by Tom Keatinge

The increasingly unstable global geopolitical landscape, coupled with the risk of America turning to isolationism, requires Europe to stand united and fashion true cooperation.

Opening a window for greater collaboration across the English Channel, European Commission President Ursula von der Leyen rightly noted: “Our threats are too great to tackle individually.” Meanwhile, British Prime Minister Keir Starmer’s new government has made it clear it’s seeking to reboot relations with the EU.

Along these lines, we believe that working together on the financial dimension of security threats offers a clear opportunity to demonstrate how the U.K. and EU can work in harmony.

Firstly, as the new Commission implements its long-awaited Anti-Money Laundering (AML) Package, an immediate opportunity presents itself. And by ensuring engagement between Brussels and London on this matter, both parties could maintain alignment, share best practices and develop synergies to enhance the integrity of the European financial system in tackling criminal abuse.

Additionally, we can identify a range of opportunities for collaboration on finance and security, spanning the spectrum of traditional responses to financial crime and working closer on sanctions through to addressing the threat of malign influence on the financial front.

For many years, continental Europe viewed dirty money as a strictly Anglo-Saxon problem, with London — universally derided as Londongrad —long seen as a global center for money laundering and a favored destination for kleptocrats, crooks and the corrupt.

Indeed, a number of MEPs shone a light on this during Brexit discussions and talks of a potential financial services deal. Yet, a series of scandals in the most unlikely of EU members like Estonia and Denmark, not to mention Germany’s uncharacteristically poor evaluation by the Financial Action Task Force watchdog, put paid to that myth. EU regulatory adjustment was already overdue, and these scandals finally shocked Brussels enough to act — hence the extensive AML Package.

For U.K. financial services to continue flourishing and avoid self-harm — particularly in the absence of a deal with the bloc — British regulations and standards will now need to stay aligned with those of the EU.

Coincidentally, by bringing its AML Package forward, the EU is arguably seeking to raise its standards, which aligns them more closely with the U.K.’s. The U.K. is far from perfect in fighting financial crime, of course, but when it comes to this package’s areas of focus — particularly the supervision of regulated entities — it’s clearly ahead of most of its European friends.

It’s no surprise the bloc’s European Banking Authority was in London until Brexit. And there’s much that collaboration between London, its network of international financial centers, Brussels and the EU’s financial capitals could bring to the table.

Much has changed in global security since the U.K. voted to leave the EU, though. Russia’s full-scale invasion of Ukraine, an increasingly organized and assertive global south, and China’s economic clout all actively pose finance and security challenges. However, they represent important opportunities for working together too.

Sanctions are the most obvious first step here. Even before the Kremlin dramatically escalated its illegal war in Ukraine, the U.K. and EU had close working relations on sanctions, rooted in Britain’s widely acknowledged leadership in this arena prior to Brexit. And there’s no doubt the strength of this partnership has developed over the last two years.

The EU’s rollout of sanctions against Russia awoke an appetite in Brussels to continue using restrictive measures as an important part of its foreign policy toolkit. | Jeff J. Mitchell/Getty Images
At times, there is no doubt that the EU has drawn on the historically more well-developed U.K. sanctions apparatus, setting the stage for a possible new pan-European approach. And if used effectively, such coordination could support shared European foreign policy goals, whether through reinforced joint signaling to external partners or bolstering the effectiveness of existing regimes and programs.

Moreover, the EU’s rollout of sanctions against Russia awoke an appetite in Brussels to continue using restrictive measures as an important part of its foreign policy toolkit. So, with sanctions here to stay, learning from the Russia experience and looking at how to best coordinate with close economic neighbors may well become urgently unavoidable if Trump wins the White House in November.

Beyond this obvious opportunity, however, two other areas are ripe for collaboration: For one, economic security has now surged to the top of policymakers’ agendas, in part thanks to Japan’s G7 presidency, in part because of growing awareness of Europe’s dependency on China for manufacturing and access to key products and resources. 

This landscape is, at present, confusing. The EU has made a first attempt, publishing new initiatives to strengthen its economic security, and individual member countries have flirted with the idea too. But strategy is still nascent, and there’s currently no clear-eyed, honest view of the threat China poses on either side of the Channel.

Then there’s the funding of misinformation and disinformation. Recent history suggests policymakers in both London and Brussels have at times been too consumed with highlighting shortcomings elsewhere in the world when more attention is due at home. Cross-Channel collaboration on this is keenly needed.

In the meantime, old threats mustn’t be forgotten either. Although terrorist attacks across Europe have abated in recent years, the threat remains ever present and far from over. Countering terrorist financing is crucial — something the EU has arguably forgotten. And through its joint public-private partnership work, the U.K. has much valuable experience to share.

Finally, while Europe must defend itself, it mustn’t lose sight of the impact of the measures it takes. For example, the stability of the European neighborhood is challenged by illegal migration, which also derives from the economic struggles of many African countries. Such unintended consequences of European sanctions and anti-financial crime standards shouldn’t be overlooked — or allowed to exacerbate the problems confronting Africa.

Against a geopolitical backdrop that’s unrecognizable from just a few years ago — and with a new government in London, as well as a newly mandated Commission in Brussels — there’s a strong case for developing a cross-Channel finance and security partnership. As trade and finance are increasingly weaponized by opponents of liberal democracies, it’s time for the U.K. and the EU to pool their strengths and experience for the benefit of all.

Tom Keatinge is director for the Centre for Finance & Security at RUSI. Kinga Redlowska is head of the Centre for Finance & Security at RUSI Europe.

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