Sunday, June 17

EU publishes blacklist of countries believed to be tax havens in EU-wide crackdown


After 10 months of investigations by European Union (EU) officials, the EU has officially published a “blacklist” of 17 countries it considers to be affording large companies and the wealthy a complete bypass of tax laws.

EU finance ministers suggested that those countries (listed below) were not exerting enough pressure to prevent offshore tax-avoidance schemes.

American Samoa Mongolia
Bahrain Namibia
Barbados Palau
Grenada Panama
Guam Saint Lucia
South Korea Samoa
Macau Trinidad and Tobago
Marshall Islands Tunisia


The European Council’s Code of Conduct (COC) also drafted a “grey list” which encompasses another 47 countries which are not compliant with EU tax standards but who have committed to change their rules. These countries will have to adopt EU rules by the end of 2018, or 2019 for developing countries, to avoid being included in the main list.

Minister for finance of Estonia, which currently holds the European Council presidency, Toomas Tõniste, has spoken of the encouragement such a move will give towards ensuring “that good tax governance becomes the new norm”. He has also indicated that many of the countries the European body has targeted appear to be forthcoming in their efforts to support the initiative.

He said:

“This initiative is already proving its value, as numerous countries have worked to meet the deadline for making commitments on the basis of our criteria”.

Pierre Moscovici, commissioner for economic and financial affairs, taxation and customs, lauded the “blacklist” as “mark[ing]a key victory for transparency and fairness”, but urged that there was still more work to be done and that the creation of the “blacklist” was an initiative in which ministers and countries would need to remain proactive in enforcing rather than allowing it to remain static and wither away.

He said:

“The process does not stop here. We must intensify the pressure on listed countries to change their ways.

“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.”

On the other hand, however, the enterprise has been strongly criticised by Members of European Parliament and sceptics alike for the absence of certain, more important tax havens on the list, with some describing it as a “whitewash”.

Sven Giegold, economics spokesperson for the Green group, said:

“It undermines the EU’s credibility that Member States were only able to agree on a whitewashed blacklist of tax havens”. “Not one of the most important tax havens has been put on the list. The list is politically biased as relevant financial centers like the United States of America are missing.”

Alex Cobham, chief executive of the Tax Justice Network, went as far as accusing the COC of “picking their least favourite countries to name and shame” in a “political fix” which has seen the list underwhelmingly deviate from its intended basis on an objective set of criteria.

He suggested that “the list is hard to take seriously” because “EU members like the Netherlands, Ireland and Luxembourg are the greatest procurers of global profit shifting but are excluded; and while the UK has sought to frustrate the blacklisting of its Crown Dependencies and Overseas Territories at every turn, [most of those are also excluded]”.

He described the process as “flawed” and said that the list includes only the economically weak and politically unconnected.

The announcement comes less than a month after the publication of the Paradise Papers, a global leak containing information about individuals and companies holding offshore finances.

A spokesperson for HM Treasury has signalled the “blacklist” as “an important step in our ongoing efforts to tackle tax avoidance and evasion internationally”.

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About Author

Gareth graduated from Hull University with a 2:1 and is currently studying the BPTC at BPP Leeds. He joined Legal Loop in March 2017.

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