Financial Action Task Force
Reactions in Panama
New Laws and Regulations


Financial Action Task Force

Panama was included in the list of Non-cooperative Countries or Territories issued by the Financial Action Task Force of the Organization for Economic Cooperation and Development (OECD) in June. It was one of 25 countries including Israel, Liechtenstein and Monaco.

The OECD is a governmental organization in which European countries have significant influence. Apart from Mexico, which defines itself as part of North America on the OECD web site, no other Latin American or Caribbean country belongs to the OECD. The only three members from the American continent are the United States, Canada and Mexico.

Politics certainly had a part to play when the list was drawn up. European countries with very flexible financial systems and other countries with few financial controls and liberal banking policies did not make the list.

Reactions in Panama

The list appeared to ignore many recent changes and developments in some of the countries named in the document. In its acknowledgement of the decision to include Panama, the Panamanian Presidential Committee Against Money Laundering issued a resolution in which it expressed surprise at Panama's inclusion when the OECD's Revision Group for the Americas had not consulted either the Panamanian authorities or representatives of the private sector. The government of Panama not only considered the inclusion as unfair but also unsubstantiated, particularly asthe government claims to have provided substantial documentation to prove Panama's cooperation in preventing money laundering.

The actual situation is somewhere between these positions. As the government argued, the decision could be seen as unilateral, politically influenced and not necessarily fair, but it is also true that budget limitations have prevented the enforcement authorities in Panama from achieving more.

New Laws and Regulations

In the last 10 years the government has adopted various measures in its fight against money laundering. Panama has signed mutual legal aid agreements with:

  • the United Kingdom in 1994;

  • Colombia in 1995;

  • Central American countries in 1995;

  • the United States in 1991 (but the US government has yet to ratify);
  • Mexico in 1995 and 1998; and

  • Peru, Cuba and Argentina in 1996.

Panama has entered into international agreements with as many countries as possible in order to combat money laundering, but not all have shared Panama's interest.

Many new laws and regulations have also been put into practice in recent years. Long gone are the days when anybody could open a bank, for example, as banking is strictly regulated by an independent governmental supervisory agency (Superintendencia de Bancos).

In the last 10 years Panama has adopted strict measures to counter the flow of drug-related money into the financial system. It is the first country in Latin America with an intelligence unit to trace dubious and illicit money entering the financial system.

Money-laundering laws are limited to drug-related crimes. It is widely accepted and even suggested among financiers and governmental authorities, that other serious crimes shall be included in the laws against money laundering. This would certainly require the adoption of amendments to existing laws and regulations, but would not be difficult to achieve. It is thought that these changes would certainly be welcomed by the general public.


Although Panama does not have sufficient economic resources to combat financial crimes, recent international aid and training for the enforcement agencies has been provided by Spain, the United States and Germany.

The inclusion of Panama in the list of Non-cooperative Countries or Territories should not be taken at face value. Steps are being taken to more effectively enforce its laws in the fight against criminal activities.

For further information on this topic please contact Richard Ballard at Patton, Moreno & Asvat by telephone (+507 264 8044) or by fax (+507 263 7887) or by e-mail ([email protected]).

The materials contained on this web site are for general information purposes only and are subject to the disclaimer.