EU updated blacklist of offshore jurisdictions

The Council of European Union recently updated the EU blacklist of non-cooperative jurisdictions. This list is a very important benchmark for all offshore centres due to recognition as reliable of the jurisdiction in question by the EU member states.

The EU blacklist consists with two lists namely the Annex I or the “Blacklist” and Annex II  the “Graylist”.

Offshore jurisdictions that according to 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 to the Blacklist. The jurisdictions that are not enough compliant with those requirements, but made some progress, can be included into the Gray list.

Currently Blacklisted jurisdictions

After the latest review on 22^nd 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 the bank transfers in Euro.

If your company registered in the EU blacklisted jurisdiction

Astra Trust recommends to consider  re-domiciliation of their offshore companies or corporate restructuring for those beneficial owners whose companies are on the list and has any connection with the EU. The particularly popular offshore jurisdictions affected by inclusion into the Annex I are Anguilla, Dominica, Panama, Seychelles and Vanuatu.

We will continue to inform you on the further changes into the blacklist. The EU updates it twice a year, giving the offshore jurisdictions some time to make necessary amendments into 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.