For EU ministers, the Cayman Islands are no longer a tax haven

For some time it had been “saved” from the blacklist despite the fact that investigative reporters for the Paradise Papers discovered that from there, in triangulation with Antigua and Bermuda, several billions of suspicious funds had passed, most likely as a result. of tax evasion and evasion operations. In February 2020, before the pandemic, the course changed with blacklists. An ephemeral “punishment”, lasting just 7 months, given that as of today the Cayman Islands are no longer a tax haven. At least according to the finance ministers of the 27 EU member states.

The decision took place during the Ecofin in Brussels and aroused not a few discontent. “I was surprised to learn that today the EU ministers removed the Cayman Islands from the black list of tax havens – said Pedro Marques, spokesman for European Socialists, the second parliamentary group in the EU floor – The Cayman Islands offer a” Zero tax rate, making it easier for businesses and the super-rich to evade taxes. Clearly, the EU criteria for blacklisting tax havens are not working. “

Ecofin, in its note, explains that the decision was made after having wanted the benefits of the reforms implemented by Cayman and Oman. The EU blacklist, born in 2017 under the pressure of a series of tax scandals, in fact foresees that the states included in the list can leave once certain measures have been approved. In the case of the Cayman Islands, finance ministers considered that recent reforms “on collective investment funds” are sufficient to make these islands “a cooperative jurisdiction”.

The Caymans are an overseas territory of the United Kingdom and their blacklisting was interpreted as a retaliation linked to Brexit. Instead, Anguilla, another British overseas territory located in the Caribbean, has been blacklisted, which with Barbados leads to 12 tax havens currently considered as such by Brussels (the others are Fiji, Guam, Palau, Panama, Samoa, Seychelles, Trinidad and Tobago, US Virgin Islands and Vanuatu).

According to Marques (and not only him), this list is incomplete: “Some of the most damaging tax havens in the world such as Switzerland, Hong Kong or Jersey have never entered the list,” he complains. The Socialist MEP calls for “a review of the criteria” by which countries are included or excluded from the black list: “The decision on the Cayman Islands shows that we must include more precise economic indicators to help identify tax havens”, criteria such as “at ‘minimum effective tax rate”. In addition, Marques continues, the procedure by which EU ministers decide who to put on the list “lacks transparency: the Code of Conduct group, in charge of controlling tax havens, works behind closed doors and very few documents are available. available to the public, “he explains. . Marques also calls for “severe penalties.” Finally, he touches on a delicate point of the EU: “We want the selection procedure (in tax havens, ed) to also be extended to the EU countries. Even with the weak criteria in force today, some member states should enter into the blacklist if they were not exempted from trial. Only if we keep our houses in order, Europe will be a credible leader in tax justice “in the world. Words that recall the criticisms that Italy has recently leveled at the Netherlands, for example.

NGOs committed to tax justice have also lined up against the decision of EU ministers, such as Oxfam: “Paradises take from poor and rich countries hundreds of billions in lost revenue each year, money that is needed. more than ever during the pandemic. Instead of holding them accountable, the EU allows the most aggressive countries to be removed from the list, “read a statement. 5-star MEP Piernicola Pedicini also criticized:” Ecofin’s decision to remove to the Cayman Islands from the blacklist of tax havens is an off-season Christmas present for the big tax evaders and organized crime who use them to launder money. In the Cayman Islands, corporate taxation is zero and the International Monetary Fund has included it among the 10 economic spaces that drain 85% of all phantom investments in the world ”, says Pedicini.