If a non-EU company decied not to pay VAT, then it might only have problems working with the EU on legal issues - ex. copyright, hacking, anti-trust etc.
Processors with European divisions will be at a much higher risk for an audit after 1st of July 2003... but again processors could claim they are simply processing the transaction, and that the companies they work with will pay VAT based on where they are located. That would mean alot more work and higher cost for webmasters/companies within the EU and outside the EU. Plus processors would have to give up details on who are processing with them, which could leed alot of webmasters/companies into tax problems with their local tax authorities.
If processors without any European divisions will "wait and see", then I think they will be ok, until next round of VAT laws (6-18 months).
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"Chaos is the law of nature, order is the dream of man."
~Henry B. Adams (Historian) 1838-1918
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