Feds dispute EU naming territories as “tax havens”

U.S. has full confidence in American Samoa, Guam and all of the US territories

US Treasurer Steven T. Mnuchin has objected to the European Union including American Samoa and Guam in its “non-cooperative tax jurisdictions” blacklist, with a recommendation to remove the two territories from the list, which names entities considered as tax havens.

The Council of the EU released a press statement as well as the list of 17 countries and territories on Dec. 5. In its 38-page “Outcome of Proceedings” document, it states that American Samoa and Guam — among other things — does not apply any automatic exchange of financial information, and does not apply the BEPS (Base Erosion and Profit Shifting) minimum standards. (See Samoa News edition Dec. 6 for details.)

Samoa News had sought comments at the time from ASG Treasury Department without success. However, an ASG news release yesterday states that the local government officials, including ASG Treasurer Uelinitone Tonumaipea and Attorney General Talauega Eleasalo Ale, have been working behind the scene with US Treasury officials on this very important issue for American Samoa.

The ASG news release also included a copy of a Dec. 27 letter from Mnuchin to Jeppe Tranholm-Mikkelsen, the Secretary-General of the Council of the EU.

The letter includes specific issues pertaining to American Samoa and Guam, with Mnuchin saying that the US “particularly objects” to the inclusion of its two territories, adding that as US territories, American Samoa and Guam participate in the international community through the United States.

Additionally, the commitments and actions of the United States in implementing the BEPS minimum standards extend to the US territories —a including Northern Mariana Islands, US Virgin Islands and Puerto Rico.

Furthermore, the US territories are evaluated as part of the review of the United States in the Global Forum peer review process and under the criteria for non-cooperative tax jurisdictions established by the G-20.

“Therefore, American Samoa, Guam and the other US territories are already subject to monitoring of the implementation of international tax standards,” Mnuchin said, adding that the US “disagrees” with the EU’s decision to consider the US territories separately from the United States.

“Taking into account both the laws in American Samoa and Guam and their connection to the European Union, there is no basis for concluding that American Samoa and Guam have any role in promoting the evasion or avoidance of taxes imposed by the European Union member states,” he points out.

According to Mnuchin, the US supports international cooperation in tax transparency and remains firmly committed to working on the issues that concerned the Council of the EU when it announced its intention to create the list of non-cooperative jurisdictions for tax purposes through the G-20 and the Inclusive Framework on BEPS.

Furthermore, the US “would like to reiterate the close connection between the legal framework in place in the U.S territories and the legal framework in the rest of the United States,” he explained.

Therefore the US “urges the Council to reconsider both the decision to analyze the US territories separately” from the US and the decision to include American Samoa and Guam on its list of non-cooperative tax jurisdictions.

“The United States has full confidence in American Samoa, Guam and all of the US territories; their tax administrations; and their compliance with international norms with respect to taxation,” Mnuchin concluded.

Samoa News will report on the governor’s and ASG’s comments in next Wednesday’s edition. Due to the holiday, there will be no Samoa News publication on Monday, Jan. 1st and Tuesday, Jan. 2nd.

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