The upcoming EU tax haven blacklist should include at least 35 countries, as well as Malta and three other EU member states, in order to be effective, Oxfam finds in a new report published on Monday.

In the report, ‘Blacklist or Whitewash?', Oxfam has applied the EU’s own criteria to the 92 countries screened by the EU, as well as to the 28 EU member states. According to the analysis, at least 35 non-EU countries should be included in the EU tax haven blacklist, and four EU member states: Ireland, Luxembourg, the Netherlands and Malta.

The EU member states were included because of Oxfam’s “fair taxation” criterion.

The anti-poverty organisation warned that the official EU blacklist expected next week would likely miss key tax havens due to political pressure from inside and outside the EU.

The EU is currently drafting a blacklist for tax havens, analysing 92 countries and other jurisdictions against a set of three criteria, which include tax transparency and policies that stimulate large-scale profit shifting. However, those criteria exclude EU member states.

Oxfam is concerned that, regardless of these clear findings, EU governments will come up with a weak or even empty blacklist. The blacklist is being drafted in secret, which makes public scrutiny impossible.

“The Maltese EU presidency has publicly advocated for an empty blacklist. Also, following a meeting with EU finance ministers, the Swiss government has openly declared it does not expect the country to be blacklisted,” Oxfam said in a statement.

Aurore Chardonnet, Oxfam's EU policy advisor on inequality and tax, said: “If the EU is committed to ending tax scandals such as the Paradise Papers, the Panama Papers and Lux Leaks, a robust, objective and coherent tax haven blacklist is an important step. EU governments have a choice between ending the harmful impact of tax havens on both the EU and developing countries – or whitewashing tax havens.”

The research shows how profits made in tax havens are out of proportion with the countries’ real economic activity. For instance, some tax havens attract “absurd” levels of income from royalties, financial services and other services. Bermuda – home to Appleby, the company at the heart of the Paradise Papers – attracts a value of about 4.5 times their Gross Domestic Product (GDP), the Bahamas over 2 times their GDP.

Multinationals also often use artificial loans to shift profits through interest payments between their subsidiaries. Interest income represented 73% of GDP in the Cayman Islands, 40% of GDP in Bermuda and 25% of GDP in Luxembourg, Oxfam's research reveals.

Oxfam criticizes the EU for also failing to address the race to the bottom on corporate tax rates: “As a result, governments offer tax deals to large companies that help such multinationals keep billions of euros at the expense of other taxpayers both inside the EU and in developing countries. The organization calls on the EU to improve its blacklisting criteria to include all harmful tax practices and to cover tax havens within the European Union.

“Tax havens enable tax dodging on an industrial scale. They deprive countries of hundreds of billions of dollars, fuelling poverty and inequality. EU governments must put the interests of their people above those of tax havens and multinational corporations if they are going to close the gap between rich and poor. Strong sanctions against those tax havens on the blacklist are needed to make sure they do not get away with impunity.”