EC Finds RGA's US Complaint Warrants Investigation

10 March 2008

The European Commission today announced a decision to launch an investigation into U.S. anti-online gambling measures, following a complaint filed in December 2007 by the Remote Gambling Association concerning the United States' selective enforcement practices.

"The United States has the right to address legitimate public policy concerns relating to Internet gambling, but discrimination against EU companies cannot be part of the policy mix," said EU Trade Commissioner Peter Mandelson in a prepared statement. "We are interested in a constructive and mutually satisfactory solution to this issue."

Following several months of negotiations, the European Union in December reached a compensation agreement with the United States over the United States' decision to withdraw gambling services from its commitments to the General Agreement on Trade in Services. Under the compensation agreement, the United States decided to open up certain services sectors to Europe.

In response, the RGA filed a complaint under a provision of the EU Trade Barriers Regulation, which enables any EU company or association of companies to complain about a non-EU country with trade barriers which adversely affect EU exports.

Meanwhile, the U.S. Department of Justice has continued to investigate and prosecute the activities of EU online gambling operations that took place prior to the U.S. withdrawal of gambling services from the GATS.

The RGA argues that the United States is in violation of the GATS and should not be allowed to selectively enforce laws against foreign online gambling companies.

The investigation will take five to seven months and will include dialogue with interested parties and relevant authorities, according to the European Commission.

If the commission finds that a breach in WTO law has caused harm to EU businesses it would start a WTO dispute settlement case against the United States.

The European Commission has published a fact sheet outlining the reasons for the investigation and what it expects from the United States.

RGA Chief Executive Clive Hawkswood could not be reached for comment.

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