European Union states are set to remove Bahrain, the Marshall Islands and Saint Lucia from a list of tax havens next week, leaving only six jurisdictions on it, an EU document shows.
The planned removals from the EU list drew criticism from an anti-corruption watchdog on Tuesday. The decision is also likely to bring more disapproval from lawmakers and activists who had strongly criticized a first delisting in January that cut the number of jurisdictions named to nine from 17.
The latest decision was taken by the EU Code of Conduct Group, which includes tax experts from the 28 member states, according to an EU document seen by Reuters.
EU finance ministers are expected to endorse the proposal at their regular monthly meeting in Brussels on March 13.
The jurisdictions that remain on the blacklist are American Samoa, Guam, Namibia, Palau, Samoa and Trinidad and Tobago.
Bahrain, the Marshall Islands and Saint Lucia are to be delisted after they made "specific commitments" to adapt their tax rules and practices to EU standards, the document says.
Those commitments are not public.
"This ever-decreasing list of tax havens will soon be so short it will be able to fit on a Post-it. It's time for the EU to publish how it chooses which countries go on the list and why," said Elena Gaita, of Transparency International EU, an anti-corruption watchdog.
In the last cut, EU governments decided to remove Barbados, Grenada, South Korea, Macau, Mongolia, Tunisia, the United Arab Emirates and Panama.
Panama's delisting caused particular outcry. The EU process to set up a tax-haven blacklist was triggered by publication of the Panama Papers, documents that showed how wealthy individuals and multinational corporations use offshore schemes to reduce their tax bills.
Ministers said January's delisting signaled that the process was working as countries around the world were agreeing to adopt EU standards on tax transparency.
All delisted countries have been moved to a "gray list," which includes dozens of jurisdictions that are not in line with EU standards against tax avoidance but have committed to change their rules and practices.
These countries can be moved back to the blacklist if they fail to respect their undertakings.
Blacklisted jurisdictions could face reputational damage and stricter controls on their financial transactions with the EU, although no sanctions have been agreed by member states yet.
The blacklist was set up to discourage the use of shell structures abroad, which in many cases are legal but may hide illicit activities.
It took nearly a year for EU experts to screen an initial 92 jurisdictions around the world before identifying 17 in December that could favor tax avoidance.
EU countries were not screened. They were deemed to be already in line with EU standards against tax avoidance, although anti-corruption activists and lawmakers have repeatedly asked for some EU members such as Malta and Luxembourg to be blacklisted.