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Antigua Gaming Jurisdiction And The WTO Dispute

By: Mark Freedman, Monday July 20th 2009
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ZookZ, a private company in Antigua, has decided to exploit the World Trade Organization (WTO) ruling in favor of Antigua. ZookZ is a subscription-based company that allows unlimited music and movie downloads from the Internet. According to ZookZ the WTO ruling allows it to disregard US copyrights because of the latter’s violation of WTO laws with regard to Internet gambling.

After the enactment of the UIGEA, Antigua approached the WTO stating that this act violated Antigua’s free trade rights by preventing gambling operators licensed in Antigua from accessing US customers. The WTO ruled in favor of Antigua and also awarded a penalty of $21 million per year to Antigua because the US suspended it is obligations under the free trade act. The Antiguan government however is trying to arrive at a negotiated settlement with the US, in which it has been far from successful.

At a time when even the European Union is seeking an amicable settlement with the US on the same issue, the Government of Antigua and Barbuda does not want to complicate matters further. Therefore they have distanced itself and the Directorate of Offshore Gaming from the activities of ZookZ. A statement released through their legal representative Robert Blumenthal said, “Zookz.com is not authorized by the government of Antigua and Barbuda, or by the World Trade Organization, to offer entertainment downloads in contravention of international law.”

However the Antiguan government has clearly reserved its right to implement the sanctions against the US that has been awarded to it by the WTO. Another statement released through the law firm Mendel Blumenfeld LLP said, “Under the US [Internet] gambling case before the WTO, Antigua retains its right to implement intellectual property sanctions against the U.S. if the remote gambling matter can not be brought to a negotiated solution. If and when the Government of Antigua and Barbuda invokes sanctions it will follow WTO protocol.”

The Antiguan minister Harold Lovell has also condemned the action taken by ZookZ. He said that in the first instance ZookZ was in no way connected with the online gambling business in Antigua and had not suffered in any way because of the imposition of the UIGEA. He also pointed out that only the Government of Antigua and Barbuda was authorized to implement the intellectual property sanctions it was awarded by the WTO and private parties could not act on their own accord. The Antiguan Ministry of Legal Affairs will be launching a full scale investigation into the ZookZ issue.

ZookZ however has a different point of view. Its attorneys have stated that government authorization is not required in this matter. The WTO action has been awarded to companies trading from Antigua and ZookZ fits that bill. ZookZ is registered in and operate from St. John’s in Antigua and employs ten workers, all from Antigua.

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