Following their regularly scheduled meetings in Brussels on Tuesday, the so-called ECOFIN designated the two countries as havens for offshore tax evasion and urged greater transparency in the tax practices of individuals and companies operating in their jurisdictions.
"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.
Smaller, low-tax, European Union member states such as Luxembourg, Ireland and Malta were concerned about discouraging multinational corporations with the United Kingdom fighting hard against the blacklist since its own crown independencies such as the Virgin Islands could be potentially jeopardized.
The Council concluded that these countries are non-cooperative jurisdictions for tax purposes because they did not meet Council criteria established in November 2016 and did not provide a sufficient commitment to meet these criteria in the future.
This second list includes Switzerland, Turkey and Hong Kong.
Many have also taken to social media to criticise the list, including the managing director of Arton Capital who tweeted the list was "total and complete nonsense".
"To be on a blacklist is in itself bad enough and of course there will be consequences for these countries", Luxembourg Finance Minister Pierre Gramegna said. These include stricter monitoring of transactions and increased audit risks for taxpayers benefiting from the regimes involved, or for those using these jurisdictions' structures.
"Tax havens will not disappear from our radars and we will keep the pressure on", he said.
The "repatriation provision" proposed by Republicans would change give American companies a tax break - allowing them to pay a minimum of 10 percent tax on some types overseas earnings (in the Senate version of the bill) and a 20 percent tax on domestic profits.
The clock is counting down: Now that tax reform bills have made their way through the House and Senate, Republicans in both chambers are working to iron out the differences between the two bills - with a goal of overhauling the U.S. tax system by December 22.
This country was also named in the Panama Papers a year ago. "If we want to fight tax avoidance credibly on a global stage, we must also put our own house in order", said socialist legislator Peter Simon.