BRUSSELS (Reuters) - European Union finance ministers agreed on Friday to remove the Caribbean island countries of the Bahamas and Saint Kitts and Nevis from an EU list of tax havens.
The two countries had been included on the blacklist in March as their tax rules and practices were deemed not in line with EU standards.
After they committed to changes, EU ministers agreed to move them from the blacklist to a so-called grey list of jurisdictions with low tax transparency standards but aiming to become less opaque, an EU document shows.
Seven other jurisdictions remain on the blacklist. They are Namibia, Palau, Samoa, Trinidad and Tobago and the three U.S. territories of American Samoa, Guam and the U.S. Virgin Islands.
The EU blacklist was set up last December after revelations of widespread tax avoidance schemes used by corporations and wealthy individuals to lower their tax bills. It originally included 17 jurisdictions.
“Having fewer jurisdictions on the list is a measure of the success of the listing process”, said Vladislav Goranov, minister for finance of Bulgaria, which currently holds the EU presidency.
Fair tax groups and EU lawmakers have criticized the rapid shrinking of the list and the fact that renowned tax avoidance countries are not listed.
Blacklisted jurisdictions could face reputational damage and stricter controls on their financial transactions with the EU, although no sanctions have been agreed by member states yet.
Those who are on the grey list could be moved to the blacklist if they do not honor their commitments.
Reporting by Francesco Guarascio; editing by David Stamp