The EU has named 17 countries - including South Korea, Mongolia, Namibia, Panama, Trinidad & Tobago, Bahrain and the United Arab Emirates - in its first ever tax haven blacklist and put a further 47 on notice, including British overseas territories and the crown dependencies of Jersey, Guernsey and the Isle of Man, in an attempt to crack down on the estimated £506bn lost to tax avoidance every year.
"Given the unfortunate incorporation of the country in this discriminatory list, the Republic of Panama has made a decision to call its Ambassador to the European Union, Dario Chiru, to assess the steps to be followed moving forward", the government said in a statement. "This list needs to be effective, meaning that it needs to allow us to take sanctions so that those who don't respect rules change their behavior".
Potential countermeasures that have been tabled on behalf of the European Commission, include limiting access for listed jurisdictions to the European Fund for Sustainable Development, as EU-28 level measures, while the member states could on a country to country bass reinforce monitoring of transactions, increase audit risks for taxpayers benefiting from the regimes at stake or for those using structure involving these jurisdictions. "No one must get a free pass", he added.
The list was made on the basis of three main components: tax transparency, fair tax competition and implementation of Base Erosion and Profit Shifting (BEPS), which is a way of battling tax avoidance created by the OECD.
The bloc did not assess its own member states.
Panama's president, Juan Carlos Varela, objected to his country being on the list, saying it is making progress against tax evasion.
In a blow to activists, states that charge no corporate tax are not automatically considered at risk of breaching European Union tax criteria.
The EU will continue to monitor and, if needed, update the blacklist of tax havens, it said. Among them are Switzerland, Morocco, Turkey, Qatar, Thailand and Hong Kong. It follows a number of high profile disclosures about companies and individuals and their tax planning, such as 2016's Panama Papers and the more recent Paradise Papers.