EU puts 17 nations on blacklist in bid to beat tax avoidance
The European Union agreed on a blacklist of 17 countries on Tuesday, with named states potentially facing sanctions and the loss of aid for failing to tackle tax avoidance.
The group of jurisdictions, which was rubber stamped by EU finance ministers at a meeting in Brussels on Tuesday, includes South Korea, Panama, Bahrain, Tunisia and the United Arab Emirates, as well as Barbados, Samoa, American Samoa, Grenada, Guam, Macau, the Marshall Islands, Mongolia, Namibia, Palau, St Lucia and Trinidad and Tobago, according to the EU.
The list was criticised for targeting mostly small nations but to not applying the same criteria to the EU's own member states.
Oxfam Ireland said Ireland, Luxembourg, the Netherlands and Malta would all fail to meet the EU's own criteria if it was applied to its own member states.
"We welcome the EU's commitment to addressing the damage done by tax havens and this first concrete step towards tackling tax avoidance. However, it is worrying to see that some of the most notorious tax havens got away on the grey list," Oxfam Ireland CEO Jim Clarken said.
"It's a sad irony that if the EU were to apply the criteria to its own member states, Ireland, along with three EU countries; Malta, the Netherlands and Luxembourg would be blacklisted too," he said.
The final list could still change depending on the ministers' political decision. Ministers decided that 17 countries will be blacklisted, while another 47 will be included in a separate grey list, to be monitored for their compliance with commitments undertaken.
A further 47 jurisdictions are included in a public "grey" list of countries that are not compliant with EU standards but have committed to change their tax rules.
Following multiple disclosures of offshore tax avoidance schemes by companies and wealthy individuals, EU states launched a process in February to list tax havens in a bid to discourage setting up shell structures abroad which are themselves in many cases legal but could hide illicit activities.
Over the past year experts under the direction of EU Economic and Financial Affairs Commissioner Pierre Moscovici, whose remit includes taxation and customs, have screened 92 jurisdictions to identify whether they met the EU's standards for transparency or whether they engaged in harmful tax practices.
Some of these were deemed cooperative straight away while others, including Turkey, were spared inclusion on the list following multiple commitments to the EU about improving transparency and engaging in fairer competition.
The European Commission - the EU's executive arm - says the threat of being on list itself can act as an incentive for countries to bring their tax systems in line with EU standards, for fear of being named and shamed. (Additional reporting Bloomberg and Reuters)