Mongolia was listed amongst 17 non-cooperative tax haven jurisdictions in the European Union’s first ever blacklist on tax havens. Along with Mongolia, 17 countries -- South Korea, Namibia, Panama, Trinidad & Tobago, Bahrain and the United Arab Emirates -- are included in the blacklist published by Brussels on December 5. According to the EU, the named countries have failed to meet international standards and did not give sufficient commitments that they implement significant reform during talks in the months leading up to publication of the list. At first glance, the 17 countries named in the blacklist, while they may have been uncooperative, are not exactly the main hubs used for tax evasion and certainly not the places one would imagine as tax havens. In Mongolia’s case, negotiations and more importantly the capability on the exchange of information regarding the private financial information of individuals had not yet reached a point where it could be disclosed to the EU. “Mongolia has a few critical issues concerning its legislature. The EU wants to have access to information on the bank accounts of foreign nationals and the shares that foreign nationals hold in Mongolian companies. The EU does not want to ask the banks for this information, it wants it straight from the taxation office,” said Finance Minister Ch.Khurelbaatar. The Finance Minister explained that seeing as Mongolia is a developing country, the telecommunications and information systems have not yet developed to a stage where all the information can be aggravated. According to him, the government and EU were on track to negotiate the issue in 2019. Ch.Khurelbaatar reported on the issue to Cabinet on December 6. The Finance Minister stressed that Cabinet had a lot of work to do, including enrolling in Global Forum and BEPS, in addition to reforming legislature, improving transparency, and exchanging tax information. South Korea, Asia’s fourth largest economy, took a different approach compared to Mongolia.  South Korea's finance ministry has expressed "deep regret" over being blacklisted as a tax haven. It also accused the EU of not following the rules. "The EU's decision is not in accordance with international criteria," despite the fact that the Europeans had "previously agreed to accept OECD/G20's assessment of harmful tax practices," the ministry said in a statement. It also said the decision "poses the risk of violating Korea's tax sovereignty." Many have criticized the move of publically shaming 17 countries in a scramble to take action in light of the latest release of damning document leaks in the Paradise Papers. Both Mongolia and South Korea had been taken by surprise. However, many pundits and analysts have framed putting 17 countries on the uncooperative jurisdictions just as a sideshow to the real action that is planned to be taken by the accompanying “grey” list. The grey list includes 47 territories, including the Cayman Islands, Vanuatu, Guernsey, Jersey, Bermuda and the Isle of Man. All of the mentioned territories have been at the center of both the Panama Papers and the Paradise Papers and all of which have a corporation tax rate of zero. The six territories have been singled out due to its shortcomings in fair taxation. The EU has said these territories “facilitate offshore structures which attract profits without real economic activity”. The laws in the six territories allow multinational corporations to store trillions in untaxed revenue. Territories included in the grey list have promised to comply and enact certain legislative reform, addressing tax fairness and transparency. Those named in the grey list have the end of 2018 to implement reform. Progress will be monitored by an entity called the European code of conduct group on business taxation, which is made up of tax experts from member states and chaired by Italian Fabrizia Lapecorella. If improvements don’t materialize, these jurisdictions could be added to the blacklist, which is set to be updated annually. However, the Finance Minister of European Union member countries have yet to agree on sanctions. The fact that no sanctions have been agreed upon, while seen as a sign of weakness by some, serve to warn the countries included in the first ever blacklist. The most drastic action that is being proposed is withholding taxes; profits cannot leave a member state disguised as interest payments on a loan, or royalties, without being taxed in the market where they were made. At the other end of the scale, tax inspectors could decide to pay special attention to any structures involving these jurisdictions. Mongolia will most likely enter into negotiations with the EU as soon as possible and could potentially be removed from the blacklist through legislative reform. Even though negotiations were set to begin in 2019, the government of Mongolia will feel more inclined to take action in fear or repercussions or potentially even sanctions. While the issue of tax havens and offshore accounts is mainly concerning corporations and the trillions of dollars untaxed revenue in the EU, Mongolia has its own fight with offshore territories. Specifically, the allegations related to politicians who have reportedly embezzled billions of MNT from state funds into private offshore accounts. As a result, it is important more than ever to remain in sync with the world in the fight against the illicit uses of offshore territories.