EU finance ministers have removed Anguilla, Dominica and Seychelles from the EU blacklist of tax havens, ignoring critics in the European parliament who described the move as wrong and “grotesque” in the wake of the Pandora papers revelations.
Meeting in Luxembourg on Tuesday, the bloc’s 27 finance ministers approved a decision to remove the three jurisdictions from the blacklist, saying that while they “do not yet comply with all international tax standards” they “have committed to implementing tax good governance principles”.
The EU tax haven list, created in 2017 to clamp down on tax avoidance and tax evasion, now has nine jurisdictions blacklisted as “non-cooperative”: American Samoa, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, US Virgin Islands, and Vanuatu.
Responding to the decision, Oxfam accused the EU of closing its eyes to tax havens, including those used by political leaders and business tycoons featured in the Pandora papers.
Oxfam’s EU tax policy adviser, Chiara Putaturo, said in a statement:
Today’s decision to delist Anguilla, the only remaining jurisdiction with a zero per cent tax rate, and the Seychelles, which are at the heart of the latest tax scandal, renders the EU’s blacklist a joke.
MEPs across the political spectrum have also criticised the EU blacklist for leaving out major tax havens. Ahead of the decision, German Green MEP Sven Giegold said removing the three jurisdictions was grotesque.
The Pandora papers should be a wake-up call, Giegold added:
The Pandora papers show that the advances in international tax cooperation are not enough. The global minimum tax only applies to large corporations, but not to the letterbox companies of the wealthy and corrupt. We need full international transparency about the real owners of letterbox companies and real estate.
Prior to the vast data leak, EU officials had begun discussions on whether to overhaul the criteria that determines which countries feature on the blacklist. Meanwhile, the European Commission has promised new legal proposals to crack down on shell companies before the end of the year.
In a change to its timetable, the European parliament will discuss the implications of the Pandora Papers on Wednesday.