European Union’s finance department recently added Panama, Seychelles, the Cayman Islands and Palau to the EU’s blacklist of tax havens, an EU document stated. According to the document, the organisation has given Turkey more time to avoid being blacklisted. The countries which get blacklisted in the EU’s list face reputational damage, higher scrutiny of financial transaction and an increased risk of losing EU funds.
The EU document revealed that Seychelles, an eastern African archipelago was added to the list owing to its “harmful preferential tax regime” while Panama and the pacific island of Palau were blacklisted because of its shortcomings over the exchange of tax information. The document further said that the British oversee territory of Cayman islands were included because investment funds based there did not reflect real economic activity on the archipelago. Meanwhile, in another separate decision, British oversees territories were deemed fully compliant with the EU list and were removed from the list.
Turkey despite failing to present its records in December was given an extended deadline ending next year to begin sharing data with other 27 EU states. Two officials said the decision was taken for political reasons, despite the risk that this could undermine the EU listing process. One of the diplomats told international media that they should remain aware of the relevance of Turkey in many policy areas, which are important to the organisation.
The EU depends on Turkey to curb migration from the Middle East and Asia, but the relationship has soured over President Tayyip Erdogan's crackdown on critics following a failed coup in 2016. It has worsened over Turkey's gas and oil drilling off the Cyprus coast.
EU’s blacklist now includes 12 jurisdictions. The other jurisdiction included in the list is Fiji, man, Samoa, Trinidad and Tobago, Vanuatu and the three U.S. territories of American Samoa, Guam, and the U.S. Virgin Islands. The list was set up by the world body in 2017 after revelations of widespread tax evasions and avoidance schemes.