EU ministers agree September deadline for draft ‘blacklist’

EU finance ministers have agreed to set a September deadline for establishment of a list of so-called “non-cooperative jurisdictions”, with endorsement of the list to be set for 2017.

The list would be drawn up by the EU Code of Conduct Group, which would also look at possible sanctions that might be imposed on those jurisdictions deemed to be non-cooperative, according to a statement on the EU Council’s website which was posted on 25 May.

The Code group would aim to start work on this non-cooperative jurisdictions list “by September”, and would be asked to determine a list of countries “with which dialogues should start, with a view to establishing an EU list of non-cooperative jurisdictions… to be endorsed by the Council in 2017”, the statement added.

According to the statement, in agreeing to establish a list of “third-country non-cooperative jurisdictions”, the Council said it would “explore coordinated defensive measures at EU level”, while working “closely and in parallel with the OECD” in determining the criteria to be used.

Such criteria, it noted, would have to be compliant with internationally agreed standards on transparency and exchange of information for tax purposes, “in particular standards developed by the OECD, both on exchange of information on request and automatic exchange of information (Common Reporting Standard)”.

The EU published its first list of non-cooperative jurisdictions last June, as part of what was described as a crackdown on multinational companies trying to avoid paying tax in the 28-nation bloc.

The list of 30 territories included Hong Kong and Brunei in Asia, Monaco and Andorra, as well as and a number of Caribbean islands.

As is often the case whenever “blacklists” are published, it drew criticism, not only from jurisdictions on the list but from the OECD, which argued that the EU list included some countries that had actually signed up to global transparency initiatives.

Blacklists are nevertheless popular with voters and businesses that feel they are losing out to low-tax “havens”, and with governments that are keen to appear to be taking a stand against such places, on behalf of those who pay the taxes they owe.

The OECD also keeps records of countries that agree to abide by certain standards, the current standard being a commitment to share financial account information automatically with other countries. Last month, in conjunction with a related organisation known as the Global Forum on Transparency and Exchange of Information for Tax Purposes,  it announced  that Bahrain, Lebanon, Nauru, Panama and Vanuatu had agreed to the OECD standard, bringing the total number of compliant jurisdictions to 101.

“We are now seeing an unstoppable movement toward information sharing, on the basis of a single common standard developed by the OECD and endorsed by the international community,” OECD secretary-general Angel Gurría said, in a statement.

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