EU set to remove eight jurisdictions from tax haven blacklist

The European Union is expected to remove eight countries, including Panama, from a 17-country “tax haven blacklist” of jurisdictions it published in December, according to a Reuters report.

As reported, Panama yesterday formally signed up to the OECD’s automatic exchange of information programme known as the Common Reporting Standard, which means that beginning later this year, it will begin to automatically exchange of financial account information under the OECD’s Multilateral Convention on Mutual Administrative Assistance, joining some 97 other jurisdictions that have signed up to the CRS MCAA.

The other seven countries expected to be removed imminently from the EU blacklist are South Korea, the United Arab Emirates, Barbados, Grenada, Macao, Mongolia and Tunisia, Reuters said. The removal of almost half the names from the blacklist, the Reuters report noted, may be seen by some EU critics “as a blow to its campaign against tax avoidance”.

OF the eight countries said to be in line to be removed from the blacklist, just four are among the 98 that have agreed to participate in the OECD’s Common Reporting Standard exchange of information convention. In addition to Panama these are the UAE, Barbados and Grenada.

In a report it said was based on EU documents seen by its journalists, Reuters noted that the removal of Bahrain from the list “was also initially considered, but its delisting was eventually not recommended” by EU ministers involved in determining the list’s make-up.

Bahrain is one of three jurisdictions on the OECD’s CRS-implementing list that are, according to the Reuters’ report, set to remain on the EU’s blacklist. The other two are Saint Lucia and Samoa.

According to Reuters, the proposal to remove the eight jurisdictions  will be discussed at a meeting of EU ambassadors tomorrow, “and is expected to be adopted by EU finance ministers when they meet next week in Brussels”.

The jurisdictions seen likely to remain on the blacklist, in addition to Bahrain, Saint Lucia and Samoa, are American Samoa, Guam, the Marshall Islands, Namibia, Palau, and Trinidad and Tobago.

The European Union drew up the blacklist in response to growing pressure on it to be seen to be doing something about tax evasion. The pressure came from a number of sources, including private interest groups and politicians from many EU countries. The Panama Papers and Paradise Papers exposés, of April 2016 and November 2017 respectively, are seen to have forced an issue that had already been under discussion.

At the time the list was unveiled in December, some critics argued that it was incomplete, as it left out a number of jurisdictions seen to be tax evasion facilitators, including Luxembourg and Malta.

The proposal for the delisting was made by the EU’s so-called Code of Conduct Group, Reuters noted.

ABOUT THE AUTHOR
Helen Burggraf
Helen Burggraf is Chief Correspondent for International Investment. She is a US-trained journalist who has worked in Rome, New York City and London, covering among other things the fashion and retailing industries, the global drinking water and water-treatment sector, private equity, and most recently, the international cross-border financial services/advice industry.

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