VZCZCXRO1740
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHMD #2235 3480902
ZNR UUUUU ZZH
R 140902Z DEC 07
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 3941
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE

UNCLAS MADRID 002235 
 
SIPDIS 
 
SIPDIS 
 
CAROL HENNINGER IN EEB/TPP/MTA AND THOMAS FINE AT USTR 
 
E.O. 12958: N/A 
TAGS: ECON ETRD WTRO SP
SUBJECT: SPAIN WANTS MORE COMPENSATION IN BANKING OR 
INSURANCE IN RETURN FOR RESOLVING INTERNET GAMBLING WTO CASE 
 
REF: STATE 165472 
 
¶1. Summary: Spain recognizes that the U.S. has made a serious 
offer to resolve the WTO internet gambling case.  However, 
Spain is looking for more compensation in banking or 
insurance.  Moreover, as Spain appears to be relatively 
liberal on internet gambling, the public order argument for 
maintaining a robust regime for controlling internet gambling 
has little resonance in Spain.  End Summary 
 
TREND IN SPAIN IS FOR 
LIBERALIZED RULES ON 
INTERNET GAMBLING 
--------------------- 
 
¶2. Per reftel, EconOff contacted Ministry of Industry, 
Tourism and Trade Deputy Director General for International 
Trade in Services, Jose Alberto Plaza Tejera, on 12/11/07. 
Tejera told EconOff that Spain was moving in the direction of 
more liberalized rules on internet gambling.  Spain permits 
internet gambling, albeit with admittedly difficult to 
enforce restrictions.  For example, the Autonomous Community 
of Madrid (autonomous communities correspond roughly to U.S. 
states) allows internet gambling.  The gambling organizer and 
gambler are both required to be resident in Madrid, but 
obviously this is difficult to verify.  Tejera probed EconOff 
for where U.S. internet gambling legislation might be headed, 
and EconOff told him that whatever happened in this area in 
the U.S. Congress, it would very unlikely impact the 
resolution of this WTO case.  Tejera subsequently committed 
to providing a list of Commission ideas for compensation and 
Spanish views. 
 
SPAIN WANTS MORE FROM 
U.S. IN INSURANCE OR 
BANKING 
--------------------- 
 
¶3. Tejera passed to EconOff on 12/12/07 a fax with 
information on areas where the Commission is seeking 
compensation from the U.S. and areas that Spain is 
particularly interested in.  According to Tejera, the EU 
would like U.S. concessions in the following areas. 
 
--  Storage and warehousing: the EU is asking for an 
extension of commitments to cover ports. 
 
--  Insurance: elimination of federal taxes related to 
premiums. 
 
--  Banks: elimination of federal requirement for bank 
directors to be American citizens. 
 
--  R&D: EU asks for commitments in the social and natural 
sciences and in interdisciplinary R&D services, which the 
    the U.S. appears willing to concede, although not with 
respect to publicly financed projects. 
 
--  Telecommunications: reduction in foreign ownership 
restrictions (20% for radio licenses). 
 
--  Postal services: commitments in the liberalized 
activities (press and international mail). 
 
--  External legal consulting:what has not been offered in 
the Doha Development Round (in the states that have 
    legislation on this topic. 
 
Spain recognizes that the U.S. has made a concession on R&D 
services but believes that this should be complemented by a 
concession in the banking or insurance sectors. 
 
COMMENT 
------- 
 
¶4. The extra compensation Spain is looking for in insurance 
or banking likely stems from the fact that BBVA and Santander 
have made important acquisitions in the U.S. in the last year 
or so and see the U.S. as a very important area for future 
growth.  Spain's largest insurance company, MAPFRE, recently 
bought a car insurance company in Massachusetts, making 
MAPFRE one of the top 20 insurance companies in the U.S. 
MAPFRE also owns insurance companies in Florida and New 
Jersey. 
 
AGUIRRE