Freeports consultation

AAT understands and supports the desire to increase investment and promote economic growth, especially post-Brexit. However, the proposed introduction of Freeports as a means of achieving this raises serious concerns from an anti-money laundering (AML) perspective. Freeports are vulnerable to illicit activity in part because by providing preferential treatment, they resemble offshore financial centres, offering both high security and discretion to users, allowing transactions to be made without attracting the attention of regulators. This does not sit well with the importance of establishing and maintaining a consistent and robust AML supervisory regime in the UK.

AAT believes that regulatory requirements are only meaningful when effectively enforced. The recent transposition of the 5th Money laundering directive (5MLD) on 10 January 2020 placed a greater emphasis on regulated entities in relation to the client due diligence process. However, the creation of Freeports endangers the effective implementation of the directive by reducing the due diligence burden for goods in Freeports.