The European Union adopted a new blacklist of 17 tax havens and a ‘grey list’ of 44 countries and jurisdictions that will have to take measures against tax evasion and tax avoidance.
Vanuatu is in European Union’s ‘grey list’ together with Fiji and Cook Islands. Not to get in the black list, Vanuatu has to meet EU’s tax rules by the end of 2018. Although, Fiji and Vanuatu, as developing nations, will have an extra year after that to meet the standards before they will appear in the black list.
A of the Pacific Island countries are in EU’s black list: Samoa and American Samoa, Guam, the Marshal Islands and Palau, EUobserver reports.
The two lists “will help to increase the transparency of the global tax environment,” Estonian finance minister Toomas Toniste, who chaired the meeting, told journalists.
After months of talks in the secretive code of conduct expert group, the lists were changed until the last minute following agreements with and commitments from screened countries.
EU experts looked at 92 countries, before the list of non-cooperative entities was taken down to about 50.
Work accelerated in recent weeks, after the Paradise Papers revelations increased public pressure to take action.
“We’ve done in two months what would have been done in eight-nine months otherwise,” an diplomat noted ahead of the meeting.
“I’m glad that many jurisdictions have taken this very seriously and are willing to cooperate in order to avoid being listed,” Toniste said.
The fact that the blacklist includes only 11 countries and territories can be seen as a “success,” an EU source told EUobserver – who admitted however that the real test will be how the grey list countries behave in the future.
“I would have preferred that it is called the ‘orange list’,” the source said. “It would have made clear that they can get a red light or a green light according to what they do next.”
The grey list entities pledged to take measures required by the EU such as more transparency, exchange of information or fairer taxations and have one year – two years for developing countries – to implement them.
Countries that fail to meet their promises could end up on the blacklist, but EU ministers did not discuss whether sanctions could be taken.
‘No tax haven in the EU’
“It seems the EU’s pressure has obliged some of the most notorious tax havens like Switzerland and Bermuda to commit to reforms,” said Aurore Chardonnet, from the Oxfam NGO.
“However, placing countries on a ‘grey list’ shouldn’t just be a way of letting them off the hook,” she said in a statement, asking the EU “to make sure governments on the grey list follow up on their commitments”.
Tove Maria Ryding, from Eurodad, another NGO, said that the list “looks like an attempt to divert attention away from the fact that EU governments have failed to clean up their own house”.
“The EU itself is central to the tax haven problem, and many European countries have tax structures that multinationals can use to avoid taxes – that’s deeply concerning,” she said in a statement.
“There is no tax haven in the EU,” Moscovici assured, insisting that EU member states “respect international standards”.
He admitted however that some practices should be “prohibited” or “fought” in some member states.