The EU has blacklisted 17 ‘tax haven’ states as it cracks down on the estimated £506bn lost in avoidance schemes each year.
Countries which could lose access to EU funding and face possible sanctions include: American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macau, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia and the United Arab Emirates.
Another 47 jurisdictions have been included on a so-called “grey” list of those deemed not currently compliant with EU standards but which have committed to changing their tax rules.
The list was agreed by finance ministers from EU member states in Brussels, but “the lack of well established tax havens from the list has led some MEPs and anti-tax avoidance campaigns to brand it a whitewash”, says The Independent.
Among those not included on the main blacklist were British overseas territories such as the Cayman Islands, British Virgin Islands and Jersey, all of which were revealed to be at the centre of major tax avoidance schemes in the recent Paradise Papers.
With Ireland, the Netherlands and Luxembourg also not listed, Alex Cobham, chief executive of the Tax Justice Network, said “the list appears to be a political fix with EU members picking their least favourite countries to name and shame”.
“The result of the flawed blacklisting process is a politically led list, that includes only the economically weak and politically unconnected,” he added.
The move was hailed as a vital “first step” but the failure of the member states to agree on any sanctions for those on the blacklist provoked the European commissioner for economic and financial affairs, Pierre Moscovici, to concede it was as yet “an insufficient response”, reports The Guardian.
The EU said it would decide on what measures, if any, were necessary against the territories on the blacklist in the coming weeks, and Sky News says some member states, such as France, are pushing for “the toughest response” possible.