Wednesday, 13 december 2017 | Redacción CEU
States and regions of "non-cooperative jurisdiction in tax matters". This is how the European Union denominates tax havens. It has not been easy for these organization members to reach an agreement about the seventeen countries that are part of this list. Some analysts say that this is the first time that an organization of this magnitude dares to take such a step when it comes to combating tax evasion at a global scale. Others point out to countries that do not appear on the list. What criteria has the EU followed to choose who are the listed members? Which countries have the great honor of appearing on it? How have the chosen ones reacted? What will be the consequences of publishing this list?
The ministers of Economy and Finance of Ecofin have taken two years to reach an agreement. It has been a slow and difficult process that has culminated in the creation of a list of countries that could be considered tax havens –although the EU does not use this terminology–. Last Tuesday, the Twenty-eighth countries published the list of States of "non-cooperative jurisdiction for tax purposes". Seventeen territories are finally listed on the called black list: American Samoa, Bahrain, Barbados, Granada, Guam, South Korea, Macao, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia and United Arab Emirates. Has anyone been left out? Why?
The chosen ones
Although images of idyllic beaches come to the minds of many when they talk about tax havens, it is not essential for these places to have a wonderful coastal area. Tax havens are those territories where citizens go with the aim of finding a fiscal "den" with a questionable nature. Those destinations that serve as a refuge thanks to their special tax regimes. Places that can be especially attractive for people who do not reside in them. The OECD defines them as instruments of harmful tax competition. Among the main characteristics of these places we find the strict protection of their financial information –like the bank secrecy–, the opacity of operations and the total exemption or a considerable amount of the taxes that individuals must pay.
Some people situate the origin of financial paradises in the sixties, when some small states became independent and took advantage of the conjuncture to offer certain fiscal benefits. It was not until the 1980s that some of these places became consolidated as an important destination for international capital flows. Others build theories about islands where pirates hid their booties of Spanish ship boardings, but this is an issue than could even be older. Some historians have revealed the existence of isolated islands that functioned in a similar way since the times of ancient Greece. Whatever their past is, these places occupy an important space in the present of the international economy as it is evidenced by recent scandals.
The establishment of companies in these territories is legal, as long as the founders declare where the money or legacies come from. The criminal act responds to the tax evasion that takes place through these companies. Sometimes, law firms, due to the prevailing secrecy, cannot or do not want to verify where this capital comes from. Therefore, these havens can become the ideal destination for the fortunes of criminals and delinquents.