Cayman Islands removed from EU blacklist

Cayman Islands has been removed from the EU’s blacklist of non-co-operative jurisdictions for tax purposes.

The domicile has now adopted necessary reforms to its tax policy framework on collective investment funds in September.

A note from the general secretary of the EU Council stated: “The Group examined this issue at its meetings on 15 July and 7 September and concluded on 21 September 2020 that Cayman Islands has delivered on its commitment on criterion 2.2 and can be removed from Annex I.”

According to Nick Bullmore, Cayman Islands managing partner at law firm Carey Olsen, the Cayman Islands' government has been actively engaging with the EU ever since their surprise decision to place the Cayman Islands on the EU Blacklist earlier this year. “We were confident the blacklisting would be temporary given the Cayman Islands’ continuing commitment to meet all appropriate global tax, transparency and governance standards." 

The jurisdiction also passed The Private Funds Law, that addresses the EU concerns for collective investment funds, on 7 February 2020.

Cayman Islands was originally blacklisted by the EU in February after the Council reviewed its list of non-co-operative jurisdictions for tax purposes.

Minutes from a European Council meeting in Brussels at the time stated: “Cayman Islands does not have appropriate measures in place relating to economic substance in the area of collective investment vehicles.”

Following this removal, 12 jurisdictions remain on the EU’s blacklist: American Samoa, Anguilla, Barbados, Fiji, Guam, Palau, Panama, Samoa, Seychelles, Trinidad and Tobago, the US Virgin Islands and Vanuatu.