Following the revelations that Panama has 214,000 so-called letterbox companies, the Organization for Economic Co-operation and Development (OECD) on Tuesday accused the Central American country of serious shortcomings.
"Panama is the last major holdout that continues to allow funds to be hidden offshore from tax and law enforcement authorities," OECD Secretary General Angel Gurria said in Berlin.
Gurria said that just a few weeks ago he had warned the finance ministers of the G20 group of industrialized and developing nations that Panama "was back-tracking on its commitment to automatic exchange of financial account information."
"The consequences of Panama's failure to meet the international tax transparency standards are now out there in full public view. Panama must put its house in order, by immediately implementing these standards," he went on to say in a statement.
Millions of documents from the Panama-based law firm Mossack Fonseca, leaked to a select group of media outlets, detail how leading politicians, sports stars and suspected criminals funnelled money to shell companies in the tax haven.
The firm has denied any wrongdoing and says the media reports are "inaccurate."
The OECD has played a leading international role in combatting tax fraud and evasion.