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Saturday, Nov 27, 2021

EU Urged to Pressure UK over Money Laundering Commitments

EU Urged to Pressure UK over Money Laundering Commitments

Members of the European Parliament are asking the EU’s executive arm to withhold permits granting UK financial services companies easy access to the bloc’s market pending a stronger commitment from London to do more on money laundering and tax avoidance, the Financial Times reported Tuesday.
Green MEPs said in a letter to the European Commission that the current wording on financial transparency and corporate taxation in the new EU-UK trade deal does little to stop the United Kingdom from becoming a “Singapore on [the] Thames,” according to the FT.

“We strongly recommend that the leverage we still hold over the United Kingdom in granting it access to the single market for financial services or not should be used to the maximum extent in order to gain robust commitments against tax dumping and in favour of financial transparency,” the signatories said.

Anti-money laundering and taxation rules have been excluded from the deal’s “rebalancing” provisions, which are intended to mitigate regulatory differences between the jurisdictions, according to the letter, which was signed by Philippe Lamberts, co-chair of the European Parliament’s green group, and German MEP Sven Giegold. Nor does the deal take into account the EU’s tax haven list and code of conduct on business taxation, they said.

“The deal relies heavily on the international standards that we know are insufficient,” Tove Maria Ryding, a tax expert at the European Network on Debt and Development, told the FT. “In areas where the EU has gone further than the global standards, the risk of international tax dodging now seems higher — for example, in relation to transparency requirements under the fifth Anti-Money Laundering directive.”

As currently worded, the deal’s provisions on tax obligations and money laundering are generally “weak,” Ryding said.

“If the United Kingdom does not want to lose all credibility as an international actor, there is a baseline that the UK cannot go below” Markus Ferber, an MEP from the centre-right European People’s party, told the FT. “After all, I do not think that the UK will have any desire to find itself placed on AML or taxation blacklists.”
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