European officials have recommended that eight countries, including Panama and Tunisia be moved from the EU’s tax haven blacklist to its grey list, after they promise to reform.

The Europe Council’s group of tax experts – the so-called Code of Conduct group – recommended that EU Finance Ministers move Barbados, Grenada, South Korea, Macau, Mongolia, Panama, Tunisia and UAE off the list of “non-cooperative” tax jurisdictions at their regular meeting next Tuesday, according to a leaked memo.

With the recommendation to move Panama to the grey list, the council’s blacklist “becomes laughable” according to Markus Ferber, German MEP and member of the parliament’s Economic and Monetary Affairs Committee. Pardoning “the world’s most prolific tax haven… would be a fatal signal for the EU’s role in fighting tax evasion and money laundering. Panama has built its reputation of a top-notch tax haven and money-laundering hub for years – the Panama Papers are proof of that. To pardon Panama after only a little more than month and a noncommittal letter promising to do better is hard to beat in terms of naivety.

”Critics argued that blacklisting Tunisia in December sat uncomfortably with European support for the north African state’s efforts to fight terrorism, attract foreign investment and deal with the fallout from turmoil in neighbouring Libya.

Tunisia had been working closely with officials to secure the move, after its reform commitments arrived too late to secure the move in December. South Korea and UAE are also strategically and economically important to the bloc and have been working intensely to secure a move off the blacklist.

The council announced a blacklist of 17 countries on December 5 and most of those jurisdictions have been working on tax reforms to meet the bloc’s three criteria: have fair tax rules, meet transparency standards and implement anti profit-shifting measures set by the Organisation for Economic Co-operation and Development.

If the leaked recommendation is approved by the ministers, Panama and the other seven countries would join nearly 50 other jurisdictions on the grey list which have one year to fulfill their commitments. Developing nations on the list have an extra year to reform.The council’s analysis excluded 48 of the least developed nations, while eight hurricane-affected jurisdictions including the US Virgin Islands and the British territories of Anguilla, the British Virgin Islands and the Turks and Caicos Islands, have extra time to respond.