Financial Crime World

Fiji’s Addition to the EU Blacklist: Understanding the Background and Implications

Background

Fiji has been added to the European Union’s (EU) list of non-cooperative tax jurisdictions, marking a significant development for the country. However, this is not Fiji’s first time in the spotlight regarding financial regulations.

  • Fiji has not been featured on the Financial Action Task Force (FATF) blacklist in the past.
  • In contrast, it has recently faced scrutiny from the European Union (EU), which has added it to its list of non-cooperative tax jurisdictions.

EU Blacklist Criteria

The EU assesses third countries against three key criteria when determining whether they will be included on the blacklist:

1. Transparency: Automatic Information Exchange

  • The EU requires countries to exchange information automatically, ensuring that financial institutions and taxpayers comply with tax regulations.

2. Fair Tax Competition: OECD Principles on Harmful Tax Practices

  • Countries must adhere to the Organisation for Economic Co-operation and Development (OECD) principles on harmful tax practices, promoting fair competition among nations.

3. Commitment to Base Erosion and Profit Shifting (BEPS) Minimum Standards

  • The EU expects countries to commit to the BEPS minimum standards, addressing tax avoidance strategies that shift profits to low-tax jurisdictions.

Fiji’s Situation

Fiji has been moved from the EU’s greylist to the blacklist after failing to comply with the EU criteria in a timely manner. An assessment by the EU revealed that Fiji has “harmful preferential tax regimes” that have not been abolished, prompting its inclusion on the blacklist.

Commitment to Comply

Fiji has committed to complying with the EU’s recommendations, which will be subject to ongoing monitoring by the EU. This commitment is a crucial step towards removing Fiji from the blacklist and promoting cooperation between the country and the EU in addressing tax-related issues.

Disclaimer: The information provided in this article is for general purposes only and should not be considered as professional advice. For more detailed information, please consult relevant authorities or seek expert assistance.

U4 Anti-Corruption Helpdesk: If you are looking for research and evidence on anti-corruption issues in Fiji or other countries, the U4 Anti-Corruption Helpdesk is a free resource available to staff from partner agencies.