The European Union has removed the Bahamas, Belize, Seychelles and Turks and Caicos Islands from its "blacklist" of non-cooperative tax havens, the Council announced on Tuesday. The list now includes 12 jurisdictions.
The European blacklist, created in 2017 in the wake of scandals such as the Panama Papers and LuxLeaks, is meant to encourage other countries and jurisdictions to "adopt fair tax policies" and "increase tax transparency."
This EU list of non-cooperative tax jurisdictions includes "countries that either have not engaged in a constructive dialogue with the EU on tax governance or have failed to deliver on their commitments to implement the necessary reforms," the Council said in a press release.
These reforms should aim to comply with a set of objective tax good governance criteria, "which include tax transparency, fair taxation and implementation of international standards designed to prevent tax base erosion and profit shifting."
In that context, Member States decided on Tuesday to permanently remove the Bahamas and the Turks and Caicos Islands (a British overseas territory) from the list. Seychelles and Belize will also be taken off the blacklist, and instead be transferred back to the "grey list" – meaning they still have work ahead of them, but are constructively cooperating.
The updated blacklist currently includes 12 countries and jurisdictions: American Samoa, Anguilla, Antigua and Barbuda, Fiji, Guam, Palau, Panama, Russia, Samoa, Trinidad and Tobago, the US Virgin Islands and Vanuatu. "The Council regrets that these jurisdictions are not yet cooperative on tax matters and invites them to improve their legal framework in order to resolve the identified issues."
However, the blacklist mechanism has been deemed "ineffective" and "meaningless" by independent non-governmental organisations such as Oxfam.
"How much longer will the EU persist in this absurd exercise? The list is meaningless," said Oxfam tax expert Chiara Putaturo in October last year. "It fails to screen countries like the United States and the United Kingdom, as well as EU tax havens like Luxembourg and Malta."
