This is a significant improvement over the OECD blacklist of tax havens which only includes one country. Now we just have to wait for some friendly soul in Brussels to leak the grey list of 47 countries.
Brussels identifies 17 states including South Korea, Barbados, Panama and UAE with 47 others such as the Isle of Man and Bermuda warned
The EU has named and shamed 17 states in publishing the bloc’s first ever tax haven blacklist and put a further 47 states on notice, including four British overseas territories and crown dependencies, in a move designed to crack down on the estimated £506bn lost to aggressive avoidance every year.
The blacklisted states include South Korea, Mongolia, Namibia, Panama, Trinidad & Tobago, Tunisia and the United Arab Emirates.
The EU has said the blacklisted states had failed to offer sufficient commitments that they would change their ways.
Of the jurisdictions with links to Britain, the states of Bermuda, the Cayman Islands, the Isle of Man and Jersey, have been placed on a list of those who have committed by the end of 2018 to reform their tax structures to ensure that firms are not simply using the country’s 0% corporate tax rates to shield their profits.
A further eight states affected by recent hurricanes will be addressed in February.
Sanctions against blacklisted states are yet to be agreed at EU level, and so the European commission is encouraging individual member states to draw up their own plans.
Namibia was the only country on the list who made no effort at all to correspond with the EU’s tax experts on the European council’s code of conduct (COC) group when issues were raised with the country’s government.
The other states on the blacklist are: American Samoa, Bahrain, Barbados, Grenada, Guam, Macau, the Marshall Islands, Palau, St Lucia, and Samoa.
Pierre Moscovici, the European commissioner for economic and financial affairs, described the publication as a vital “first step”.
He said: “This list represents substantial progress. Its very existence is an important step forward. But because it is the first EU list, it remains an insufficient response to the scale of tax evasion worldwide.
“I therefore call on the finance ministers to avoid any naivety on commitments. The countries that have taken commitments must change their tax laws as soon as possible. I also call on ministers to agree quickly on dissuasive national sanctions. We must do everything we can to keep up the pressure on all of these countries. We must not accept unfair tax competition and opacity.”
Moscovici, a former French minister for the economy, added: “Europe has taken a step forward, but the fight against tax havens must continue unabated. In order to do this, I expect the member states to set a precise timetable: in three months’ time, we will have to examine the situation of the countries affected by hurricanes.
“In six months’ time, we will have to review all the commitments made. Tax havens must not slip off Europe’s radar screen. Countries that are not on the blacklist will only be fully off the hook once they have fulfilled their commitments.
“As a European citizen, I share the expectations of those who hoped for more. I say to them, let us take this list for what it is: a first step. And let us keep up the pressure together, on the Member States and on third countries.”
Companies across the EU will be forced to disclose their true owners under new legislation prompted by the release of the Panama Papers.
Anti-corruption campaigners applauded the agreement as a major step in the fight against tax evasion and money laundering, but expressed disappointment that trusts will mostly escape scrutiny.
The revised terms of the EU’s fourth anti-money laundering directive include:
A requirement for companies to disclose their beneficial, or true, owners in a publicly available register.
Data on the beneficial owners of trusts to be available to tax and law enforcement authorities, as well as sectors with an obligation to follow anti-money laundering rules, such as lawyers.
A requirement for member states to verify beneficial ownership information submitted to their registers.
Extending anti-money laundering and counter-terrorism regulations to apply to virtual currencies, provision of tax services and those dealing in works of art.
EU member states will have 18 months to transpose the new directive into domestic legislation. As a current member of the EU, the UK will implement the legislation.
“This is a big breakthrough and confirms that full transparency of corporate ownership is now the global standard against which other countries will be judged,” said Laure Brillaud, the anti-money laundering policy officer at Transparency International EU.
“The EU deserves credit for taking this bold leap to end the secrecy that facilitates corruption, tax evasion and other crimes.”
