A European Response to Major Tax Scandals

Following the revelations of the LuxLeaks (2014), Panama Papers (2016), Paradise Papers (2017), and later the Pandora Papers (2021) scandals, the European Union significantly strengthened its policy against fraud, tax evasion, and harmful tax practices.

One of the main measures adopted was the creation, in December 2017, of the European list of tax havens, now updated twice a year by the Council of the European Union.

This list is today a central instrument of European policy on international tax governance and excessively aggressive international tax optimization.

A List Regularly Updated

Unlike a fixed list, the European list is continuously evolving.

Jurisdictions can be added, removed, or placed under monitoring depending on the commitments they make and the reforms actually implemented.

Following the February 2026 revision, the list includes ten jurisdictions:

• American Samoa;
• Anguilla;
• Guam;
• Palau;
• Panama;
• Russia;
• the Turks and Caicos Islands;
• the U.S. Virgin Islands;
• Vanuatu;
• Vietnam.

This regular updating illustrates the European Union’s determination to maintain constant diplomatic pressure on jurisdictions that fail to meet international tax transparency standards.

The Criteria Used by the European Union

The methodology adopted by the Council of the European Union continues to rest on three main criteria.

Tax transparency

Jurisdictions must comply with international standards for the exchange of tax information, particularly the automatic exchange of information developed under the OECD framework.

Fair taxation

The European Union checks for the absence of tax regimes considered harmful or that artificially favor the shifting of profits without genuine economic activity.

Implementation of international standards

Jurisdictions must apply the recommendations arising from the OECD’s Base Erosion and Profit Shifting (BEPS) project and adhere to international principles aimed at combating base erosion and artificial profit shifting.

A Procedure Based on Dialogue

Before any jurisdiction is added to the list, it is invited to engage in dialogue with European authorities.

Jurisdictions may make reform commitments, which are subject to regular monitoring. When these commitments are honored, the jurisdiction may be removed from the list or placed on a commitment-tracking document (“Annex II”).

This mechanism explains the frequent changes to the European list.

A Mechanism That Continues to Draw Criticism, as It Targets Only States Outside the European Union

While the creation of this list represents a significant step forward in international tax cooperation, its effectiveness remains a subject of ongoing debate.

The main criticism concerns its scope: only states and territories located outside the European Union can be included.

Yet several member states—particularly Ireland, Luxembourg, Malta, the Netherlands, and Cyprus—continue to be regularly cited in economic studies and NGO reports for certain particularly attractive tax arrangements, without being eligible for inclusion on this list.

This situation fuels a recurring debate about the coherence of the European mechanism.

A Tool Now Integrated into European Tax Strategy

Since its creation, the European list of non-cooperative tax jurisdictions has formed part of a much broader strategy that includes:

• the strengthening of European directives on administrative cooperation (DAC);
• transparency obligations imposed on multinational companies;
• the OECD’s work on the BEPS projects;
• the progressive implementation of the 15% global minimum tax (Pillar Two).

The European blacklist is therefore no longer intended to function as an isolated instrument. It is now part of a coherent set of measures designed to strengthen international tax transparency and combat harmful tax practices.

A Mechanism Set to Continue Evolving

Nearly ten years after its creation, the European list has become a permanent tool of international tax governance. While its effectiveness remains debated, it exerts real pressure on the jurisdictions concerned and encourages them to strengthen their cooperation with tax authorities.

Its future evolution will depend on new international standards, the full implementation of the OECD’s Pillar Two, and future European initiatives to combat tax fraud and evasion.