The International Monetary Fund has called on Panama to strengthen its anti-money laundering regime, following the Financial Action Task Force's (FATF) decision to return the country to its ‘grey list' of monitored jurisdictions.
A staff team of the International Monetary Fund (IMF), led by Alejandro Santos, visited Panama during July 17-23, 2019, invited by the Panamanian authorities.
"In June 2019, the Financial Action Task Force (FATF) placed Panama on the list of countries with strategic deficiencies on its anti-money laundering framework. Despite recent progress on financial integrity, including the recognition of tax evasion as a predicate offense to money laundering, the legal framework needs to be further strengthened and its effectiveness needs to be demonstrated. The authorities are fully committed to implementing the recommendations of the action plan agreed with the FATF and aim to be out of this list as soon as it is possible. Sustained efforts to enhance the anti-money laundering framework and tax transparency will be crucial to strengthen Panama's position as a regional financial center," the IMF said in a statement.
The authorities are fully committed to implementing the recommendations of the action plan agreed with the FATF and aim to be out of this list as soon as it is possible"
"Sustaining inclusive growth over the medium term will require reinforcing the structural reform agenda, especially in education, social security and public health services. Further improvements in fiscal revenues and stricter expenditure controls will be required to improve macroeconomic management, create the necessary fiscal space to cover the cost of future reforms and strengthen fiscal discipline. We encourage the authorities to upgrade the statistical framework to facilitate sound economic decision making at all levels of government," it added.
The country has made a high-level political commitment to implement the FATF recommendations, which include adequate verification and update of beneficial ownership information by obliged entities; establishing effective mechanisms to monitor the activities of offshore entities; assessing the existing risks of misuse of companies and other entities; and introducing measures to prevent the misuse of nominee shareholders and directors.
The business sector has rejected the inclusion made to Panama in the list of nations that need to be supervised in the process of implementing measures to prevent money laundering and financing of terrorism, arguing that "private and government sectors have worked hard to strengthen their legal, regulatory and institutional framework with the adoption of norms aligned with international standards."