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There is a separate but related topic regarding Panama and financial blacklists. One topic (this one) addresses blacklisting by the USA, and the other topic addresses blacklisting by the European Union. Please also see: http://www.chiriqui.life/topic/7898-panama-versus-european-union-tax-haven-blacklist-money-laundering-illicit-black-money/

Panama's action to criminalize tax evasion is discussed at http://www.chiriqui.life/topic/7388-criminalization-of-tax-evasion/

 

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According to: http://www.fatf-gafi.org/about/ regarding the Financial Action Task Force (FATF):

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The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions. The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.

Panama was on the FATF "Gray List".

According to: http://www.centralamericadata.com/en/article/main/Panama_Gets_Off_FATF_Gray_List, Panama is now (as of this week) off the FATF "Gray List".

Methinks this probably is a good thing.

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New York Times piece by President J.C. Varela

http://mobile.nytimes.com/2016/04/11/opinion/dont-blame-panama-tax-evasion-is-a-global-problem.html?referer=https://www.google.com.pa&_r=1

 

Op-Ed Contributor

Don’t Blame Panama. Tax Evasion Is a Global Problem.

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By JUAN CARLOS VARELA
April 11, 2016

Panama City — DESPITE their name, the Panama Papers are not mainly about Panama. They are not even primarily concerned with Panamanian companies. The more than 11 million documents, illegally hacked and released last week relating to previously undisclosed “offshore” corporations, is roiling the world with revelations of the vulnerability for rampant abuse of legal financial structures by the wealthy.

They are unfairly called the Panama Papers because this particular trove of documents came from a single law firm based in Panama. But the problem of tax evasion is a global one.

Panama does not deserve to be singled out on an issue that plagues many countries. But we are willing to accept the responsibility for fixing it, in part because greater transparency is ultimately a continuation of reforms we have recently undertaken. The world must tackle this problem collectively and with urgency, and Panama stands ready to lead the way.

The scope of the information is breathtaking: The files include information on more than 14,000 banks, law firms, corporate incorporators and other middlemen from more than 100 countries, which is just a small part of a worldwide industry that harbors trillions of dollars.

That some can rig the system to hide their wealth is not merely unjust; it also harms global development by siphoning off revenues that could be directed to education, health care and infrastructure.

Contrary to media reports, Panama does not make special allowances for “offshore” structures. The association of Panama with offshore activities comes from the fact that we tax only income derived from within Panama, not from without, which remains taxable pursuant to the laws of relevant jurisdictions. These rules, based on laws in New York and Delaware, originated in 1927 and are common today. While these laws have been buttressed by additional regulations, they can still be manipulated for illicit purposes.

Under previous governments, Panama was no doubt a target of money launderers. Today, Panama is committed to adopting all transparency reforms needed to satisfy the international community. In the 21 months of my administration, Panama has taken steps to increase the transparency and strength of our financial legal systems. We developed a robust treaty network that allows exchange of information. “Know your client” regulations were substantially enhanced and extended not only for financial and corporate providers but also for key nonfinancial industries vulnerable to abuse. And as of January this year, we require identity certification of shareholders of all Panama companies.

I have announced a commitment to the automatic exchange of financial and corporate information, and we have proposed steps we believe are consistent with the goals of the international community, including the Organization for Economic Cooperation and Development through its Common Reporting Standards proposal.

These reforms have been recognized and validated by the international community, including the Financial Action Task Force on Money Laundering, which cited Panama’s “significant progress” in combating money laundering when it removed us this year from its “gray list.” Removal from that list occurred in record time.

Our financial transparency ranking with the nongovernmental organization Tax Justice Network has steadily improved since 2013, and we now rank well ahead of Japan, Germany and the United States. We have also progressed positively in a peer review by the O.E.C.D.’s Global Forum for Transparency and Exchange of Information for Tax Purposes. These reforms in Panama, along with other international efforts, have been paying dividends.

Still, more work is needed. I have announced that Panama’s Ministry of Foreign Affairs will create an independent committee of international experts to evaluate our policies, determine best practices and propose measures that will be shared with other countries to strengthen global financial and legal transparency. We expect their findings within six months.

Panama will continue to cooperate with other jurisdictions to prosecute offenses outlawed in our Criminal Code, and we will continue to exchange financial and legal information to comply with the many treaties we have ratified. We also reiterate our willingness to engage in dialogue with the O.E.C.D. and its Global Forum with respect to reaching financial transparency agreements that can further the economic development of our countries.

After decades of dictatorship, Panama is a stable democracy committed to the rule of law and the regional headquarters of more than 100 transnational companies. To fulfill our democratic evolution, we must have a government committed to transparency, accountability and the separation of powers. Our response to the current crisis will test our resolve and our potential.

