RegulationApr 16 2014

Advisers must protect corporate clients against EU prosecutor

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Mr Vitou, partner at City law firm Pinsent Masons, said the new European Public Prosecutor’s Office, due to be established on 1 January 2015, will ensnare many UK business owners, despite the government’s decision to vote against proposals to raise scrutiny of organisations with EU contracts or funding.

Mr Vitou said: “The EU is conscious of the need to be seen to be doing more to ensure that taxpayers’ money is spent properly, and it will be determined to ensure that EPPO is not a toothless tiger.

“Firms that are in any way involved in spending EU money would do well to get proper advice to ensure that their own anti-fraud measures, as well as those of any European partners, will stand up to the scrutiny of this tougher new environment.”

He added that the body’s activities, part of wider international efforts to crack down on fraudulent uses of public money, would not be limited to the “stereotypical frauds” commonly associated with southern European countries.

The warning follows comments from Guy Rainbird, public affairs director at the Association of Investment Companies, who said the UK government would not be able to unilaterally remove EU-led regulation.

Tim May, chief executive of the Wealth Management Association, said that many people in the wealth advisory world were concerned about a perception of “regulatory creep” from Europe.

He blasted a “massive overhit” of European regulation, such as MiFID II, exacerbated by the British tendency to “follow rules to the letter”.