Effective EU tax haven blacklist must include at least 35 countries, Oxfam analysis finds

Published: 27th November 2017

The upcoming EU tax haven blacklist has to include at least 35 countries, including notorious tax havens such as Switzerland and Bermuda, in order to be effective, Oxfam finds in a new report published today. The analysis also shows that at least 4 EU countries would be blacklisted if the EU were to apply its own criteria to member states. The anti-poverty organization warns that the official EU blacklist expected for next week will likely miss key tax havens due to political pressure from inside and outside the EU.

The EU is currently drafting a blacklist for tax havens, analyzing 92 countries and other jurisdictions against a set of three criteria, which include tax transparency and policies that stimulate large-scale profit shifting. However, those criteria exclude EU member states, meaning that major tax havens are missed out.

In the report, ‘Blacklist or Whitewash?’, Oxfam has applied the EU’s own criteria to the 92 countries screened by the EU, as well as to the 28 EU member states. According to the analysis, at least 35 non-EU countries should be included in the EU tax haven blacklist, and 4 EU member states: Ireland, Luxembourg, the Netherlands and Malta.

Oxfam is concerned that, regardless of these clear findings, EU governments will come up with a weak or even empty blacklist. The blacklist is being drafted in secret, which makes public scrutiny impossible. The Maltese EU presidency has publicly advocated for an empty blacklist. Also, following a meeting with EU finance ministers, the Swiss government has openly declared it does not expect the country to be blacklisted.

Aurore Chardonnet, Oxfam's EU policy advisor on inequality and tax, said:

“Our report shows what a robust blacklist of tax havens would look like if the EU were to objectively apply their own criteria, free from political pressure. However, the blacklisting process has been surrounded by secrecy, putting citizens in the dark and leaving tax havens free to use their political and economic leverage to get themselves off the EU blacklist. There is a real risk the EU ends up with an empty blacklist.
“If the EU is committed to ending tax scandals such as the Paradise Papers, the Panama Papers and Lux Leaks, a robust, objective and coherent tax haven blacklist is an important step. EU governments have a choice between ending the harmful impact of tax havens on both the EU and developing countries – or whitewashing tax havens.”

The research shows how profits made in tax havens are out of proportion with the countries’ real economic activity. For instance, some tax havens attract absurd levels of income from royalties, financial services and other services. Bermuda – home to Appleby, the company at the heart of the Paradise Papers – attracts a value of about 4,5 times their Gross Domestic Product (GDP), the Bahamas over 2 times their GDP. 
Multinationals also often use artificial loans to shift profits through interest payments between their subsidiaries. Interest income represented 73% of GDP in the Cayman Islands, 40% of GDP in Bermuda and 25% of GDP in Luxembourg, Oxfam's research reveals. 

Oxfam criticizes the EU for also failing to address the race to the bottom on corporate tax rates. As a result, governments offer tax deals to large companies that help such multinationals keep billions of euros at the expense of other taxpayers both inside the EU and in developing countries. The organization calls on the EU to improve its blacklisting criteria to include all harmful tax practices and to cover tax havens within the European Union.

“Tax havens enable tax dodging on an industrial scale. They deprive countries of hundreds of billions of dollars, fueling poverty and inequality. EU governments must put the interests of their people above those of tax havens and multinational corporations if they are going to close the gap between rich and poor. Strong sanctions against those tax havens on the blacklist are needed to make sure they do not get away with impunity”, said Chardonnet.


Notes to editors

  • The report’s author, Aurore Chardonnet, is available for interviews in Brussels.
  • An interactive map shows the 39 countries listed in the report and explains why they should be blacklisted.
  • Read the full Oxfam report.
  • The EU committed to a blacklist process in the wake of scandals like the Panama Papers and Lux Leaks that showed how tax havens let the super-rich get away with billions in unpaid taxes. EU finance ministers are expected to publish the EU blacklist on 5 December at their meeting in Brussels.
  • The EU’s listing process uses three sets of criteria to identify tax havens: transparency, fair taxation, and participation in international fora on tax.
  • The EU’s blacklisting negotiations have taken place behind closed doors and countries participating in the talks have refused to answer questions. The process has been in the hands of one of Brussels’ most secretive working bodies, the so-called Code of Conduct Group, which insists on its work being confidential.
  • Last June the OECD released its own backlist, but the result was farcical and ended up naming only one country, Trinidad and Tobago.
  • Tax dodging costs developing countries $170 billion a year: $70 billion through tax dodging by super-rich individuals and $100 billion through corporate tax dodging. $100 billion is enough money to provide an education for 124 million children and prevent the deaths of almost eight million mothers, babies and children a year. 
  • Switzerland, which fails the EU’s criteria on fair taxation according to Oxfam’s analysis, has already declared they expect not to appear on the EU blacklist. This illustrates the risk that major tax havens might escape blacklisting due to political and economic pressure. 
  • Following the Paradise Papers, Oxfam released a 5-point plan outlining steps governments should take to prevent further scandals on a global scale. This includes establishing a global blacklist of tax havens that naming countries such as Ireland and the Netherlands that have been key players in the Paradise Papers scandal. 
  • The 35 non-EU countries that should feature on the blacklist are as follows. An * indicates a conduit tax haven.
  1. Albania
  2. Anguilla
  3. Antigua and Barbuda
  4. Aruba
  5. Bahamas
  6. Bahrain
  7. Bermuda
  8. Bosnia and Herzegovina
  9. British Virgin Islands*
  10. Cook Islands
  11. Cayman Islands
  12. Curaçao
  13. Faroe Islands
  14. Former Yugoslav Republic of Macedonia
  15. Gibraltar
  16. Greenland
  17. Guam
  18. Hong Kong
  19. Jersey
  20. Marshall Islands
  21. Mauritius*
  22. Montenegro
  23. Nauru
  24. New Caledonia
  25. Niue
  26. Oman
  27. Palau
  28. Serbia
  29. Singapore
  30. Switzerland
  31. Taiwan
  32. Trinidad and Tobago
  33. United Arab Emirates
  34. US Virgin Islands
  35. Vanuatu
 • The 4 EU member states that should be blacklisted if the EU were to apply its criteria to its own member states are: 1. Ireland2. Luxembourg3. The Netherlands4. Malta

Contact information

Florian Oel | EU media officer, Brussels | florian.oel@oxfam.org | office +32 2 234 11 15 |
mobile +32 473 56 22 60

For updates, please follow @Oxfam and @OxfamEU