more beneficial settlement, and may proceed with implementing the package of measures despite warnings from the United States of the reputational damage it could deal Antigua and Barbuda, potentially impeding the jurisdiction's ability to attract foreign direct investment in the future.

Dominica told the Dispute Settlement Body that: "Antigua and Barbuda had not seen any substantial progress on the part of the US to comply with the DSB's recommendations and rulings nor to reach a settlement with Antigua and Barbuda." Dominica relayed that Antigua and Barbuda wished to appeal to the United States to "make one last effort at resolving the matter and avoiding unpredictable consequences," given that the measures would be unprecedented.

TAGS: tax | law | international financial centres (IFC) | copyright | tariffs | offshore | gambling | legislation | offshore e-gaming | trade disputes | Antigua and Barbuda | United States | retail | trade | services

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