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EU countries fall short of their promises to stop tax havens

Today, European ministers updated the EU’s list of tax havens. The update added no countries to the blacklist and 10 countries to the greylist.

In response, Chiara Putaturo, Oxfam EU’s tax expert, said:

“A year ago, Open Lux uncovered the secrets of tax havens existing in Europe. Eight months later, the bombshell of the Pandora Papers made headlines around the world for blowing the lid on how the super-rich use tax havens to escape their tax bills. This week, a historic leak of Swiss banking records revealed how criminals, fraudsters and corrupt politicians used the secretive Swiss banking system to stash over US$8 billion in assets. Yet, none of this made a dent in EU rules on tax havens. The updated list does not challenge the persistent weaknesses of the process which exempts EU tax havens, and leaves secrecy jurisdictions, like Switzerland and the US, and zero tax rate countries, like the Cayman Islands, off the hook. Meanwhile, poorer countries, like Tunisia and Vietnam, are at risk of being blacklisted for not complying with top-down designed standards. 

“Greylisting the Bahamas, Bermuda and the British Virgin Islands means some real tax havens will be put under the magnifying glass. However, as long as the criteria are not reviewed, these countries can continue to operate as tax havens without any repercussions and can easily be completely delisted in the next review.

“How many more tax scandals must happen before the EU commits to a real reform? The current process is full of holes, lacks credibility and fails to put an end to tax avoidance. It is time for the EU to automatically blacklist zero and low tax rate countries, and to hold EU countries up to the same level of scrutiny as non-EU countries. The EU should also not use the blacklist in the future to force poorer countries, like Nigeria and Kenya, to sign up to the unfair OECD tax deal.”

Notes

  • Today, European governments published a revised EU tax havens list. The blacklist remained unchanged. The greylist added 10 countries. They are on the greylist as they fail to fulfil at least one of the criteria.
  • Read Oxfam’s December 2021 tax briefing for background on why and how the EU should reform their rules on tax havens. It includes what criteria should be on the list and why the EU’s proposal to introduce a criterion requiring countries to sign up to the OECD BEPS2 tax deal is unfair to poorer countries.
  • Last December, EU countries failed to agree on the reform of the Code of Conduct for Business Taxation. This failure undermines the ability to make progress in reviewing the definition of harmful tax regimes (Code of Conduct for Business Taxation) and the listing criteria (based on that definition) as put forward by the European Commission’s Communication on tax good governance.
  • The current blacklist does not include a single one of the world’s 20 worst corporate tax havens identified by Tax Justice Network in 2021, nor does it include any of the world’s 15 worst corporate tax havens identified by the still relevant 2016 Oxfam analysis. Among the 12 countries in the world with a zero per cent tax rate, none are blacklisted and 6 are now greylisted.
  • In previous analyses, Oxfam showed that some EU countries have characteristics of tax havens.
  • On Sunday, a journalist investigation, #SuissSecrets, revealed leaked data of Credit Suisse. It shows how the bank has helped problematic customers to hide large sums of money and how this practice is embedded in the Swiss secrecy system.
  • In the last year, two tax scandals have shown the weakness of the EU list: OpenLux and the Pandora Papers. OpenLux showed how tax havens exist in the EU, and the need for the EU to get its house in order. The Pandora Papers showed that some US states have become hubs of financial and corporate secrecy. The US is not compliant with the EU’s tax transparency criteria because it has not joined the Common Reporting Standard (CRS) and does not fully exchange information with other countries.
  • The EU has listed several low-income countries for failing to comply with international standards. This is despite these countries not being included in the discussions to set these standards or not having the capacity to implement the requirements to avoid being blacklisted.

EU leaders’ refuse to consider AU calls for a waiver on COVID-19 vaccines

Today, African Union and European Union leaders discussed the global vaccine rollout and calls to support the current proposal at the World Trade Organisation (WTO), tabled by India and South Africa and backed by 100 countries, to temporarily suspend intellectual property rules for Covid-19 vaccines, tests, and treatments.

