France has removed Bermuda and Jersey from its tax haven blacklist.
The move, first announced in December, was made official Sunday when the decision was published in the French finance ministry journal, France’s equivalent of the government gazettes.
The British Virgin Islands, however, remain on the list, together with Brunei, Montserrat, Botswana, Guatemala, Nauru, the Marshall Islands and Niue.
Bermuda, Jersey and the BVI were added to the blacklist in August and faced a penalty tax rate of 75 percent on all capital flows from France.
The motivation for the blacklisting were French concerns that despite the tax information exchange agreements it had concluded with the three jurisdictions, the French tax authorities were not receiving all the information they sought in tax information exchange requests in a satisfactory way.
The French government was also unhappy about an ongoing appeal against an information disclosure in response to a French request in Jersey. Bermuda equally saw a wave of litigation challenging requests for tax information.
The blacklisting caused heightened diplomatic activity between the countries, and Bermuda and Jersey rushed to amend their tax information exchange legislation.
In Jersey, the changes are designed to limit the statutory scope for appeal to judicial review grounds only, and to carve certain elements out of the scope of the judicial review. It also shortens the period for lodging an appeal to 14 days and forces appellants to go directly to the Privy Council, bypassing the Jersey Court of Appeal.
In Bermuda, similar legislative amendments were passed in December.
The French Ministry of Finance said in December, “Jersey and Bermuda have been informed that they will be removed from the list for 2014, which means that the retaliation measures provided for by law will not be applied.”