EU adopts tax haven blacklist, British territories spared

EU adopts tax haven blacklist, British territories spared

BRUSSELS - Reuters
EU adopts tax haven blacklist, British territories spared

European Union finance ministers adopted a blacklist of 17 jurisdictions deemed as tax havens on Dec. 5, in an unprecedented step to counter worldwide tax avoidance, although they did not agree on financial levies for the listed countries.

To discourage the use of shell structures abroad - which in many cases are legal but may hide illicit activities - the EU in February began screening 92 jurisdictions seen as possible tax havens. The move came in the wake of numerous disclosures of offshore tax avoidance schemes used by companies and wealthy individuals.

EU finance ministers approved a common blacklist on Dec. 5 made up of American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macau, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia and United Arab Emirates.

“This list represents substantial progress. Its very existence is an important step forward. But because it is the first EU list, it remains an insufficient response to the scale of tax evasion worldwide,” EU tax commissioner Pierre Moscovici said after the meeting.

A second public “grey” list, or “watchlist”, of 47 jurisdictions that have committed to changing their tax rules to abide by EU standards on transparency and cooperation was also adopted. It includes Switzerland, Turkey and Hong Kong.

Morocco and Cape Verde were moved from the blacklist to the watchlist at a late hour after making last-minute commitments to tax reforms, officials said.

The lists will be updated regularly.

Blacklisted countries may no longer be used by EU institutions for international financial operations, and transactions involving them could be subject to closer scrutiny.