EU updated blacklist of offshore jurisdictions
The Council of the European Union recently updated the EU blacklist of non-cooperative jurisdictions. This list is a very important benchmark for all offshore centres due to the recognition as reliable of the jurisdiction in question by the EU member states.
The EU blacklist consists of two lists, namely Annex I or the “Blacklist,” and Annex II, the “Graylist”.
Offshore jurisdictions that, according to the EU do not match the principles of good governance in tax transparency, substance requirements, sufficient taxation, or generally do not comply with the OECD’s BEPS initiatives shall be included on the Blacklist. The jurisdictions that are not compliant enough with those requirements, but made some progress, can be included in the Gray list.
Currently Blacklisted jurisdictions
After the latest review on 22nd of February 2021, the EU has excluded Barbados from the Annex I, and included Dominica instead. At present, the EU Blacklist consists of 12 jurisdictions, namely:
- American Samoa;
- Anguilla;
- Dominica;
- Fiji;
- Guam;
- Palau;
- Panama;
- Samoa;
- Seychelles;
- Trinidad and Tobago;
- the US Virgin Islands; and
- Vanuatu
The companies incorporated according to the laws of blacklisted jurisdictions cannot normally transact within the European Union or with other companies incorporated in the EU. Companies from the updated EU blacklist experience serious difficulties with bank transfers in Euro.
If your company is registered in the EU blacklisted jurisdiction
Astra Trust recommends considering re-domiciliation of their offshore companies or corporate restructuring for those beneficial owners whose companies are on the list and have any connection with the EU. The particularly popular offshore jurisdictions affected by inclusion in Annex I are Anguilla, Dominica, Panama, Seychelles, and Vanuatu.
We will continue to inform you of the further changes to the blacklist. The EU updates it twice a year, giving the offshore jurisdictions some time to make necessary amendments to their legislations and to show progress in compliance with modern BEPS requirements, CRS, and other arrangements.
If you have any questions or your company is affected by the changes, please do not hesitate to contact us for more information and a free initial consultation.
