Fourteen countries or independent territories including the Cayman Islands, Aruba, Vietnam, Macao, the United Arab Emirates, and the Marshall Islands have made last-minute commitments to the European Union to avoid being on the bloc’s tax haven blacklist, due to be finalized Dec. 5.
An EU official, speaking to Bloomberg Tax Dec. 1, confirmed that the submissions by the 14 were made to meet EU criteria concerning either bank information exchange—including the Organization for Economic Cooperation and Development’s common reporting standard—or corporate tax reforms, like the proposals under the OECD’s Action Plan on Base Erosion and profit Shifting.
“These submissions do not mean these countries will not be on the blacklist,” the EU official told Bloomberg Tax. “But these submissions will be examined in advance of the Dec. 5 meeting. A final decision on whether or not these countries or others are on the list will not be finalized until EU finance ministers conclude their Dec. 5 meeting.”
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The list of 14 countries or territories to make last-minute submissions also include Armenia, Grenada, Fiji, Jordan, Swaziland, Morocco, Tunisia, and Palau.
Earlier, another EU official, speaking to journalists on the condition of anonymity, said the current number of countries on the EU blacklist was in the “double digits.” The official didn’t provide the names of the countries or jurisdictions that are currently on the list.
The same official said the EU-member nation experts will finalize a blacklist, but also another “annex” list of countries that have made commitments not to be on the blacklist.
“There will be a strict monitoring process conducted to ensure these countries follow through on their commitments,” the EU official said.
Some member nations as well as the European Commission insist that because a number of countries have already made commitments to meet the standards, the blacklisting process has been a success. The Cayman Islands is a case in point: for much of the past year, it has insisted it shouldn’t be on the EU blacklist because it meets all of the EU transparency criteria, including the OECD’s CRS.
The upcoming EU tax haven blacklist has come under intense criticism from some members of the European Parliament as well tax advocacy groups, because EU member nations have been excluded from the blacklist screening process. A total of 92 countries or jurisdictions received letters from the EU at the end of January because an analysis found they didn’t comply with EU criteria concerning transparency and corporate tax standards.
“We fully support global standards, but they should apply to everyone,” Jude Scott, CEO of Cayman Finance, which represents the financial services industry on the Caribbean island, told Bloomberg Tax when the EU was finalizing its tax haven critera a year ago.
Besides finalizing the EU tax haven blacklist, EU finance ministers are expected to sign off on a set of sanctions that can be imposed on any country or jurisdiction that doesn’t take the necessary steps to comply with EU banking transparency and corporate tax standards.
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