Fri | Apr 3, 2020

EU blacklists Cayman Islands, Panama

Published:Wednesday | February 19, 2020 | 12:21 AM
European Commissioner for Economy Paolo Gentiloni, right, speaks with President of the European Investment Bank Werner Hoyer during a meeting of EU finance ministers at the Europa building in Brussels, Tuesday, February 18, 2020.
European Commissioner for Economy Paolo Gentiloni, right, speaks with President of the European Investment Bank Werner Hoyer during a meeting of EU finance ministers at the Europa building in Brussels, Tuesday, February 18, 2020.

The European Union has added four countries and jurisdictions to its blacklist of tax havens, including the British overseas territory Cayman Islands.

EU finance ministers decided to also add Palau, Panama and the Seychelles to the list of jurisdictions that have not implemented the necessary tax reforms to be in line with EU standards.

The EU has set up the system to sanction those it deems guilty of unfairly offering tax avoidance schemes. Eight jurisdictions were already listed: American Samoa, Fiji, Guam, Oman, Samoa, Trinidad and Tobago, US Virgin Islands and Vanuatu.

The addition of the British territory of the Cayman Islands stood out considering that the United Kingdom just left the EU at the end of last month.

European lawmaker Markus Ferber, of the Christian Democrat EPP group, said it should serve as a warning to the UK as it tries to position itself in the global economy as a country outside the EU.

“The UK would be well advised to take note that EU Finance Ministers put a British Overseas Territory on the blacklist of tax havens. This sends a clear signal that the idea of turning the UK into a tax haven will not be acceptable to the EU,” Ferber said.

Being on the blacklist can affect the EU funds a nation can receive, but EU Commissioner Valdis Dombrovskis said that the public shame was just as important.

“There are reputational consequences because being blacklisted by the EU clearly is a signal about the problems in tax governance,” Dombrovskis said.

AP