ABSTRACT
This paper aims to assess the European tax havens in terms of corporate financial misconduct risks. The study relies on an index method developed by a group of economists belonging to the international non-governmental organization - the Tax Justice Network. The method allowed the authors to calculate the Corporate Tax Harbor Index (CTHI) and determine the role of a particular jurisdiction in global corporate financial misconduct risks. The study established a ranking of European tax havens and jurisdictions with features of tax havens and classified these tax havens based on corporate financial misconduct risks. The study found that European tax havens and tax haven jurisdictions accounted for nearly 40% of global corporate financial misuse risks in 2020. The classification of European tax havens according to corporate financial misconduct risks demonstrated that the Netherlands, Switzerland, the UK, Ireland, and Luxembourg accounted for more than half of the risks. The shares of Liechtenstein (1%), Monaco (1%), Andorra, and San Marino (less than 1%) did not exceed 3% of the European share of the global risk. The results show the need for adjustments to the regulatory policy of international organizations currently focused on fighting classic tax havens. Their real share of global misuse risks is very small compared to the share of 'gray cardinals' of the offshore market.