EU ‘grey list’ should not let tax havens off the hook

EU finance ministers have today adopted the first EU blacklist of tax havens. The list includes 17 mostly small countries. The EU has also published an additional grey list of countries that currently qualify as tax havens, but have promised reforms.

Reacting to the news, Aurore Chardonnet, Oxfam EU policy advisor on inequality and tax, said:

“It is disturbing to see mostly small countries on the EU blacklist, while the most notorious tax havens got away on the ‘grey list’.

“It seems the EU’s pressure has obliged some of the most notorious tax havens like Switzerland and Bermuda to commit to reforms.

“However, placing countries on a ‘grey list’ shouldn't just be a way of letting them off the hook, as has happened with other blacklisting efforts in the past. The EU has to make sure governments on the grey list follow up on their commitments, or else they must be blacklisted.

“Only a strong blacklist with effective sanctions for the companies and wealthy individuals exploiting tax havens will help end tax dodging.

“Urgent tax reforms are also needed inside the EU. If the EU were to apply its own criteria to member states, even four EU countries would be blacklisted. As long as tax havens remain at the heart of the EU, it is hard to believe that they will push for further reforms by countries on the ‘grey list’ or agree on strong sanctions.”

Notes to editors: 
  • Spokespeople are available for interviews in Brussels.
  • Photos and TV-quality video footage of today illustrating a tax haven in Brussels are available and can be used by the media for free.
  • Last week, Oxfam published the report ‘Blacklist or whitewash?’, showing what a robust blacklist of tax havens would look like if the EU were to objectively apply its own criteria and not bow to political pressures. Oxfam concluded that at least 35 non-EU countries should be included in the EU tax haven blacklist. In addition, 4 EU member states fail the EU’s own criteria: Ireland, Luxembourg, the Netherlands and Malta.
  • An interactive map shows the 39 countries listed in the report and explains why they should have been blacklisted by the EU.
  • 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 companies and the super-rich get away with billions in unpaid taxes. The EU blacklist is based on three criteria: 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.
  • 86% of European are in favor of “tougher rules on tax avoidance and tax havens”, while 8% are “against the idea” according to the Standard Eurobarometer, published in July 2017.
  • 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 could provide an education for 124 million children and pay for healthcare services that could prevent the deaths of at least six million children annually.  There are 124 million children out of school. The annual domestic financing gap to achieve universal education in low and low middle-income countries is $39 billion per year. $32 billion would fund the key healthcare to prevent the deaths of 6 million children each year.
  • Following the Paradise Papers scandal, 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.
Contact information: 

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

For updates, please follow @Oxfam and @OxfamEU