KPMG refers to the global organization or to one or more of the member firms of KPMG International Limited (“KPMG International”), each of which is a separate legal entity. The current FATF grey list, issued on 21 February 2020, includes the following countries: Albania, the Bahamas, Barbados, Botswana, Cambodia, Ghana, Iceland, Jamaica, Mauritius, Mongolia, Myanmar, Nicaragua, Pakistan, Panama, Syria, Uganda, Yemen and Zimbabwe. It is extremely likely that blacklisted countries will be subject to economic sanctions and other prohibitive measures by FATF member states and other international organizations. It also found Albania, Costa Rica, Mauritius, Serbia and Switzerland to be compliant with all commitments on tax cooperation. 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. The deadline for implementing the commitments was the end of 2019 and the Code of Conduct Group’s assessment was that: 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. © 2020 Guardian News & Media Limited or its affiliated companies. “This list represents substantial progress. 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. In particular, concerning the situation of the United States, the Council agreed that its network of exchange of information arrangements is sufficiently broad to cover all EU Member States, effectively allowing both exchange of information on request and automatic exchange of information in line with international standards and the respective needs of both sides . The majority of the commitments had a deadline of the end of 2018 and their enactment into national law was carefully monitored at a technical level by the Code of Conduct Group on business taxation until the beginning of 2019. Seychelles was moved from the grey list to the blacklist, for failure to address issues in relation to existing harmful preferential tax regimes. It has also incorporated the FATCA and CRS standards in its local legislations and ratified the OECD’s Multilateral Instrument (“MLI”). For those that are on today’s list, we hope that this increased scrutiny and the potential for counter-measures will lead them to reconsider their approach.”. The. In May 2009, the Committee on Fiscal Affairs decided to remove all three remaining jurisdictions (Andorra, the Principality of Liechtenstein and the Principality of Monaco) from the list of uncooperative tax havens in the light of their commitments to implement the OECD standards of transparency and effective exchange of information and the timetable they set for the implementation. • Follow Guardian Business on Twitter at @BusinessDesk, or sign up to the daily Business Today email here. Read more about the role of the European Council, October 2019 note to Council on the update to the EU list of non-cooperative jurisdiction on business taxation, Policy - EU list of non-cooperative jurisdictions, send your request to the public information service. 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 current FATF blacklist includes two countries: North Korea and Iran. “Urgent tax reforms are also needed inside the EU. The UAE and the Marshall Islands have both passed the necessary reforms to implement the commitments they had made to improve by the end of 2018 their tax policy framework by introducing economic substance requirements. And let us keep up the pressure together, on the Member States and on third countries.”. The blacklist is a living document and is issued and updated periodically in official FATF reports. (FSRBs) to report on the progress they are making towards their AML/CFT goals. We must not accept unfair tax competition and opacity.”. Since the last time you logged in our privacy statement has been updated. While grey-list classification is not as negative as the blacklist, countries on the list may still face economic sanctions from institutions like the IMF and the World Bank and experience adverse effects on trade. You will not receive KPMG subscription messages until you agree to the new policy. Please take a moment to review these changes. She said: “It is disturbing to see mostly small countries on the EU blacklist, while the most notorious tax havens got away on the ‘grey list’. Between 2000 and April 2002, 31 jurisdictions made formal commitments to implement the OECD’s standards of transparency and exchange of information.. Our AML tools allow you to automate screening against FATF Blacklists and Greylists to ensure your business does not onboard customers with a financial crime background. Out of the ninety-two jurisdictions initially chosen for screening, seventeen jurisdictions were placed on the blacklist in December 2017. The countries that have taken commitments must change their tax laws as soon as possible. The Financial Action Task Force (FATF) blacklist (sometimes referred to as the OECD blacklist) is a list of countries that the intragovernmental organization considers non-cooperative in the global effort to combat money laundering and the financing of terrorism. This is clearly working, as over 40 jurisdictions have made significant commitments to reform as part of this process. The UK Treasury said: “Today’s publication marks an important step in our ongoing efforts to tackle tax avoidance and evasion internationally. The next update is scheduled for October 2020. The ECOFIN