The IMF is assisting Panama to get out of the gray list of the FATF, an entity made up of nations that seek to combat money laundering, said the organization when approving a precautionary credit line for the Central American country.
The International Monetary Fund (IMF) indicated that priority in documents published Monday on the Precautionary and Liquidity Line (PLL) of 2.7 billion dollars for two years attributed to Panama, approved by the board on January 19.
"The policy agenda during the PLL will focus on facilitating the early exit of (Panama) from the FATF gray list, strengthening the adequacy of data and public financial management, as well as preparing the economy for post-pandemic recovery," said the Fund in its technical report on Panama.
The Financial Action Task Force (FATF), an intergovernmental body created in 1989 to fight money laundering and terrorist financing, placed Panama on its gray list in June 2019. This not only hits the reputation of its system it makes all business more expensive throughout the Central American country.
The IMF technical report carried out in January highlights the measures taken by Panama to comply with FATF standards since the inauguration of President Laurentino Cortizo in July 2019, but warns of the negative impact of the pandemic on the implementation of the roadmap.
"The authorities must immediately address the elements of the FATF action plan to get out of the gray list," the document says, citing June 2021 as a possible date to finalize it.
When announcing the PLL, the IMF's chief of mission for Panama, Alejandro Santos, stated that the Panamanian authorities hired international experts to guide the process to get off the FATF list.
"The IMF is providing technical assistance in this regard," Santos said in an interview published by the Fund.
With an average growth of 6% between 1992 and 2019, Panama has been the most dynamic economy in Latin America in three decades, but due to its high integration in the world it has been exposed to "extreme shocks" due to the
covid-19 pandemic, established the Fund in its technical evaluation.
The IMF estimates a 9% contraction of Panama's GDP in 2020 and a growth of 4% by 2021.
In this context, the PLL is considered an "insurance policy" against adverse risks related to the pandemic, the agency said.