EU Shrinks Tax Haven Blacklist

EU Shrinks Tax Haven Blacklist

In what is turning out to be somewhat of a joke, the European Union has once again decided to shrink its tax haven blacklist.

Following this decision, as shown in an EU document seen by the mainstream press, the list now only contains six jurisdictions—American Samoa, Guam, Namibia, Palau, Samoa and Trinidad and Tobago.

According to the EU document, Bahrain, the Marshall Islands and Saint Lucia will be removed from the list of non-cooperative tax jurisdictions following their promise to reform their tax systems to better cater to Europe’s preferred standards.

A prior cut that occurred in January 2018 had already extricated Barbados, Grenada, South Korea, Macau, Mongolia, Tunisia, the United Arab Emirates and Panama from the tax haven blacklist, a move that was not particularly well received considering the impact of the Panama Papers back in 2016.

Anti-Corruption & Tax Justice Up in Arms Over Tax Haven Blacklist Reduction

Anti-Corruption & Tax Justice Up in Arms Over Tax Haven Blacklist Reduction

Obviously, anti-corruption and tax justice advocates criticized the EU Code of Conduct Group’s latest decision.

Transparency International’s Elena Gaita said, “This ever-decreasing list of tax havens will soon be so short it will be able to fit on a post-it. It’s time for the EU to publish how it chooses which countries go on the list and why.”

On Twitter, Alex Cobham of the Tax Justice Network called the EU’s tax haven blacklist “an embarrassment” and denounced the methodology used to promote jurisdictions to the organization’s grey list.

Cobham said, “the EU has comprehensively trashed any remaining credibility that the blacklist had, by collapsing back to the bad old ways of allowing jurisdictions to get off the hook by making who knows what deals behind closed doors.”

However, the EU Council’s Political Administrator Aloys Rigaut replied to Cobham that “there were no "who knows what deals" behind close doors.”

Rigaut emphasized that the deals were “based on the assessment of the commitment letters received from jurisdictions” and that the EU is working on releasing these letters “when we get the consent of their authors.”

Saint Lucia and CARICOM React to EU Tax Haven Blacklist Developments

Saint Lucia and CARICOM React to EU Tax Haven Blacklist Developments

Saint Lucia, one of the three beneficiaries of this latest round of cuts, received the news with open arms and highlighted this as a result of the work it has carried out to adopt the EU’s standards.

Senior Communications Officer of the Office of Saint Lucia’s Prime Minister, Nicole McDonald, said: “The Government of Saint Lucia is aware of the issues associated with being on this list and [has] always been committed to working with the EU toward tax transparency. The blacklisting of Saint Lucia is not an issue that occurred overnight and Government must take everything into account because, even as we are committed to tax transparency and the exchange of information, we must also simultaneously stimulate growth in the economy to provide a favourable environment for our people to live, work and invest.”

McDonald added that this effort “takes dialogue with the EU so we can state our position, efforts made and decide on a way forward. For some, myopic in their view, a quick fix, “send the letter, sign on the dotted line” might seem like the only option, but a Prime Minister and Government must consider the consequential effects.”

As reported by the Curacao Chronicle, in a recent meeting of the Caribbean Community (CARICOM), regional leaders agreed that its members must “continue to ensure that they meet all requisite standards set by the globally recognized authorities in respect of global tax co-operation and related initiatives” and “that they should forge links beyond CARICOM because of shifting global standards.”

At the same time, CARICOM criticized “the unilateral processes underway in the European Union as detrimental to member states’ economic progress and efforts to achieve sustainable development.”

Any final thoughts on the EU’s tax haven blacklist? Best comment wins!

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