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7th Dec 2022

EU adding Bahamas to tax-haven blacklist

  • Nassau: Natural and tax-avoidance paradise, EU says (Photo: Venture Minimalists)
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The EU is adding Anguilla, the Bahamas, and Turks and Caicos Islands to its blacklist of tax-havens, in what some have called a "fig-leaf" exercise.

The three Caribbean countries are being added because they facilitate "offshore structures and arrangements aimed at attracting profits without real economic substance," the EU said in a draft decision seen by EUobserver on Monday (26 September).

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Meanwhile, nine more countries that were already designated are staying on the register, which is to be rubber-stamped by EU finance ministers without further discussion on 4 October.

The nine other EU-designated tax miscreants are American Samoa, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, the US Virgin Islands, and Vanuatu.

Panama is staying on because it is not even "largely compliant" on tax transparency and has "a harmful foreign-source income exemption regime," the EU said.

Listed places are marked as red blips on an online EU Council world map.

And the EU name-and-shame exercises are painful for those concerned.

The EU also publishes a parallel but separate blacklist of high-risk countries for money laundering and terrorist financing.

The Bahamas used to be on the money-laundering list, but got off in February.

"This favourable outcome of the many months of engagement [with the EU Commission] is a welcomed one," the Bahamas Financial Services Board, a Nassau-based lobby group said at the time, showing how culprits take pains to avoid EU stigma.

PR aside, the tax-haven blacklist comes with sanctions, because EU countries do increased audits on individuals and monitoring of transactions from designated countries.

The EU document also cites several other places which fall short of international tax norms, in what EU officials and financial lobbyists call a "grey list".

Those on the tax-haven grey list, but not under enhanced due-diligence, include Armenia, Belize, British Virgin Islands, Costa Rica, Hong Kong, Israel, Jamaica, Jordan, Malaysia, Russia, Qatar, Thailand, Turkey, and Vietnam.

For tax-justice campaigners, such as UK-based group Oxfam, Anguilla, the Bahamas, and Turks and Caicos Islands "clearly deserve" what they got.

But the expanded EU blacklist was still just a "fig-leaf" for Oxfam's Chiara Putaturo.

Bermuda, the Cayman Islands, and British crown dependencies also merited action, she told EUobserver. "The EU tax-havens list is still missing strong and effective criteria, like one taking into account the corporate tax rate," she said.

"EU countries are also missing from the list," Putaturo added.

"Some of them [member states] have features that are typical of tax-havens" she said, citing Oxfam research which named Cyprus, Ireland, Luxembourg, Malta, and the Netherlands as the EU's worst.

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