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By David Haskel
Nov. 21 — A panel appointed by Panama’s government to advise on how to cope with the Panama Papers scandal warned of an “urgent and serious need to reduce the high levels of perceived opacity.”
The group’s 23-page report, published Nov. 21, urged authorities to adopt international standards on financial transparency, increase the amount of tax information exchanged with other jurisdictions, upgrade legislation and beef up monitoring of financial activities.
“This will require decisions, investment, legislation and a high degree of commitment,” the report said. “The moment has come. The country can no longer postpone decision-making in this field.”
Meanwhile, President Juan Carlos Varela Nov. 18 warned France that Panama will retaliate if Paris keeps it on its list of tax havens beyond Dec. 31. He issued the warning as the panel presented its report to the National Assembly.
Among the report’s recommendations, which reminded the government that Panama’s key offshore banking industry accounts for 9.5 percent of its gross domestic product, were that the government:
The Central American nation has come under heavy international pressure after its financial and banking image was badly tarnished by the leak in April of 11 million documents from the local law firm Mossack Fonseca & Co., which triggered the scandal of global proportions widely known as the Panama Papers.
France immediately said it would return Panama to the list of uncooperative jurisdictions and it asked the Organization for Economic Cooperation and Development to do the same. The OECD at the time called the country “the last major holdout that continues to allow funds to be hidden offshore from tax and law enforcement authorities,” and sought to persuade the nation to clean up its act.
Panama answered with a two-pronged offensive, mixing warnings of retaliation with promises of improvement. The latter included setting up the panel of experts, which initially involved international experts such as Nobel Prize laureate in Economics Joseph Stiglitz. Stiglitz later resigned, saying the government declined to guarantee that the report would be made public.
More recently, the country Oct. 27 signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, earning immediate OECD praise.
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The panel’s report is at https://www.presidencia.gob.pa/tmp/file/1503/INDEPENDENT%20EXPERT%20COMMITTEE.pdf.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
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