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Bulgaria Takes Panama Off Grey List

Citing the country's progress in international cooperation in fiscal matters, the European country has decided to remove the country from the discriminatory tax list.

Wednesday, April 12, 2017

From a statement issued by the Ministry of Foreign Affairs in Panama:

The Government of the Republic of Bulgaria informed the Government of the Republic of Panama of its decision to take immediate measures to remove the country from the discriminatory tax list, as a result of Panama's advances in international cooperation in tax matters and the forthcoming entry into force of the Convention on Mutual Administrative Assistance in Tax Matters (MAC).  

In November 2016, the Ministry of Foreign Affairs established diplomatic communications with the Bulgarian authorities in order to inform them of the latest developments made by the Government of the Republic of Panama, so that evaluation could be made, according to technical and not political criteria, of the country's unfair inclusion in that list.

 

http://www.centralamericadata.com/en/article/main/Bulgaria_Takes_Panama_Off_Grey_List

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Black Money in Central America

Costa Rica 's estimated illicit financial flow averages 45% of its total foreign trade, and the incoming amount is 2.5%; For El Salvador these figures are 9% and 7.5%, for Guatemala 9% and 1.5%, for Honduras 31% and 28%, for Nicaragua 13% and 9%, and for Panama 16% and 307%.

Friday, May 12, 2017

A report by Global Financial Integrity (GFI) entitled "Illicit Financial Flows to and from Developing Countries: 2005-2014" concludes that the illicit flow of money to and from developing countries remains at high levels. The purpose of the report is to quantify those illicit financial flows that represent a serious disadvantage to economic development. 

According to the GFI, their main source of illicit financial flows is deliberate falsification in the billing of traded merchandise. It concludes that lack of commercial information is the main reason for the facility which exists to illegally transfer funds to and from developing countries.

With respect to counterfeit invoicing, the GFI estimates the following average figures for the Central American countries, in relation to the total volume of foreign trade: Costa Rica, 44% and incoming 2.5%, El Salvador 9% and 4.5%, Guatemala 7% and 1.5%, Honduras 31% and 26%, Nicaragua 9% and 9%, and Panama 12.5% and 307%. 

See full report "Illicit Financial Flows to and from Developing Countries: 2005-2014". 

 

For those who might be interested in the full report released in April 2017, click here: GFI-IFF-Report-2017_final.pdf


http://www.centralamericadata.com/en/article/main/Black_Money_in_Central_America

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Panama under  money laundering microscope

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UNDER  the shadow of over 40 corruption  and money laundering investigations involving scores of high ranking  officials of the previous administration along with family members and business associates, President Juan Carlos Navarro sat down on Monday, May 15  to head the fourth mutual evaluation by the International Financial Action Task Force (FATF).

Varela was  joined by  Vice-President Isabel De Saint Malo de Alvarado whose brother was interrogated last week for his alleged  links to the Odebrecht construction company   bribery and money laundering scandal.

The group will measure the effectiveness of the implementation of the regulatory framework to prevent money laundering.

 

http://www.newsroompanama.com/news/panama/panama-money-laundering-microscope

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Panama’s dismal money laundering status

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PANAMA SITS  on the 30th rung of the 146 step ladder of nations most at risk of money laundering according to The Anti-Money Laundering Index (AML 2017), published in Basel, Switzerland.

In Latin America, the isthmus was in fourth position, behind Paraguay (16 global), Haiti (17) and Bolivia (23).

According to the index – which quantifies the risk from highest to lowest – Peru (100), Uruguay (101), Chile (109) and Colombia (125) were the best in the region.

At the global level, the countries with the most robust legislation and regulations were the Same as last year: Estonia (144), Lithuania (145) and Finland (147).

The country most at risk for money laundering is Iran, which has led the index for four consecutive years. In this year’s edition,  it was followed by Afghanistan and Guinea-Bissau.

The Basel Institute on Governance measures the vulnerability of a country through 14   risk indicators based on high levels of perceived corruption; low transparency; under compliance with laws and political rights; Financial standards and transparency; and deficiencies in money laundering legislation.

