Financial Crime World

Panama Removed from Anti-Money Laundering Grey List After FATF Compliance Efforts

On October 27, 2023, the Financial Action Task Force (FATF) officially removed Panama from its anti-money laundering “grey list” following a significant milestone in the country’s efforts to combat money laundering and terrorist financing.

Background: Why Was Panama Added to the Grey List?

In June 2019, the FATF added Panama to its grey list due to 15 unfulfilled action points required for compliance with international financial regulations. These concerns were addressed through intense efforts by the Panamanian government, resulting in the country successfully meeting all necessary requirements.

Key Developments and Recommendations

A report published by KPMG in November 2023 highlights key developments and recommendations for businesses operating in Panama:

  • Staying up-to-date with evolving regulatory requirements: Businesses should stay informed about changes to Panama’s anti-money laundering framework to ensure compliance.
  • Improved cooperation between financial institutions and regulators: Enhanced collaboration is essential for effective risk management and preventing money laundering activities.

Implications of Panama’s Removal from the Grey List

Panama’s removal from the FATF grey list is a positive development for the country’s reputation as a financial hub. It may also have implications for international businesses operating in or with connections to Panama, including:

  • Increased compliance requirements: Businesses must adhere to local regulations to maintain a strong reputation and avoid reputational risk.
  • Improved access to international markets: Panama’s enhanced anti-money laundering framework may facilitate increased cooperation with other countries and improve its position in global financial markets.

Conclusion

Panama’s removal from the FATF grey list is a testament to its commitment to improving its anti-money laundering framework. This development has significant implications for businesses operating in or with connections to Panama, emphasizing the importance of staying informed about evolving regulatory requirements and cooperating effectively with regulators and other financial institutions.