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Don’t blame Panama for the Panama Papers Don’t blame Panama for the Panama Papers
(4 months later)
A trove of leaked documents relating to offshore corporations with ties to the rich and famous has shed light on the extent to which the world’s financial and corporate centres are vulnerable to abuse by those seeking to hide their wealth.A trove of leaked documents relating to offshore corporations with ties to the rich and famous has shed light on the extent to which the world’s financial and corporate centres are vulnerable to abuse by those seeking to hide their wealth.
The affair has unfairly come to be known as the Panama Papers, even though, as the documents show, tax evasion and financial crimes are global problems to which no nation is immune.The affair has unfairly come to be known as the Panama Papers, even though, as the documents show, tax evasion and financial crimes are global problems to which no nation is immune.
The 11.5m documents revealed by the leak show that the majority of corporations formed by Mossack Fonseca, a law firm headquartered in Panama and with affiliates around the world, are in reality incorporated in countries other than Panama.The 11.5m documents revealed by the leak show that the majority of corporations formed by Mossack Fonseca, a law firm headquartered in Panama and with affiliates around the world, are in reality incorporated in countries other than Panama.
Related: Panama Papers: global tax officials to launch unprecedented inquiry
While we must maintain a presumption of innocence, Panama recognises our role and responsibility to fully investigate and penalise any illegal activities in full accordance with our laws. Such investigations are currently being carried out through the proper institutions in our country, and are aided by the fact that in recent years, particularly the last 20 months under President Juan Carlos Varela, Panama has strengthened its legal mechanisms relating to money laundering.While we must maintain a presumption of innocence, Panama recognises our role and responsibility to fully investigate and penalise any illegal activities in full accordance with our laws. Such investigations are currently being carried out through the proper institutions in our country, and are aided by the fact that in recent years, particularly the last 20 months under President Juan Carlos Varela, Panama has strengthened its legal mechanisms relating to money laundering.
Yet we also know that this challenge not only goes beyond Panama, but beyond politics. The world must work together to fight the challenge of systemic tax evasion that deprives taxpayers across the world of as much as $200bn (£140bn) each year. That is why Panama is setting up an independent commission, co-chaired by the Nobel laureate Joseph Stiglitz, to evaluate our financial system, determine best practices, and recommend measures to strengthen global financial and legal transparency. We expect its findings within the next six months, and will share the results with the international community.Yet we also know that this challenge not only goes beyond Panama, but beyond politics. The world must work together to fight the challenge of systemic tax evasion that deprives taxpayers across the world of as much as $200bn (£140bn) each year. That is why Panama is setting up an independent commission, co-chaired by the Nobel laureate Joseph Stiglitz, to evaluate our financial system, determine best practices, and recommend measures to strengthen global financial and legal transparency. We expect its findings within the next six months, and will share the results with the international community.
This step follows a series of reforms in Panama aimed at promoting greater financial transparency. Since assuming office in 2014, Varela implemented new “know your client” regulations and continues to develop a robust treaty network that allows the exchange of legal and corporate information.This step follows a series of reforms in Panama aimed at promoting greater financial transparency. Since assuming office in 2014, Varela implemented new “know your client” regulations and continues to develop a robust treaty network that allows the exchange of legal and corporate information.
We have also implemented legislation that allows the shareholders of all companies incorporated in Panama to be identified, and enacts stronger regulations for financial and corporate providers as well as key non-financial industries.We have also implemented legislation that allows the shareholders of all companies incorporated in Panama to be identified, and enacts stronger regulations for financial and corporate providers as well as key non-financial industries.
These reforms and others have been recognised and validated by the international community, including the Financial Action Task Force on Money Laundering, which cited Panama’s “significant progress” when it removed us this year from its “grey list” of countries that lack sufficient anti-money laundering legislation. We also made positive progress in a peer review by the OECD’s Global Forum for Transparency and Exchange of Information for Tax Purposes.These reforms and others have been recognised and validated by the international community, including the Financial Action Task Force on Money Laundering, which cited Panama’s “significant progress” when it removed us this year from its “grey list” of countries that lack sufficient anti-money laundering legislation. We also made positive progress in a peer review by the OECD’s Global Forum for Transparency and Exchange of Information for Tax Purposes.
The term “Panama Papers” is more than an unfair misnomer – it reflects a deep misunderstanding of Panama’s financial system. As an international business hub, Panama treats foreign and domestic corporations the same. The notion that Panama is a “tax haven” for international corporations comes from the fact that we only tax income derived from Panama, not from outside. All transactions in Panama are taxable in accordance with the laws of relevant jurisdictions. Our government has strengthened its laws, but they can still be manipulated for illicit purposes.The term “Panama Papers” is more than an unfair misnomer – it reflects a deep misunderstanding of Panama’s financial system. As an international business hub, Panama treats foreign and domestic corporations the same. The notion that Panama is a “tax haven” for international corporations comes from the fact that we only tax income derived from Panama, not from outside. All transactions in Panama are taxable in accordance with the laws of relevant jurisdictions. Our government has strengthened its laws, but they can still be manipulated for illicit purposes.
Even after recent reforms, Panama remains committed to adopting more changes in order to comply with international transparency standards. Our government has repeatedly made it clear that we are fully behind the implementation of bilateral automatic exchange of information consistent with the goals of the OECD’s common reporting standards. We are open and willing to engage in international dialogue to discuss how these standards are best implemented.Even after recent reforms, Panama remains committed to adopting more changes in order to comply with international transparency standards. Our government has repeatedly made it clear that we are fully behind the implementation of bilateral automatic exchange of information consistent with the goals of the OECD’s common reporting standards. We are open and willing to engage in international dialogue to discuss how these standards are best implemented.
Additionally, we will continue to cooperate with the UK and other countries to prosecute offences that are outlawed in Panama, and continue to abide by the many international treaties we have ratified with our partners around the world.Additionally, we will continue to cooperate with the UK and other countries to prosecute offences that are outlawed in Panama, and continue to abide by the many international treaties we have ratified with our partners around the world.
Many forget that Panama is now a stable democracy after years of being ruled by a dictatorship. Our efforts to transform our country into a global economic hub have resulted in the establishment of the regional headquarters of over 100 transnational corporations. It is our hope that through Panama’s reform efforts and increased international cooperation, our country will become even more attractive to multinational companies that seek to act as responsible global citizens.Many forget that Panama is now a stable democracy after years of being ruled by a dictatorship. Our efforts to transform our country into a global economic hub have resulted in the establishment of the regional headquarters of over 100 transnational corporations. It is our hope that through Panama’s reform efforts and increased international cooperation, our country will become even more attractive to multinational companies that seek to act as responsible global citizens.
Panama’s path to financial transparency is irreversible, but on a global scale the march must be a collective one. Panama stands ready to play our part.Panama’s path to financial transparency is irreversible, but on a global scale the march must be a collective one. Panama stands ready to play our part.