A report by the United States Department of State that sent to the United States Congress reports on the progress, deficiencies and vulnerabilities of Panama against money laundering.
The State Department, equivalent to the Foreign Ministry, recalls that the geographical location, the dollarized economy, the status as a logistics, commercial and financial hub are some of the attractions for money launderers.
"High-profile international investigations into money laundering, originating in Panama or elsewhere, have intensified scrutiny of the capacity and vulnerabilities to deal with illicit financial activity," said the report, dated March 2.
The US office recognizes that Panama has agreed to address deficiencies in money laundering and terrorist financing, strengthening its understanding of the national and sectoral risks of this scourge, reinforcing regulation and supervision of non-financial activities, applying appropriate sanctions, ensuring the access to information on the final beneficiary of the companies and improving investigations of crimes of tax evasion and international money laundering.
Law 70 from 2019 penalizes tax fraud and considers it a previous crime of money laundering. However, it points out that the limit $300,000 from which evasion is considered fraud and, therefore, becomes a criminal offense, "may limit the effectiveness of investigations on laundering linked to lower amounts of tax evaded."
Money laundering is trying to give the appearance of legality to illegally obtained money. The money that is laundered in Panama comes mainly from illegal acts committed abroad, including drug trafficking, tax crimes, and trafficking property and people. And it is done through the smuggling of cash, trade in ports and airports, shell companies, real estate, construction, casinos, virtual currencies and free trade zones.
Specifically, it refers to the fact that the Colon Free Zone remains vulnerable to illicit financial and commercial activities due to weak application of customs regulations and limited supervision of transactions.
The report also considers that legal structures created and registered in Panama, such as companies, private foundations and trusts, are of high risk for the laundering activity and recalls that the use of nominee directors still prevails.
Among the deficiencies of the system, the lack of capacity to identify cash shipments, the inexperience in investigations and judicial processes of money laundering not linked to drug trafficking, an inconsistent application of laws, a judicial system with limited resources. and corruption. All of these factors hinder efforts to combat money laundering, the report notes.
Regarding the judicial system, he warns that entities find it difficult to be effective under the accusatory criminal system, and the lack of coordination has led to few investigations, prosecutions, and convictions, especially in cases not related to drugs. "Panama needs to provide additional training in financial investigation and prioritize financial investigations beyond cases related to drug trafficking," said the report.
Regarding the institutional gear, the State Department mentions the creation of the Superintendency of Non-Financial Subjects and recalls that the Financial Analysis Unit reports to the Presidency, which leaves it "vulnerable to political influence and dependent on the support of the Presidency" .
"High-profile international investigations into money laundering, originating in Panama or elsewhere, have intensified scrutiny of the capacity and vulnerabilities to deal with illicit financial activity," said the report, dated March 2.
The US office recognizes that Panama has agreed to address deficiencies in money laundering and terrorist financing, strengthening its understanding of the national and sectoral risks of this scourge, reinforcing regulation and supervision of non-financial activities, applying appropriate sanctions, ensuring the access to information on the final beneficiary of the companies and improving investigations of crimes of tax evasion and international money laundering.
Law 70 from 2019 penalizes tax fraud and considers it a previous crime of money laundering. However, it points out that the limit $300,000 from which evasion is considered fraud and, therefore, becomes a criminal offense, "may limit the effectiveness of investigations on laundering linked to lower amounts of tax evaded."
Money laundering is trying to give the appearance of legality to illegally obtained money. The money that is laundered in Panama comes mainly from illegal acts committed abroad, including drug trafficking, tax crimes, and trafficking property and people. And it is done through the smuggling of cash, trade in ports and airports, shell companies, real estate, construction, casinos, virtual currencies and free trade zones.
Specifically, it refers to the fact that the Colon Free Zone remains vulnerable to illicit financial and commercial activities due to weak application of customs regulations and limited supervision of transactions.
The report also considers that legal structures created and registered in Panama, such as companies, private foundations and trusts, are of high risk for the laundering activity and recalls that the use of nominee directors still prevails.
Among the deficiencies of the system, the lack of capacity to identify cash shipments, the inexperience in investigations and judicial processes of money laundering not linked to drug trafficking, an inconsistent application of laws, a judicial system with limited resources. and corruption. All of these factors hinder efforts to combat money laundering, the report notes.
Regarding the judicial system, he warns that entities find it difficult to be effective under the accusatory criminal system, and the lack of coordination has led to few investigations, prosecutions, and convictions, especially in cases not related to drugs. "Panama needs to provide additional training in financial investigation and prioritize financial investigations beyond cases related to drug trafficking," said the report.
Regarding the institutional gear, the State Department mentions the creation of the Superintendency of Non-Financial Subjects and recalls that the Financial Analysis Unit reports to the Presidency, which leaves it "vulnerable to political influence and dependent on the support of the Presidency" .