{"id":18121,"date":"2016-11-01T15:07:17","date_gmt":"2016-11-01T20:07:17","guid":{"rendered":"http:\/\/panamaadvisoryinternationalgroup.com\/blog\/?p=18121"},"modified":"2016-11-01T15:08:29","modified_gmt":"2016-11-01T20:08:29","slug":"the-stiglitz-factor","status":"publish","type":"post","link":"https:\/\/panamaadvisoryinternationalgroup.com\/blog\/the-stiglitz-factor\/","title":{"rendered":"The Stiglitz Factor"},"content":{"rendered":"<p><a href=\"http:\/\/panamaadvisoryinternationalgroup.com\/blog\/wp-content\/uploads\/2016\/11\/joseph-stiglitz.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-18122\" src=\"http:\/\/panamaadvisoryinternationalgroup.com\/blog\/wp-content\/uploads\/2016\/11\/joseph-stiglitz.jpg\" alt=\"joseph-stiglitz\" width=\"488\" height=\"360\" srcset=\"https:\/\/panamaadvisoryinternationalgroup.com\/blog\/wp-content\/uploads\/2016\/11\/joseph-stiglitz.jpg 488w, https:\/\/panamaadvisoryinternationalgroup.com\/blog\/wp-content\/uploads\/2016\/11\/joseph-stiglitz-300x221.jpg 300w\" sizes=\"auto, (max-width: 488px) 100vw, 488px\" \/><\/a><\/p>\n<p>Derek Sambrook, Managing Director at Trust Services, S.A. sent me this article that he wrote about the resignation of Joseph Stglitz from the Panama Papaers committee.<\/p>\n<h1>&#8220;<\/h1>\n<p>Now we have the unfortunate resignation in August of Messrs. Stiglitz and Pieth from the Panama Papers committee, an embarrassment to the Panamanian government and which has been widely covered by television, blogs and newspapers. \u00a0Quoted hereunder are comments made by Mr. Stiglitz and reported, in this instance, by Reuters as follows:<\/p>\n<p>&nbsp;<\/p>\n<p><em>&#8220;I think that the official Panamanians were in a state of denial. They were basically saying<\/em><\/p>\n<p><em>&#8216;well, \u00a0what \u00a0we&#8217;ve \u00a0been \u00a0seeing \u00a0in \u00a0the \u00a0Panama \u00a0Papers\u00a0 is \u00a0something \u00a0that \u00a0you \u00a0observe<\/em><\/p>\n<p><em>everywhere in the world.\u201d<\/em><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p><em>M<\/em><em>r Stiglitz also told Reuters news agency he was concerned that the panel&#8217;s final report would not be published.<\/em><\/p>\n<p>&nbsp;<\/p>\n<p><em>&#8220;We can only infer that the government is facing pressure from those who are making profits from the current non-transparent financial system in Panama,&#8221; he said.<\/em><\/p>\n<p>&nbsp;<\/p>\n<p>These particular comments compel me to share my own thoughts on this development and which will be expressed at Oxford University next month during my speech at a symposium, and also as a member of the separate panel later in the day which will discuss the subject in detail.<\/p>\n<p>&nbsp;<\/p>\n<p>Whilst public enquiries dictate general publication of the findings, any government has the right to decide whether the findings of this type of commission which it has funded should be released in full, in part, or at all to the public. \u00a0The number of precedents supporting this are countless.<\/p>\n<p>&nbsp;<\/p>\n<p>But what really does strike me, with my appreciation of irony, is this: Mr Stiglitz thinks Panama feels that \u201cwhat we\u2019ve been seeing in the Panama Papers is something that you observe everywhere in the world\u201d. \u00a0I wouldn\u2019t say everywhere in the world, but certainly it can be observed less than 130 miles away (by car) from New York City, where I understand that \u00a0the \u00a0crucial \u00a0committee\u00a0 meeting\u00a0 was \u00a0held \u00a0in \u00a0June.\u00a0 \u00a0That \u00a0place \u00a0is \u00a0Wilmington \u00a0in Delaware, America\u2019s epicentre for anonymity, but not the only state offering it.\u00a0 \u00a0Allow me to quote an extract from my September\u2019s Latin Letter:<\/p>\n<p>&nbsp;<\/p>\n<p><em>Walmart-style\u00a0 sales\u00a0 of\u00a0 corporations is \u00a0not \u00a0exclusively an \u00a0offshore\u00a0 phenomenon, and \u00a0I quo<\/em><em>t<\/em><em>e:\u00a0 \u00a0\u201cWith \u00a0every \u00a0threat \u00a0that \u00a0we \u00a0track, \u00a0be \u00a0it \u00a0foreign \u00a0terrorists, \u00a0narcotics \u00a0cartels, sanctioned regimes or cyber hackers, our investigators encounter\u2026 shell companies used to hide and move money. \u00a0Consider the notorious arms dealer Viktor Bout, the alleged model for the movie \u201cLord of War\u201d, who sold weapons to butchers and terrorists from Africa to the Balkans. \u00a0Bout didn\u2019t move his arms here, but his Soviet arms merchant moved his blood money through companies established in \u2026. \u00a0A loophole in our financial system allowed for this secrecy, and it took years to uncover the full money trail\u201d. \u00a0That was \u00a0a \u00a0direct \u00a0quote \u00a0from \u00a0Mr. \u00a0Adam \u00a0Szubin, \u00a0acting \u00a0undersecretary\u00a0 for \u00a0terrorism \u00a0and financial intelligence at the US Department of the Treasury.