Tax consultant Paul Hotchkiss, who is managing director of Hotchkiss Associates, has commented for Business News on the blacklist threat from the EU.

On seeing the headlines in the Guardian regarding yet another potential EU blacklisting process, my first reaction was ‘not again’ but also confusion because the headline just mentioned the Cayman and Channel Islands.

However, once I read the EU Resolution in detail I realised it applied to the island as well but also that it was not quite as bad as I first imagined.

Yes, the EU want to revisit the so-called blacklist and yes the island, like many others, is in its sights.

However, a great deal of the content focusses on the desire to reform the listing process by making it transparent, consistent and impartial whilst bringing ‘democratic accountability’ into it.

This, the EU Parliament states, will mean greater accountability and public scrutiny in relation to decisions made by the Code of Conduct Group (the EU group responsible for this listing) including allowing public scrutiny by publication of topics of discussion, technical assessments, minutes and conclusions.

This information has not, I understand, been available historically.

Perhaps surprisingly, these proposals include not only looking at so-called third countries, such as the island, but there is also a desire to shine the spotlight on EU member states themselves to make sure any new framework and principles are applied equally to them.

The Resolution goes further and requests any recommendations made both historically and in the future are implemented to avoid internal blacklisting.

To this end, the Resolution cites ‘tackling tax evasion and harmful tax practices worldwide depends on the example it sets at home’: I am sure many readers will echo that sentiment.

Of course, the worrying part for many readers is the EU Parliament’s desire to include tax rate into the list of criteria used to establish the blacklist (which has hitherto been absent).

It must be remembered that despite its potential inclusion, tax rate will still only be one of the factors to be considered and in respect of the other existing criteria the island seems to currently satisfy them.

In conclusion, we don’t yet know what the implementation of this resolution will mean for the island or its businesses but if once more we are to be the subject of such external scrutiny, transparency in the process must be a good thing: if we fail the process then at least we will know what we have to do to satisfy requirements and if we satisfy them the public will also know the reasons.’