Panama has given Colombia a seven-day deadline to remove their name from a tax haven list released by Colombia’s customs agency DIAN, or face possible repercussions. CCTV America’s Michelle Begue reports.

Colombia’s mission to curb tax evasion is targeting its neighbor by pressuring Panama to sign a financial information sharing agreement.

“Since last year we began sending notices. There were meetings between presidents and ministers of finance here in Bogota. There was a technical meeting,” said Santiago Rojas, a DIAN staff member. “But unfortunately, the negotiations never started.”

The customs agency warned that Colombian investors in Panama could be taxed 33 percent instead of the original 10 percent rate. Panama joins countries like Barbados, United Arab Emirates, Kuwait, and Qatar on the tax haven list.

According to Colombia’s central bank figures, Colombia’s investments in Panama totaled $3.2 billion and represented 41.8 percent of total foreign investments by Colombians in 2013. Experts said the recent move is an attempt to find additional tax revenue.

In retaliation, Panama has given Colombia till Oct. 21 to reverse the decision or face economic sanctions. However Colombian officials said there is still a chance for a diplomatic solution.