Finance ministry welcomes EU decision to remove Seychelles off blacklist |22 February 2024

SS Payet and Ms Vidot answering journalists’ question during yesterday’s press conference (Photo: Laura Pillay)

Following the decision by the Council of the European Union to remove Seychelles from its list of non-cooperative jurisdictions for tax purposes, officials from the Ministry of Finance, National Planning and Trade revealed that the country welcomes the decision, as more reflective of Seychelles and commitment to meeting the standards.

During a press conference yesterday morning at the ministry’s headquarters at Liberty House, Secretary of State for the ministry, Patrick Payet explained that Seychelles was deemed as non-compliant and consequently blacklisted in October 2023, after the Organisation for Economic Co-operation and Development (OECD) Global Forum's negative assessment regarding Seychelles' exchange of information on request.

The decision stemmed from difficulties in responding to information exchange requests related to a registered agent who left the jurisdiction with all of its records in 2018, following the 2016 Panama Papers disclosures.

According to SS Payet, despite denouncing the EU council’s decision to add Seychelles to Annex I of its non-cooperative jurisdictions list, Seychelles engaged with the OECD for another supplementary review.

In its December 2023 review, Seychelles demonstrated significant progress between March 2022 and December 2023 to the OECD, particularly in providing beneficial ownership information, and enhancing supervision, director general of the financial services development division, Odile Vidot highlighted.

Seychelles is focused on information exchange, continuous inspections by the Financial Services Authority (FSA), and aligning legislative frameworks with international standards towards compliance.

SS Payet stressed that blacklisting adds pressure on the domestic financial system, most notably in relation to revenues inflows and payments being made overseas.

With Seychelles removed from the blacklist, a supplementary review is scheduled for 2025, after which it is expected that Seychelles will be upgraded to “at least largely compliant”.

Despite the recent development, SS Payet emphasised that the Seychelles government is advocating for revisions in the OECD standards, especially concerning legacy issues, to ensure fairness, especially for small islands states.

The ministry plans to table further reforms to the National Assembly within the coming month, to address legislative discrepancies and continue fostering transparency. The main discrepancies relate to nominees and foreign partnerships.

“We expect that once we have been able to make these legislative amendments, and as we continue with the successful exchange of information relationship with our international partners, we will be in a position to demonstrate that in terms of statistics and legislation, the reality on the ground and in terms of our activities as the regulator, we are assuring that we take a stance which promotes transparency, and this can show that we meet the standards,” Ms Vidot stated.

The 2025 review process is expected to last up to one year, after which the OECD will make its decision.

In a press release issued yesterday, Finance Minister Naadir Hassan expressed satisfaction over the Global Forum and EU council positions.

Minister Hassan stated that this is “more reflective of the current state of play of the Seychelles’ compliance with the standards on tax transparency, and that they recognise the progress and commitment of the country with meeting these standards.”

He however reiterated his position for the EU to review the methodology for the assessment, towards ensuring that jurisdictions are not “disproportionately damaged” for legacy matters.

Laura Pillay