Vanuatu’s listing by the Financial Action Task Force
March 3, 2020 – Question for written answer E-001251/2020
to the Vice-President of the Commission / High Representative of the Union for Foreign Affairs and Security Policy – Rule 138 – Thierry Mariani (ID)
The Financial Action Task Force (FATF) – a body bringing together more than 190 countries and organisations – keeps a grey list of high-risk, non-cooperative jurisdictions. The listed countries potentially face a whole host of bans, and administrative and financial obstacles.
The EU also keeps a list of countries whose tax authorities it deems non-cooperative on the grounds that they ‘have refused to engage with the EU or to address tax good governance shortcomings’.
Vanuatu is still listed by the EU, despite the fact that, in June 2018, the FATF praised the significant progress that the country had made in its efforts to counter money laundering and terrorism financing (i.e. its ‘AML/CFT regime’), and noted that Vanuatu’s legal and regulatory framework was conducive to fulfilment of its action plan commitments to remedy the strategic shortcomings identified in February 2016. It would therefore no longer be monitoring Vanuatu for AML/CFT compliance, but the country would continue to improve its AML/CFT regime in cooperation with the Asia/Pacific group.
The EU’s delay in updating its list is causing very serious problems in Vanuatu. When will the official documents be updated?
Answer given by Executive Vice-President Dombrovskis on behalf of the European Commission
May 5, 2020
The EU regards fight against tax avoidance as well as money laundering and terrorist financing as high priority.
The EU list of non-cooperative tax jurisdictions and the EU list of high-risk countries for money laundering and terrorism financing (AML/CFT) are two separate processes with different criteria and methodologies.
Vanuatu remains on the EU tax list, as it has not fulfilled the commitments it made to address important deficiencies in its tax system. The Commission continues to offer Vanuatu technical assistance and support to comply with the necessary tax good governance criteria.
Under Article 9 of the Anti-Money Laundering Directive1, the Commission has a legal obligation to identify high-risk third countries with strategic deficiencies in their AML/CFT regime. In 2016, the Commission reviewed relevant information, notably from the Financial Action Task Force (FATF), and concluded that Vanuatu has strategic AML/CFT deficiencies, which consequently led to its inclusion in the EU AML list of high-risk third countries2. The Commission monitors Vanuatu’s progress to assess whether it meets the requirements set in the AML Directive.
The Commission closely follows the work of the FATF and will take into account, as appropriate, its relevant reports. It includes the 2018 decision to no longer subject Vanuatu to monitoring under its ongoing global AML/CFT compliance process. The Commission also takes into account relevant information from other international organisations, such as the OECD’s Global Forum peer review report3, notably on beneficial ownership information transparency, a criterion defined in Article 9 of the AML Directive.
The Commission is currently working on amending Regulation (EU) 2016/1675 and on a refined methodology for identifying high-risk third countries and will adopt a Delegated Regulation updating the EU list of high-risk third countries.
- Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (Text with EEA relevance). OJ L 141, 5.6.2015, p. 73‐117.
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02015L0849-20180709&from=EN ↩︎ - See Annex of the Delegated Regulation (EU) 1675/2016 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2016.254.01.0001.01.ENG ↩︎
- Organisation for Economic Cooperation and Development (OECD)’s Global Forum on Transparency and Exchange of Information for Tax Purposes peer review report on Vanuatu of 30 July 2019. https://www.oecd.org/countries/vanuatu/global-forum-on-transparency-and-exchange-of-information-for-tax-purposes-vanuatu-2019-second-round-dd70b774-en.htm ↩︎
