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Anger over EU decision to include Barbados and remove Cayman Islands from tax-transparency blacklist

By Dan Byrne for AMLi

The EU has included two new territories to its list of non-cooperative jurisdictions for tax purposes, deleting two others at the same time.

Barbados, an independent Caribbean nation, and Anguilla, an overseas territory of the UK, will now join ten other countries on the controversial EU ‘blacklist’, the European Council announced Tuesday.

The blacklist marks places across the globe that the EU deems to have failed on previous tax governance promises, or simply not engaged in “constructive dialogue” with the EU at all.

The other ten members of that list are American Samoa, Fiji, Guam, Palau, Panama, Seychelles, Trinidad and Tobago, the US Virgin Islands and Vanuatu.

The Cayman Islands and Oman were removed from the list Tuesday, meaning twelve jurisdictions still appear in total.  

The EU agreed to remove the Cayman Islands after it “adopted new reforms to its framework on Collective Investment Funds in September 2020,” but backlash against this announcement was swift.  

“I was shocked to learn that EU ministers today struck the Cayman Islands off the EU’s tax-haven blacklist,” said MEP and Spokesperson for the European Socialists and Democrats Pedro Marques.

“The Cayman Islands lead the race to the bottom by offering a zero-tax rate, facilitating companies and the super-rich… Clearly, the EU criteria for black-listing tax haven do not work.”

Oxfam’s EU Tax Policy Advisor Chiara Putaturo also criticised the removal, saying that the EU is allowing the most aggressive countries to be delisted.

She advised that if the list is to keep its credibility, “The EU must include all countries that operate as tax havens.”

Meanwhile, in the run up to Barbados’ rumoured inclusion in the list, German Chancellor Angela Merkel received a communication from Barbadian Prime Minister Mia Mottley, who labelled the move “wrong and disproportionate,” CBR Reported Monday.

Both Barbados and Anguilla received downgraded compliance ratings in a recent OECD report on Transparency and Exchange of Information for Tax Purposes. This was the reason for their inclusion, the EU advised.

However, Mottley claimed that Barbados was receiving sanctions for activity committed under the country’s last government, which Mottley’s party swept aside in a landslide 2018 election victory.

“They [The EU] are now giving us a lash by something not done by this government, but by the last administration, because the last administration did not do audits. We will take it, but we will disagree with them,” she said at a rally Sunday.

While the EU frequently updates the tax transparency blacklist, it has granted certain nations a reprieve on meeting promised commitments due to the COVID-19 pandemic.

They also advised that Mongolia and Bosnia and Herzegovina – two countries which were deemed not fully compliant with international tax standards – have been cleared following their ratification of the OECD Convention on Mutual Administrative Assistance in Tax Matters. 

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