EU to remove Panama, 7 others from tax haven blacklist

European Union officials have proposed removing eight jurisdictions from the blacklist of tax havens the bloc adopted in December, in what critics may see as a blow to its campaign against tax avoidance. EU states decided last month to draw up the list in a bid to discourage the most aggressive tax dodging practices.

Panama, South Korea, the United Arab Emirates, Barbados, Grenada, Macao, Mongolia and Tunisia are the jurisdictions that EU officials have recommended be delisted.

The removal of Bahrain was also initially considered, but its delisting was eventually not recommended, the documents show.

Reports say the recommendation for delisting the jurisdictions will be discussed at a meeting of EU finance ministers in Brussels on January 23rd.  If the proposal is adopted, eight countries will be changed from non-cooperative tax jurisdictions to a gray list of countries that will be monitored for compliance following new commitment letters signed at a high political level. 
And that would leave places like Guam, Bahrain, American Samoa, the Marshall Islands and others on the blacklist facing the possibility of sanctions for their failure to comply with EU's standards. 

The proposal for the delisting was made by the so-called Code of Conduct Group, which gathers tax experts from the 28 EU member states. It monitors countries’ commitments to abide by EU standards on tax matters.

The shrinking of the blacklist is likely to be criticized by tax transparency groups. In December some activists denounced the listing process as a whitewash and had called for the inclusion in the blacklist of some EU countries accused of facilitating tax avoidance, like Luxembourg, Malta, Ireland and the Netherlands.

The recommended removal of Panama may cause particular outcry, as it has been at the center of one of the largest disclosures of offshore schemes, the so-called Panama Papers.

EU officials have said the purpose of the blacklist is to convince jurisdictions to become more transparent. Having fewer on the list means more countries have committed to changes, they say.