The European Council Code of Conduct agreed on 23 January 2018 to remove eight (including Panama, South Korea and the UAE) of the original 17 jurisdictions listed in the inaugural EU tax haven blacklist published on 5 December 2017.

The countries have been moved from the EU blacklist - which includes jurisdictions that have failed to implement necessary measures to tackle tax fraud, evasion and aggressive tax-avoidance – to the “grey list”. The grey list is reserved for jurisdictions that are considered to be generally non-compliant with EU standards on tax transparency and cooperation, but have committed to making the changes necessary to meet those standards.

The commitments made by the eight jurisdictions moving from the blacklist to the grey list have not been made public, which is ironic given that transparency is one of the purposes of the EU lists, and calls into question the efficacy of a system where countries can move so easily from the blacklist to the grey list. Jurisdictions may similarly be moved from the grey list to the blacklist where previous commitments have not been honoured. The ease with which jurisdictions seem to be able to move between EU lists adds a layer of uncertainty for business when dealing in a jurisdiction that is on the grey list.