The European Union (EU) finance ministers have adopted a blacklist of 17 countries for refusing to cooperate with its crackdown on tax evasion.
The countries listed are American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macau, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia and the United Arab Emirates.
The President of Panama Juan Carlos Varela said the country was “not in any way a tax haven.”
EU tax commissioner Pierre Moscovici said the blacklist represented "substantial progress,” adding, "Its very existence is an important step forward. But because it is the first EU list, it remains an insufficient response to the scale of tax evasion worldwide."
Forty-seven other nations were included in a public “gray” list of countries which are currently not compliant with EU standards but have committed to change their tax rules. The lists followed the recent leaking of the Panama Papers and the Paradise Papers.
To determine whether a country is a "non-cooperative jurisdiction" the EU index measures the transparency of its tax regime and tax rates. It also checks whether the tax system encourages multinationals to unfairly shift profits to low tax regimes, avoiding higher duties in other states.
According to French Finance Minister Bruno Le Maire, the blacklisted countries could lose access to EU funds. Other possible countermeasures will be decided in the coming weeks, he said.
Last month, Le Maire said tax havens should be blocked from any right to seek help from global financial institutions like the International Monetary Bank or the World Bank.
Some countries such as Luxembourg and Malta have opposed stricter sanctions while EU Commission Vice-President Valdis Dombrovskis said: “stronger countermeasures would have been preferable.”