At least two of the recent additions to be EU’s list of non-compliant jurisdictions for tax purposes wasted no time in their fight to be removed.
The Cayman Islands government has contacted EU officials in a bid to be taken off the tax haven blacklist.
This comes after the Caribbean country; alongside Panama, Palau and Seychelles, was flagged for failing to meet the EU’s standards.
Jurisdications looking to be removed from the list, however, will have to wait until at least October 2020 when the next revision will take place.
De-listed ASAP
Alden McLauglin, Cayman Island premier, said: “The Cayman Islands government acknowledged the EU’s statement, which said dialogue will continue with listed jurisdictions.
“The Cayman Islands also remains fully committed to cooperating with the EU and will continue to constructively engage with them with the view to be de-listed as soon as possible.”
McLaughlin also said that, over the past two years, the government has cooperated with the EU to “deliver on our commitments to enhance tax good governance”.
Adding that, “since 2018, Cayman has adopted more than 15 legislative changes in line with the EU’s criteria”.
Collective investment vehicles
On 18 February, an EU document said that the Cayman Islands was placed on the blacklist because it “does not have appropriate measures in place relating to economic substance in the area of collective investment vehicles (CIVs)”.
But, in reponse, McLaughlin said that the “EU confirmed that Cayman had satisfied its economic substance requirements, with the exception of economic substance for funds, also known as collective investment vehicles” in April 2019.
On 31 January 2020, Cayman passed The Private Funds Law and The Mutual Funds (Amendment) Law, “both of which address the EU’s concerns for CIVs”, he said.
The laws came into force on 7 February 2020.
EU criteria
The premier added: “The EU was duly notified that Cayman would pass the CIVs-related legislation by 31 January 2020.
“However, it appears that the listing stems from Cayman’s legislation not being in force by 4 February, which was the date of the EU’s Code of Conduct Group meeting to advise the EU Finance Ministers, prior to their decision regarding the listing.
“While Cayman consulted with a number of stakeholders on our legislation, including our financial services industry, the principal components of our new and revised laws were shaped by the EU’s criteria.”
Great effort
Elsewhere, Panama has asked the EU to look at “the great effort” that has been made by its government to meet international requirements in terms of cooperation.
On 18 February, the EU cited Panama’s lack of at least a “largely compliant” rating from the Global Forum on Transparency and Exchange of Information for Tax Purposes as the reason for putting it on the blacklist.
Adding that the country “has not resolved this issue yet”.
The president of the Central American country, Laurentino Cortizo Cohen, said it is “making every effort to leave all lists”.
In a Spanish language statement, Cohen said that the country has made “great efforts” to meet the approval of laws, enforcement and cooperation with countries in order to avoid all blacklists.
The president also said the “government will continue to work on its agenda to make the country as competitive as possible”.
Off the list
There does not currently appear to have been a response from Palau or the Seychelles to their respective blacklisting.
Since the EU initiative was launched in December 2017, almost 30 countries have been listed as non-cooperative.
The majority have been subsequently removed, once required actions have been taken.
Any changes in the situation of individual jurisdictions or changes to the methodology of the EU blacklist will be done at the next revision, which is planned for October 2020.
