by Linda Straker
International Business Minister, Nikolas Steele says that Grenada’s Government is yet to receive an official communication from the European Union (EU) regarding the inclusion of island as 1 of the 17 that are on its first ever list of non-cooperative tax jurisdictions.
“We were aware of the monitoring done, but right now we only saw the list online and are awaiting communications from the EU as to what are the reasons or the reason for us be placed on the list,” Steele said.
The list was disclosed on Tuesday by the Finance Ministers of EU Member States during their meeting in Brussels. The ministers said that the 17 countries have failed to meet agreed tax good governance standards.
In addition, 47 countries have committed to addressing deficiencies in their tax systems and to meet the required criteria, following contacts with the EU.
A statement from the EU said that this unprecedented exercise should raise the level of tax good governance globally and help prevent the large-scale tax abuse exposed in recent scandals such as the ‘Paradise Papers.’
According to the EU fact sheet explaining the procedure, the list was compiled through a 3-step process. They were:
1: Pre-Selection of 216 countries worldwide using more than 1600 indicators. These indicators help to classify countries according to their economic ties with the EU, financial activity, legal and institutional stability, and tax good governance levels.
2: Screening: All jurisdictions chosen for screening were formally contacted, to explain the process and invite them to engage with the EU. Member State experts then assessed the selected jurisdictions’ tax systems in-depth, using the agreed criteria.
3: Listing: Once the experts had finished the screening stage, they delivered their findings to the Code of Conduct Group of EU Ministers.
Other regional countries on the list are: Barbados, St Lucia and Trinidad and Tobago. St Vincent and the Grenadines is listed as a jurisdiction with improved fair taxation while Bermuda and the Cayman Islands are listed as jurisdictions which introduce substance requirements.
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: ”The adoption of the first ever EU blacklist of tax havens marks a key victory for transparency and fairness. But the process does not stop here. We must intensify the pressure on listed countries to change their ways. Blacklisted jurisdictions must face consequences in the form of dissuasive sanctions, while those that have made commitments must follow up on them quickly and credibly. There must be no naivety: promises must be turned into actions. No one must get a free pass.”
The idea of an EU list was originally conceived by the commission and subsequently taken forward by Member States. Compilation of the list has prompted active engagement from many of the EU’s international partners.
The EU statement said that as a first step, a letter will be sent to all jurisdictions on the EU list, explaining the decision and what they can do to be de-listed.