In response, Peter Kamalingin, Oxfam Pan Africa Programme Director said:

“EU leaders continue to make a song and dance about the importance of their relationship with the African continent. Yet they once again put the interests of their profit-hungry pharmaceutical corporations first. The point-blank refusal to even consider the waiver at this summit is shameful and an insult to the millions of people in poorer countries who have needlessly lost loved ones because of vaccine inequity. While Europeans are getting boosters, nearly 90 per cent of Africans are yet to have their initial two doses.

“What Africans need is equal and fair access to vaccines. The ‘charity model’ has failed. Europe has already thrown away more vaccines than they donated to African countries this year. It is time for African leaders, governments and people around the world to seriously call into question Europe’s commitment to their so-called ‘partnership of equals’.

“Instead of siding with Big Pharma who are making billions out of vaccines, the EU and European countries must stop kicking the can down the road and support the full waiver and insist the vaccine technology is shared. This is the only way to ensure we can supply and distribute vaccines, tests and treatments – to everyone, everywhere and bring an end to this pandemic.”

 

Notes to editors

BioNTech to ship mobile vaccine factory containers to Africa

Responding to the announcement that BioNTech plans to ship mobile vaccine factory containers to Africa, which could start producing vaccines in the second half of 2023, Oxfam’s Health Policy Manager, Anna Marriott, said:

“Efforts to boost vaccine manufacturing in Africa are welcome but this is a long-term project and should not distract from the failure of rich country governments and companies, including Germany and BioNTech, to tackle today’s shameful vaccine inequality responsible for millions of needless deaths in poorer countries from this pandemic.

“It is unacceptable that BioNTech, along with other pharma giants, is ignoring the World health Organisation’s mRNA Hub in Africa which is ready to produce vaccines and expand manufacturing in favour of a BioNTech controlled vaccine container module that won’t be producing vaccines for well over a year.

“To date, Germany has exported just one per cent of its vaccines to the African continent. If Germany is serious about tackling vaccine inequality it must reverse its refusal to support the waiving of intellectual property rules for these life-saving pandemic tools and insist BioNTech transfer their technology now to the WHO so that existing manufacturers across Africa, Latin America and Asia can make them.

“Serious questions must also be raised about BioNTech’s objectives with this initiative. Last week it was revealed that a consultancy on BioNTech’s payroll, the kENUP Foundation, is trying to undermine the work of a World Health Organisation and South African-led project to make mRNA COVID vaccines as a global public good and free of big pharma’s control.”

Countries to count donations of unwanted vaccine doses as part of their foreign aid commitment

In response to the statement issued today by the Organisation for Economic Co-operation and Development’s (OECD) Development Assistance Committee, which says that countries will be able to count donations of unwanted vaccine doses as part of their foreign aid commitment, for a guideline cost of $6.72 a dose, Oxfam’s Health Policy Manager, Anna Marriott, said:

“This guidance is a double insult to the world’s poorest countries. First, rich countries bought many more doses than they could use at a time of limited supply, preventing millions of people in developing countries from getting life-saving vaccines. Now they are free to charge any donations of unwanted doses to their aid budgets, to the detriment of other essential aid spending.

“Rich countries should donate any excess doses immediately to developing countries, but this should not be  at the expense of aid countries desperately need to help save lives. It is not only immoral, but there’s a high chance of failure if the donations replace aid that would have supported health systems and other non-vaccine related costs that are critical for their delivery, especially at a time when COVAX has run out of funds.

“Due to the lack of safeguards in this guidance, rich countries could count donated vaccines as aid that can never reach arms, because they are donated too close to expiry or without essential equipment such as syringes. Between them G7 countries currently have over 240 million doses which are due to expire at the end of February.

“Many of the same rich country governments that this guidance applies to are also those continuing to block proposals to enable and encourage the widescale generic production of COVID-19 vaccines in developing countries – measures that would scale up vaccine access, drive down prices and diminish the need for donations in the first place.

“If generic production of vaccines were allowed, each $6.72 of aid could purchase five vaccine doses, instead of just one.”

