Optimism is Strong amongst Panama Authorities Regarding the European Recommendation to Remove Panama as a Tax Haven

The European Commission’s recommendation to remove Panama from the list of countries at high risk for money laundering and terrorist financing has generated some optimism among authorities, as it is the result of joint efforts by several administrations.  When asked by news reporters about the decision of the Council and European Parliament, President José Raúl Mulino stated that he wants to be “positive” and believe that the country has the necessary votes to consolidate its exit.  The president explained that, internally, for several years, the banking system has been undergoing various modifications to comply with the multiple transparency requirements demanded not only by Europe but also by the rest of the countries that maintain these ratings on the isthmus. 

Panama’s actions have focused on strengthening controls over cash handling, transfers, deposits, and other banking transactions for clients, ensuring that their funds are not used to promote illegal activities.  These actions, according to the Executive Branch, seek to demonstrate to these organizations that Panama has a firm conviction not to sponsor money laundering and terrorist financing from the country or through its financial system.  “Money laundering always exists, but not through the banking system as a matter of policy; we don’t have any intelligence reports on that,” Mulino said.  Authorities stated that they will continue to address the issue of discriminatory lists until Panama is no longer considered a tax haven. 

Furthermore, they reaffirmed that the sanctions against these countries will remain in place; therefore, as long as Panama remains on these lists, they will not be able to bid with the State.  According to the European Commission, the list update was based on a technical analysis using information gathered through the Financial Action Task Force (FATF), the international body responsible for combating money laundering.  However, it is only a suggestion that must be evaluated by the Council and the European Parliament, the bodies responsible for such a vote, which have previously rejected this opinion.  Executive trusts are in a definitive exit from the discriminatory European lists as Panama strengthens its banking system.