Panama Angry At Continued Inclusion On Money Laundering Lis

Mike Godfrey, Tax-news.com, New York

27 October 2000

As reported in Tax-news.com, the Financial Action Task Force (FATF) met in Madrid earlier this month and praised seven of the 15 financial centres listed on its recent blacklist for their endeavours in the global fight against money laundering. Among the seven was Panama, which since the list's June publication has enacted two laws addressing money laundering and has issued Executive Decrees to effect accompanying administrative changes. However, the FATF has made it clear that the list will not be amended at this stage and a decision in this regard will not be made until early next year. Panama has been one of the first jurisdictions to react to this latest development, and is clearly peeved that its efforts have not been rewarded with automatic removal from the now infamous blacklist.

Panama has amended its anti-money laundering laws as a direct response to specific complaints cited by the FATF. According to a communiqué by the Foreign Ministry, the Panamanian government acknowledges the FATF's recognition that money laundering laws have been expanded, but is up in arms at the organisation's decision to keep Panama on the blacklist while it sees how the changes actually work, saying that it amounts to the unfair addition of an extra condition that wasn't part of the original demands for change. The Foreign Ministry, Financial Analysis Unit, and Banking Superintendent have all reiterated that Panama is stepping up its efforts against money laundering and the fact that the country is barely any closer to getting of the FATF list obviously rankles.

In an interview with a local newspaper, the Panama News, Minister of Economy and Finance Norberto Delgado said that Panamanians should forget about the blacklists and think about the country. He added that at this point the blacklist doesn't affect the government's ability to get loans or deal with the International Monetary Fund. He stated: 'I think that Panama has demonstrated that it has a serious and responsible financial system. In recent days I have spoken with various investors, including discussions with members of the IMF, and explained all of the regulations and laws that this country has to avoid whatever irregularity. They're norms that they don't have in other countries.'

In Mr Delgado's opinion, Panama has done and is doing all that it can to stop the laundering of drug trafficking proceeds and the recent reforms to the money laundering laws are only the most recent of many efforts toward that end. He added that the international investors with whom he has spoken view Panama as a politically stable democracy with good conditions for smooth economic development. He continued: 'On the world stage, Panama is a prestigious country that's taken seriously. I'm confident that these problems are passing'.

Foreign Minister José Miguel Alemán appears to be more concerned with the FATF's reluctance to proceed with striking names of its sin list. He says that it is a worrisome sign that the FATF has decided that before a country can be taken off of its blacklist, it must prove the effectiveness of new legal norms. He says quite categorically that the amendments to Panama's money laundering laws meet the conditions imposed by the FATF and though inclusion on the blacklist carries no specific sanctions at the moment, Mr Aleman believes that it bound to have a negative effect on Panama's image and economy.

Victoria Figge, the former director of Panama's Financial Analysis Unit, is quoted in the Panama News as saying that it is unrealistic to expect that Panama could get off the blacklist just by passing new legislation, pointing out that Panama's problematic image is not just a reflection of the country's laws.

The president of the Panamanian Banking Association, Moisés Cohen, is far from conciliatory but does admit that it's perfectly logical for the FATF to wish to see some evidence of change. He has invited the FATF to come to Panama to try and open a bank account if the organisation wishes to see whether or not the reformed money laundering laws are being enacted. He states that all Panamanian banks are working according to anti-laundering manuals, and they ask questions and require banking and business references before they will create an account. Roxana Castrellón, president of the National Chamber of Businesswomen, said: 'Panama has been one of the pioneers in financial transparency. It's much more difficult to open a bank account in our country than in any of the First World countries that belongs to the FATF, where you can do this type of transaction over the Internet.'

Concern is mounting in Panama's commercial and financial circles that inclusion on the blacklist will cause potential foreign investors to think twice before risking their money in the country. Ms Castrellon has called Panama's continuation on the FATF list unjust, but added: 'Panama needs a more consistent policy about building our image on the international level.' She has called for cooperation among government leaders, the media, private business and law enforcement agencies toward this end. She called the country's inclusion on the FATF blacklist a 'public relations lesson that we must never forget.'

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