 

Notes:

EU set to bin 25 million more vaccine doses than it has donated to Africa this year

Europe has betrayed Africa by blocking proposals which would allow manufacturers on the continent to make their own COVID-19 vaccines while hoarding millions of doses which are set to expire at the end of the month, warns the People’s Vaccine Alliance ahead of tomorrow’s meeting of African and European leaders at the AU-EU Summit.

According to new analysis from the Alliance, the EU will have to throw away 55 million doses of COVID vaccines by the end of February, many more than the 30 million doses they have donated to Africa so far in 2022.

Despite the rhetoric of a special relationship with Africa, the EU – which is now the world’s biggest exporter of vaccines – has prioritised selling vaccines made on EU soil for eye-watering prices to rich nations and just eight per cent of its vaccine exports have gone to the African continent. The figures for Germany are even worse; just one per cent of vaccine exports from BioNTech, the German pharmaceutical company behind the Pfizer vaccine, have gone to Africa.

At the same time, EU member states, led by Germany, have been a major blocker of proposals tabled by South Africa and India and supported by the African Union and over 100 countries for an intellectual property waiver which would allow the generic production of COVID vaccines, tests and treatments. Leaked drafts of the summit declaration show a divide between the EU and the AU, with the AU insisting language on the waiver is included. Last summer, French President Emmanuel Macron – who is hosting the AU-EU summit – announced his support for the waiver but has done little since to challenge the EU’s stance on the issue.

It is estimated that a quarter of a million people have died as a result of COVID-19 in Africa since the beginning of the year, almost 7,000 people a day. Due to very low vaccine supplies, just 11 per cent of people on the continent have received their first two COVID vaccines to date. The number of people who have had a booster jab in the EU outnumber those in Africa who have had two doses by more than a third. 

The People’s Vaccine Alliance, a group of nearly 100 organisations including African Alliance, Christian Aid, Oxfam, Public Services International and UNAIDS, says the EU should be held to account for the lack of vaccines in Africa, because it has stood so firmly in the way of the continent being able to produce its own doses.

Joab Okanda, Pan Africa Senior Advocacy Advisor for Christian Aid, said: “European Commission President, Ursula Von der Leyen, said at the beginning of the pandemic that the vaccine should be a global public good. Yet instead, she has ensured it is a private profit opportunity, raking in billions for Big Pharma and the EU, while almost 9 out of 10 people in Africa aren’t fully vaccinated, two years into this deadly pandemic. This is shameful.”

The EU has made much of plans to support the set-up of vaccine factories in Africa under the monopoly control of European pharmaceutical corporations – but this still wouldn’t give countries autonomy on vaccine supplies produced. BioNTech recently announced plans to produce 50 million vaccines in Africa once fully operational, however this is less than their factory in Germany produces each month.

Anna Marriott, Health Policy Manager at Oxfam, said: “Europe must stop blocking African producers from making their own doses of COVID vaccines. If there truly is a common agenda between the Unions, then the EU would stop putting the interests of pharmaceutical companies, who have reaped billions from the pandemic, ahead of African lives.

“These vaccines were publicly funded, and the recipes should be shared with the world to allow all qualified producers to make these vital shots.”

The EU have contributed €3 billion in funding to COVAX, the initiative designed to help developing countries to access vaccine doses, but the scheme has now run out of funds after failing to reach its target of vaccinating 20 per cent of people in poorer countries by the end of 2021. Meanwhile, Germany alone has received back €3.2 billion in tax revenue from BioNTech.

Sani Baba Mohammed, Public Services International Regional Secretary for Africa and Arab countries, said:  “The EU claims they are promoting a ‘prosperous partnership of equals’ with the African Union – yet they are throwing more vaccine doses in the trash than they are donating to us, while continuing to block a waiver on vaccine patents which would enable us to produce our own vaccines. What’s equal about that?

“This vaccine apartheid – perpetuated by the EU – has a brutal human cost. Our livelihoods continue to be destroyed, our economies shattered, our health workers pushed beyond the brink.

“It is encouraging that the African Union is standing up to the EU and asking for a reference to the TRIPS waiver to be included in the Summit’s outcome document. We need the TRIPS waiver now and the EU must stop standing in the way.”

