The most common and most likely answer to this crossword clue is the 7 letter word CURAÇAO
I've seen this crossword clue in Independent
C
U
R
A
Ã
‡
A
O
More clues leading to the result CURAÇAO
- You are casually opening what’s needed to make chocolate liqueur
- Liqueur, almost the last of it, worthless, imbibed in company
- Bean you are told to put in liqueur
- Island where accountant may be spotted in The Dog and Duck
- Old city dons a source of chocolate liqueur
- Island job for rural vet, some say
- Scoundrel Bill with a love for liqueur
- Liqueur rumored to heal foot-and-mouth disease among pigs?
- Blue liqueur and chocolate bean found around ziggurat site
Buddy explains!

The straight part
We know that "Island" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case island = curaÇao.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does CURAÇAO mean?
CURAÇAO noun- A liqueur, made from eau-de-vie, sugar and, as flavor, dried peel of sweet and sour oranges.