Two laws were added to the books this week that will help Panama get off the gray list . Law 167 addresses money laundering and Law 183 addresses the use of bearer shares.
This is a major step in an effort to clean up its reputation as Latin America’s premier hub for money laundering.
The nation’s legislature late Wednesday unanimously approved a proposed law that will toughen supervision of more than a dozen non-financial sectors where illicit proceeds from the sale of narcotics, corruption and terrorism have seeped into Panama’s booming economy in recent years.
The landmark legislation, which requires everyone from lawyers and real estate brokers to casinos and construction firms to report suspicious transactions, is the key component of Panama’s campaign to win a stamp of approval from the world’s richest nations, which in recent years have clamped down on tax havens and shadow banking centers.
Last year, the Financial Action Task Force, an inter-government body representing the world’s most-developed economies, placed Panama on its “gray list” of 19 financial jurisdictions including Argentina, Syria and Zimbabwe that have major deficiencies in combating money laundering and terror financing.
Panama’s financial oversight has strengthened since the dictatorship of Gen. Manuel Noriega during the 1980s, when the country was a banking center for Colombian drug cartels and corrupt institutions. But a bustling dollarized economy at the crossroads of the Americas continues to make Panama an attractive offshore banking center.
Driven by traffic through the Panama Canal, economic growth has averaged 8 percent annually over the past decade — far outstripping the performance of every other Latin American nation.
Some economists have expressed concern that cumbersome regulations could hurt Panama’s competitiveness at a time Latin America is experiencing a major slowdown. But a financial overhaul seemed unavoidable, with local banks at risk of losing their vital lifeline to bigger, foreign institutions needed to carry out international translations.
President Juan Carlos Varela made passage of the legislation, which revises 15-year-old rules, a top priority of his year-old administration.
Interesting how the US has bearer shares and non of the rules they impose on other countries. Basically it is simple the US is not fighting money laundering, they do not like competition and want all money laundering to go through the US because it is very profitable. To be a small white list country Panama has to look at its tax laws. other countries on the whit list like the isle of man (tax rate 0%) Hong Kong (top tax rate 15% offshore income 0%) Panama has a 27% tax rate, the US on average has a lower tax rate (but much more complicated on convoluted reporting tax rate on a sliding scale of 0% to 40%) Panama also has a wealth tax, sales tax pushing the overall tax rate to over 40%. Many companies are now leaving. Ireland (tax rate 12% is one of the countries of choice and England (tax rate on offshore income 0%) All on the white list. Not sure if Panama just wants to destroy is position as a business hub. But if they want to be on the white list and be a business hub they have to do some changes to the tax laws and the labor laws otherwise it will no longer be a center for business head quarters.