Fri | Sep 21, 2018

African Caribbean and Pacific Group condemns Europe over new tax haven list

Published:Saturday | December 9, 2017 | 10:21 AM

BRUSSELS (CMC):
The African Caribbean and Pacific (ACP) Group has “strongly condemned” the “unilateral and discriminatory practices” of the European Union in the publication of a list of non-cooperative tax jurisdictions.

A statement following the 106th ACP Council of Ministers meeting here noted that in the last EU list, eight ACP member states had been included “despite the fact that these countries are compliant or largely compliant with the standards set by the Organisation for Economic Cooperation and Development (OECD) – the international body recognised for setting norms and standards on tax cooperation at the international level”.

EU finance ministers who met here on Tuesday said the new list, which included Trinidad and Tobago, Grenada, Barbados and St Lucia, was drawn up after 10 months of investigations by EU officials. The finance ministers also named American Samoa, Bahrain, Guam, South Korea, Macau, Marshall Islands, Mongolia, Namibia, Palau, Panama, Tunisia and the United Arab Emirates.

They said the countries on the blacklist were not doing enough to crack down on offshore avoidance schemes. Potential sanctions that could be enforced on members of the list are expected to be agreed in the coming weeks.

The EU said that the new list was compiled through a three-step process including the pre-selection of 216 countries worldwide using more than 1600 indicators and that all  jurisdictions chosen for screening were formally contacted, to explain the process and invite them to engage with the EU.

St Vincent and the Grenadines is listed as a jurisdiction with improved fair taxation while Bermuda and the Cayman Islands are listed as jurisdiction which introduced substance requirement.

The EU said that as a first step, a letter will be sent to all jurisdictions on the new list, explaining the decision and what they can do to be de-listed.

But the ACP noted that the countries blacklisted “are mostly small, developing states with vulnerable economies, which could suffer further negative economic impact and extensive reputational damage from the EU’s unilateral actions.

“Such actions are against the letter and spirit of partnership enshrined in the ACP-EU Cotonou Agreement. They undermine the trust and confidence of the world’s unique North-South Development partnership of the ACP Group and the EU due for a successor Agreement come 2020 negotiations,” the ACP noted “strongly” urging the “EU to enter into dialogue with the ACP to resolve this matter”.