The Cayman Islands should join the European 'black' list of uncooperative jurisdictions for tax purposes, a European source confirmed to EUROPE on Thursday 13 February.
The information was first revealed by the Financial Times, which reported that the British territory, which in 2017 was placed on the 'grey' list of jurisdictions that had made commitments (see EUROPE 11919/1), had not adopted adequate legislation to address EU concerns regarding the establishment of offshore structures.
In a statement issued on Wednesday, the Cayman Islands Government reiterated that it is the European Finance Ministers who will have the final say and says that it has not received any formal notification at this stage.
On Wednesday evening, Member States' ambassadors to the EU (Coreper) agreed on a revised 'black' list - "with reservations pending" (see EUROPE 12424/16) for certain jurisdictions - to be formally adopted on 18 February at the Ecofin Council.
"We believe that we have introduced the appropriate legislative changes to enhance our regulatory framework, in line with the EU's requests", it defends.
While it is tempting to link this decision to the UK's departure from the EU, it should be remembered that the Cayman Islands is not the first British territory to be blacklisted. Bermuda suffered the same fate before being transferred to the 'grey' list last May (see EUROPE 12257/3).
However, as the Financial Times points out, this decision could indeed complicate the negotiations between Brussels and London on the future relationship (see EUROPE 12417/1), which is supposed to ensure fair conditions of competition (‘level playing field’).
In addition to the Cayman Islands, Panama, Seychelles and Palau are also expected to join the 'black' list, according to AFP, while Turkey is expected to escape the list for the time being and remain on the 'grey' list. (Original version in French by Marion Fontana)