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For Latin American bank industry it is an "error" to associate Panama with tax havens

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  • Sat, 03/18/2017 - 16:26
For Latin American bank industry it is an "error" to associate Panama with tax havens
  • For Latin American bank industry it is an "error" to associate Panama with tax havens
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BOGOTA.- The Latin American Federation of Banks (Felaban) said today that it is an "error" to associate Panama's financial system, one of the most solid systems in the region, with tax havens, but  it considered "mandatory" "that the country adopt international standards that prevent it from being used for the flow of illicit capital.

Jose Manuel López Valdés, president of Felaban, said in Bogotá, during a meeting of the federation, that cases such as Panama papers "have affected the reputation, but the system remains solid."

"This case has had a great reputational effect, but a marginal impact on the system, which is very solid. It is a misnamed 'Panama papers', since the people involved did not violate Panama's law but that of its own Countries, where they had to declare taxes " Lopez said.

The Panamanian legal and financial system received harsh criticism from some countries after last year's disclosure of thousands of documents from Mossack Fonseca, a case known as Panama papers.

Over four decades in 21 jurisdictions of the world, the Panamanian firm constituted offshore companies or extraterritorial companies that involve world personalities and raised suspicions of tax evasion and hiding of fortunes.

A report sent to Efe by Felaban today indicates that "the case has shown the use of corporate structures of different origins, in a very low proportion of Panama."

"These corporate structures designed for tax evasion were created in other jurisdictions or the capitals were deposited in other banking places, not in the Panamanian system," the document says.

According to López, "Panama is an economy with a tax structure that does not tax revenues obtained abroad and is not the only jurisdiction in the world with that tax scheme, which does not mean that it is a tax haven."

"The law allows it and operates in the legal framework. It is a mistake to label tax haven because a country is sovereign to choose whether to collect taxes or not," he said.

The president of the Panamanian Banking Association, Jaime Moreno, told Efe that, despite Panama papers and the case of the Waked business conglomerate, included in the Clinton List, the country's economy and financial system, which 93 banks are part of, "continue to grow."

"The Panamanian system has been characterized by maintaining good levels of solvency and liquidity," with a capital adequacy of an average of 15%,” he said.

Moreno agreed that it is "a transparent system that seeks to boost foreign investment," which represents about 10% of gross domestic product (GDP).

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