EU Blacklist: What It Signals For Caribbean Investment Risk & Capital Access

News Americas, NY, NY, Sun. Feb. 22, 2026: Last week, the European Union updated its list of non-cooperative jurisdictions for tax purposes, adding the Turks and Caicos Islands back to on the EU blacklist while removing Trinidad and Tobago. Anguilla and the U.S. Virgin Islands also remain on the EU’s list of jurisdictions that have not fully met agreed international tax standards.

“The Turks and Caicos Islands were included in Annex I of the EU list of non-cooperative jurisdictions for tax purposes following concerns raised by the OECD forum on harmful tax practices regarding the enforcement of economic substance requirements in the jurisdiction,” the EU said.

“The list is part of the EU’s efforts to promote tax good governance worldwide. It is composed of countries which fail to comply with agreed international tax standards or did not fulfil their commitments on tax good governance within a specific timeframe,” an EU statement said. The other countries on the list are American Samoa, Guam, Palau, Panama, Russia, Vanuatu, and Vietnam.

The changes follow the OECD’s Forum on Harmful Tax Practices (FHTP), assessment, which flagged shortcomings in the Turks and Caicos Islands’ enforcement of its economic substance rules. For regional stakeholders, this update is more than a technical compliance adjustment – it carries real implications for investment risk, capital flow, and cross-border financial activity.

Being on the EU tax blacklist can invite enhanced scrutiny from international banks and investors, who are increasingly cautious about jurisdictional reputational risk and regulatory alignment. Blacklisted territories may face higher due-diligence costs, slower transaction reviews, and, in some cases, restrictions on access to international funds or incentives tied to EU markets. For Caribbean governments, businesses, and investment hubs, the message is clear: global capital allocators are placing greater emphasis on transparency, enforcement, and measurable regulatory compliance as conditions for engagement.

The Turks and Caicos government has acknowledged the listing and stressed that the FHTP findings are centered on technical improvements rather than deliberate non-cooperation. Authorities have already commenced revisions to economic substance reporting tools, expanded enforcement powers for regulators, and strengthened compliance monitoring capacity. These steps signal a proactive intent to align with international standards and protect the jurisdiction’s standing as a credible financial center.

“The Government remains fully committed to meeting and exceeding global regulatory expectations. The identified enhancements form part of a continuous improvement process that demonstrates the jurisdiction’s proactive and cooperative approach to compliance,” a statement said. “The Turks and Caicos Islands values its reputation as a responsible international financial centre and will continue to work constructively with international partners to ensure full alignment with Economic Substance requirements and best regulatory practices.”

For investors and project sponsors active in or entering the Caribbean, this development is a timely reminder to factor regulatory risk into capital planning and due diligence. Jurisdictional assessments – particularly those affecting tax and financial reporting standards – can materially influence financing terms, partner selection, and risk pricing. Entities operating in the region should update compliance frameworks, engage with local regulators on evolving requirements, and consider how policy shifts may affect capital access over the next 12–24 months.

Ultimately, the EU tax update underscores a broader global trend: capital flows are increasingly tied to regulatory certainty and international cooperation. Caribbean markets that adapt swiftly and transparently to these expectations are better positioned to attract long-term institutional investment and reduce the friction that can stall growth capital.

BACKGROUND

The EU list of non-cooperative jurisdictions for tax purposes was established in December 2017. It is part of the EU’s external strategy on taxation and aims to contribute to ongoing efforts to promote tax good governance worldwide.

Jurisdictions are assessed based on a set of criteria laid down by the Council. These criteria cover tax transparency, fair taxation and implementation of international standards designed to prevent tax base erosion and profit shifting. The Council updates the list twice a year. The next revision of the list is scheduled for October 2026.