A European Union blacklist of 17 countries that “fail to meet agreed good governance standards” includes both Bahrain and the UAE.
Neither country had committed to the minimum standards of the base erosion and profit shifting (BEPS) framework, claimed the Council of the EU, in its conclusions
. Bahrain was additionally accused of not signing and ratifying an OECD convention on mutual administrative assistance and of not covering all EU member states for automatic exchange of information.
Other countries on the blacklist include Panama, Barbados and Macau. An additional 47 countries including Oman, Qatar and Jordan were named as having made some progress or commitment to meeting the EU's standards, although more was required.
“The adoption of the first ever EU blacklist of tax havens marks a key victory for transparency and fairness,” said Pierre Moscovici, European commissioner for economic and financial affairs, taxation and customs. “But the process does not stop here. We must intensify the pressure on listed countries to change their ways.”
Moscovici called for sanctions on blacklisted jurisdictions. European member states have yet to agree what sanctions would be appropriate, however, which means that in the short term there will be none.
Bahrain reportedly promised to take measures to remove itself from the blacklist while the UAE government said it was “surprised and disappointed” to be included.
“We have committed to a reform process which will be finalised by October 2018, and we are absolutely confident this will ensure the UAE is swiftly removed from the list,” said Younis Haji Al-Khouri, undersecretary of the Ministry of Finance, in a statement.
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