Turkey is at the “grey list” of 44 countries that European Union (EU) has defined as they will have to take measures against tax evasion and tax avoidance, but it stopped short of planning sanctions.
According to a report by Brussels-based online news outlet EUobserver, the EU adopted on last Tuesday (December 5, 2017) a blacklist of 17 tax havens and a ‘grey list’ of 44 countries, including Turkey, and jurisdictions that will have to take measures against tax evasion and tax avoidance, but it stopped short of planning sanctions.
The blacklist agreed by finance ministers includes American Samoa, Bahrain, Barbados, Grenada, Guam, Korea, Macao the Marshal Islands, Mongolia, Namibia, Palau, Panama, Santa Lucia, Samoa Trinidad and Tobago, Tunisia, and United Arab Emirates.
The second list includes countries like EU candidates Turkey, Serbia and Montenegro, as well as Switzerland, Bosnia and Herzegovina, Macedonia, Morocco, Thailand, Vietnam and Hong Kong. It also includes entities that are considered as being among the main tax havens but which have promised to change their legislation: Bermuda, the Cayman Islands as well as UK-associated Jersey, Guernsey and the Isle of Man.
Eight countries and territories recently hit by hurricanes – Antigua and Barbuda, Anguilla, Bahamas, British Virgin Islands, Dominica, St Kitts and Nevis, Turks and Caicos, US Virgin Islands – were given a grace period until February to come up with commitments.
It was reported that the two lists “will help to increase the transparency of the global tax environment,” Estonian finance minister Toomas Toniste, who chaired the meeting, told journalists.
After months of talks in the secretive code of conduct expert group, the lists were changed until the last minute following agreements with and commitments from screened countries. EU experts looked at 92 countries, before the list of non-cooperative entities was taken down to about 50. Work accelerated in recent weeks, after the Paradise Papers revelations increased public pressure to take action.
The fact that the blacklist includes only 11 countries and territories can be seen as a “success,” an EU source told EUobserver – who admitted however that the real test will be how the grey list countries behave in the future. “I would have preferred that it is called the ‘orange list’,” an EU source said. “It would have made clear that they can get a red light or a green light according to what they do next.”
The grey list entities pledged to take measures required by the EU such as more transparency, exchange of information or fairer taxations and have one year – two years for developing countries – to implement them. Countries that fail to meet their promises could end up on the blacklist, but EU ministers did not discuss whether sanctions could be taken.
According to the report, for the EU, publishing the list at Tuesday’s meeting, just a month after the publication of the Paradise Papers, was the priority, while some member states like Malta, Luxembourg or the UK did not want to consider sanctions.
Turkey’s main opposition Republican People’s Party (CHP) leader Kemal Kılıçdaroğlu has documented on November 28, 2017 that Turkey’s autocratic President Recep Tayyip Erdoğan’s family members and relatives have transferred millions of dollar to a one-sterling foreign company on the Isle of Man.
CHP leader Kılıçdaroğlu has shared the SWIFT codes and transfer receipts of 13 million 750 thousand dollars sent by Erdoğan’s brother, son, brother-in-law and principal clerk to Isle of Man with public. Addressing Erdoğan, before exposing the documents Kılıçdaroğlu has said, “I know you are listening to me. Have a doctor by you.”
Concerning the money transfers allegedly done by members of Erdoğan family, Kılıçdaroğlu has said:
- A company was founded on August 1, 2011 on Isle of Man. It is a very tiny island. We have the document of foundation of that company. This company holds executive board meeting as of August 2. The board consists of Sıtkı Ayan. It is a 1-sterlin company.
- On November 15, 2011, he handed over this company to Kasım Öztaş. Do you know who Sıtkı Ayan is? Do you know who Kasım Öztaş is?
- On December 15, 2011, Erdoğan’s brother-in-law Ziya İlgen sends 2,5 million dollars to this company.
- On December 15, 2011, Erdoğan’s brother Mustafa Erdoğan sends 2,5 million dollars to this company.
- On December 26, 2011, Ziya İlgen sends 1 million and 250 thousand dollars to this company.
- On December 27, 2011, Erdoğan’s father-in-law Osman Ketenci sends 1 million and 250 thousand dollars. His principal clerk Mustafa Gündoğan sends 1 million and 250 thousand dollars.
- On December 29, 2011, his son Ahmet Burak Erdoğan sends 1 million and 450 thousand dollars and sends 2 million and 3 thousand dollars on January 4, 2012.
Following Paradise Papers revelations that Prime Minister Binali Yıldırım’s sons had invested in tax-haven Malta, Kılıçdaroğlu in a speech on Nov. 21, had asked questions of Erdoğan: “Dear Erdoğan, do you know that your children, your brother-in-law, the father-in-law of your [son], your brother and your former principal clerk have sent millions of dollars to a tax haven?”