 

http://www.newsroompanama.com/news/panama/panamas-dismal-money-laundering-status

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OPINION: High profile corruption legacy

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THE BASEL INDEX measures the risk of countries being used for money laundering and financing of terrorism. In its most recent report, this index classifies Panama as the fourth worst country in Latin America and the Caribbean, only surpassed by Paraguay, Haiti and Bolivia. This alarming result should not be a surprise because of the legacy of high profile corruption that Panama is trying to fight. In addition, the reluctance of financial and regulatory authorities to sanction bad actors in the financial system, and making this information public does not help us either. The brave effort undertaken in recent years has succeeded in getting Panama off the negative lists of different  international agencies but it is finally the history of cases of success and exemplary justice in this matter which will define Panama as a paradise for legal investments, and not with the reputation of being a haven for high-flying criminals, accomplices bankers, and indifferent authorities. That is the great challenge that the whole of society must face to clear the name of the country … hoyporhoy, La Prensa, Aug.25

 

http://www.newsroompanama.com/news/panama/opinion-high-profile-corruption-legacy

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The Risk of Money Laundering in Central America

Panama and Nicaragua are among the ten countries in Latin America with the highest risk of money laundering, according to the Basel Institute of Governance.

Friday, August 25, 2017

The anti-money laundering index (AML) prepared by the Basel Institute of Governance places Panama in fourth place in the list of countries with the highest risk of money laundering and financing of terrorist activities in Latin America and the Caribbean. 

Panama is surpassed only by Paraguay, Haiti and Bolivia, according to the index. 

Central America is closely followed by Nicaragua, in the eighth position, ahead of Guatemala, which is ranked 14th in the list of Latin American countries. 

Honduras (16), Costa Rica (18) and El Salvador (21) received lower scores, and although they are countries prone to money laundering, according to the Basel Institute of Governance, the risk is lower than in the aforementioned countries. 

According to the Basel Institute of Governance,   "... While most countries legally comply with current rules to combat money laundering and terrorist financing, many countries are short on compliance (sometimes severely short) in terms of effective implementation and compliance with those laws."

"...  By including data from the FATF, which in recent years has used an evaluation methodology that focuses not only on technical compliance but also on law enforcement capacity, the Basel AML Index is increasingly able to capture this significant difference."

See details on the AML index complied by the Basel Institute of Governance.

 

http://www.centralamericadata.com/en/article/main/The_Risk_of_Money_Laundering_in_Central_America

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Laundering crackdown on insurance brokers

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THE LICENSES of 745 Panama insurance brokers have been suspended for failing to comply with a law governing money laundering.

The Superintendency of Insurance and Reinsurance has suspended the licenses to sell and renew policies or collect commissions

for noncompliance with Law 23 of 2015 under which  insurers and insurance brokers are required to report transactions in cash and suspicious transactions. To do so, they must register with the Financial Analysis Unit (UAF online)).

Superintendent José Joaquín Riesen said that they were issued circulars warning of the obligation to register on the UAF online portal. On May 10 , the regulator granted a deadline up to July 31 to comply.

Since the law came into force two years ago, some 950 licenses have been suspended. The suspension is for a period of three months extendable another similar period. If at that time they have not complied), the licenses are canceled.

Riesen said that this is a drastic measure, but noted that “we must enforce the rules that we adopted as a country. ”

Law 23  identifies the professions that must report suspicious transactions in financial activities. The insurance sector has the largest number of obligated people (2,400).

In February 2016, after approving the package of measures to prevent money laundering and the financing of terrorism, Panama left the gray list of the Action Group which it had entered 2014 due to the weakness of its legal framework to combat the crime.

This year, the Latin American arm of the Financial Action Task Force is making a new evaluation, which included a visit to Panama in May to gauge the effectiveness of the new rules.

 

http://www.newsroompanama.com/news/panama/laundering-crackdown-insurance-brokers

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2 hours ago, Moderator_02 said:

Since the law came into force two years ago, some 950 licenses have been suspended. The suspension is for a period of three months extendable another similar period. If at that time they have not complied), the licenses are canceled.

750 just recently suspended as well.1695 Insurance Brokers suspended in the last 2 years. There are that many insurance brokers in Panama?

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Three  banks hit for money laundering flaws

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THE STATE-OWNED   National Bank is one of three  that have been sanctioned for laxity in applying  standards   to prevent money laundering.

The Superintendency of Banks of Panama has also imposed fines  on Multibank  and Banvivienda. “for failure to comply with the standards for the prevention of money laundering capital and for violations of the banking regime.”

According to the regulator’s website, Multibank was fined $300,000 for violations of rules of the anti-money laundering regime and financing of terrorism; and one of $100,000 for violations of the banking system.

The state-owned Banco Nacional de Panamá was fined $106,750 for money laundering violations and $21,875 for violating banking regime rules. Rolando de León, the general manager of the state bank, said in an e-mail that “the sanctions were for cases of clients considered as Politically Exposed Persons (PEP). ”

Banvivienda was fined $90,000  for the prevention of money laundering failures, and another of $40,000 for violations of the banking regime.

