One year ago (5 December 2017) the European Union has published its first black list of tax havens. This was a long anticipated move against the ever-increasing strength of multinational companies and private billionaires.

As a result of this pressure, many famous tax havens have committed themselves to reforming their tax laws before the end of 2018 and companies have started to move away from the tropical islands and micro-states with a zero tax burden.

However, if the black list aims to remain a suitable instrument in the fight against tax avoidance, the EU must take further steps.

A new Oxfam analysis shows that only one month before the the deadline, at least 20 countries have failed to implement enough reforms and they will soon be included in the black list, including large economies such as Switzerland.

It is crucial that EU governments support the initiative so that we could put an end to the era of tax havens in order to ensure that the billions currently hidden from public money are spent on services that are relevant to European citizens – healthcare, education, infrastructure and development.

Economists estimate that multinational companies transfer up to 40 percent of their total profits in tax havens each year. This deprives EU governments and citizens of 50 to 70 billion euros a year, while developing countries lose at least USD 100 billion (€88 billion) over the same period that develops even more inequality and poverty.

At the same time, the so-called “grey list” of countries committed to reform their tax systems by the end of 2018 is increasing. This list includes many of the most obvious tax havens, such as the Bermuda Islands and the Cayman Islands.

In turn, the Grey List is a clear success for the EU. For example, Liechtenstein has been removed from it after abolishing the harmful tax practices that the EU has identified.

The inclusion and exclusion process provoked changes in the way multinational companies operate. Large corporations start moving from the tropical islands, where they do not pay taxes, in countries where they pay extremely low taxes.

US multinational companies change their tax structures and leave the Bermuda Islands and the Cayman Islands in order to transfer their accounts in countries such as Ireland and Singapore, that are using weak international standards.