EU removes Panama & Korea from Economic Black List

The European Union finance ministers agreed that eight jurisdictions, including much-criticized Panama, should be removed from the bloc’s blacklist of tax havens, one month after the list was set up?

The shady decision prompted an outcry from worldwide lawmakers and activists. The move supposed to be in line with recommendations by EU tax experts in the “Code of Conduct” Group.

The blacklist was only created in December, 2017 to discourage the most aggressive tax-evading practices after several disclosures of off-shore schemes.

But the move drew strong criticism. The de-listing of Panama, which was at the center of one of the largest disclosures, the so-called Panama papers, caused particular concern.

The decision is a confession of failure. Crossing Panama, one of the world’s most prolific tax havens off the blacklist, is a disastrous sign in the fight against tax dodging.

Instead, the EU ministers should have expanded the list, including EU countries and jurisdictions, such as Malta and Britain’s overseas territories.

The detailed commitments made by the eight jurisdictions who were removed from the list have not been made public. Panama Papers journalist Daphne Caruana Galizia was killed by a heavy duty car bomb in Malta.

The EU is rushing to take countries off the blacklist without it being clear what they have actually committed to improve; this is further undermining the process,” said Aurore Chardonnet, of the anti-poverty group Oxfam.

Nine jurisdictions remain on the blacklist. They are American Samoa, Bahrain, Guam, the Marshall Islands, Namibia, Palau, Saint Lucia, Samoa, and Trinidad and Tobago. At the same time, Dutch and British tax havens were never marked as such by the EU?

EU ministers avoided discussing possible sanctions for jurisdictions who remain on the blacklist. The eight delisted jurisdictions have been moved to a so-called gray list.

Countries on the gray list can be moved back to the blacklist if they fail to respect their illusive engagements.

Reuters / AA Magnum News 2018.