CAN INDONESIA INVOKE PUBLIC MORALS EXCEPTION UNDER THE WORLD TRADE ORGANIZATION (WTO) FOR PROHIBITING CROSS-BORDER GAMBLING?

Abstract

Under the WTO, Indonesia is obliged to liberalize its markets through establishing the schedule that comprise a list of services that can be either opened or closed to foreign suppliers.  However, Indonesia’s schedule is vague as to whether gambling services are closed to foreign suppliers. Through this loophole, the practice of cross-border gambling services has been rampant, resulting in some consequences, especially those related to money laundering and underage gambling. Tackling this problem, Indonesia could apply public morals exception that allows member states to impose trade prohibition. By using public morals exception that was applied in some WTO cases, this article explores the way in which Indonesia could justify prohibiting cross-border gambling services. This article claims that Indonesia has a justification to impose public morals exception under the WTO to prohibit cross-border gambling services within its territory because the prohibition would be designed to protect public morals; it would be necessary to protect public morals; and the prohibition would equally apply  to both foreign and local suppliers in cross-border gambling services in Indonesia.