Monique Melis and Malin Nilsson Speak to International Investment About the EU’s Tax Haven Blacklist

Global Head Monique Melis and Managing Director Malin Nilsson in Duff & Phelps Compliance and Regulatory Consulting practice, recently published an article in International Investment to discuss the EU’s tax haven blacklist.

Monique and Malin commented: “The Caribbean is not the most obvious place to look for the new front line in the battle over Brexit. Nevertheless, it's hard to escape the suspicion that in adding the Cayman Islands to its tax havens' blacklist, the EU is trying to make a point.” 

As one member of the European parliament put it: "This sends a clear signal that the idea of turning the UK into a tax haven will not be acceptable to the EU." The EU introduced its list of "non-cooperative jurisdictions" in 2017 in the aftermath of the Panama Papers and other scandals. Some of these revealed the use of offshore centres to avoid tax, breach sanctions and launder money. The list already included American Samoa, Fiji, Guam, Oman, Samoa, the Seychelles, Trinidad and Tobago, the U.S. Virgin Islands and Vanuatu. The latest additions were Palau, Panama and the Seychelles, as well as the Cayman Islands.

In the short term, not much changes for those included on the list. Those in a blacklisted country are subject to enhanced due diligence by EU-based organizations. In the longer term, the EU Council has provided guidance to EU member states to impose "administrative measures" against countries on the blacklist: reinforcing transaction monitoring and increasing audit risks for taxpayers who benefit from, or use, arrangements in listed jurisdictions. They can also—but don't have to—impose legislative measures, including withholding tax measures.”

Read the full article here.