The Cost of Being a "High Risk" Country

The inclusion of Panama in the list of high-risk countries with strategic deficiencies in the battle against money laundering and terrorism would increase the operating costs of foreign banks in the country.

Monday, February 25, 2019

A few days ago, the European Commission included the Central American country in a list of 23 nations classified as territories with lax measures and controls against money laundering and financing of terrorism.

See "Panama Does Not Want to Be a 'High Risk' Country'"

Risk rating agency Moody's prepared a report called "Panama´s inclusion on Commission watchlist for lax controls in credit negative for its offshore Banks", which was published on February 15, 2019.

According to Elcapitalfinanciero.com, the rating agency's report explains that "... financial and banking institutions will need to increase controls over the transactions performed with their clients, allowing them to identify suspicious transactions."

The article adds that "... The inclusion of Panama in the new EU black list will increase the scrutiny of European correspondent banks in dealing with banks in the Panamanian square, generating additional operating costs. In addition, some correspondents could reduce or terminate their relations with the CBI of Panama."

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More on this topic

Adverse Outlook for Panama's economy

June 2019

After the country was put back on the FATF grey list, the private sector believes that investments will be driven away and economic growth will face multiple obstacles.

After the Financial Action Task Force (FATF) decided to include the country in the list of nations that need to be supervised in the process of implementing measures to prevent money laundering and the financing of terrorism, entrepreneurs from different sectors foresee that the effects will be negative for the local economy.

Panama Does Not Want to Be a "High Risk" Country

February 2019

The Varela administration rejects the European Commission's proposal to include the country in a list of high-risk countries with strategic deficiencies in the struggle against money laundering and terrorism.

Considering that the publication issued today by the European Commission must be submitted to the European Parliament for approval within one month, which may be extended, the Government of Panama announced that it will continue its efforts to establish a communication channel to clarify the Commission's concerns.

Costa Rica: 25 Days to Avoid the "Gray List"

June 2016

Entrepreneurs who do business overseas could see their commercial operations affected if the country is included in the list of non cooperative nations in the fight against money laundering and terrorism financing.

EDITORIAL

The demonstrated difficulty of the Solis administration in governing, understood as the management of conflicts between different sectors of the population, makes it difficult to be optimistic and believe that it eill be able to approve, before July 15th, the laws against money laundering and terrorism financing, which would prevent the country from being included in the list of non-cooperative countries on these issues.

Panama: Now Facing Consequences for Being "Gray"

February 2015

Banks struggling to keep their correspondents and restrictions for Panamanian companies in the external financial market, are some of the consequences of being on the FATF's gray list.

The Panamanian government expects to submit, within the next month, a bill to prevent money laundering and terrorist financing, which seeks to control the vast majority of economic activities by requiring additional controls to those which do not have increased supervision. With this measure they hope to get off the gray list and meet the deadline set by the Financial Action Group, which expires in June.

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