The bill being discussed in Costa Rica basically seeks to extinguish the assets of organized crime, but there are those who claim that as proposed, it puts at risk the presumption of innocence of individuals.
The extinction of domain is a concept that in practice refers to seizing or confiscating assets linked to criminal activities, and then transferring them in favor of the State.
From May 2019, foreign customers will have to declare to local system banks that their funds meet their country's tax requirements.
The Superintendence of Banks of Panama (SBP) approved Agreement 02-2019, which implements the recommendations of the Financial Action Task Force, which consists of expanding the required due diligence measures of banks with their customers.
Following the transfer by Abdul Waked of Gese's majority shareholding to Fundación Publicando Historia, the Editorial Group's access restrictions to the United States financial system have been lifted.
From a statement by the US ambassador in Panama:
I and my Embassy colleagues in Panama congratulate all parties involved in the successful effort to reestablish unfettered access to markets and the financial system of the United States on behalf of the newspapers of the La Estrella de Panama and El Siglo Editorial Group (GESE).
Panama and Nicaragua are among the ten countries in Latin America with the highest risk of money laundering, according to the Basel Institute of Governance.
The anti-money laundering index (AML) prepared by the Basel Institute of Governance places Panama in fourth place in the list of countries with the highest risk of money laundering and financing of terrorist activities in Latin America and the Caribbean.
...and I will tell you who you are. In their quest to reduce exposure to risk, banking correspondents have started to restrict the services they provide to gambling companies, remittance companies, and brokerage firms that are not related to banking groups in the region.
In order to reduce risk exposure, some international banks with correspondents in Panama and other countries in the region are failing to open accounts for or provide services for companies whose income comes from activities such as remittances and gambling.The banks' argument is that they are more likely to be used for money laundering. Even non-banking brokerage firms claim to have difficulty offering their customers products and services,"... since banks wont open accounts in which customers can deposit their funds and receive a return on their investment."
"When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowing to those who deal, not in goods, but in favors–when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed."
Costa Rica 's estimated illicit financial flow averages 45% of its total foreign trade, and the incoming amount is 2.5%; For El Salvador these figures are 9% and 7.5%, for Guatemala 9% and 1.5%, for Honduras 31% and 28%, for Nicaragua 13% and 9%, and for Panama 16% and 307%.
A report by Global Financial Integrity (GFI) entitled "Illicit Financial Flows to and from Developing Countries: 2005-2014" concludes that the illicit flow of money to and from developing countries remains at high levels.The purpose of the report is to quantify those illicit financial flows that represent a serious disadvantage to economic development.
The housing market, casinos, concert halls, and the livestock sector are all used to launder money in Central American countries.
Excerpted from the report "International Narcotics Control Strategy Report, Volume II, Money Laundering and Financial Crimes" by the US State Department:
Costa Rica Transnational criminal organizations continue to favor Costa Rica as a base to commit financial crimes due to its location and limited enforcement capability. Costa Rica’s government has attempted to strengthen the legal framework for supervision and enforcement; however, challenges remain in mitigating money laundering risks. Costa Rica is a transit point that is also increasingly used as an operations base for narcotics trafficking; and significant laundering of proceeds from illicit activities continues. Costa Rica should continue to close financial crimes legislative gaps and allocate resources for investigation and prosecution.
After the bank was taken over because of its inclusion in the Clinton List drawn up by the U.S. Treasury Department, the Superintendency of Banks has ordered its reorganization and sale to another bank.
From a statement issued by the Superintendency of Banks in Panama:
Through Resolution SBP-0116-2016 of July 1, 2016, the Superintendency of Banks has ordered the reorganization of Balboa Bank & Trust Corp., effective from the date July 4, 2016 at 2:30 pm, taking into consideration the recommendations of the Interim Administrator.The reorganization of the bank aims to fulfill three basic objectives:• To protect the best interests of depositors;• To minimize any loss of value of the bank to the detriment of depositors and•Reduce any adverse impact on the banking system. The decision to reorganize the bank will allow choices to be made that aim to give greater security to depositors and creditors of Balboa Bank & Trust Corp. for an early normalization of the situation in the bank and access to all of its funds.
The Office of Foreign Assets Control has granted a license, until December 14, 2016, to access the US financial system, and allow the sale of the companies to be managed.
The license granted by the Office of Foreign Assets Control and the US Treasury Department (OFAC) is valid until December 14 this year and authorizes the companies Importadora Maduro, Maduro Internacional and Lindo & Maduro to make arrangements for them to be bought.
In order help keep the chain stores operating, the Office of Foreign Assets Control has authorized the breakdown of links to the ownership and control of Wisa Group.
The aim of these measures is to "protect the workforce", at Felix B. Maduro, Importadora Maduro, S.A. and MaduroInternational, S.A. Grupo Wisa, which can now start a process to disassociate themselves from Wisa, Abdul Waked and Mohamed Abdo Waked.
As a holder of concessions for duty free shops WISA contributes 7% of the revenues of Tocumen SA, and its inclusion in Clinton list has rattled investors.
An article in Prensa.com reports that yesterday "... the stock broker Citivalores informed the Stock Exchange of Panama that the initial purchaser of the issue, Citigroup Global Markets, decided that the original conditions set out in the purchase agreement had not been met and voided the bond offer made on May 4 and whose closing date was May 11."
In order to protect sources of employment the Panamanian government wants the US to grant permissions so that Waked Group companies can temporarily transact with US citizens and businesses.
From a statement issued by the Ministry of Economy and Finance (MEF):
Objective is to protect the jobs of Waked companies
Treasury Department has been asked to grant a license.
In response to rumors of more interventions into financial institutions, the Superintendency of Banks in Panama says that they are unfounded, highlighting the strength of the banking system.
From a statement issued by the Superintendency of Banks of Panama:
The Superintendency of Banks in Panama made public knowledge, that as a result of taking operational and administrative control of Balboa Bank & Trust and its subsidiaries a number of comments and news stories have arisen which do not have any foundation regarding future actions that may be taken by this institution on other banks, or conditions of vulnerability of some institutions in our banking system.
The identification of Grupo Waked in a money laundering network could result in significant changes in the representations of brands marketed in the country.
An article on Prensa.com cites Jorge Garcia Icaza, president of the Chamber of Commerce, Industries and Agriculture of Panama, who emphasized that restraint should excerised when dealing with the case in order to minimize damage which it is estimated could be caused, especially in relation to jobs in the companies under question.