Panama

PANAMA: Incoming govt pledges to get Panama off 'grey list'.


By added on 27/06/2019

As published on bnamericas.com, Wednesday 26th June, 2019.

 

Panama’s incoming government is signaling a redoubled commitment to the nation’s anti-money laundering and terror finance (AML/TF) efforts.

The administration of President-elect Laurentino Cortizo will take office on July 1 amid embarrassment that Panama has been once again been placed on the grey list of tax havens that is kept by The Financial Action Task Force (FATF).

The Paris-based FATF announced the return of Panama to its list of tax jurisdictions subject to monitoring on June 21.

The list identifies jurisdictions deemed to lack sufficient anti-money laundering and counter-terrorist financing (AML/CTF) rules.

Long before winning the elections in May, Cortizo promised to restore the country's international image, which was greatly tarnished by the 2016 release of the so-called Panama Papers, the massive filtration of documents from Panamanian law firm Mossack Fonseca that revealed how many of the world’s rich and powerful managed to hide fortunes overseas.

Cortizo’s choice to take over the finance ministry, Héctor Alexander, said in a statement, “We will promote transparency in all sectors and the frontal fight against the illegitimate financing of terrorism and money laundering.”

Alexander said that his team would work on “a road map, with a complete and adequate strategy to face this and other inherited challenges and adopt the pertinent actions to improve the country's international image and leave the list.”

Panamanian business chamber CCIAP slammed the FATF’s decision, saying the country has been working to beef up its regulatory framework and shed its image as a money-laundering hotspot.

"Panama is taking steps in the right direction in a consistent manner, and the message that FATF sends to the country with this measure is disastrous, since it has a demoralizing effect on the effort required to promote all the changes implemented,” said CCIAP president Jorge Juan de la Guardia.

The Central American nation was first added to the list following an IMF evaluation 2012 that found shortcomings in anti-money laundering practices. It was taken off the list in 2016 after FATF determined that Panama had made significant progress in improving its AML/CFT regime.

Recently, Panama approved a rule to criminally punish tax evasion, a key recommendation from the OECD.