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EU adds Dominica to tax blacklist - Turkey deadline before blacklisting

Martin Everson

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The European Council has added Dominica to the controversial EU list of non-cooperative jurisdictions in tax matters and removed Barbados from the list.

The EU said Dominica is on the blacklist because it only received a ‘partially compliant’ rating related to its tax information exchange arrangements and has not yet resolved this issue.

For the purposes of the list, the EU requires jurisdictions to be at least ‘largely compliant’ with the international standard on transparency and exchange of tax information on request.

Barbados was added to the EU list in October 2020 for the same reason after it received a ‘partially compliant’ rating from the Global Forum on Transparency and Exchange of Information for Tax Purposes.

Barbados has applied for and was granted a supplementary review of its tax information exchange regime by the Global Forum and will therefore be grey-listed pending the outcome of this review.

The grey list, or state-of-play document, includes jurisdictions which do not yet comply with all international tax standards but which have made sufficient commitments to implement tax good governance principles, according to the EU.

The European Council removed Morocco, Namibia and Saint Lucia from the document on Monday as they have fulfilled all their commitments, the EU said.

However, Jamaica has been added as it has committed to amend or abolish a harmful tax regime related to its special economic zone by the end of 2022.

Australia and Jordan have been granted an extension to the deadline for fulfilling their commitments as the assessment of their reforms by the OECD Forum on Harmful Tax Practices is pending. The Maldives has been given four additional months to ratify the OECD Multilateral Convention on Mutual Administrative Assistance.

Growing criticism of tax list

The EU’s tax blacklist has attracted growing criticism from all sides. In January, the EU Parliament passed a resolution demanding an extension of the tax list criteria to specifically target zero tax jurisdictions.

EU parliamentarians argued that any tax haven blacklist that does not include offshore centres like the Cayman Islands was insufficient.

The resolution called into question the listing and de-listing process, stating it was biased because the “most harmful” jurisdictions like Cayman and Bermuda were de-listed after they had introduced “very minimal substance criteria and weak enforcement measures”.

At the same, the EU Parliament demanded the inclusion of EU member states that exhibit tax haven characteristics.

The resolution is not binding but the EU Commission has to respond.

Barbados-based economist Marla Dukharan last year criticised the EU for institutionalised racism and bullying. She stated that the EU “weaponizes its rules by arbitrarily, unilaterally, selectively and disproportionally imposing them on certain hapless non-EU members”.

Following the latest update, 12 jurisdictions remain on the list: American Samoa, Anguilla, Dominica, Fiji, Guam, Palau, Panama, Samoa, Seychelles, Trinidad and Tobago, the US Virgin Islands and Vanuatu.

The argument that the tax blacklist predominantly targets small island nations in the Caribbean and the Pacific which have no relevant financial services sectors to speak of will only be fuelled by the addition of Dominica.

The omission of Turkey, in turn, draws attention to the arbitrary nature of the listing process.

The EU had given that country a deadline to commit by the end of last year to facilitate the exchange of tax information, but Turkey failed to do so.

Although this should have triggered a blacklisting, council members decided to extend the deadline until May 2021.

The 27 EU member states were split on the issue as the EU and Turkey are trying to ease political tensions, which have been worsened by Turkey’s gas exploration in the eastern Mediterranean.

In particular, Germany, which has a large Turkish population, and is attempting to smooth its political relations with Turkey, is said to have resisted the blacklisting.

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Late to the thread... does this mean that SWIFT transfers from blacklisted countries into the EU will be rejected? Or would there be a hold and request for verification of source of funds?
You cannot send in or out into eussr. If you want to send from euroland into Dominica, your bank will return the funds to you after a week or so and deduct some admin fees.
It will also (mainly) apply for eu correspondence banks. So even if you have a bank close to eu which is cool with this because they know you, you will still face that issue if it has to go thru some eu based big correspondence banks.

Depending on the bank and your relationship with it, they reimburse the admin fees.
That is what has happened in my case (not with Dominica but with another blacklisted place). But the bank for sure was not happy about that, but no verification or whatsoever took place, but they also knew me pretty well.
 
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Thank you. I've been waiting 7 business days for a wire to Croatia from Trinidad. They're running a trace, but that's taking time also. There seems to be no urgency when it's my money in limbo land;-)
Nah there is absolutely no urgency ;) especially if you are not a preferred customer. If you are, it is slightly better.
After all, they have your dough under custody.
 
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The blacklist is the biggest joke when you get to the fact America isn't on it lol every non American I know with sketchy tax practices has a story about a bank of america or wells fargo branch in Miami lol but I dont hear peep about oh i hid my money in Dominica lol. The EU are the US bitch though so they aint never adding uncle sam to the blacklist lol now EU are our colonies.
 
FYI: Anguilla, Dominica and Seychelles removed from EU tax havens blacklist a few days ago...

EU finance ministers have removed Anguilla, Dominica and Seychelles from the bloc’s blacklist of tax havens, ignoring critics in the European parliament who described the move as wrong and “grotesque” after the Pandora papers revelations.

Meeting in Luxembourg on Tuesday, the bloc’s 27 finance ministers approved a decision to remove the three jurisdictions, saying that while they “do not yet comply with all international tax standards”, they “have committed to implementing tax good-governance principles”.

The EU tax-haven list, created in 2017 to clamp down on tax avoidance and tax evasion, now has nine jurisdictions blacklisted as “non-cooperative”: American Samoa, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, US Virgin Islands, and Vanuatu.

Source: EU tax haven blacklist trim ‘grotesque’ after Pandora papers, say critics

The EU list of non-cooperative jurisdictions for tax purposes as today:
American Samoa
Fiji
Guam
Palau
Panama
Samoa
Trinidad and Tobago
US Virgin Islands
Vanuatu
 

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