EU Finance Ministers have approved an EU’s tax-haven blacklist. This lists 17 countries that have not responded to information requests from the European Council or that have not committed themselves to make their tax policy compliant with EU criteria.
They also published a “grey list”, setting out an additional 47 countries considered harmful, but which have committed to improving their tax legislation. No agreement has been reached on the list of sanctions against blacklisted jurisdictions.
Responding to today’s announcement, Molly said:
“The final decision on who is in and who is out of this list of shame has been jealously guarded by national finance ministers, and it is clear that member states have put their own political and economic interests above the needs of European citizens for tax justice. Given the strength of our Panama papers report we can be sure that a list from the Parliament would have been longer and stronger.
“The whole blacklisting process has been a bit of a whitewash; it has lacked transparency and has failed to agree any sanctions for those blacklisted. It has also excluded EU Member States themselves, despite the fact that the Netherlands, Ireland, Malta, Luxembourg, the UK and Cyprus do not comply with the EU’s own criteria.
“Neither is a blacklist a panacea. We need real tax reforms to tackle the scourge of tax avoidance including Country-by-Country Reporting (CBCR) and a Common Consolidated Corporate Tax Base (CCCTB).
“The absence of British Overseas Territories from the list – including Bermuda that was the centre of the Paradise Papers scandal and the British Virgin Islands that featured so prominently in the Panama Papers revelations – demands explanation. While the severity of the hurricane season is a legitimate reason for delay, this must not be used by Chancellor Hammond to protect the global tax haven network that revolves around The City.
“Overall, the EU tax blacklist is letting too many countries and territories off the hook. This is failing the world’s citizens – particularly the poorest and most vulnerable – denying them the tax revenue needed to fund vital public services.”
Blacklist (17 jurisdictions): American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macau, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia and United Arab Emirates.
Work on the blacklist of tax havens started in July 2016 within the Council’s Code of Conduct Group on Business Taxation.
In November 2016, the Council agreed on the process to be followed, setting the end of 2017 as a deadline for finalising the list. It laid down criteria for screening third country jurisdictions, namely tax transparency, fair taxation and implementation of anti-BEPS (tax base erosion and profit shifting) measures agreed by the OECD. The screening criteria can be seen here
Since then, the Code of Conduct Group has overseen a ‘screening’ that included a technical dialogue with 92 third country jurisdictions on their compliance with the EU’s criteria. After non-public discussions among EU Member States, the outcome of this screening process are the two lists published today. So far it seems that the documents of the screening process and the minutes of the meetings of Member States in the process will not be published. The EU Member States did not apply the criteria on themselves, not even in a screening exercise.