On 3rd October, the IMF released a statement containing the preliminary findings of IMF staff at the end of an official staff visit (or ‘mission’) to Panama, September 24th to October 3rd.  Amongst its comments is that –

  • a key domestic risk is failure to demonstrate progress in addressing outstanding FATF Recommendations, notably criminalisation of tax evasion ahead of the next FATF Plenary in February 2019 and advancing tax transparency initiatives, which could expose Panama to reputational damage, among other consequences;
  • Effective implementation of the AML/CFT framework must remain a priority. Building on the recent positive assessment by GAFILAT (the regional FATF-style body), the authorities should continue strengthening supervisory capacity for AML/CFT oversight. Further development of risk-based approaches to AML supervision will be essential to effectively channel available resources to critical areas.  Enhancing the understanding of AML/CFT risks to which Panama is exposed, particularly in the highly vulnerable sectors will help map out strategies to mitigate AML/CFT risks;
  • Outstanding gaps in the legal framework should be addressed to fully align it with international AML/CFT standards. Making tax crimes a predicate offense to money laundering by approving the draft legislation under consideration without further delay and ensuring the availability of beneficial ownership and accounting records of Panamanian entities are important to avoid being listed as a non-cooperative jurisdiction, and thereby eroding the recent gains; and
  • actions being taken to share tax information more widely and promptly under the OECD’s Common Reporting Standard (CRS) and the Multilateral Competent Authority Agreement should continue. Going forward, the priority should be to further advance the implementation of tax transparency initiatives towards a successful Global Forum’s forthcoming assessment against enhanced standards.  In addition, the authorities are also encouraged to implement the minimum standards on Base Erosion and Profit Shifting (BEPS), in line with Panama commitments as a member of the OECD/G20 Inclusive Framework on BEPS.

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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