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Federica Casano about EU tax haven blacklist

One of the EU's most heralded weapons against tax avoidance and evasion falls prey to political whims, is applied arbitrarily, and lacks transparency, according to tax observers and lawmakers.

Federica Casano

The EU blacklist of noncooperative jurisdictions for tax purposes — a soft-law tool used to name and shame non-EU jurisdictions with laws and policies that facilitate tax avoidance — faces criticism from members of the European Parliament, scholars, and other tax observers, who allege that the mechanism falls short of curbing the tax avoidance and evasion that drains the EU's coffers.

Researcher and PhD candidate Federica Casano is studying the blacklist's effectiveness in tackling harmful tax competition and tax avoidance under the supervision of harmful tax competition scholar Martijn Nouwen. She agreed that the EU's practice of holding low-income and developing nations to standards that they did not create — such as the two-pillar plan to modernise corporate tax rules under action 1 of the OECD's base erosion and profit-shifting project — is unfair. Many blacklisted countries are not part of the inclusive framework on BEPS, she noted, and thus do not have any input on international standards to combat tax avoidance.

The possibility that the blacklist could target EU countries has long prompted worries among some Member States. To Casano, though, the reason Member States are excluded from the blacklist is as simple as it is intractable. 'To approve the list, you need unanimity,' she said. 'You would never get that from including EU Member States on the list.'

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