The frontrunners for the leadership of the Conservative Party, Boris Johnson and Jeremy Hunt, have both said they would consider plans to create “freeports” in Aberdeen, Peterhead and Teesside.
Freeports are zones that are exempt from normal customs regulations, allowing for the import, export and manufacture of goods free from the usual tariffs and customs duties. They are typically used to store high-value items such as artwork, antiques and precious stones.
However, while the proposed freeports could attract investment and create thousands of jobs—around 17,500, according to Johnson’s team—they have also been criticised for serving as tax havens.
“Freeports have repeatedly been shown to facilitate large scale criminality, including tax abuse,” said Alex Cobham, chief executive of the Tax Justice Network, an independent think tank pushing for reform of tax laws around the world.
“The establishment of a freeport should not be countenanced without, at a minimum, requiring far-reaching public registers of those using them and the assets involved.”
Earlier this year, Jean-Claude Juncker, the president of the European Commission, came under fire for his stance towards freeports, which he authorised during his time as the prime minister of Luxembourg.
A special committee of MEPS evaluating financial crime and tax evasion criticised freeports for circumventing international transparency rules and enabling money laundering. According to their report, high-value items were held indefinitely and could potentially be traded on the premises without tax authorities being notified.