The European Commission announced that the two Central American countries are on the list of nations with deficiencies in their anti-money laundering and anti-terrorist financing strategies.
Bahamas, Barbados, Botswana, Cambodia, Ghana, Jamaica, Mauritius, Mongolia, Myanmar/Burma, Nicaragua, Panama and Zimbabwe are the countries included in the list, the European Commission reported.
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.
The Panamanian business sector assures that the efforts and results that have been achieved in such a short time have not been recognized by the FATF, which decided to put the country back on its gray list.
Although at the beginning of the year efforts were made in the country to improve controls in relation to tax evasion, as in the case of the approval by the National Assembly of the bill criminalizing tax evasion, when the amount defrauded in a fiscal period of one year is equal to or greater than $300,000, it was not enough for the country to return to the FATF grey list.
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.
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.
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.
The law approved in Nicaragua empowers authorities to investigate and even intervene in businesses suspected of being linked to money laundering or terrorist financing.
With the support of government legislators and in the context of a crisis that is deepening every day, the National Assembly yesterday approved a new law that will provide more investigative faculties to the Financial Analysis Unit (UAF by its initials in Spanish), which, among other things, may sanction those who alter the constitutional order.
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.
Gafilat has identified the outstanding tasks needed to bring up to date matters relating to financing terrorism, control of casinos and the inclusion of lawyers in the Mandated Persons category.
The ruling was made by the Financial Action Task Force for Latin America (Gafilat), who released the Mutual Evaluation Report, up to the date of the in situ visit made between November 23 and December 4, 2015.
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.
The figure is an estimate made by the Intelligence Directorate in Costa Rica released by the US State Department, along with information that indicates a rise in criminal organizations based in the country, and little capacity to combat them.
Money laundering is a criminal activity that handles amounts that are difficult to measure. For example, the report "Illicit Financial Flows from Developing Countries: 2004-2013" by Global Financial Integrity says that during the aforementioned 10 year period, the flow of illicit money from Costa Rica exceeded $11 billion, that is about $1.1 billion a year.
Confirmation has been given that the country is to be removed from the list compiled by the Financial Action Task Fprce a year and a half after adjusting laws and regulations for the financial sector.
The Minister of Economy and Finance in Panama, Dulcidio De La Guardia, confirmed that the removal of Panama from the gray list was approved during the plenary session of the Financial Action Task Force (FATF) held on Thursday February 18 in Paris, France.
There were "few initiatives identified to combat the laundering of proceeds of crimes such as fraud, forgery, tax evasion and product piracy".
The real estate market, construction, legal services and casinos once again appear as the most susceptible to money laundering.
The ruling was made by the Financial Action Task Force for Latin America (Gafilat), which released a report on Anti-Money Laundering measures and Combating the Financing of Terrorism (AML / CFT) put in place in Costa Rica at the time of the site visit (19 the January 30, 2015).
The Financial Action Task Group has removed Nicaragua from the list of countries that pose risks relating to money laundering and terrorist financing.
From a press release by The Financial Action Task Force (FATF):
Jurisdictions no Longer Subject to the FATF’s On-Going Global AML/CFT Compliance Process:
Nicaragua
The FATF welcomes Nicaragua’s significant progress in improving its AML/CFT regime and notes that Nicaragua has established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies that the FATF had identified in June 2011. Nicaragua is therefore no longer subject to the FATF’s monitoring process under its on-going global AML/CFT compliance process. Nicaragua will work with GAFILAT as it continues to address the full range of AML/CFT issues identified in its mutual evaluation report.
In Panama the insurance market is strengthening preventive measures in order to get the country removed from the "gray list" of the International Financial Action Group.
The latest measure taken by the Superintendent of Insurance and Reinsurance was hosting the forum 'Measures for the Prevention of Money Laundering and Combating the Financing of Terrorism in the Insurance Sector' in which issues were addressed related to the prevention of money laundering and risk management in the sector.
The two nations have been included in the list of countries with deficiencies in the fight against money laundering and terrorist financing.
The Financial Action Group, assigned to the Organization for Economic Cooperation and Development noted that Panama and Nicaragua are in breach of the recommendations that the agency provides to improve controls for preventing money laundering in the financial system.