Fears have been raised that the 海角视频's eight new freeports announced by the Chancellor in his Budget on Wednesday could lead to money laundering - with calls not to let them "become an opportunity for criminal activity to enter the 海角视频 via the back door".
Rishi Sunak announced yesterday the eight new 海角视频 locations for freeports as East Midlands Airport, Felixstowe and Harwich, the Humber region, the Liverpool City Region, Plymouth, Solent, Thames and Teesside.
He told MPs they will have 鈥渟impler planning鈥, 鈥渃heaper customs 鈥 with favourable tariffs, VAT or duties鈥, and lower taxes 鈥 with 鈥渢ax breaks to encourage construction, private investment and job creation鈥.
However Michael Harris, a financial crime consultant, has warned that they present a money laundering risk and that there have been "numerous examples" of vulnerabilities in freeport areas over the past few years.
Mr Harris, who works for global data and analytics provider LexisNexis Risk Solutions , admitted freeports will provide a "welcome boost" to local economies, especially in areas where the government is looking to 'level up'.
He added: "It is crucial, however, that this does not become an opportunity for criminal activity to enter the 海角视频 via the back door.
鈥淚n recent years, there has been numerous examples of vulnerabilities in free trade zones, with trade in high valuable goods being funded by illicit money. It is imperative that lessons are learned from this to ensure that firms taking advantage of the tax breaks and other benefits are held to account.
"Authorities granting access to firms, need to take a risk-based approach and conduct adequate levels of checks and due diligence on both the company, its beneficial owner and key executives to ensure there are no known financial crime or reputational risks.
鈥淔rom day one, we must have effective regulatory control and proper governance in place to ensure that we keep bad actors out. If not, we risk the government repeating previous mistakes, allowing criminals to take advantage of inadequate fraud and due diligence checks.鈥
Chief Secretary to the Treasury Stephen Barclay, quizzed about freeports by MPs last month, said he had expected the locations to be announced in 鈥渢he spring鈥, with the first freeports 鈥渋deally 鈥 operational by the end of the year鈥.
The freeport model works by allowing companies to import goods tariff-free and only paying once it is sold into the domestic market, or exporting the final goods without paying 海角视频 tariffs.
In 2016, Mr Sunak 鈥 before he was given a ministerial role 鈥 authored a paper for the pro-free market think tank Centre for Policy Studies calling for freeports to be set up once the 海角视频 had left the European Union.
Tudor Evans, Labour leader of Plymouth City Council, tweeted that freeport status could bring thousands of jobs to the city and more than 鈥溌100 million in investment鈥.
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Tim Morris, chief executive of the 海角视频 Major Ports Group, said 鈥渁mbitious and exciting bids鈥 had been recognised.
He added: 鈥淗owever, freeports alone are not a silver bullet for addressing deprivation in coastal communities.
鈥淭he Government should look at extending some of the low-cost, pro-investment measures in the freeports 鈥榯ool box鈥 to port areas more widely.鈥
Further announcements are still expected on freeports within the devolved administration, with the manifesto committing to creating 10 in total in the 海角视频.
