18th February 2020, EU finance ministers added the Cayman Islands, Palau, Seychelles and Panama to the EU Blacklist of Tax Havens for failure to comply with EU standards of anti-tax avoidance. They join Fiji, Oman, Belize Trinidad and Tobago, Samoa, Vanuatu, American Samoa, Guam, and the US Virgin Islands. The Cayman Islands, Seychelles, Palau and Panama have not implemented the necessary tax reforms to be in line with EU standards. This week the EU27 deemed the Cayman Islands’ recent changes in legislation to not meet EU standards.
The addition of the British Overseas Territory of the Cayman Islands stood out in light of the UK's recent Brexit decision. In particular, Brussels is concerned with the enabling of structures that attract profits with the aim of benefiting from zero or low tax in their territories without maintaining the appropriate economic substance in those territories. The Financial Times reported that the Cayman Islands is “the first UK overseas territory to be named and shamed by Brussels for failing to crack down on tax abuse”.