Thursday, Aug 05, 2021

Panama continues on the FATF gray list, but there is progress in compliance

Panama continues on the FATF gray list, but there is progress in compliance

Since 2019, the Financial Action Task Force (FATF) has kept Panama on its gray list.
Panama continues on the gray list of "countries subject to increased surveillance" of the Financial Action Task Force (FATF), which this Friday announced the inclusion of Haiti, Malta, the Philippines and South Sudan in this list, and the withdrawal of Ghana.

In total, 22 countries make up the FATF gray list, compared to 19 in the last one released in February.

FATF considers that these countries have deficiencies in their systems for the prevention of money laundering and financing of terrorism.

"When the FATF subjects a jurisdiction to heightened scrutiny, it means that the country has committed to rapidly remedying identified strategic deficiencies within a specified timeframe and may be subject to additional scrutiny," said a statement.

According to the FATF report on Panama, the country must strengthen its understanding of ML / TF risk of legal entities; ensure effective, proportionate and dissuasive sanctions against AML / CTF violations; guarantee adequate verification and updated information on the beneficial owner by obliged entities and timely access by competent authorities; demonstrate their ability to investigate and prosecute money laundering involving tax crimes abroad.

FATF recognizes the progress of Panama in its action plan, but highlights that the deadlines for its execution have expired and stresses that it still has a lot of work to do. "FATF strongly urges Panama to soon complete the full action plan and address the aforementioned difficulties."

Regarding the commitments that Panama must comply with for its exit from the gray list of the Financial Action Task Force (FATF), according to the Ministry of Economy and Finance (MEF) the country "has 5 actions that are mostly fulfilled and 10 actions partially fulfilled ".

Regarding the pending, the MEF indicates that these fall to different institutions and also depend on the participation of the private sector.

"Among the topics addressed and classified as most complied with is the Update of Chapter V of the National Risk Assessment on the Financing of Terrorism, the Sectorial Assessment of the use of cash in Free Trade Zones - Construction - Real Estate, the identification of illegal remittances, the use of financial intelligence products for investigations related to money laundering and the issuance and implementation of a guide for investigations of tax crimes in Panama", highlights the MEF.

Among the pending issues in Panama is "the strengthening of the understanding of the risk of use of legal entities and effective monitoring of activities, application of a risk-based approach in the supervision of non-financial obligated subjects, the effective imposition of proportional sanctions and dissuasive measures, as well as continuing investigations and prosecutions related to tax crimes committed abroad, money laundering and financing of terrorism."

Since 2019, the FATF has kept Panama on its money laundering gray list. In addition to the regulatory and institutional framework on the anti-money laundering and terrorist financing regime, FATF assesses the effectiveness of the application of the standards.

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