Tunisia is seeking to persuade the EU to take it off a tax haven blacklist as countries around the world deploy geopolitical arguments against Europe’s crackdown.
President Beji Caid Sebsi has said friendly EU states led by France are helping Tunisia to fight its inclusion on the list. Mr Sebsi said Tunisia’s inclusion was “unjust” and undermined its efforts to transform itself into a “21st-century state”.
Critics argue that Tunisia’s designation as one of 17 “non-co-operative” territories in December sits uncomfortably with European support for the north African state’s efforts to fight terrorism, attract foreign investment and deal with the fallout from turmoil in neighbouring Libya.
Other countries on the list, such as the United Arab Emirates and South Korea, are also strategically and economically important for the bloc.
“Punishing countries like Tunisia hardly speaks of a well thought-out neighbourhood policy in Brussels,” said Francis Ghilès, an associate senior researcher at the Barcelona Centre for International Affairs, a think-tank.
Mr Ghilès joined Tunisian business and finance figures and former European ministers to write to the Financial Times in December, accusing the EU of misunderstanding Tunisia’s policy and endangering the bloc’s efforts to foster the country’s democracy.
One senior EU diplomat sympathetic to Tunisia said the country needed to be taken off the list before President Emmanuel Macron of France visits in February. Tunisia plans to propose measures ahead of an EU finance ministers’ meeting on January 23 to address the bloc’s concerns about its tax regimes for exports and financial services.
The diplomat said Tunis’s poor management of deadlines was to blame for the blacklisting. Under EU rules, Tunisia’s special tax regimes for exports and financial services qualified as a harmful preferential tax regime while its offer of reform arrived too late to move it to the bloc’s less consequential “grey list”.
The senior diplomat said the EU could have had “more political sense” and taken the extra time to consider the offer. But he added that reform was needed and said Tunisia’s quick removal to the grey list could provide “another positive signal to attract foreign investors”.
Blacklisting stops countries from acting as intermediaries in transfers of official EU funds, although it does not halt direct aid. EU finance ministers will discuss other countermeasures next year.
Several other countries are also seeking to persuade the ministers to rethink their designation as tax havens.
South Korea has reacted with anger to its blacklisting over its special economic zones, which it started discussing with the EU late in the classification process. Officials in Seoul said it would lobby to rescind its inclusion, which was “not in accordance with international standards” and could violate “taxation sovereignty”.
“The government plans to make diplomatic efforts to explain our stance through high-level talks with the EU or separate meetings with EU countries,” said Noh Kyu-duk of the ministry of foreign affairs.
The UAE, a western security partner and an export market for big-ticket European goods such as military hardware, expressed surprise at being on the list. It said it expected to have in place a process to meet EU requirements on exchanging tax-related information by October.
European officials insist the blacklist process is objective and aimed at rewarding reform. “The blacklist is made up of jurisdictions that did not engage in dialogue with the EU or did not make sufficient and timely commitments during their contacts with us,” said Pierre Moscovici, commissioner for tax.
“But I’m convinced that this should be a dynamic process. If the listed countries take the necessary steps, they should be taken off.”
The EU’s process has offered some concessions to countries facing difficult circumstances. The analysis excluded 48 of the least developed nations, while eight hurricane-affected jurisdictions including the US Virgin Islands and the British territories of Anguilla, the British Virgin Islands and the Turks and Caicos Islands, have extra time to respond. Developing nations have two years, rather than one, to implement promised changes.