The Council of the European Union has found Albania, Costa Rica, Mauritius, Serbia and Switzerland to be complying with all the 'commitments' that they have made to the EU on the subject of tax-related co-operation. It has also removed the United Arab Emirates and the Marshall Islands from its list of non-co-operative jurisdictions for tax purposes.

The UAE and the Marshall Islands have both reformed their "tax policy frameworks," as the EU calls them, by introducing the concept of "economic substance" in their laws. Consequently, the UAE now complies with all its commitments towards the EU regarding something that that governmental club calls "tax co-operation" and is off the list. The Marshall Islands will be moved from "annex I of the conclusions to annex II," whatever that means.

The EU's dreaded "code of conduct group," which judges the worth of offshore tax regimes and threatens their business with the bloc if they fail to measure up to its exacting standards, is still trying to decide whether the islands are good enough at sending information about wealthy account holders to Western countries.

‘Economic substance’ is a label with no clearly defined meaning but it does, in the eyes of the Organisation for Economic Co-operation and Development, rule out the use of companies in states with desirable tax treaties that are often qualified as ‘letterboxes,’ shell companies or conduits to gain benefits from tax treaties because these companies exist on paper but have hardly any real presence in the relevant jurisdiction. The more a company conducts actual economic activity in an offshore jurisdiction, the more legitimate it is in the OECD’s eyes for that company to be tax-resident there.

Albania, Costa Rica, Mauritius, Serbia and Switzerland have made all necessary reforms ahead of schedule and are now complying with some rules that the EU's tongue-tied officials describe as "EU tax good governance principles." These countries will be removed from annex II of the aforementioned "conclusions."

The EU list of non-cooperative jurisdictions for tax purposes, as of 17 October, consists of: American Samoa; Belize; Fiji; Guam; Oman; Samoa; Trinidad and Tobago; US Virgin Islands; and Vanuatu.