© 2021 Copyright owned by one or more of the KPMG International entities. Because of the coronavirus crisis, the regulation and any new protective measures, such as access restrictions to EU funding, will only apply from 1 Oct. 2020. In addition to the proposed new methodology to identify high-risk third countries that pose a threat to Europe’s financial system, the commission adopted a new anti-money laundering blacklist. The new countries, which were added to the bloc's notorious blacklist on Thursday, include The Bahamas (which was removed from the EU's tax blacklist only in February), Barbados, Jamaica, Nicaragua and Panama. Developing countries without a financial centre that have made meaningful progress in delivering on their commitments with regard to the OECD Multilateral Convention on Mutual Administrative Assistance (criterion 1.3) are granted until August 31, 2020 to sign the Convention and until August 30, 2021 to ratify it. 0000002607 00000 n Saint Lucia is considered to have adopted sufficient amendments to its foreign source income exemption regime and has committed to address a remaining issue by August 31, 2020. Palau failed to implement any automatic exchange of financial information measures, including signing and ratifying the OECD Multilateral Convention on Mutual Administrative Assistance and has therefore been re-added to the blacklist. InSight Crime — The European Union’s latest money laundering blacklist included four Caribbean nations that have been deemed to be high-risk countries.The list was met by cries of unfairness from officials, but why were these countries added in the first place and what can they do to get off the list? A decision on inclusion/exclusion for several countries is expected from the EU in October. Over the course of 2018, most of the countries and territories on the blacklist engaged in constructive dialogue with the EU and made commitments to comply with the EU’s criteria. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. In addition, the Code of Conduct Group will continue to monitor the implementation of the country by country reporting minimum standard (CbCR) and will track jurisdictions that have foreign source income exemption regimes in place. The proposals, which were passed by the EU parliament by 587 votes to 50, called for jurisdictions with a zero tax rate policy to be automatically placed on the blacklist. <<938F73B0F7562C41A0AFB17E9B72A393>]/Prev 134466>> 19 30 The EU blacklist, first adopted on December 5, 2017, is part of the EU’s effort to clamp down on tax avoidance and harmful tax practices. The jurisdictions which were removed from the grey list are: Antigua and Barbuda, Armenia, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cabo Verde, Cook Islands, Curacao, Marshall Islands, Montenegro, Nauru, Niue, Saint Kitts and Nevis and Vietnam. The Commission, the executive arm of the EU, explained that it modified criteria for determining compliance of third countries, to “deliver a new, comprehensive framework to fight money laundering and terrorist financing. Black list (Annex I) Grey list (Annex II) 18 February 2020. On February 18, 2020 the Economic and Financial Affairs Council of the EU (ECOFIN) adopted a revised EU blacklist of non-cooperative jurisdictions for tax purposes. Since the first EU blacklist was published in December 2017, it has been revised twelve times. 0 The Cayman Islands does not have appropriate measures in place relating to economic substance requirements for collective investment vehicles. Consequently, Aruba, Barbados, Belize, Bermuda, Dominica, Fiji, the Marshall Islands, Oman, the UAE and Vanuatu were added to the blacklist on March 19, 2019. (The situation in the European Union and its Member States is covered in the section below.) The list was put together by EU’s Code of Conduct Group (Business Taxation) team, who are responsible for assessing the tax measures for business taxation and overseeing the provision of information on those measures. Uganda was already on the list which now has a total of 22 countries. This change is intended to allow sufficient time for Member States to amend defensive measures against non-cooperative jurisdictions in their domestic law. While three of the jurisdictions (the Cayman Islands, Palau and Seychelles) were added to the blacklist, sixteen jurisdictions were found to have fulfilled their commitments within the 2019 deadline. The draft legislation states that the government may propose the list of affected countries as from 1 January 2021 to parliament, based on the latest version of the EU blacklist on the proposal date. Share. Failure to do so will lead to inclusion on the blacklist. The EU blacklist will become applicable as from 1 October 2020. The Council of the European Union. The first so-called EU blacklist was adopted by the EU Council in 2017 and has been revised several times. The EU Blacklist and Local Country Blacklists The EU Blacklist As outlined in our previous alert (19 February 2020), the Cayman Islands was added to the EU Blacklist earlier this year as a result of a failure to introduce appropriate measures aimed at ensuring minimum levels of economic substance for collective investment vehicles (“CIVs”). Moving back to October 2020, you surely remember the surprising delisting of Cayman Islands from the well-known EU tax blacklist of non-cooperative companies. The EU blacklist will become applicable as from 1 October 2020. On the 18th of February 2020, the EU Black List was updated by the Council. Please take a moment to review these changes. 0000001541 00000 n Following this latest revision, as at February 18, 2020, the EU blacklist comprises the following twelve jurisdictions: American Samoa, the Cayman Islands, Fiji, Guam, Oman, Palau, Panama, Samoa, Seychelles, Trinidad and Tobago, the US Virgin Islands and Vanuatu. 0000005648 00000 n The UAE and the Marshall Islands were removed from the list on October 10, 2019 while Belize was also removed on November 8, 2019. The EU has approved a plan to impose financial sanctions on countries or jurisdictions on the bloc's tax haven blacklist by the end of 2020. xref Australia and Morocco were granted until the end of 2020 to amend or abolish their harmful tax regimes. 48 0 obj <>stream The next update is scheduled for October 2020. Since the last time you logged in our privacy statement has been updated. 0000032532 00000 n In December 2019, the Council produced guidance on coordination of national defensive measures in the tax area towards non-cooperative jurisdictions, inviting member states to apply legislative defensive measure as of January 1, 2021 (see Euro Tax Flash issue 419 for details). The four countries are Botswana, Ghana, Mauritius and Zimbabwe. 0000001456 00000 n 0000016370 00000 n Should you have any queries, please do not hesitate to contact KPMG’s EU Tax Centre (mailto:[email protected]), or, as appropriate, your local KPMG tax advisor. The following countries are affected: Bosnia and Herzegovina, Botswana, Eswatini, Jordan, Maldives, Mongolia, Namibia and Thailand. Cayman Islands, Palau and Seychelles were moved from the grey list to the black list. The European Commission added four African countries to a new list of countries that pose financial risks to the European Union due to anti-money laundering and terrorism financing shortfalls. The Council re-iterated its conclusion from its meeting in December 2019 that updates to the black and grey lists will be limited to maximum twice per year going-forward. Get the latest KPMG thought leadership directly to your individual personalized dashboard. 0000011973 00000 n Being a small economy, Botswana has limited investment opportunities, which compelled the country to invest billions of Pula in countries like the United Kingdom, Europe and the United States of America (USA) in pension funds money as well as foreign reserves. In total, nineteen jurisdictions were removed from the grey list of non-cooperative jurisdictions since it was last published in December 2019. 19 0 obj <> endobj The EU is committed to providing technical assistance to the listed countries to remedy the identified strategic deficiencies. On February 18, 2020, EU Finance Ministers agreed to add the Cayman Islands, Palau, Panama and Seychelles to the blacklist, after making assessments of the implementation commitments made by each jurisdiction at the end of 2018. 0000000896 00000 n 0000001425 00000 n Also known informally as the EU Council, it is where national ministers from each EU country meet to adopt laws and coordinate policies. The EU’s decision to blacklist Mauritius for money laundering and terrorist financing sent a shockwave across the island. Find out how KPMG's expertise can help you and your company. You will not receive KPMG subscription messages until you agree to the new policy. 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