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Mark Warner is a Canadian and American trade and investment lawyer. As counsel at the Organization for Economic Co-operation and Development, he advised on harmful tax competition issues.

The recent Panama Papers unauthorized release of confidential documents for many offshore entities has, like the 2014 LuxLeaks release, shone a spotlight on tax havens and enforcement co-operation among tax authorities.

Over the years, countries have grappled with these issues with measured intensity in bilateral tax treaties and various international forums, such as the United Nations, the Organization for Economic Co-operation and Development (OECD), the Group of 20 and the intergovernmental Financial Action Task Force (FATF). In 1998, the OECD launched a project on harmful tax competition. Initially, this project aimed at identifying and sanctioning a list of non-OECD member tax havens. To the surprise of some, many of these countries pushed back, pointing the finger at similar practices engaged in by various OECD member states.

In the end, the OECD backed down and agreed to form a global forum on taxation, to which various non-members that agreed to some degree of information exchange would be invited to participate. After 9/11, the impetus toward enforcement co-operation was reinforced by the perceived need to deal more aggressively with money laundering and terrorist financing, which led to the reinvigoration of the FATF's "name and shame" efforts.

This work hummed along quietly in the background until the OECD rechristened its work on harmful tax competition as work on "aggressive tax planning." The OECD also proceeded on a parallel track, encouraged by the G20 initiating work on base-erosion and profit-shifting (BEPS). In this context, earlier OECD threats of sanctions and countermeasures against non-compliant tax havens was reborn with tacit approval of the G20.

Because the OECD abandoned its work on countermeasures, their legitimacy was not really tested until very recently. However, perhaps not surprisingly, two early recent cases have involved Panama. While underreported, these cases are particularly important in light of the recent threats by the G20 and the European Union to sanction tax havens after the Panama Papers scandal.

The first case involved a challenge within the World Trade Organization, initiated by Panama in 2012, to eight measures taken by the government of Argentina.

Argentina had imposed sanctions on financial services and service providers of various listed "non-co-operating" countries. The measures included foreign-exchange authorization requirements, withholding tax on payments of interest and requirements of access to the country's capital market and for the registration of branches. The WTO struck a dispute settlement panel, chaired by former Canadian trade minister Pierre Pettigrew.

In this rare WTO dispute-settlement decision relating to financial services, the panel found that all of the measures in question violated the "most favoured nation" provisions of the multilateral General Agreement on Trade in Services (GATS). In essence, this prohibits one WTO member from discriminating among WTO members.

However, the panel found that certain measures did not violate the market-access commitments or "national treatment" obligation not to advantage domestic services or service providers. In doing so, the panel cited approvingly OECD and G20 statements on harmful tax practices and defensive measures.

Even where the WTO panel found the Argentine measures had violated the GATS, the panel found that they fell within the general exception contained in the agreement. The panel found that based on the OECD and G20 work, the Argentine measures were necessary to secure compliance with laws or regulations related to the prevention of deceptive and fraudulent practices. However, the panel found that the manner of their implementation constituted arbitrary and unjustifiable discrimination.

What was the source of the discrimination? Ironically, to improve diplomatic relations, Argentina began to negotiate a tax co-operation agreement with Panama in 2013. Accordingly, Panama was removed from the sanction list and the panel concluded that weakened the sanction regime so Argentina could not qualify for the defence. This was a Pyrrhic victory for Panama since the remedy for Argentina might have been as simple as putting Panama back on the non-co-operating list.

Panama appealed the panel decision. On April 14, the WTO Appellate Body reversed the panel's findings that the measures in question discriminated in the treatment of co-operative and non-co-operative countries. In effect, the Appellate Body found that access to tax information could have affected the "competitive relationship" between the two and so the two might not be alike and thus discrimination had not been established.

In the Argentine case, the panel focused primarily on the effect on trade in services. In a separate case initiated by Panama in 2013 involving Colombia, another WTO panel focused exclusively on goods. That case related to Colombia's imposition of a compound tariff affecting the importation of textiles, apparel and footwear from Panama.

In a 2015 decision, that panel found that the tariff resulted in duties in excess of the bound rates set forth in Colombia's Schedule of Concessions. However, the panel found that Colombia failed to demonstrate that the tariff fit within the general exceptions for measures necessary to protect public morals or that it was either "designed" or "necessary" to fight money laundering. In making its decision, the panel referred in detail to a number of FATF studies on "trade-based" money laundering. Colombia appealed the decision and a decision of the Appellate Body is pending.

Decisions by WTO dispute settlement panels are not binding on future panels. However, it is noteworthy that in at least one case with respect to trade in financial services, the WTO appears to be aligned with other multilateral institutions in efforts to deal with tax havens.

Trade lawyers will doubtless pick over the carcass of both of these panel decisions and Appellate Body decisions in the years to come. However, tax authorities will probably feel emboldened to threaten sanctions even where their hands and the hands of their subnational jurisdictions, overseas dependencies and major trading partners are less than clean. And for that reason, this probably is not and shouldn't be the WTO's final word on the subject.