Panama can return to FATF gray list if it does not criminally classify evasion

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  • Fri, 12/28/2018 - 13:58
Panama can return to FATF gray list if it does not criminally classify evasion
  • eleconomista.net

The Government of Panama warned today that the country risks to be included again in the gray list of the Financial Action Task Force (FATF), in 2019, if the Parliament does not approve a project of law that typifies tax evasion as a criminal offense precedent to money laundering.

This is the bill 591, presented by the Ministry of Economy and Finance (MEF) last January to the National Assembly (AN), which provides penalties of up to 5 years in prison for those who evade the payment of taxes over the $ 300,000 per year, an unprecedented proposal in this country that struggles to end the image of tax paradise.

"The seriousness of the fact that Bill No. 591 is not approved is that the country will have to face the real possibility of being included in the FATF Gray List in 2019", the Ministry of Economy and Finance said on Thursday in a public statement.

Panama was already included in 2014 in the gray list of the FATF, which hampered the international activities of banks and some industries, but it was excluded in 2016 after complying with a series of recommendations from that institution to strengthen the supervisory systems and control.

In current Panamanian legislation, tax evasion is an administrative fault, and the official initiative to make it a criminal offense on the recommendation of international organizations, as the Government maintains, has met with stiff resistance, especially in legal sectors, but also among businessmen.

The Ministry of Economy and Finance said that the Financial Action Group of Latin America (GAFILAT) analyzed in a recent meeting "the technical progress of Panama in closing gaps to comply with the FATF recommendations identified in the Mutual Evaluation Report (IEM) published in January 2018".

"GAFILAT, in this report, has concluded that Panama has been progressing in relation to addressing the technical deficiencies identified in its IEM (...) however, it also highlights as a deficiency that fiscal crimes are not defined as predicate offenses of money laundering".

That "omission impacts on one of the main risks identified that is the placement of assets derived from offenses committed abroad", according to official information.

"The Ministry of Economy and Finance considers necessary for Panama that the National Assembly approve the bill that places tax evasion to criminal offenses and as a precedent for money laundering", he said.

At the end of last October the Minister of Economy and Finance, Eyda Varela, rejected a proposal from the Chamber of Commerce, Industries and Agriculture of Panama (CCIAP) that asked to reduce the prison sentences up to 4 years and increase to 500,000 dollars the amount to from which tax evasion would be considered a tax crime.

For the same date, the Banking Association of Panama (ABP) asked the Parliament to approve the bill that defines tax evasion as a criminal offense.

The Panamanian financial platform has been under the microscope for several years and the criticism intensified after the inclusion of Panama in the gray list of the FATF in 2014, and the publication of the so-called Panama Papers.


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