The UK government has launched a consultation to create up to 10 freeports in locations across the country.
Serious concerns have been expressed about the use of freeports for money laundering and other illicit activities but the government believes that the UK’s security services will contain these threats.
The government wants to establish freeports, with different customs rules than the rest of the country because it believes they will become innovative hubs, boost global trade, attract inward investment, increase productivity and generate employment opportunities.
The government says it is intent on cutting red tape by streamlining customs processes, exploring measures to speed up planning processes and making additional targeted funding for infrastructure improvements available.
The formal consultation seeks to garner views on the UK’s plans for freeports and the government says these views will feed into the policy development process.
Responses should be submitted by 20 April 2020.
International organisations have previously expressed concerns about links between freeports and a number of illicit cross-border activities, including trade-based money laundering.
Case studies presented in 2010 by the Financial Action Task Force (FATF) point firmly towards money laundering and terrorist financing risk indicators while a 2011 review by the World Bank labelled many of the zones white elephants where the cost of lost tax and duty revenue outweighed the benefits. The Economistmagazine in 2015said that freeports create distortions in economies. (Trade Based Financial Crime, 18 September 2019)
The government’s response in its consultation paper focuses mainly on the art trade which has recently been subject to new reporting requirements.
It suggests that the UK’s Border Force and other agencies will be able to contain money laundering, tax evasion and other illicit activities.
The consultation paper, Freeports Consultation, Boosting Trade, Jobs and Investment Across the UK can be found here.
Categories: Trade Based Financial crimes News