Published: Thu, December 07, 2017
Science | By Hubert Green

European Union 'tax haven' blacklist labelled a 'whitewash'

The bloc has finally agreed on a tax haven blacklist of 17 third countries in December's Economic and Financial Affairs Council (ECOFIN) on Tuesday.

Potential countermeasures that have been tabled on behalf of the European Commission, include limiting access for listed jurisdictions to the European Fund for Sustainable Development, as EU-28 level measures, while the member states could on a country to country bass reinforce monitoring of transactions, increase audit risks for taxpayers benefiting from the regimes at stake or for those using structure involving these jurisdictions.

The news comes as the European Union moves to clamp down on tax avoidance by non-compliant countries and discourage the use of shell structures overseas.

"To be on a blacklist is in itself bad enough and of course there will be consequences for these countries", Luxembourg Finance Minister Pierre Gramegna said.

By naming and shaming the non-compliant tax jurisdictions, the European Union aims to increase good tax governance worldwide South Korea and the United Arab Emirates (UAE) were placed on the list, alongside Panama - which was at the heart of the 'Panama Papers' a year ago - and Caribbean nations such as Grenada and Saint Lucia.

The release of the list came close on the heels of the Paradise Papers - which revealed questionable tax practices by a host of actors, including Apple.

Trinidad and Tobago was identified as one of 19 secrecy jurisdictions in the Paradise Papers. On top of agreeing on the final blacklist, there were also considerations being made for the Caribbean countries that had been damaged during hurricanes earlier this year.

The Panama Papers is an unprecedented leak of 11.5m files from the database of the world's fourth biggest offshore law firm, Mossack Fonseca.

The decision was made by European finance ministers at a meeting in Brussels.

He said the pressure on listed countries to change must be intensified.

The governments of the UAE and Bahrain did not respond to Reuters requests for comment on Wednesday.

An existing list of tax havens compiled by the Organisation for Economic Cooperation and Development (OECD) now includes only Trinidad and Tobago.

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