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In the News from Panama

Panama Taken Off International ‘Gray List’

panama-taken-off-gray-list

Panama’s reputation as the financial Wild West has both aided and hurt the country’s growth over the years. On one hand, there is no doubt that many characters, both shady and legit, flocked to Panama due to its, shall we say, lax banking structure. But now that Panama is a maturing market and the center for regional business, that old reputation does more harm than good, and it is no longer justified.

panama-taken-off-gray-listA few days ago the Financial Action Task Force, a global group focused on battling money laundering, removed Panama from its “gray list” of uncooperative jurisdictions—a move which should help remove the long-standing cloud over Panama’s financial systems. According to the group, Panama has made “significant progress” and “established the legal and regulatory framework” to address the “strategic deficiencies” identified in earlier reports.

Few would argue that the Panama’s banking system has resolved all the issues, but this is a clear sign that Panama is moving forward and earning the respect of global regulators. President Juan Carlos Varela took to Twitter to praise the move as an example of the “the new era of transparency.”

Exiting the gray list “represents more investment, more tourism, more jobs and more opportunities for our country,” the President tweeted. (Turns out the President has an active Twitter page: @JC_Varela)

For investors, this is another indication that Panama is reaching international standards for security and transparency. Already, real estate buyers know that when they purchase property in Panama, they will find many of the same systems and protections they find in their home countries.

Panama long ago took steps to improve its reputation as a tax haven, following new standards implemented around the globe. But the FATF, which includes representatives of 32 countries, had questioned its standards on such issues as on information sharing, tax compliance and reporting suspicious transactions. However, Panama has taken several recent steps, including restrictions on “bearer shares” and other steps to curb money-laundering.

More than anything, the FATF announcement shows that Panama’s banking system is no longer the Wild West, and the financial community is earning the respect of global regulators.

 

Jeff Barton is managing director 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.