Panama to deepen tax sharing talks with OECD after revelations: VP
Panama will deepen talks with the OECD on sharing tax information in the wake of the “Panama Papers” scandal, its vice president told AFP in an exclusive interview on Thursday.world Updated: Apr 08, 2016 10:32 IST
Panama will deepen talks with the OECD on sharing tax information in the wake of the “Panama Papers” scandal, its vice president told AFP in an exclusive interview on Thursday.
“We are going to establish technical-level dialogue between Panama and the OECD specifically on exchanging information,” said Isabel De Saint Malo, who is also the country’s foreign minister.
She said the talks were agreed earlier the same day in a “very good” conversation with the head of the Organization for Economic Cooperation and Development (OECD), Angel Gurria.
Panama is scrambling to avert being once again designated as a tax haven that facilitates money laundering, after the revelations of offshore dealings of many of the world’s wealthy, famous and infamous in the so-called Panama Papers revelations.
They came when millions of documents covering nearly 40 years of business were leaked from the archives of the Panamanian law firm Mossack Fonseca.
Need to ‘refine’ reforms
The OECD has led the charge accusing Panama of not doing enough to implement transparency and information-sharing standards.
Gurria this week called the country “the last major holdout” allowing funds to be hidden from the authorities of other nations.
That prompted De Saint Malo’s deputy foreign minister, Luis Miguel Hincapie, to accuse Gurria of being “unfair and discriminatory.”
In the interview with AFP, De Saint Malo also said that Panama would improve information-sharing with France, which warned this week it was looking at putting Panama back on its blacklist of tax havens.
Just two months ago, Panama managed to get off an international “gray list” of countries not doing enough to battle money laundering and possible terrorist financing.
In the past couple years, the government instituted a range of reforms to somewhat curb the anonymity its banking and legal businesses have created for offshore companies.
However, it has resisted fully implementing automatic reporting procedures set out by the OECD.
De Saint Malo stressed the “big steps” Panama had made so far.
“We hope that experts and people who know the subject will be able to look a bit at our practices, to make recommendations to us over what we’ve done and to help us refine these changes.”
She reiterated the government’s “zero tolerance for irregularities and shady dealings, and a strong commitment to transparency in the area of financial services.”
However, she acknowledged that Panama was “cautious” about further reforms because it wanted to ensure its nexus of banks and law firms with many international clients did not lose its competitive edge as a financial hub.
The sector contributes seven percent to the country’s gross domestic product.
President Juan Carlos Varela on Wednesday emphasized Panama’s efforts to fight tax dodging and money laundering, and said a national commission of experts would look at ways to further improve them.
He also vowed to “confront” anybody who tried to drag Panama’s reputation down because of the revelations from the law firm.
A ‘global issue’
The government has already threatened to retaliate against France if Paris again labels Panama a tax haven.
The vice president said on Wednesday that she had met with the French foreign ministry’s director for the Americas, Kareen Rispal, who told her France backed Panama’s moves toward greater transparency.
“Between France and Panama, we have to be more effective in agreeing on the exchange of information, and that is what we are doing,” De Saint Malo said.
She also stressed that money laundering and tax evasion is a “global issue” in which other jurisdictions besides Panama are involved, and lamented that the widespread scandal has been bundled under the title “Panama Papers.”