Crime and transparency in the EU

Two important EU Council meetings took place over the last few days, with major decisions taken.

At the end of last week, there was the Justice and Home Affairs (JHA) Council Meeting of the EU. (Yes, our very own Amber Rudd was there, noting down the names of all the foreign people present, accompanied by Brandon Lewis, minister for policing and the fire service – although I see from the participants list that the EU thought Amber was a man, and Brandon a woman.)

There were significant decisions taken. The first is that the Legal Aid Directive was finally approved, having been through all the legislative procedures. This directive sets out the rules for harmonising the grant of criminal legal aid to suspects or accused, and also to those who are the subject of a European Arrest Warrant.

It complements and completes the set of minimum criminal procedural safeguards which has been a long-term undertaking of the European Commission: the directives on the right to interpretation and translation, the right to information and the right of access to a lawyer are now joined by a directive on the right to legal aid.

For the particular attention of lawyers, the directive prescribes standards for the quality of legal aid services and the training of staff involved in the decision-making process, which includes the services provided by lawyers (Article 7). The relevant part for lawyers says: ‘Member states shall take necessary measures, including with regard to funding, to ensure that: (b) legal aid services are of a quality adequate to safeguard the fairness of the proceedings, with due respect for the independence of the legal profession.’

Leavers, relax: the UK has already opted out of the directive.

The JHA Council also turned its attention to the European Public Prosecutor’s Office (EPPO), which will have the competence to combat crimes against the EU’s financial interests in national courts. I have been writing about this for four years now, and the proposal has still not been approved (Brexit in two years, anyone?). But it is nearing completion.

There has been a major move forward in agreeing that VAT fraud, which currently costs EU governments at least €50bn a year in lost revenue, will be included within the EPPO’s jurisdiction. I see that DG Justice tweeted that December 2016 was a realistic deadline for final approval of the whole package.

There have been serious concerns with the EPPO from the beginning. For instance, as always with a prosecution measure, defence rights are overlooked (sample problems which have arisen: the right to silence varies widely between the member states, as does the right to have access to the prosecution file).

Leavers, relax: the UK government has been opposed to this proposal from its inception, and has again opted out.

Earlier in the week, the second EU Council meeting took place, for Economic and Financial Affairs Ministers. (This was attended for the UK by David Gauke, financial secretary to the Treasury.) It considered a number of matters of relevance to lawyers.

The Council welcomed the moves to enhance transparency in tax matters and to fight against tax avoidance, which I wrote about last month. In fact, it stressed ‘the need to increase oversight of enablers and promoters of aggressive tax planning and to introduce more effective disincentives for such activities’.

There was heavy emphasis on knowing the beneficial owner of companies, legal entities and legal arrangements. It ended by hoping for a global approach to greater transparency in this area.

Within the next four weeks, the European Commission will launch a public consultation on tax transparency, with a 90-day response time. (And the Commission is also steaming ahead with its supranational risk assessment of players in money laundering, with a likely heavy focus on the role of lawyers – for instance, on the question of why so few lawyers or bars in continental Europe report suspicious transactions to their financial intelligence units.)

Meanwhile, the European Parliament has set out its timetable for its Panama Papers investigation, which covers some of the same ground. On 9 February next year, it will hold a meeting with intermediaries – lawyers, tax advisers, financial intermediaries and others.

Leavers and Remainers, as I have said before, it is irrelevant whether we have a Brexit so hard that it makes our eyes water: these transparency provisions, which are promoted heavily by the OECD and are supported by our own government, will apply to us one way or the other in any future scenario.