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under U.K. law -- all characteristics of taxes, not of payments
for specific economic benefits.
The parties herein rely heavily on expert witnesses -- from
the petroleum industry, from the U.K. Government, and from legal,
tax, accounting, and economic professions –- as to the character
of PRT as a tax or as payment for specific economic benefits.
The basis of the opinions rendered by respondent’s economic
experts seems to be that, in hindsight, oil companies “got a good
deal” when they entered into North Sea license agreements, that
the licenses turned out to be more valuable than anyone
anticipated at the time the licenses were issued, and therefore
that the oil companies “probably felt there was an implicit
contract” to pay some type of additional charges, and that these
additional charges (whatever they may be called, however they are
administered, and regardless of their features) should be
regarded as what respondent’s expert witnesses refer to as
“economic rent” (i.e., as deferred payments in exchange for the
licenses granted in earlier years to the oil companies) and not
as taxes.
Respondent’s experts overemphasize the fact that North Sea
licenses issued by the United Kingdom to the oil and gas
companies in the late 1960's and in the 1970's were issued
largely without an auction system. As we have found, throughout
the world most countries traditionally have not relied on auction
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