European Union finance ministers have adopted the first ever list of tax havens, which includes 17 countries that fail to meet agreed tax good governance standards, the European Commission informed.
The list of non-cooperative jurisdictions for tax purposes was adopted on December 5 during a meeting in Brussels. In addition, 47 countries have committed to addressing deficiencies in their tax systems and to meet the required criteria, following contacts with the EU.
The list includes American Samoa, Bahrain, Barbados, Grenada, Guam, Republic of Korea, Macao SAR, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia, and the United Arab Emirates.
The move is expected to raise the level of tax good governance globally and help prevent the large-scale tax abuse recently exposed in the Paradise Papers, which caused a stir in various sectors, including the shipping industry.
“The adoption of the first ever EU blacklist of tax havens marks a key victory for transparency and fairness. But the process does not stop here. We must intensify the pressure on listed countries to change their ways,” Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said.
“Blacklisted jurisdictions must face consequences in the form of dissuasive sanctions, while those that have made commitments must follow up on them quickly and credibly. There must be no naivety: promises must be turned into actions. No one must get a free pass,” Moscovici added.
The idea of an EU list was originally conceived by the Commission and subsequently taken forward by Member States. Compilation of the list has prompted active engagement from many of the EU’s international partners.
However, the Commission said that work must now continue as 47 more countries should meet EU criteria by the end of 2018, or 2019 for developing countries without financial centres, to avoid being listed. The Commission also expects Member States to continue towards strong and dissuasive countermeasures for listed jurisdictions which can complement the existing EU-level defensive measures related to funding.