24/02/23

MARSHALL ISLANDS: Officials upset at EU tax blacklisting.

As published on rnz.co.nz, Friday 24 February, 2023.

The European Union has placed the Marshall Islands on its tax haven blacklist, surprising government officials in Majuro.

It is the second blacklisting for the Marshall Islands, which operates offshore corporate and ship registries, in six years.

The EU put the nation on its tax haven blacklist in late 2017 but removed the Republic in 2018.

The blacklisting signifies the EU's determination that the Marshall Islands is non-cooperative on tax matters. The move will likely continue until October, when the EU is scheduled to update the list.

"Marshall Islands facilitates offshore structures and arrangements aimed at attracting profits without real economic substance by failing to take all necessary actions to ensure the effective implementation of substance requirements," the EU said.

But Marshall Islands Minister of Finance Brenson Wase pushed back on the decision.

"The Marshall Islands has engaged in an open, transparent dialogue with the EU and made every effort to fully clarify, implement, follow up and monitor the implementation of its commitment to the EU," he said in a letter to the EU's Code of Conduct Group.

"We feel strongly that we are indeed a cooperative jurisdiction and hold the EU authorities and their process of engaging with us in high esteem."

The addition of the Marshall Islands and three other countries, including Russia, brings the EU blacklist to 16 countries and territories, including Pacific nations Palau, Guam, Fiji, American Samoa, Samoa and Vanuatu.

Wase requested the EU to reconsider the decision.