Although they welcomed the agreement on the future relationship between the EU and the UK (see EUROPE 12628/6) “with great relief”, MEPs Philippe Lamberts (Greens/EFA, Belgium) and Sven Giegold (Greens/EFA, Germany) have expressed concern about its weak provisions on tax evasion and money laundering.
In a letter sent on Monday 4 January, the two environmentalist MEPs call on the European Commission not to let the United Kingdom convert itself into a “Singapore on Thames”.
The MEPs are particularly concerned that rules on corporate tax avoidance are limited to the global rules of the OECD. They explain that, in practical terms, this means that, where EU rules go further than the OECD standards, they are not included in the agreement. This is the case, for example, for the EU’s ‘black’ list of tax havens and the Code of Conduct on business taxation.
Most importantly, taxation and anti-money laundering rules are excluded from the rebalancing provisions, which enable the alignment of standards as they evolve. This situation is particularly worrying, according to the MEPs, since a number of rules that have been proposed by the European Commission and supported by the European Parliament are still awaiting approval by the EU Council and will therefore not be covered by the agreement.
The two MEPs point to another concern: the text does not include any rules concerning the British overseas territories, which are responsible for about a third of the total tax losses caused by tax havens around the world.
They therefore call on the Commission to correct the situation by using the equivalence regime for the UK’s financial services, a process that is currently underway, to obtain a robust commitment from the country against tax dumping and in favour of financial transparency.
The two MEPs state that the European Parliament and the EU Council should discuss a strategy and the Commission should propose a communication on the matter before any equivalence decisions are taken.
The letter can be found at: http://bit.ly/2JNqoht (Original version in French by Marion Fontana with Damien Genicot)