Financial Crime World

Panama Fails to Meet International Financial Regulations

A recent evaluation by the Financial Action Task Force (FATF) has revealed that Panama is falling short in several areas of compliance with international financial regulations. The FATF, a global watchdog group, assesses countries on their adherence to 40 recommendations aimed at preventing money laundering and terrorist financing.

Key Areas of Non-Compliance

The evaluation highlighted significant shortcomings in several key areas:

  • Confiscation and Provisional Measures: Panama was found to be non-compliant (NC) with international standards, failing to ensure that individuals and entities can be held accountable for their actions.
  • Financial Institution Secrecy Laws: The country was rated partially compliant (PC) in this area, indicating that while some progress has been made, more needs to be done to prevent the misuse of financial institutions.
  • Customer Due Diligence: Panama was found to be largely compliant (LC), but there are still concerns about the effectiveness of customer due diligence practices.
  • Targeted Financial Sanctions Related to Terrorism and Terrorist Financing: The country was rated PC in this area, indicating that while some progress has been made, more needs to be done to prevent the misuse of financial institutions.

Recommendations for Improvement

The FATF has issued a series of recommendations aimed at improving Panama’s compliance with international financial regulations:

  1. Strengthening Laws and Regulations: The government should ensure that laws and regulations are in place to prevent money laundering and terrorist financing.
  2. Improving Customer Due Diligence: Financial institutions should implement effective customer due diligence practices to prevent the misuse of financial services.
  3. Enhancing Transparency: The government should increase transparency and beneficial ownership of legal persons and arrangements.

Conclusion

The FATF evaluation highlights significant shortcomings in Panama’s compliance with international financial regulations. While some progress has been made, more needs to be done to prevent money laundering and terrorist financing. The government should take immediate action to address these issues and improve the country’s rating.