Offshore Centres Face Tougher Regulation From EU In Wake Of Parmalat Affair

by Ulrika Lomas, Tax-News.com, Brussels

13 February 2004

The European Union’s taxation Commissioner Frits Bolkestein, has warned that the financial services industry must “get its act together” in order to prevent a heavy-handed response from EU regulators in the event of another Parmalat style scandal.

"If industry leaders are not prepared to do this, then regulators will have to do much more than perhaps they or we would like," stated Bolkestein whilst addressing a plenary session of the European Parliament on Wednesday.

The Commissioner signalled that offshore financial centres will come under increased scrutiny in the wake of the Parmalat affair, arguing that regulatory controls in this area need to be tightened. He observed that the third Money Laundering Directive, which is to be tabled in June, will play a “significant role” in this.

In addition, the European Parliament voted overwhelmingly this week for the Commission to assess the "establishment of a European registration scheme" for rating agencies – also in response to the fallout from the Parmalat scandal.

Bolkestein remarked to the parliamentarians that “the financial services industry had better get its act together, and do so fast.” He added that should it fail to heed his warning, then “industry leaders can't whinge about regulation from Brussels. They will have brought it upon themselves.”

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