French ETNC Black List Effective, Moscovici Claims

by Ulrika Lomas, Tax-News.com, Brussels

22 January 2014

French Finance Minister Pierre Moscovici has underlined the effectiveness of the country's so-called "black list" of states and territories deemed uncooperative in tax matters (ETNC), insisting that the device has resulted in both Jersey and Bermuda cooperating fully with France in 2013.

In accordance with a decree of January 19, 2014, the French Government removed Jersey and Bermuda from its ETNC list.

France sanctioned countries for failing to provide "effective tax cooperation" with the French tax authorities for the first time last year. Consequently, Jersey, Bermuda, and the British Virgin Islands (BVI) were added to the infamous list, designed to promote and encourage fiscal transparency. Jurisdictions were given one year to respond to all requests for information, before application of "retaliatory" tax measures.

As a result of this decision, Jersey and Bermuda elected to "modify their practices," opting to cooperate in full with France in the fight against tax evasion. Both states issued a response to all requests for information. In addition, Jersey agreed to modify its interpretation of the bilateral tax information exchange agreement (TIEA) between the two countries, to remove "technical obstacles" to information exchange.

However, given that the BVI have still not responded to a number of information requests, they will remain on the list.

Concluding, French Finance Minister Moscovici underscored that the criteria for the ETNC black list are "legal" and based on the level of fiscal cooperation with France. The criteria are nevertheless "incomplete" due to a recent ruling from the French Constitutional Council, he ended.

In December 2013, the Constitutional Council rejected Article 57 of the Government's anti-tax evasion and major economic and financial crime bill, providing that the Government could add to its "black list" countries that from January 1, 2016, have not and do not intend to conclude with France an administrative assistance agreement, with provision for an automatic exchange of documents.

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