Tuesday

26th Sep 2017

EU parliament wants to blacklist tax havens

  • Panama hats at Malta protest: The massive leak on tax dodging implicated several EU politicians (Photo: Daphne Caruana Galizia)

The European Parliament wants the European Commission to put countries that are considered tax havens on a blacklist that also features countries suspected of money-laundering and terrorism financing.

Last July, the commission published its first blacklist in the context of a new directive aimed at countering money-laundering and financing terrorist.

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Afghanistan, Bosnia, Guyana, Iraq, Laos, Syria, Uganda, Vanuatu, and Yemen were identified as countries with “strategic deficiencies in their AML/CFT [anti-money laundering and counter-terrorism financing] regimes that pose significant threats to the financial system of the Union” .

If a country is listed, financial institutions in the EU are required to “apply enhanced customer due diligence measures when establishing business relationships or carrying out transactions with natural persons or legal entities established in the listed countries”, according to the legislation.

The European Parliament and EU member states have given the commission the power to decide who is put on the blacklist via a so-called delegated regulation, but they maintained veto power.

MEPs decided to approve the first version of the list, but this week also decided to write a letter saying that more countries should be added the next time it is updated - expected to be in October.

A draft letter addressed to justice commissioner Vera Jourova, seen by this website, said the list should be “a broad list of criminal activities, including for example 'tax crime',” mentioning Panama as an example.

The Central American republic came into the public eye recently when a trove of documents showed the extent to which money is stored offshore there.

By not including countries involved in “tax crimes”, the commission “puts European institutions in a difficult position as it can unintentionally be understood as an endorsement to those regimes that would not be in line with its own assessment criteria”, the MEPs wrote.

The EU commission was not immediately available for comment.

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Cyprus’ failure to go after Russian mafia money in its banks indicates it's paying no more than “lip service” to international money laundering laws, a Dutch MP has said.

Finance ministers baulk at tax-avoidance rules

Member states will discuss again in June a proposed directive to outlaw practices used by large companies to avoid paying taxes. Meanwhile, the European Parliament makes progress on its probe of Panama Papers.

EU states warm to tax avoidance measures

In the wake of Apple's record-breaking tax bill, EU finance ministers are giving more support to the idea of strengthening corporate tax legislation.

EU takes time to ponder tech giant tax

The EU commission published a paper that outlined several options on how to increase tax income from internet companies' activities, but fell short of proposing legislation.

Investigation

EU bank accused of muzzling watchdog

An ongoing review of the the European Investment Bank's "complaints mechanism" could make the oversight branch less independent and less effective.

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