France will put Panama back on its blacklist of uncooperative tax jurisdictions, its finance minister said on Tuesday after media revelations about a Panamanian law firm specialised in setting up offshore firms.
"Panama is a country that wanted us to believe that it could respect the main international tax principles and thus it was taken off the tax haven blacklist," Michel Sapin told lawmakers during question time in parliament.
"France has decided to add Panama back on the list of uncooperative countries with all of the consequences that that will have for those who have dealings with Panama," he added.
Panama is a far bigger financial centre than the other jurisdictions on France's tax haven list, which currently includes Botswana, Brunei, Guatemala, Nauru, Niue and the Marshall Islands.
Panama has come under fire from the Paris-based Organisation for Economic Cooperation and Development for back-tracking on a commitment to automatically share tax information with other countries.
The country increasingly stands out for its failure to push ahead with automatic tax information exchange since all other major offshore financial centres having committed to it in the coming two years.
Of the 7,800 tax regularisation cases French authorities dealt with last year, 515 involved a shell company registered in Panama, the Finance Ministry said on Monday.
Following a massive leak about clients of Panama law firm Mossack Fonseca, France's financial prosecutors opened a preliminary investigation into aggravated tax fraud to establish whether French taxpayers are concerned.
The leak could prove to be a boon for the Socialist government in the midst of a tax evasion clampdown that netted over €12bn last year.