European Union finance ministers added three major offshore hubs to its blacklist of uncooperative jurisdictions on Mar. 13: the Bahamas, the U.S. Virgin Islands and St Kitts and Nevis. All three were featured in either the Panama Papers or Paradise Papers investigations (and can be found in the Offshore Leaks Database).
Those jurisdictions had been left off the list until now because the EU had decided to put on hold reviewing the tax systems of Caribbean jurisdictions struck by hurricanes last year.
The blacklist was first announced last December in order to put pressure on mostly offshore jurisdictions that EU member states say fail to meet tax fairness and transparency benchmarks and have refused to commit to improvements in the future. In January, eight countries were removed from the blacklist, including Barbados and Panama, after they made commitments to meet the EU tax requirements. The list now totals nine countries.
Moving in the opposite direction, Bahrain, the Marshall Islands and Saint Lucia were delisted and moved to the gray list of countries put on notice to change their ways. Originally excluded from the EU review of tax regimes, Anguilla, Antigua and Barbuda, the British Virgin Islands and Dominica were also added to the gray list which now includes 62 jurisdictions.
This week the Council of the European Union started publishing the commitments taken by countries to move from the black to the grey list, after initially keeping those secret.
“EU pressure appears to be pushing more and more notorious tax havens into changing their murky ways,” said Oxfam’s tax policy advisor Johan Langerock. “The commitments taken by the tax havens on the gray list must be followed up by EU member states, and fast. No tax haven should be let off the hook.”
An agreement was also reached regarding intermediaries who help devise tax avoidance structures, and new rules were drafted requiring banks and accountants to report to authorities “potentially aggressive cross-border tax planning arrangements” set up for their clients.
If European member states adopt this new set of rules, tax advisers might face fines if they fail to inform authorities of potentially harmful tax schemes set up in the EU. Penalties would be implemented by the member states.
“Enhancing transparency is key to our strategy to combat tax avoidance and tax evasion”, said Vladislav Goranov, minister for finance of Bulgaria, which currently holds the council presidency. “If the authorities receive information about aggressive tax planning schemes before they are implemented, they will be able to close down loopholes before revenue is lost.”
ICIJ’s Offshore Leaks Database contains searchable information from the three jurisdictions added to Europe’s blacklist and more. You can read how to search by jurisdiction here.
