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French Politician Threatens Sanctions Against Offshore Centres
Jeremy Hetherington-Gore, Tax-news.com, London

12 May 2000

The French presidency of the European Union, due to begin on 1st July, and lasting six months, is shaping up to be an exciting time for Europe's offshore financial centres.

Ever since Colbert, the French have been Europe's natural centralisers, harmonisers and levellers, and this tendency is specially marked under a socialist government. What Napoleon couldn't achieve by force of arms, his successors have now almost achieved by political dexterity. Who would ever have believed that the British would buy their beef in kilos, boned or otherwise?

Last week Lionel Jospin trailed some of his government's priorities for the French presidency, saying that they would press fellow EU governments to advance the battle against money laundering, and would also try to make progress with tax harmonisation.

But the true voice of French dirigisme was heard more clearly in Madrid on Thursday when Arnaud Montebourg, a left-wing deputy from Burgundy (once English territory during another, failed attempt at European harmonisation) set out a scarifying vision of his party's agenda for the presidency.

M Montebourg, who is president of a parliamentary enquiry into money laundering, said that member states would be asked to agree to a series of repressive measures, including sanctions, against the worst offenders; and he gave a list, which included Luxembourg (a founder member of the EU), Monaco, Andorra, Jersey, Gibraltar and Liechtenstein (not in the EU at all).

In Jersey, Senator Frank Walker, president of the island's finance and economics committee, said that Montebourg was indulging in political posturing. Senator Walker said that in the previous week, a delegation from France's Trackfin agency, a criminal intelligence service, had congratulated the island's government on its anti-money laundering procedures. He pointed out that Jersey's income tax rate, at 20%, was higher than Ireland's 12.5% rate which would shortly come into effect.

No doubt Deputy Montebourg was indeed making a political statement, even if it's rather crass of him to do it while in the chair of a parliamentary enquiry; but there can be no doubt about the strength of egalitarian feeling among many left-leaning politicians and legislators in France. Allied to the visceral 'anti anglo saxon' attitude which drives French politicians of all persuasions, the result can sometimes come uncomfortably close to anti-capitalism in the minds of some socialists. Still, it is one thing for this dangerous cocktail to bubble away in Paris - it is a long way to Brussels, and even further to unanimity among the 15 member states, which would be required before any action could be taken against the offshore centres. Still, it should be a lively autumn.

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