EU Urges the UK to Push Harder on Tax Avoidance and AML Regulations
The European Union has shown concerns regarding legal permits which allow financial services providers in the UK to carry out their operations in the single market. Unless and until the EU capital in Brussels is satisfied with the UK’s commitments to take down tax avoidance and money laundering, legal permits are subject to be withheld.
Green MEPs, Members of the European Parliament, have emphasized the importance of financial transparency and corporate tax avoidance, in a letter to the European Commission. They also highlighted that the deal excluded Anti-money Laundering (AML) rules stated in the agreement for rebalancing regulatory differences.
Furthermore, the MEPs in a statement acknowledged the fact that the UK needs to take necessary measures to curb money laundering to improve its regulatory infrastructure for the single market, which stated,
“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.”
Law experts believe that financial services companies in the UK are already used to the new standards and would find it difficult to ease regulations because of their commitment to global banking authorities. Politicians are of the view that it is highly unlikely for the UK to neglect shared commitments and responsibilities chartered by the FATF and OECD.
“The UK has control over its regulatory regime and is deciding how best to use that autonomy but there will always be a strong anti-money laundering regime for attracting international investment. [Authorities] want the UK to be a credible place to do business,” said Alasdair Holt, a partner at Linklaters London, which is a renowned law firm in the UK.
An MEP of the centre-right European People’s Party, Markus Ferber, believes that
“I do not think that the UK will have any desire to find itself placed on AML or taxation blacklists. 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.”