France wants EU to cut international funding of
'Paradise Papers' countries
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[November 07, 2017]
By Francesco Guarascio and Lily Cusack
BRUSSELS (Reuters) - France on Tuesday
asked its European partners to agree on curbing international funding of
states that provide tax shelters, following the huge leak of documents
showing the tax affairs of the rich and famous.
Finance Minister Bruno Le Maire, ahead of a meeting of European Union
peers, called for a "credible" blacklist to be drawn up of tax havens
and for sanctions for those who do not cooperate.
Talks on a blacklist, initially planned for December, were brought
forward by the EU ministers after media reports citing the "Paradise
Papers", a trove of financial reports leaked mostly from Appleby, a
prominent offshore law firm.
Though tax avoidance is legal in many circumstances, the papers have
dragged in famous names, including Britain's Queen Elizabeth.
The documents were obtained by Germany's Sueddeutsche Zeitung newspaper
and shared with the International Consortium of Investigative
Journalists (ICIJ) and some media outlets. Reuters has not independently
verified them.
Le Maire called for the EU to look at the funding of countries that
provide shelter.
"We are thinking, for instance, about the possibility of cutting
financial support of the international institutions like the IMF
(International Monetary Fund) or the World Bank on the states that would
not provide the needed information on tax," he told reporters before the
meeting of EU finance ministers in Brussels.
He said he would present these proposals to his EU counterparts on
Tuesday.
The debate is part of a new EU effort to contrast tax havens, as
ministers consider setting up an EU blacklist of offshore jurisdictions
that do not cooperate on tax matters.
The EU has been working for more than a year on the common blacklist
that would replace largely toothless national lists. The European
Commission, the EU's executive arm, has called for sanctions for
countries in the list, without giving details on the possible measures.
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French Finance Minister Bruno Le Maire watis for the start of the
questions to the government session at the National Assembly in
Paris, France, October 24, 2017. REUTERS/Charles Platiau
But some states remain cautious about the project.
Luxembourg's Finance Minister Pierre Gramegna said on Tuesday that blacklisting
countries "is always a difficult exercise" and stressed all EU countries needed
to agree on the plan. Other EU tax reforms have collapsed in past years because
of opposition from some member states.
BLACKLIST
Le Maire said an existing list of tax havens compiled by the Organisation for
Economic Cooperation and Development (OECD), a global group of mostly rich
nations, was not enough to counter tax avoidance.
The OECD list currently includes only Trinidad and Tobago. By contrast, the
European Commission is currently screening about 50 countries that may not
respect EU criteria on tax cooperation.
The final number is likely to be much lower than that, if an EU blacklist were
agreed, officials said.
Many of Britain's Crown Dependencies and Overseas Territories, such as Guernsey
and Bermuda, were subject to an initial screening by the EU Commission of 81
countries and jurisdictions deemed at risk of breeching EU criteria on tax
transparency.
The inclusion of these territories in an EU blacklist may further complicate
relations with Britain, as the country negotiates its divorce from the EU.
(Reporting by Francesco Guarascio and Lily Cusack; Additional reporting by
Philip Blenkinsop Editing by Jeremy Gaunt)
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