In a widely expected move, Panama was officially dropped this week from the so-called international financial “gray list.”
The list is a product of the Financial Action Task Force, which evaluates a country’s financial system’s ability to combat money laundering and the flow of money involved in illegal activities. The list receives widespread coverage, although it has little impact on most businesses, beyond the country’s investment rating.
Panama has been on and off the list for years, and it’s often unclear why. Many of the issues involve technical standards and the mechanics of reporting money movement reporting. In recent years, it was clear that Panama was taking steps to meet the requirements, and it was only a matter of time before it was once again removed from the list.
Earlier this year, the FATF acknowledged that Panama had demonstrated a commitment to prosecuting “all types of money laundering,” after implementing a wide range of controls. Then the FATF had to go through their inspections and confirmation before taking action.
Panamanian Economy and Finance Minister Hector Alexander told Reuters that systemic changes made by the government in the financial sector are solid enough for the country not to rejoin the list in the future.
Exiting the list will unlock international investments to the country, especially from Europe, Alexander added, without disclosing a specific estimate for upcoming transactions.
Exiting the list will unlock international investments in the country, especially from Europe, Alexander said. “Panama is a small country, and as a small country we have to grow outwards,” Alexander told the news service.