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NEWS ROUND-UP: FTTISSUE 30 | JUNE 6, 2013Center For Policy Studies RaisesConcerns Over FTTEuropean financial transaction tax (FTT) proposalswere "introduced in a remarkably un-transparentway," while their extraterritoriality "may well beillegal," a new report from the Center for PolicyStudies is to claim.have on the UK's financial services sector. Lawsonwrites that as the Commission has intimated that allfinancial institutions will be subject to the levy wheretransactions are carried out with a counterparty withheadquarters in the EU11, "much of the tax collectedby the UK tax authorities from economic activityhere might well not accrue to the UK."In "The Tobin Tax rears its ugly head, again," tobe published tomorrow, author and tax expert JohnChown criticizes the European Commission's plansfor a 0.01 percent tax on derivatives and a 0.1 percentrate on other financial instruments.The UK will therefore suffer from a loss of tax revenueas a result of the direct and indirect costs ofFTT on profits and earnings. Lawson believes that"this extraterritoriality may well be illegal: it is clearlyunenforceable."Belgium, Germany, Estonia, Greece, Spain, France,Italy, Austria, Portugal, Slovenia and Slovakia areprogressing with an FTT along the lines of "enhancedcooperation." This procedure, which enablesthose states wishing to work more closely togetherto do so, was authorized by the EuropeanCouncil of Economic and Financial Affairs (Ecofin)at the start of the year.According to Chown, the manner in which the proposalswere introduced was "surely an abuse of process."He points to the Treaty of Lisbon, which he believes isclear that tax legislation can only be introduced withthe unanimous consent of all Member States.Summarizing Chown's points in a foreword to the report,ex-UK Chancellor Nigel Lawson raises his ownconcerns about the potential impact the FTT willLawson welcomes the UK Government's decisionto challenge the FTT in the European Court of Justice,but warns that this is "not nearly enough." Itis possible that the FTT may be introduced beforethe case is even heard. This would lead to major uncertaintyand significant costs for financial servicescompanies based in the UK.The FTT is, Lawson claims, "designed both to punishthe bankers and to raise money for the EU budget,"and will "drive financial business away fromthe EU (including the UK) to more hospitable jurisdictionselsewhere."FTT Scale-Back On The Cards?Official sources have suggested that the so-calledEU11 group of European nations is considering a67