Minister rejects claim that green freeports threaten indy Scotland’s chances of being able to join EU
RICHARD Lochhead has denied that green freeports could threaten the prospect of an independent Scotland rejoining the European Union. “There is no evidence,” the Minister for Small Business, Innovation, Tourism and
Trade claimed.
His comments came after The National interviewed Scottish Greens MSP Ross Greer for our week-long exclusive series on Scotland’s two green freeports.
Greer argued that the EU is moving away from the freeport model and their implementation in Scotland could see the country “diverge from EU standard practice and minimum standards” and could lead to a “delay or an outright challenge to Scotland’s accession process”.
But Lochhead told The National this wouldn’t be the case.
“Many free zones are in operation across European Union member states, including those similar in design to the green freeports,” he said.
“The UK had previously established freeports while an EU member state.”
The first freeports in the UK opened in the 1980s by Margaret Thatcher while an EU member state. It was only in 2012 that the Tory-led government decided not to renew their licences.
Post-Brexit, Rishi Sunak pushed freeports again with the argument that without governance by the EU, the UK has more freedom over the flexibilities and concessions it can offer in the free zones.
This is due to the fact that EU freeports are governed by EU rules on state aid, which stop member states using selective tax exemptions and financial incentives to distort competition.
The establishment of the
UK’s freeports has led to some friction with EU officials, who have doubts the scheme is in line with the post-Brexit trade deal.
Inverness and Cromarty Firth freeport and Forth freeport were announced as Scotland’s two winning bids in January last year through the green freeport scheme agreed by the Scottish and UK governments.
These “green freeports” are different from other UK freeports in that they have a focus on contributing to the Scottish Government’s net-zero agenda.
Lochhead said that it’s “important to remember” that Scotland’s green freeports “adapts” the UK model to ensure the “distinct needs and interests of the Scottish economy are met”.
He added: “This means helping deliver our net-zero economy and ensuring a Fair Work First approach, generating thousands of highquality, well-paid jobs with fair work practices at their heart and the real Living Wage paid.”
There is also evidence that freeports can become hubs for criminal activity – including trade in counterfeit goods, drug trafficking, smuggling of untaxed goods or trade-based money laundering. In 2020, the EU clamped down on 82 free ports or free zones in 2020 after identifying that their special tariff and duty status had also aided the financing of terrorism and organised crime.
Lochhead looked to quell those concerns, saying that green freeport tax sites are designated “only if they meet strict eligibility criteria”. “Their status does not allow businesses situated within those sites to circumvent laws and regulations that apply elsewhere in Scotland,” he said.
“The green freeports will be required to adhere to strict security requirements – including the OECD Code of Conduct for Clean Free Trade Zones and the specific anti-illicit trade and security measures therein.
“They will also be required to meet the current obligations under UK anti-money laundering regulations and their security plans and approach will be scrutinised by UK National Crime Agency, HMRC, Police Scotland and Border Force.”
The minister added that the Scottish Government will “continue to work closely” with both green freeports as they develop their business cases.
Lochhead added: “Key commitments – to high-quality job creation, innovation, investment and our just transition to net zero – will be subject to robust monitoring and reporting requirements.”
Many free zones are in operation across European Union member states