Removal of Cayman Islands from EU blacklist sparks backlash

The Cayman Islands was removed on Tuesday (6 October) from the EU’s list of non-cooperative tax jurisdictions, prompting a swift backlash from civil society groups. Meanwhile, the EU added Barbados and Anguilla to the list because of tax transparency concerns.

In a statement, the European Commission said the Cayman Islands and Oman, which was also de-listed, had “delivered on their pending commitments to remove a harmful tax regime and increase tax transparency respectively.”

The move does not come as a surprise as EU ministers had been under pressure to remove the Cayman Islands from the list.

Cayman Premier Aidan McLaughlin has described the inclusion on the list as a “major source of worry and concern for us”. The Cayman government has said the listing was the result of nothing more sinister than missing a deadline to revise its legislation on Private Funds, which has since been revised.

Jude Scott, the chief executive of Cayman Finance, welcome the delisting in a statement.

“The EU’s recognition of the Cayman Islands as cooperative on both transparency and fair taxation is an important validation of Cayman’s commitment to a responsible policy of tax neutrality that poses no harm to other countries,” he said.

“The EU now joins many other respected international entities like the OECD in identifying the Cayman Islands as a transparent jurisdiction without harmful tax regimes,” Scott added.

He explained that the Cayman Islands’ “tax neutral regime remains progressive, continuing to meet the highest evolving global standards on transparency and tax information sharing. Our dedication to these standards differentiates us from other International Financial Centres.”

Critics of the tax blacklist scheme say the EU has ‘weaponised’ anti-money laundering and tax rules and point out that many of the listed countries are former European colonies.

The African Caribbean and Pacific (ACP) community has complained that the lists are ‘unilateral and discriminatory’.

Others say Brussels has been distinctly reluctant to crack down on the estimated $50 billion a year in tax that its multi-nationals avoid paying to African treasuries each year via bilateral tax treaties.

Civil society campaigners were quick to criticise the de-listing, with Chiara Putaturo, Oxfam’s EU tax policy adviser, commenting that “removing the Cayman Islands, one of the world’s most notorious tax havens, from the EU tax haven blacklist is further proof that the process isn’t working.”

Alex Cobham, chief executive of the Tax Justice Network, posted a scathing tweet:

“This is an extraordinary decision, and hard to know whether it’s testament to the lobbying efforts of the world’s worst financial secrecy jurisdiction, Cayman, or the sheer methodological ineptitude of the EU blacklist”.

Related posts

Leave a Comment