Panama on hot seat over exchange of tax info

PANAMA has been asked by to reiterate its commitment to the automatic exchange of tax information by adopting the model posed by the OECD .

The request comes from the agency’s  Global Forum of Transparency and Panama is struggling to reach an agrrement so that the country can be removed from the grey list of countries suspected of being moneyaundering havens.

The OECD mechanism would mean that the country would be required to exchange information with any country that requests it, reports La Prensa.

However, Panama has argued that the exchange should be carried out under bilateral agreements, which were signed only with countries that “have the capacity to manage the information so it is only used for tax issues,” said Deputy Foreign Minister Luis Miguel Hincapié.

Last week, Hincapié sent a letter to Global Forum on Transparency President Kosie Louw reiterating the position of Panama and asking the agency to recognize the differences between Panama and other financial centers while also noting that the United States had adopted a different system from that proposed by the OECD.

The Foreign Ministry reiterated its commitment to the exchange of financial information, but said it would only do so “under a model that guarantees strict compliance with standards of confidentiality, protection and proper use of the information.”

He also asked the Global Forum to recognize the fact that other jurisdictions that have adopted the automatic exchange of information under the rules proposed by the Global Forum have lost competitiveness. More than 90 countries have committed to begin the automatic exhcange of information between 2017 and 2018.

President Juan Carlos Varela announced at the General Assembly of the United Nations last September that Panama would engaging with the automatic exchange of information, but with certain conditions. Last December, the Foreign Ministry said that the government was working on its own model and in the development of the necessary regulatory framework for its implementation.

This model would take into account elements used by the United States, the first country that has required the automatic exchange of information.

Lawyer Álvaro Tomas said in a recent article that it is hypocritical that the OECD has allowed the United States to use its own model, but refuses to allow Panama to do the same.

“Panama has the right to defend its own platform of services,” he said.