Global Witness applauded the move “in the face of opposition from countries like the UK, Luxembourg, Ireland, Malta and Cyprus,” but criticised the failure to introduce the same requirements for trusts.
Unlike companies, which are legal entities, trusts are effectively agreements between two or more parties, which has traditionally allowed them to escape aspects of tax and crime legislation.
“Today’s deal will make it much harder for the criminal and corrupt to use EU companies, but trusts are an even better ‘getaway car’. They are the ultimate black box, so secretive that even the taxman and the police can’t see who is behind them,” said Murray Worthy, a senior campaigner at Global Witness.
“Despite numerous scandals showing their use in cases of corruption and tax evasion, the deal reached today will do almost nothing to tackle this.”
The changes also include new rules on the use of pre-paid cards. The cards, which are issued by companies including MasterCard and Visa, can be loaded with cash and used online and in shops without need for the same checks as are made on debit and credit card payments. After the terrorist attacks in Paris, French authorities found that the perpetrators had used prepaid cards in their preparations.
Under the revised rules, member states will have to limit how much can be spent anonymously to €150 in a shop and €50 online.
The agreement is likely to make it harder for the UK to resist imposing the same transparency standards on its network of crown dependencies and overseas territories, many of which are major tax havens.
Negotiations to revise the fourth anti-money laundering directive were launched partly as a response to publication of the Panama Papers in 2016. The leaked Mossack Fonseca files revealed how offshore companies are used to hide assets and wealth.
In his first UK lecture since leaving office, the former prime minister David Cameron said on Wednesday that “the cancer of corruption is developing, metastasising and becoming more commonplace, more complex, more multi-layered, elusive and ingrained”.
He also defended his record on engaging with the UK’s crown dependencies and overseas territories, which have consistently resisted international moves towards greater transparency.
European Union states and legislators agreed on Friday (15 December) on stricter rules to prevent money laundering and terrorism financing on exchange platforms for bitcoin and other virtual currencies, the EU said in a statement.
The agreement is part of a broader set of measures to tackle financial crimes and tax evasion. EU legislators also backed stricter controls on pre-paid cards and raised transparency requirements for the owners of trusts and companies.
“Today’s agreement will bring more transparency to improve the prevention of money laundering and to cut off terrorist financing,” Europe’s Justice Commissioner Věra Jourová said.
The EU decision comes as bitcoin’s prices have risen more than 1,700% since the start of the year, triggering worries that the market is a bubble that could burst in spectacular fashion.
The agreed measures will end anonymous transactions on virtual currency platforms and with pre-paid payment cards, which investigators said could have been used to fund attacks by militants.
Bitcoin exchange platforms and “wallet” providers that hold the cyber currency for clients will be required to identify their users, under the new rules which now must be formally adopted by EU states and European legislators and then turned into national laws within 18 months.
It took EU legislators more than a year of negotiations to agree on the legislative proposals, put forward by the European Commission in the wake of shooting and bombing attacks in Paris and Brussels in 2015 and 2016 which killed more than 160 people.
The talks dragged on because some EU states opposed increased transparency on trusts and companies, fearing a negative impact on their economies.
The EU lawmaker in charge of the issue, Dutch Green Judith Sargentini, said Britain, Malta, Cyprus, Luxembourg and Ireland were among those opposing the changes. The deal allows the authorities and “persons who can demonstrate a legitimate interest” to access data on the beneficial owners of trusts.
Trusts are legitimate financial vehicles to manage assets but have sometimes been accused of hiding illegal activities because of their lack of transparency.
Transparency International, a rights group, called the deal “a breakthrough” but lamented the fact that data on trusts’ owners will not be completely public, as it will be for beneficial owners of companies. The increased public scrutiny is considered essential by the EU commission and also by rights groups, to prevent financial crimes and tax evasion.
- By Deutschmania
- By FiveofSwords
- By Puffer Fish
- By wat0n