Brexit: UK ‘to redirect’ some EU funds to anti-corruption units
04 Dec 2017

KYC360 News

A number of local British enforcement agencies are set to receive extra cash when the United Kingdom leaves the EU, an analyst told KYC360.

After it leaves the European Union, the UK will stop financing a number of EU agencies and relocate the funds to several British units, including agencies that fight financial crime.

Generally, the UK is set to save up to £470 million annually when it leaves the EU and cuts funding to several bodies, including the European parliament and the EU’s anti-fraud agency OLAF, which investigates and prevents fraud against the EU budget.

Olaf is also tasked with developing anti-fraud legislation and policies.

Much of the [UK] budget will need to be redirected to support agencies within the country.

This means that the £5 million that the UK contributes annually towards OLAF could now go to the Serious Fraud Office (SFO), and the £840,000 the UK gives to the European Data Protection Supervisor (EDPS) will now likely go to the Information Commissioner’s Office.

“There are some EU agencies where we believe the UK will need to have an ongoing strategic relationship, which means financial contributions are likely to continue after Brexit,” said John Cassels, co-head of Fieldfisher’s Regulatory Group, which conducted an analysis on the UK’s budgetary contribution to the administrative costs of 67 EU institutions and agencies.

“For OLAF and the EDPS, there is likely to be a Brexit “dividend” in the sense that money currently contributed to those agencies will be repatriated to equivalent UK agencies, including the SFO and Information Commissioner’s Office. However, that dividend and more may well be eaten up by additional responsibilities and the costs of necessary engagement with EU agencies of which we are no longer members.”

Although the administrative cost savings associated with Brexit do appear to be attractive, “the reality is that the regulatory transition required to repatriate functions of EU agencies back to the UK is likely to be disruptive to regulated businesses and individuals, as well as to the UK civil service itself,” said Cassels.

Britain will, however, continue to contribute around £35m per year to part-fund a number of EU agencies, such as data protection and police departments.

In addition more millions will be pumped in to new government agencies set up, Fieldfisher’s said.

“A further £114 million constitutes the UK’s contribution to EU agencies whose functions will need to be repatriated to their UK counterparts, or to entirely new UK government agencies set up for the purpose.

“An example is the European Banking Authority, the functions of which are likely to be picked up by the Prudential Regulation Authority,” said Fieldfisher’s.

Related topics:

Special report: Brexit – what now for the UK’s AML regime?

Will Brexit Britain lose its lead in the fight against corruption?

Brexit: Implications for data protection

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