The UK’s forthcoming withdrawal from the EU is not without complication. In particular ensuring cooperation in criminal cases and law enforcement between the UK and remaining EU Member States presents a particular, and multi-faceted challenge.
EU systems to detect and combat crime across borders include: (1) the European Arrest Warrant, allowing the accelerated extradition of those suspected or convicted of offences elsewhere; (2) investigative resources in Europol and Eurojust providing support to police, prosecutors and judges; and (3) information-sharing tools, giving rapid access to suspects’ criminal records and biometric information. Each will require to be carefully considered as part of the EU exit strategy.
This observation is set against a background where as recently as 23 April 2018, The Rt Hon Nicky Morgan MP, Chair of the Treasury Committee wrote directly to Jon Thompson, Chief Executive of HMRC in an open letter requesting a response to concerns raised following a ‘BuzzFeed’ article which reported on a leaked HMRC email about a French investigation into Lycamobile, raising questions about HMRC’s approach to international cooperation in the fight against economic crime. In particular a response was sought setting out HMRC’s willingness and capacity to act vigorously on behalf of other countries and to adopt a constructive and proactive approach to requests for UK assistance in investigating economic crime; and the HMRC’s readiness to undertake investigations where there are serious allegations of money laundering and tax fraud. (A copy of the letter can be found here: https://www.parliament.uk/documents/commons-committees/treasury/Correspondence/2017-19/HMRC-lycamobile-230418.pdf).
The European Arrest Warrant
Particular attention has been paid by the EU Home Affairs Sub-committee to the retention or replacement of the European Arrest Warrant (‘EAW’), which facilitates the swift extradition of individuals between EU Member States. The scheme, which the UK opted in to, is based on the principle of mutual recognition of judicial decisions between Member States, meaning that the receiving Member State recognises the decision of the authorities in the requesting Member State, avoiding the need to litigate through the courts in both countries.
Various alternative arrangements to the EAW have been espoused, such as those exercised by Iceland and Norway as non-EU countries; individual bilateral agreements between the UK and other Member States; and the default position relying on the 1957 Council of Europe Convention on Extradition. At the time of writing, regrettably, debate has produced little clarity. This is significant and concerning as the accelerated extradition of those suspected of committing or having been convicted of crime, including economic crime, between Member States is central to the proper administration of justice.
Sanctions and Money Laundering
In order to maintain the UK’s international sanctions and anti-money laundering (‘AML’) obligations to the UN (currently enshrined in the European Communities Act 1972) post-Brexit, the Sanctions and Anti-Money Laundering Bill proposes a means to safeguard this regime. The Bill progressed to Stage 2 reading on 20 February 2018 with the Stage 3 reading to be announced in due course.
A cross-party amendment during the Stage 2 reading was proposed by Margaret Hodge MP (Labour) in respect of the Bill’s operation in British overseas territories. No doubt in the wake of the ‘Panama Papers’ scandal in 2016, she noted that,
“We can never build a global Britain on dirty money. We will not create a strong economy on the back of being the jurisdiction of choice for every kleptocrat and crook in the world … Transparency is an essential tool in the battle against all financial crimes. Exchanging information behind closed doors, which the Government claim is sufficient, particularly disadvantages the very same countries that suffer the most from financial crime and money laundering, because they have the weakest regulatory agencies in operation.”
Ensuring that the UK and its overseas territories remain a hostile environment for tax evasion is firmly on the agenda, as evidenced by the creation of the new offence of corporate facilitation of tax evasion and powers to prosecute foreign tax evasion contained within the Criminal Finances Act 2017. A robust legislative framework post-Brexit is therefore necessary as alternatively the UK may viewed as a safe haven for those seeking to veil illicit funds.