The draft Trade and Cooperation Agreement between the EU and the UK must not open the door to tax avoidance and money laundering. The Economic and Monetary Affairs Committee of the European Parliament has reiterated this demand in a joint letter supported by all pro-European political groups.
Concretely, we (Europe’s Greens) demand that the EU Commission takes a very close look at the tax and anti-money laundering legislation in the UK before granting the British financial sector new access to the European single market for financial services. Already shortly after the publication of the draft, Philippe Lamberts and I (Sven Giegold) had pointed out that the agreement will not maintain common standards in the fight against tax dumping and financial crime (read it here). It is a Green success that we were able to achieve such a clear cross-party position together with the Social Democrats, Liberals and the Left, despite the initial resistance of the Christian Democrats.
The letter also contains many other demands that are important to us Greens. As a member state, the UK had previously not been on the EU list of global tax havens. Now, however, it is a hot candidate for the list. We therefore call on the Council of Ministers to no longer turn a blind eye and to take a close look at the UK in the next update.
Before the end of March, the EU and the United Kingdom want to set out in a joint Memorandum of Understanding how they want to cooperate in the area of financial services in the future. In particular, this concerns the question under which conditions British financial companies will be granted access to the European single market. This is not covered in the draft Trade and Cooperation Agreement. We as a committee demand transparency from the EU Commission in the negotiations on the Memorandum of Understanding as well as the involvement of the European Parliament. We also emphasise that there must be no market access for British companies without the possibility of intervention by the European supervisory authorities. This is the only way to ensure the high European standards in areas such as consumer and investor protection.
The letter was sent to the chairs of the Foreign Affairs Committee and the Trade Committee. These two parliamentary committees are in charge of the draft agreement in the European Parliament.
For all that want to know more about the Trade and Cooperation Agreement between the UK and the EU: We analysed the deal together with Brexit expert Prof. René Repasi in a webinar in the beginning of January. The recording can be found here.
Essential sections from the letter:
12. Emphasises the need that such framework for future regulatory cooperation on financial services should be underpinned by robust commitments aimed at preventing tax evasion, aggressive tax avoidance and money laundering;
14. Calls on the Commission to reflect if and under which conditions the future framework of regulatory cooperation on financial services could strategically integrate the objectives of tax cooperation and the fight against money laundering into the EU equivalence framework;
23. Invites the EU to integrate robust commitments preventing tax evasion and tax avoidance, and aggressive tax planning, including tax and financial transparency in relevant areas, especially with regards the different tax jurisdictions found within the United Kingdom and its overseas territories in order to ensure a level playing field;
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