This is the second round of bank punishments. In January of this year, the Superintendency issued fines imposed between 2015 and 2016 to nine other entities.

 

http://www.newsroompanama.com/news/panama/three-banks-hit-money-laundering-laxity

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Experts assure that Panama "does not deserve" to be included in the gray list of the FATF this year

Fri, 02/01/2019 - 19:43

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For "all the changes it has made in an accelerated time", Panama "does not deserve" to be included again, as in 2014, in the gray list of tax havens of the International Financial Action Group (GAFI), bank superintendent Ricardo Fernández told to Acan-Efe on Friday.

However, the person responsible for overseeing the good performance of more than a hundred banks -most of them international- operating in the country, admitted that "last October they warned me of that possibility".

"I hope that the times accompany us, because when they told me about that possibility it was because the law that criminalizes tax evasion was not passed", which was done this week.

A FATF mission will visit Panama in mid-February to assess the level of compliance with international regulations to prevent tax evasion, money laundering and financing of terrorism and proliferation of weapons of mass destruction.

The result of that evaluation will be published next June, almost at the end of the current government, which will hand over power on July 1 to the one elected on May 5.

"The progress has been substantial since the new legal frame was made (in 2014) the prevention aspect was greatly strengthened, in line with the recommendations of the FATF and quite in line with the world. The world has been homologated and that is something that costs us to understand", he said.

More than 90 percent of the Panamanian economy is of services, has within its most important pillars the financial center, which generates more than 22,300 jobs, this is more than the same Canal of Panama (10,000 jobs) and generates direct salaries of almost 1,000 million dollars, said Fernandez to emphasize that legal changes are a necessity.

With the advances that Panama has had, in prevention and prudential, "it does not deserve" to be returned to a gray list, he said and "they have recognized" it in Europe, but he added that what is needed is "to communicate progress".

He argued that although "there are those who feel injured", it is not a problem to classify tax evasion as a crime, because "everyone must pay their taxes, and that these are invested correctly". There are projects for 20,000 million dollars that if they are done will provoke more growth and in a sustained way".

The banking industry in 2018 reached 121.5 billion dollars in assets, "an unprecedented figure, record for the system, we had been in a small decrease, but rebounded in the last three months", he said.

The result of banking is very positive, and the important thing is that it maintains solid rates of adequacy, above 16 percent, which helps the capitalization and liquidity of the banking center, which has been slightly above 60 percent the last ten years, he added.

For his part, the general manager of the National Bank of Panama (of the State), Rolando de León, told to Acan-Efe after presenting its accounts of 2018, that in 2014 that institution "was not affected by the inclusion of Panama in the gray list".

"Fortunately we comply with the fiscal penalty law, we hope that (...) the decision that will be announced (by the FATF) in the month of June will be favorable to the country," he said.

The NBP, he said, was "a support so that we could get ahead and get the country out of the list" with the cooperation of all State institutions.

"We fully trust that this time we will not be in that list again, but, in case that it should arise, we will unify efforts so that Panama can maintain its status and reputation internationally", he added.

 

https://www.panamatoday.com/economy/experts-assure-panama-does-not-deserve-be-included-gray-list-fatf-year-9124

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Non-financial sector operators could return Panama to Gray List

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Posted 11/06/2019

 Lawyers, accountants  and real estate operators  and other non-financial sectors who have not complied with anti-money laundering regulations have put Panama in danger of returning to the gray list of the Financial Action Task Force (FATF)

Rolando de Leon de Alba.manager of the National Bank of Panama (BNP),  told a press conference on Tuesday, May 11 that there is "some pessimism" among the heads of the government of Panama because they are aware that the regulations demanded by the FATF have not been complied with in some  sectors

He said that the banking and financial, insurance and related sectors comply "superlatively" with the prevention rules that were approved in 2014 to remove Panama from the so-called "gray list" of the FATF.

He  stressed that the inclusion in that list affected Panama "in what refers to the banking correspondents."

"I think that if it were given on this occasion (the inclusion in the gray list), it will not have the effects of 2014 and we can leave quickly," he argued.

Weeks ago, the FATF assessed Panama's compliance with international cooperation commitments in the fight against tax evasion, money laundering and the prevention of the financing of terrorism and weapons of mass destruction.

De León said that the current economic situation in Panama is solvent and does not see that it is going to go back in the country risk rating because there is room for maneuver with its finances.

He recommended to the authorities to evaluate the "control of public spending", rather than considering a tax increase or acquiring more indebtedness to sustain public income and investment.

 

https://www.newsroompanama.com/business/non-financial-sector-operators-could-return-panama-to-gray-list

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