A meeting of the bloc's Economic and Financial Affairs Councit in Brussels yesterday said that the decision to remove RMI from the non-compliance list followed several months of “constructive dialogue”.

"The Marshall Islands was aware in July that the amendments to the RMI economic substance regulations had been positively met by the EU," finance minister Brenson Wase said.

The EU drew up a blacklist and a grey list of tax havens in December 2017 in an effort to crack down on so-called shell companies and nominee director roles being registered offshore, among other tax oversights. Explicitly, in the case of economic substance, offshore centres have been on the hook to make sure that companies incorporating in the territory can show sufficient “substance” for doing business there.

Some 90 jurisdictions, according to Withers law firm, have come under scrutiny, but making public a list of those not in compliance has been politically controversial.

Territories remaining on the blacklist include Belize, Fiji, Oman, Samoa, Trinidad and Tobago, and Vanuatu. The list has raised US anger as the three US territories of American Samoa, Guam and the US Virgin Islands are also on the EU’s list.

The Marshall Islands said it will “maintain its engagement with the EU and other international institutions to ensure that, within its specific context and scale as a small island nation, international standards of corporate governance and taxation continue to be met.”