Panama edging closer to exiting tax haven gray list

THE REVIEW  group of the Global Forum on Transparency and Exchange of Tax Information -made up 30 countries, linked to the OECD  has acknowledged  that Panama’s legal framework for the exchange of tax information complies with international standards, and has  recommended that Panama pass to phase 2 of the peer review.

Panama emerged from the OECD  list of tax havens in July 2011, after implementing a strategy based on the signing of treaties to avoid double taxation and exchange information with other countries. At present, according to the OECD, the country maintains information exchanges with 25 jurisdictions.

However, according to the OECD provisions still exist   in the Panamanian legal system limiting transparency and exchange of information, and therefore the country had not passed the first stage of review in which the adequacy of the legal framework is analyzed.

Specifically, the agency had questioned the late entry into force of Law 47 of 2013 which establishes a system of custody of bearer shares. The standard is to always know who is the ultimate beneficiary in the securities of a company.

Although it was approved by the National Assembly, effective enforcement would not be mandatory until 2018, a period too long for the OECD. This was one of the arguments made by the international organization in 2014, when it denied the Panama’s move to phase 2.

However, as part of updating the legal framework to exit  the gray list of the Financial Action Task Force, the Government amended the Law 47 to be full compliance from 2016.

Progress must be ratified by the full Global Forum in October.

Once Panama is in phase 2, the Global Forum appoint another review group which will be responsible for ensuring that the legal framework is effectively enforced.

towards achieving an agreement.”