The Cayman Islands, a British overseas territory, is to be put on an EU blacklist of tax havens, less than two weeks after the UK’s withdrawal from the bloc.
In a clear indication of the country’s loss of influence on the EU’s decision-making, the bloc’s 27 finance ministers are expected to sign off on the decision next week.
The EU’s blacklist is an attempt to clamp down on the estimated £506bn lost to aggressive tax avoidance every year but member states are not “screened” in the process of drawing up the blacklist.
Territories linked to member states have also avoided the blacklist and the UK had heavily lobbied to protect its overseas territories from such scrutiny in the past.
On Wednesday, EU ambassadors judged that the islands in the western Caribbean Sea are not effectively cooperating with Brussels on financial transparency, the Financial Times reported.
The Cayman Islands will join Belize, Fiji, Oman, Samoa, Trinidad and Tobago, Vanuatu and the three US territories of American Samoa, Guam, and the US Virgin Islands, on the “non-cooperative” list.
Last year the UK and its “corporate tax haven network” was judged to be by far the world’s greatest enabler of corporate tax avoidance by the Tax Justice Network.
British territories and dependencies made up four of the 10 places said to have done the most to “proliferate corporate tax avoidance” on the corporate tax haven index.
