138 / 169
THE STATE OF THE EUROPEAN UNION
138
genuinely implement substantial reforms to the
most harmful tax policies.
Where it is already possible to draw some
conclusions – and not very positive ones – is in
regard to the lack of transparency that has char-
acterized the whole classification process. As a
result, it is very difficult to assess whether the
criteria have been applied objectively or if, rath-
er, political interference has had a significant
influence on the final outcome.
In this respect, the leak of 19 Council docu-
ments in February 2018 by the Green group in
the European Parliament has merely confirmed
the worst suspicions. These documents record the
pressure exertedby countries such as Luxembourg,
the United Kingdom, Ireland and even France to
weaken the application of criteria and remove
some of their natural allies from the list.
At the same time, there has been no infor-
mation about the specific commitments ac-
quired by grey list territories to prevent their in-
clusion in the blacklist. It would be far better if
these countries were to publicize these commit-
ments so that progress could be evaluated when
the deadline is reached in 2018. ECOFIN March
2018 did release the letters sent by the EU,
identifying deficiencies and requiring the af-
fected jurisdictions to implement the necessary
reforms. This is undoubtedly a first step towards
greater transparency. However, there is much
work left to be done. The EU, moreover, needs
to publish the methodology used so far to eval-
uate whether jurisdictions comply with the cri-
teria. Only in this way can we be sure that the
lists are truly reliable and not diplomatic instru-
ments.
The high degree of inter-governmental
method of cooperation and of secrecy which
has characterized the entire list process does not
offer any reassurance in this regard. The Com-
mission only participated in the initial stages of
the process, subsequently ceding almost all ini-
tiative to bodies and groups which are com-
pletely controlled by Member States.
It is important to remember that, during the
screening phase, which precedes final approval
of the initial lists, the first stage is conducted by
a group of experts appointed by the Member
States, and the Code of Conduct Group then
takes control of negotiations with the selected
jurisdictions, meaning that the Group has the
dominant role in the process of drawing up and
periodically updating the lists.
The Group consists of officials of the Member
States with expertise in tax issues. It reaches all
of its decisions unanimously and in absolute se-
crecy. The minutes of its meetings are only pub-
lished every six months, and the Committees of
the European Parliament which have – as part
of their mandate – requested documentation
from the Group, have almost always been frus-
trated. And this is before we mention the other
shortcomings of this Group, noted above, with
respect to the most innovative, harmful tax
practices.
Several Member States, along with the
Commission, have repeatedly called for reform
of the Group, affecting both its mandate and
the requirement for unanimity (it is unaccepta-
ble, for example, that a Member State should be
allowed to participate in votes that directly affect
judgements regarding its own tax regime). It
would be similarly desirable if the European
Commission were to assume at least some of
the functions of the Code of Conduct Group, to
guarantee a better balance between individual
national interests and defence of the general
interests of the EU.