European Union blacklist comes up short on sanctions

The European Union has blacklisted 17 global tax havens at a meeting of finance ministers in Brussels

EU creates blacklist of 17 'tax haven' countries

The EU has blacklisted 17 "tax haven" states as it cracks down on the estimated £506bn lost in avoidance schemes each year.

Also included on the blacklist were American Samoa, Bahrain, Barbados, Grenada, Guam, Macau, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago and Tunisia.

The EU said they face potential punitive measures related to "foreign policy, economic relations and development cooperation". These include stricter monitoring of transactions and increased audit risks for taxpayers benefiting from the regimes involved, or for those using these jurisdictions' structures.

As the European Commissioner for Tax Pierre Moscovici has repeatedly said during the last period, the list is both dynamic and a way for those countries to forget their bad practices in order to make their way out of this list of shame.

Countries in the EU's firing line have been given an opportunity to stay off the list if they provide a political commitment and a detailed plan to comply.

The screening of some Caribbean nations, including the British Virgin Islands, was put on hold because of damage caused by hurricanes in the region.

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The Council concluded that these countries are non-cooperative jurisdictions for tax purposes because they did not meet Council criteria established in November 2016 and did not provide a sufficient commitment to meet these criteria in the future.

By naming and shaming the non-compliant tax jurisdictions, the European Union aims to increase good tax governance worldwide South Korea and the United Arab Emirates (UAE) were placed on the list, alongside Panama - which was at the heart of the 'Panama Papers' a year ago - and Caribbean nations such as Grenada and Saint Lucia. It follows a number of high profile disclosures about companies and individuals and their tax planning, such as 2016's Panama Papers and the more recent Paradise Papers.

This country was also named in the Panama Papers past year.

It has also taken legal action against major firms including Amazon that have been accused of owing back taxes. The bloc has previously accused the Netherlands and Ireland of granting special tax treatment to Starbucks and Apple, respectively. Some did so by promising to clean up their act. "Tax dodging means less money available for healthcare, education and the fight against poverty".

The EU originally screened a total of 92 jurisdictions and once the list is compiled it is expected to be continuously updated.

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