Arguing that the country did not implement the reforms to which it had committed itself within the agreed time frame, the European Union decided to include it again in its list of non-cooperating territories in fiscal matters.
An agreement was signed to create a working group on fiscal and financial transparency cooperation, with the aim of removing Panama from the French list of non-cooperating countries in tax matters.
The Ministry of Economy and Finance of Panama reported that the working group will contribute to strengthening cooperation, improving the exchange of fiscal information, promoting financial transparency and the fight against money laundering, focusing on finding more efficient mechanisms and practices for the exchange of information for fiscal purposes, within the framework of the provisions of the tax agreements in force between the parties, including all aspects of the process, from the preparation and sending, to the receipt and response of requests for exchange of information.
Arguing that the country "fulfils all its commitments in terms of fiscal cooperation", the European Union decided to remove it from its list of nations and territories considered as non-cooperative.
Albania, Costa Rica, Mauritius, Serbia and Switzerland have implemented, ahead of schedule, all the reforms necessary to comply with the principles of good tax governance of the European Union (EU).
Arguing that it does not comply with the standards on transparency and exchange of information for tax purposes, the OECD evaluated Guatemala negatively and recommended working on direct access to taxpayers' banking information.
As planned, following the temporary suspension by the Constitutional Court (CC) of the article of law facilitating access to taxpayers' bank information, the Organization for Economic Cooperation and Development (OECD) decided to include Guatemala in the list of countries that do not comply with their fiscal information commitments.
In its next evaluation, the OECD could lower Guatemala's rating, because in August last year access to bank information with a court order was suspended, which could lead to an increase in the credit price.
In the new version of the European Union's list of non-cooperating countries in fiscal matters, the Central American country no longer appears.
In December 2017, Panama was included by the Council of Ministers of Economy and Finance of the European Union in Annex II of the List of non-cooperative jurisdictions in fiscal matters.
On January 1st the decree signed by the French government in April 2016 to include Panama in the list of countries considered to be tax havens came into force.
According to the French government the scope of the agreement signed in October by Panama for the automatic exchange of bilateral tax information with OECD countries, was not clear and the decree signed in April, which included Panama on the list from January of this year, was not repealed.
Thirteen foreign banks with operations in New York will have to report on their relations with the Panamanian firm Mossack Fonseca including communications, telephone records and any transaction made.
An article on Bloomberg reported that the Department of Financial Services (DFS) in New York has asked 13 banks with offices in that State, among which are Deutsche Bank AG, Credit Suisse Group AG, Commerzbank AG, ABN Amro Group NV and Societe Generale SA, to provide communications, telephone records and other records of transactions, between their branches in New York and employees or agents of the law firm, Mossack Fonseca & Co. The banks in question are not accused of any wrongdoing.
Amid the controversy generated by the Panama Papers, the Financial Action Task Force in Latin America has recognized the efforts made by the country in issues of transparency.
From a statement issued by the Latin American Financial Action Task Force (GAFILAT):
"... Relationship of the current situation with the Evaluation of Panama:
Panama is a member of GAFILAT and as such will be evaluated in the context of the Fourth Round of Mutual Evaluations next year (2017), based on the schedule of assessments approved by the body. Recently. Panama has made considerable efforts to improve its AML / CFT system, which included the modification of its legal system, it has been recognized by FATF; It is important to note that these measures will be the subject of the next assessment to be made on that country.
The Panamanian government has announced its willingness to review current practices in the legal and financial system and collaborate with other governments in legal proceedings over financial and tax offenses.
Following the massive leak of financial information from a Panamanian law firm, the Government announced that it is evaluating the practices relating to its financial system and that it will collaborate with other jurisdictions to investigate citizens suspected of criminal activities, including tax evasion. The announcement was made by President Juan Carlos Varela.
Legal tax engineering is a mandatory business practice for anyone who wants to be competitive in today's globalized world, and only those who are not entrepreneurs can afford to refuse to acknowledge this fact.
EDITORIAL
With the same firmness that we criticize businesspeople who evade taxes or bribe officials to get a contract, we must defend every business practice which is framed within the law to pursue the best use of available resources to generate wealth through the production of goods and services, which is what businesses do.
The organization has rejected Panama's attempt to implement automatic exchange of tax information using a different system to the standard used by the organization.
The General Secretariat of the Organisation for Economic Co-operation and Development (OECD) understood the proposal put forward by Panama to exchange tax information through bilateral agreements as moving away from its commitment to the model adopted by this organization, and has once again included the country in the gray list alongside Bahrain, Nauru and Vanuatu, which have so far not announced their adherence to that model.
In a seventh round of negotiations, an attempt will be made to lay the groundwork for an agreement that seeks to avoid damage to both countries.
If an agreement is not reached, Colombia will classify Panama as a tax haven, with a consequent increase in costs for bank transactions between the two countries, and exposing Columbia to the measures provided under Panama's Law of Retaliation.
The country has not yet complied with the previous standard of the OECD, and now new requirements are being added in terms of automatic exchange of information.
While trying to get removed from the gray list of the FATF, Panama now faces a new demand from the Organization for Economic Cooperation and Development (OECD), which has amended the standard for compliance with automatic exchange of information, which needs to be complied with by Panama in order to avoid sanctions.
As the region gets ready to start complying with the US law FATCA, OECD countries are already working on a Single Global Standard for automatic exchange of information.
FATCA could now be joined by the European OECD countries Single Global Standard for Automatic Clearing of CRS Information (Gatca), "... allowing tax information on their residents to be shared between them."