The French government’s decision to remove Jersey and Bermuda from the tax havens blacklist has angered a large part of the French political class, from left to right.
Officials at the French finance ministry are breathing a sigh of relief, hoping that telephone calls from distressed bankers and insurers enquiring about the "Jersey" file will cease.
The ministry made its final decision regarding Jersey. The small island will no longer be considered a tax haven, according to a decision published in the official journal on 19 January. Money transfers between France and Jersey will no longer be taxed at 60% or more as of September 2014.
Paris blacklisted Jersey and Bermuda last August, only to remain there for four months, as EURACTIV France wrote at the beginning of January.
The creation of “black lists” for tax havens is an answer to a European recommendation made in 2012. In May 2013, the European parliament’s economic and monetary committee also requested that the European Commission establish a common EU list of tax havens. In the meantime, each country is preparing its own list.
Pierre Moscovici, French finance minister, claims the issue has to be seen from a legal standpoint.
“The criteria of the French list are legal criteria based on fiscal co-operation with France: it would be illegal to keep on this list states that do not fulfill the criteria anymore,” Moscovici said.
But not everyone in France shares this opinion, notably Elisabeth Guigou, the president of the French parliament's foreign affairs committee, and Christian Eckert, general rapporteur for the finance committee.
They issued a common statement: “The inclusion on this list entails a hardened tax regime for operations from France with people and companies established there [in the islands].”
“In the view of the recent work of the OECD’s Global Forum on Transparency … such a withdrawal is not justified. Neither Jersey nor Bermuda have obtained an overall rating justifying withdrawal,” the MPs stressed, adding that “the list of non-cooperative states established by decree automatically excludes any member country despite the reality of fiscal particularities in the EU.”
The Green party said it was “surprised” that in times of austerity this “important source of income” could be ignored.
For the Greens, Jersey and Bermuda should be brought back to the list. They also want the anti-fraud provisions that were introduced by the MPs in the draft law and then withdrawn by the Consitutional court be reintroduced as soon as possible in a proper law.
Nicolas Dupont-Aignan, a hardline right-wing French conservative, “wonders whether they’ve gone mad”.
“It is surreal to consider Jersey as something other than a tax haven. It makes you wonder if it’s not the banks that govern,” the MP said, adding that he wanted to make tax evasion a central topic of the EU elections in May.
The anti-corruption association, Anticor, sent a letter to the finance minister requesting that the ministry expose the motives of its decision.
“In the period of economic and social tension such as the one we are experiencing, French citizens are extremely sensitive to tax justice issues. Laxity against non-cooperative jurisdictions would be unacceptable and even more if it is linked to the intervention of banks, which everyone knows are well established in those territories,” their letter says.
Green MP Eva Joly wrote to Minister Pierre Moscovici to ask clarification about the links between the finance industry and the French finance ministry.
“How can we not link the financial sanctions against our industry and the withdrawal of Bermuda and Jersey from the blacklist? It is also in those moments that our government risks its credibility in its capacity not to bow to the pressure of big companies, the champions of tax evasion,” the letter reads.
Tax evasion deprives EU governments of roughly €1 trillion annually, according to estimates.
France, in particular, wants to underscore its determination to tackle tax fraud.
Although limited in scope, action to tackle tax evasion at European level has proven to be effective. Under the EU Savings Directive, for example, member countries exchange information on non-resident tax-payers to the value of €20 billion.
The challenge now is to deepen such cooperation and strengthen common tools. In this respect, an agreement by member states on the revised Savings Directive is essential.