LUXEMBOURG (CN) – The European Union’s policy-making body said Thursday that it has removed the United Arab Emirates and Switzerland, among others, from its watch lists of countries seen as tax havens.
A document indicating that the Economic and Financial Affairs Council, or Ecofin, would update the EU’s lists of non-cooperative jurisdictions leaked last week. On Thursday, following an Ecofin meeting, the European Council confirmed the change.
“The EU list contributes to on-going efforts to prevent tax avoidance and promote good governance principles such as tax transparency, fair taxation or international standards against tax base erosion and profit shifting,” the council said in a press release.
The so-called grey and black lists were first created in 2017, after widespread outrage following the release of the Paradise Papers, 13.4 million electronic documents from offshore tax havens showing various politicians, celebrities and companies were using schemes to avoid paying taxes.
Countries on the lists cannot receive some EU funding. For what projects they are eligible for, the funding must be paid directly, not via financial institutions.
The first black list included 17 countries that failed to meet good governance standards and a further 47 counties landed on the grey list, meaning they had problems but were working to fix them. The lists were last updated in March 2019.
In Thursday’s report, the European Council found that blacklisted countries the UAE and the Marshall Islands “have both passed the necessary reforms to implement the commitments they had made to improve” and were moved onto the grey list.
Albania, Costa Rica, Mauritius, Serbia and Switzerland, previously on the grey list, were removed from the watch lists completely. The report noted that they implemented the necessary reforms ahead of their deadlines.
That leaves Belize, Fiji, Oman, Samoa, Trinidad and Tobago, Vanuatu and the three U.S. territories of American Samoa, Guam, and the U.S. Virgin Islands on the black list, and 31 jurisdictions on the grey list.
Switzerland, long famous for its opaque banking system, voted in a May referendum to pass a series of tax and financial reforms to bring the country into compliance.
“This work is advancing at a good pace,” Valdis Dombrovskis, executive vice president-designate of the European Commission, said in a press conference following the meeting.
But not everyone is pleased with the outcome, including Chiara Putaturo, a tax and inequalities policy adviser at the EU office of Oxfam, an anti-poverty charity group.
“The EU has whitewashed two of the world’s most harmful tax havens [in Switzerland and Mauritius]. Despite recent reforms, both countries will continue to offer sweet treats to tax-dodging companies,” Putaturo said.
The lists will be updated again in 2020.