U.K. Chancellor of the Exchequer Philip Hammond told Le Monde that Britain will not become a Singapore-style low-tax haven after Brexit, even if it doesn’t get the deal it wants with European Union. Too late, according to one new study.

The U.K. is the second-biggest offshore financial center for the conduit of money to small ’sink’ tax-havens like the British Virgin Islands or Cayman Islands, researchers at the University of Amsterdam concluded.

Britain acts as a pipeline for 14 percent of total corporate offshore investment to such ‘sinks,’ behind the Netherlands at 23 percent but ahead of Switzerland, Singapore and Ireland, according to the university’s Corpnet research group.

“They’re already there,” Frank Takes, a member of the Corpnet team, said by telephone from The Netherlands. “The amount of money, or value, that is being channeled through London is enormous.”

Hammond said in an interview with the German newspaper Welt am Sonntag in January that Britain could “change our economic model” to woo investment away from mainland Europe if it doesn’t get a desirable deal for access to the single market after Brexit.

Without acknowledging those earlier comments, Hammond told Le Monde late last week: “I often hear it said that the U.K. is considering participating in unfair competition in regulation and tax. That is neither our plan nor vision for the future.”

The Dutch research team said their research is different because it doesn’t look just at where foreign investment starts and begins but zeroes in on the countries through which untaxed investments flow before reaching the ’sinks’ in the Caribbean and other small island states.

Efforts to introduce more tax transparency in such places have yielded little progress, so targeting the volume of investment that flows through the Netherlands and the U.K. makes sense, according to Takes, a professor of network science at the University of Leiden.

“You can debate for thousands of hours about trying to close down or punish small little islands, but maybe we should look at our own national policies,” said Takes, a Dutch citizen. “If you stop using one little island as a sink, another will open up shop, but the conduits to those little shops are only a few.”

— With assistance by Joost Akkermans

For more on this story go to: https://www.bloomberg.com/news/articles/2017-07-31/is-the-u-k-already-the-kind-of-tax-haven-it-claims-it-won-t-be