News

In a big step for Panama’s financial community, the legislature moved this week to approve a bill that will force nonfinancial institutions to report suspicious money deals. The move is part of an effort to prove to the international financial community that Panama has cleaned up its act and should no longer be considered a center for money laundering.

In reality, Panama’s reputation has likely been exaggerated for many years. International agreements have already helped stem the flow of underground money. The reputation for money laundering dates back to the Noriega years, which are a distant memory to most Panamanians.

But the latest moves will likely help convince the world that Panama is serious about self-policing its own industries. The bill would require people working in a variety of industries, including real estate, to report any shady-looking deals, the Associated Press reports

The bill is considered a “key component” to winning support from financial institutions around the world, the AP says. Last year, an international body called the Financial Action Task Force, placed Panama on its “gray list” of countries that were deemed to have “major deficiencies” in their efforts to battle money laundering and terrorist financing.

In the short run, this is unlikely to impact on real estate. Companies that are operating above board will continue to operate in a professional manner. The companies that are trying to circumvent international law will pay the price.

Some buyers and investors may be wary of the uncertainly, but Panama’s financial system is still welcoming to international clients and very accustomed to handling cross-border transactions. In the long run, the increased financial scrutiny will be a major benefit for real estate, proving to the international community that Panama is a mature, stable and secure market.

Duncan McGowan is president of Punta Pacifica Realty, a Panama real estate agency focused on Punta Pacifica, the exclusive neighborhood of 18 towers perched on the edge of the Pacific Ocean.