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With US support, Panama anticipates being removed from the FATF's "grey list" later this year

The US is reportedly supporting Panama in its efforts to remove itself from the FATF watchlist as early as later this year.

The small Central American nation has a reputation for shady business practices and money laundering, especially in light of the Panama Papers revelations.


The nation now asserts that it is prepared to be removed from the FATF "grey list," claiming that it has improved its financial system in response to the Panama Papers incident.


One of the final tasks left unfinished by FATF, according to President Laurentino Cortizo, was the creation of a beneficial registry of corporate ownership.


The president declared, "We are expecting to leave FATF [’s grey list] soon, we are expecting it this year. We have made an enormous effort. I have been personally following the team working on the issue."


If enough progress was achieved on adding firms to the registry of beneficial ownership, a senior US embassy official told the newspaper that there was a "really good possibility" that Panama would be removed from the FATF's grey list before the year was up.

The embassy official stated that information from the registry also needs to be given to law authorities for potential charges.


Panama has been under considerable pressure to conclude its unfinished business since it missed a 2021 deadline to comply with FATF rules.


The organization warned Panama to "swiftly complete its action plan by June 2023" in its most recent inspection or face increased due diligence on transactions.


To combat money laundering, financing of terrorism, and other comparable risks to the integrity of the global financial system, the FATF was established in 1989. Nations like Syria, Albania, Nigeria, and the Cayman Islands are on its grey list.


The "Panama Papers" investigation, which was spearheaded by the German newspaper Suddeutsche Zeitung and involved a massive document leak from the Panama-based law firm Mossack Fonseca, made headlines in 2016.


The inquiry revealed the operations of 214,000 offshore firms, some of which protected millions of dollars' worth of secret assets belonged to politicians and world leaders.


Former cattle rancher Cortizo explained how Panama being added to the FATF grey list in 2019 was his "welcome present as president-elect."


Since it barely had 0.27 percent of the world's offshore corporations, he said, his nation had been unfairly treated.


The president remarked that some US jurisdictions, like Delaware, were tax havens, adding, "You have to ask where the other 99 per cent of the offshore companies are located. It’s important that they also deal with the problem of their tax havens."


Cortizo emphasized that "we are open, and I want to put this in capital letters, underlined and in bold, open to good investment" in order to shed Panama's reputation as a shelter for dodgy money. As "a country of opportunities which respects law and order," he wants to market Panama.


International companies have flocked to Panama in recent years to set up regional offices, appearing to have gotten the message thanks to a stable, business-friendly investment climate and superb air and sea connections. One of Latin America's best performers has been the economy. According to the IMF, it expanded by 10% last year and is predicted to grow by another 5% this year.


The possibility of former president Ricardo Martinelli standing for office again casts yet another shadow over the nation.


Although the US State Department labeled him for "significant corruption" and barred him from entering, he is currently leading in several early surveys in Panama. Additionally, he is a defendant in two distinct corruption lawsuits. His sons were found guilty of laundering $28 million in bribes and received three years in prison in the US.


When asked about the possibility of Martinelli taking over again, Cortizo responded, "It’s a decision for the people . . . that’s the weight of democracy."


"I love the tours of community work which I do in rural Panama . . . 624 activities, twice the number of the last three administrations . . . I can’t stand for re-election but I hope that style of government continues."

By fLEXI tEAM


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