A Vanuatu-based business adviser is warning Pacific nations caught on a new EU tax blacklist could get locked out of trade in Europe.
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Vanuatu, Fiji and the Marshall Islands were added to the 28-nation list on Wednesday, joining Samoa, American Samoa and Guam.
The group countries have not yet been hit with economic sanctions but will face restrictions on transactions and reputational damage.
Mark Stafford, a partner at Port Vila consultancy Barrett and Partners, said Pacific nations would be hit hard by a potential trade block from the EU.
"That would have some impact on our capacity to trade in commodities and to import from European countries, consumer goods in particular, that would be where the impact would come."
Meanwhile, Vanuatu's government has said it's been blindsided by the blacklist.
The head of Vanuatu's Financial Intelligence Unit, Floyd Mera, said the EU made no formal communication regarding the changes.
Mr Mera told the Vanuatu Daily Post once it receives this, it should be able to respond better.
The Vanuatu Chamber of Commerce and Industry was also caught off guard by the listing.