Oct. 11 (UPI) -- The European Union removed Switzerland, the United Arab Emirates and four other nations from its lists of countries it says act as tax havens, attracting criticism from anti-poverty organizations.
The EU made the announcement Thursday, stating the countries had passed necessary reforms to comply with the EU's tax good governance principles.
Albania, Costa Rica, Mauritius and Serbia were also removed from the tax haven lists, it said.
The EU established the grey and black list system on Dec. 5, 2017, in order to promote good governance to prevent tax avoidance, fraud and evasion, it said.
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When the system was created, the grey list contained 47 nations and jurisdictions to be monitored while the black list had 17, including the UAE, for reasons such as having harmful preferential tax regimes and facilitating offshore facilities and arrangements to attract profit.
The black list, which consists of regions that do not comply with at least one of the EU's three good governance principles, is now down to nine nations and jurisdictions, including American Samoa, Belize, Fiji, Guam, Oman, Samoa, Trinidad and Tobago, the U.S. Virgin Islands and Vanuatu.
The grey list, which contains countries that do not comply with at least one of the three principles but vowed to reform, has been shortened to 32.
The Marshall Islands was the only country this review to be moved from the black to grey list.
Switzerland, who had been on the grey list since it was founded, said it was erased from the list of tax havens after passing tax reform to bring its system up to international standards.
"The law introduces internationally accepted tax relief measures, such as a patent box, thereby ensuring that Switzerland remains an attractive business location," Swiss' State Secretariat for International Finance said in a statement.
However, Oxfam, a confederation of 20 charity organizations focused on global poverty, condemned the EU decision to remove Mauritius and Switzerland from the list as they still offer great incentives to companies not wanting to pay taxes.
"Today, the EU has whitewashed two of the world's most harmful tax havens," said Chiara Putaturo, Oxfam's EU policy advisor on tax and inequalities. "Despite recent reforms, both countries will continue to offer sweet treats to tax-dodging companies, like very low tax rates, accelerating the race to the bottom on corporate taxation."
She said that this deprives countries of money needed to put children in school and other necessities, and Switzerland, despite its tax reform, still offers large incentives to companies.
"The EU must strengthen the criteria for its tax haven blacklist to make it an effective tool in the fight against tax dodging," she said. "It should also support the ongoing global reform discussions that can help end the era of tax havens, including an ambitious minimum effective tax rate."