Council of 12 March 2019 had noted with concern the replacement of harmful preferential tax regimes by such regimes of similar effect in certain jurisdictions. To screen accurately, firms should ensure that their customer due diligence measures verify their customer’s residence in, or business with, listed countries and that their transaction monitoring measures are able to scrutinize the size, frequency and pattern of transactions involving high-risk countries to establish whether criminal activity such as money laundering is taking place. It was adopted for the first time in 2017 as a response to tax avoidance in the EU, screening 92 countries. You will not continue to receive KPMG subscriptions until you accept the changes. Given the increased risk of money laundering and terror financing that blacklisted and greylisted countries present, most financial authorities require firms to have suitable risk-based AML/CFT protections in place to mitigate that threat. Palau had previously been moved from the blacklist to the grey list, but was re-instated to the blacklist due to its failure to fulfill its commitments within the agreed deadline. Our privacy policy has been updated since the last time you logged in. The Council of the EU and the European Council work on a wide range of issues affecting the interests of the EU and its citizens. The Cayman Islands does not have appropriate measures in place relating to economic substance requirements for collective investment vehicles. Accordingly, firms must screen customers against the FATF blacklist and grey list during onboarding and throughout their business relationship and monitor their transactions on an ongoing basis. Nauru and Vanuatu made their commitments in 2003 and Liberia and the Marshall Islands in 2007. {{vm.newUser1}} I also call on ministers to agree quickly on dissuasive national sanctions. Press officers speak 'off the record' about the Council's activities. {{ vm.siteSelectorList.flyout.cell1.heading }}, {{ vm.siteSelectorList.flyout.cell1.global.countryLocale }}, {{ vm.flyout.cell1.viewAll.newTabAllow }}. 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. Since the first EU blacklist was published in December 2017, it has been revised twelve times. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. By issuing the list, the FATF hopes to encourage countries to improve their regulatory regimes and establish a global set of AML/CFT standards and norms. Consequently, the UAE is now compliant with all commitments on tax cooperation and can be delisted. Namibia was the only country on the blacklist who made no effort at all to correspond with the EU’s tax experts on the European council’s code of conduct (COC) group when issues were raised with the country’s government. Member firms of the KPMG network of independent firms are affiliated with KPMG International. Find out how KPMG's expertise can help you and your company. In addition to its blacklist, the FATF also issues a grey list, officially referred to as. In order to do this, I expect the member states to set a precise timetable: in three months’ time, we will have to examine the situation of the countries affected by hurricanes. On May 17, 2019, Bermuda, Aruba, and Barbados were removed from the blacklist, followed by Dominica on June 14, 2019. Like the blacklist, countries on the FATF grey list represent a much higher risk of money laundering and terrorism financing but have formally committed to working with the FATF to develop action plans that will address their AML/CFT deficiencies. {{vm.newUser4}}. Organisation for Economic Co-operation and Development (OECD), © Register now and set up your personalized dashboard around {tag_name} and all the other topics that interest you. 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. ” Also, “Mauritius has always adhered to international standards of good governance, transparency, and taxation.” As a reminder, the European Union (EU) and the Organization for Economic Cooperation and Development (OECD) recently confirmed that Mauritius' tax systems meet the required criteria. The work on the EU list of non-cooperative jurisdictions is a dynamic process. It also found Albania, Costa Rica, Mauritius, Serbia and Switzerland to be compliant with all commitments on tax cooperation. You can get in contact to arrange a visit, ask questions about the work of both institutions, and request a document, among other services. The Council will continue to regularly review and update the list in 2019, whilst it has requested a more stable process as from 2020 (two updates per year). Save my name, and email in this browser for the next time I comment. The grey list is updated regularly as new countries are added or as countries that complete their action plans are removed. The press office holds press events, offers audiovisual coverage of major events and provides facilities for journalists. Consequently, Aruba, Barbados, Belize, Bermuda, Dominica, Fiji, the Marshall Islands, Oman, the UAE and Vanuatu were added to the blacklist on March 19, 2019. Its very existence is an important step forward. The list is intended to serve not only as a way of negatively highlighting these countries on the world stage, but as a warning of the high money laundering and terror financing risk that they present.