\u00a0 What was the country and the places in it that I excluded from the quote\u2019s text? \u00a0America and the states of Florida, Texas and Delaware, respectively.<\/em><\/p>\n<p>&nbsp;<\/p>\n<p>Mr. Szubin went on to say: \u00a0<em>\u201cDelaware is well-known for its incorporation businesses, but it\u2019s no worse than any other state in this regard. \u00a0With about $100 and 20 minutes, you can go to a U.S. state\u2019s website and form a company without disclosing the name of the person who will own or control it. \u00a0Professional incorporation agents set up hundreds or even thousands of these companies and then sell them, in some cases to those looking to move money surreptitiously. \u00a0Criminals have learned that American companies have an easier time obtaining bank accounts, and so they incorporate here in large numbers. \u00a0The result is that our financial investigators often come across U.S. shell companies in their money hunts \u2013 and that may be where the trail ends. \u00a0Anonymity isn\u2019t sold by a back-alley check casher or hawaladar in these cases; it\u2019s provided in the open by state incorporation offices. This gives U.S. shell companies the dubious distinction of being the only money laundering method where secrecy is provided by a government entity.\u201d<\/em><\/p>\n<p>&nbsp;<\/p>\n<p>Is there such a thing as Panamax hypocrisy, when brazenness seems to reach a new dimension? \u00a0Panamax is a reference to the size of ship which can now transit Panama\u2019s new, larger locks.\u00a0 \u00a0If ever salt was poured on a wound, holding any Panama Papers committee meetings at the expense of the Panamanian government in the US, whether in New York City or not, on the subject of transparency must surely qualify.<\/p>\n<p>&nbsp;<\/p>\n<p><em>&#8220;<\/em>We can only infer that the government is facing pressure from those who are making profits from the current non-transparent financial system in Panama,&#8221; states Mr. Stiglitz. Non-transparent? Ask Mr. Szubin who can identify American states making profits from non-transparent services; \u00a0and \u00a0any\u00a0 \u00a0pressure \u00a0facing \u00a0the \u00a0Panamanian \u00a0government, if \u00a0it exists, is nothing like that encountered in Washington from lobbyists employed by those US states to ensure that the gravy train producing revenues from corporate services continues to roll along, despite Mr. Szubin saying:\u00a0 \u00a0\u201cBut there is a money laundering method that is less exotic yet every bit as dangerous: \u00a0shell companies incorporated in the United States\u201d. \u00a0Perhaps Messrs. Stiglitz and Pieth could offer some assistance.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>Offshore Investment, the magazine in which my monthly Latin Letter column appears, has some 10,000 readers in over 100 countries. \u00a0This is a message, however, that more than<\/p>\n<p>10,000 people need to read in defense of both Panama and \u2013 what this is all about \u2013 for the sake of transparency.<\/p>\n<h1>&#8220;<\/h1>\n<p>D. R. Sambrook Managing Director Trust Services, A.<\/p>\n<p>Panama<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Derek Sambrook, Managing Director at Trust Services, S.A. sent me this article that he wrote about the resignation<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[242,10,12,241,39,34,33,62,219,245,243,7,246,244,44],"class_list":["post-18121","post","type-post","status-publish","format-standard","hentry","category-news-articles-panama-perpsective","tag-boca-chica-real-estate","tag-bocas-del-toro","tag-boquete","tag-boquete-real-estate","tag-buenaventura","tag-casco-antiguo","tag-casco-viejo","tag-coffee-in-panama","tag-move-to-panama","tag-offshore-real-estate-panama","tag-panama-papers","tag-panama-real-estate","tag-relocate-to-panama","tag-rum-in-panama","tag-travel-to-panama"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.7 (Yoast SEO v27.7) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>The Stiglitz Factor - Blog and Newsletter<\/title>\n<meta name=\"robots\" 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