Author: Nicola Sharp 21 February 2020
Nicola Sharp of corporate crime solicitors Rahman Ravelli sees the potential benefits – but also the risks.
The UK government has launched a consultation on creating up to 10 freeports.
With their special tariff and duty status freeports will promote economic growth, according to government ministers. The government has said it intends to announce the location of the freeports this year so that the first one can open before the end of 2021.
The government is proposing zones, not necessarily based at a port, where no duty is paid on goods until they enter the full UK market, which means that none will be paid if the goods are re-exported from the port. Duties would only be paid on final goods - not on raw materials imported into the area for processing.
Under the freeports scheme, businesses would not have to fill out full customs declarations on imported goods. The government has also made reference to measures to reduce the costs of hiring workers at freeport sites but has not specified how this would be achieved. After the 10-week government consultation, areas will be invited to bid to become one of the zones.
While the government has argued that freeports could create jobs and attract investment, critics of the plan have voiced concerns that the approach will encourage money laundering and other crimes.
There is the possibility that freeports could increase trade for the UK post-Brexit. But the concerns of those who oppose the idea have been echoed by the European Union, which has talked of the risks of money laundering and tax evasion associated with freeports.
While those risks have been highlighted, it must be hoped that the increased due diligence requirements introduced under the 5th Money Laundering Directive will help eradicate those potential problems.
Nicola is known for her fraud, civil recovery and business crime expertise, her experience of leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations for corporates.