 

Notes to editors:

  • In a draft declaration, the EU has said “we support a common agenda for manufacturing vaccines, medicines and health products in Africa, including investment in production capacities, the use of intellectual property, voluntary technology transfers as well as strengthening of the regulatory framework to enable equitable access to vaccines, diagnostics and therapeutics.”
  • The Africa Group is a co-sponsor of the TRIPS waiver proposal, and the African Union passed a motion at the 34th summit of the Africa Union calling for a temporary WTO waiver of intellectual property obligations to enable the manufacture and distribution of COVID-19 vaccines in Africa. See here.
  • Data on number of doses donated to Africa analysed between 1st January 2022– 8th February 2022 from Airfinity. Data that the EU has 55 million doses due to expire at the end of February 2022 also from Airfinity.
  • Vaccination rate data from Our World In Data – 151 million people are fully vaccinated in Africa and 204 million people in the EU have received boosters.
  • Just 8 per cent of EU’s vaccine exports so far this year have been to Africa. The figure for exports from Germany is 1.4 per cent and from Netherlands and Belgium the figure is 43 per cent. Data from Airfinity.
  • Estimates on number of COVID deaths in Africa are from the Economist.

Oxfam and local humanitarian partners assisting people hit by multiple cyclones in Southern Africa

Oxfam and its humanitarian partner organisations are providing humanitarian support including cash, food, clean water and sanitation to people recovering from multiple cyclones that have torn across Southern Africa in the past two weeks.

The region has been most recently rocked by Cyclone Batsirai and earlier Tropical Storm Ana. Ana alone affected over 180,000 people, killing at least 38, mostly in Zambezia, Nampula, and Tete provinces in Mozambique, flooding thousands of hectares of land and causing landslides. In Malawi, 37 people have been reported dead, 22 missing and 158 injured. Over 193,558 households (948,434 people) are affected, and 740 hectares of crops have been destroyed.

The ferocity and frequency of the storms are consistent with scientific warnings of worsening climate-related harm. Edward Thole, a Program Manager at Circle for Integrated Community Development (CICOD), one of Oxfam’s partner organisations, said that having strong climate-proof mitigation and safety measures already in place ―such as new water dykes around Bona village in Malawi― was “a life-saver”.

Margaret Kasumgwi, from Phalombe in Malawi told Oxfam: “The floods came when it was getting dark. Within minutes, water was knee high. We ran to safety leaving everything behind. Everything we had, including our food, is gone. We have no one to turn to because everyone here is affected. We are hungry.”

Justin Kumbira, a smallholder farmer from Salima village in Malawi, said he and his family had lost property to other floods over the past years: “I don’t know what else to do because every time we rebuild something, floods come and take everything. Floods have reduced us to beggars because we can’t feed ourselves now”.

“It will not be easy getting back on our feet. My field is destroyed, and crops may not make it, we have lost food we were keeping in the house, clothes gone and right now finding work is very difficult,” Kumbira said.

Oxfam in Southern Africa Programme Director, Dailes Judge said: “the increased frequency of tropical storms and other climatic shocks in the region means 88 million people across this region, that are already extremely poor as a result of inequality and two years of COVID-19, have little resilience left and their capacity to bounce back is severely constrained. This is largely due to decreased funding to emergency, recovery and long-term support to affected communities.”

For the past three years, five tropical storms have hit the Southern Africa region killing 780 people and leaving nearly 5 million people extremely vulnerable. On several occasions, the storms have been followed by dry spells and drought, perfect breeding conditions for pests such as fall armyworms that have decimated many thousands of hectares of crops.

Oxfam and partners are urgently calling for more aid to boost the humanitarian response to affected countries, build up people’s resilience building and moving into longer-term development.

 

Notes

Oxfam and partners’ humanitarian response is currently happening in Malawi, Mozambique and Zimbabwe. To date, 3,425 people have been reached with water sanitation and hygiene, food assistance through multipurpose cash transfers and gender and safeguarding interventions.

Copyright © 2024 Oxfam Aotearoa.

Oxfam is a worldwide development organisation that mobilises the power of people against injustice. Oxfam Aotearoa is a registered charity with the New Zealand Charities Register (registration CC24641). Donations are tax refundable.

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