The European Union (EU) on Tuesday reintroduced Panama to its blacklist for not complying with global criteria for fiscal transparency, a setback for the Central American country in its goal of erasing its image of tax haven.
In addition to Panama, the EU finance ministers also blacklisted the British overseas territory of the Cayman Islands, a decision interpreted as a “warning” to the post-British United Kingdom.
“These countries or territories have not complied, within the agreed period, with the fiscal reforms to which they had committed themselves before the EU,” the EU Council said in a statement, which also added to Palau and Seychelles.
In December 2017, the EU adopted its first list of paradises in response to scandals such as the Panama Papers, which revealed the creation of opaque societies to supposedly evade taxes worldwide.
Panama represents the most emblematic case. In December 2017, the EU included it in its first “blacklist” and, after commitments by the Panamanian government, moved it to the “gray list”, which came out in March 2019. Now he returns to the blacklist for not having achieved “at least” the “largely conforming” rating of the Global Forum on Fiscal Transparency of the Organization for Economic Cooperation and Development.
The decision represents a jug of cold water for the Panamanian government of Laurentino Cortizo, who since his coming to power in July tries to change the image of his country and appointed even at the end of 2019 a chief prosecutor expert in financial crimes.
Cayman Islands
Cayman Islands on Tuesday became the first British overseas territory to go to the blacklist, “a warning for the United Kingdom” in the post-relations relationship with the EU, according to the conservative MEP Markus Ferber.
Europeans fear that the United Kingdom will lower EU tax rules to gain a competitive economic advantage over the block. Negotiations on the future relationship between the two should begin in March and end by the end of 2020. Specifically, the EU Council, which represents the countries of the bloc, criticizes this British territory “for not having appropriate measures in relation to the economic substance in the field of collective investment vehicles”.
With the inclusion of Cayman Islands and Panama, as well as Palau and Seychelles, the black list of non-cooperative jurisdictions, which already had American Samoa, Fiji, Guam, Oman, Samoa, Trinidad and Tobago, the US Virgin Islands and Vanuatu , rises to 12. Oenegé Oxfam congratulated the inclusion of Panama, Seychelles and Cayman Islands on the blacklist, but regretted that the EU “free” “more harmful tax havens” such as Bahamas or that it still does not include block jurisdictions.
The Europeans in fact decided to withdraw 16 countries or territories from their “gray list” of commitment monitoring, including the Caribbean Antigua and Barbuda, Bahamas, Barbados, Curacao and Saint Kitts and Nevis, as well as Belize.
The EU granted an extension to 12 of those present on the gray list, especially Turkey, an important economic and migration control partner, which it gave until the end of the year for the exchange of fiscal information with the countries of the bloc.
The sanctions provided for non-cooperating countries are limited to the eventual freezing of European funds, but the EU calls on the different countries in the block to adopt national measures by January 2021 to press.
“The credibility of the blacklist must be strengthened to seriously fight against tax evasion,” said environmental MP Damien Carême, advocating a “more independent and transparent process, with really dissuasive sanctions.”