Financial transparency has been a major buzzword in the international regulatory community for the past several years, yet despite recent high-profile revelations, such as the investigations of the Panama and Paradise Papers, the amount of work that remains to be done in this area is staggering.
Earlier this month, the European Union announced its first tax haven “Black List,” featuring 17 “non-cooperative jurisdictions for tax purposes.” Countries were blacklisted if they were deemed to have failed to meet international standards on tax transparency and tax rates, and had not provided sufficient recognition or commitments to change.
Blacklisted countries won’t be eligible for EU funds, except for those earmarked to aid development. There are currently no other financial sanctions. So inclusion on the list is currently more of a “we see you” from the EU to tax havens, rather than being indicative of any real forthcoming punishment.
It also released a “Grey List” of 47 countries that would have made the Black List but for their promises to reform the questionable tax policies at issue.
The Black List includes:
- American Samoa
- South Korea
- The Marshall Islands
- St. Lucia
- Trinidad & Tobago
- The United Arab Emirates
Notably absent from this list (although included on the more nebulous Grey List) are any countries within the EU itself, despite nations like Luxembourg and Switzerland having developed quite a reputation as tax havens in the past, and several British-connected jurisdictions, such as Jersey, Guernsey, Bermuda and The Cayman Islands.
These exclusions have some writing the list off as simply a collection of the least politically connected jurisdictions offered as scapegoats meant to provide the illusion of solving the problem.
That being said, since no such list existed at all prior to this one, I’m inclined to think that a questionable beginning is better than no beginning at all.