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Panama and the FATF Grey List

Author: Zulfi Meerza  8 June 2023
2 min read

Zulfi Meerza of Rahman Ravelli details Panama’s attempts to change its financial system to ensure the Financial Action Task Force no longer views it as needing increased financial monitoring.

Panama has stated that it expects to be taken off the ‘grey list’ of countries that are deemed to have insufficient anti-money laundering controls.

President Laurentino Cortizo has said the country is developing a registry of beneficial company ownership. This will be introduced later this year in an attempt to resolve issues with Panama’s anti-money laundering controls that were identified by the Financial Action Task Force (FATF).

As a result of what Cortizo calls “an enormous effort’’, he expects Panama to come off the FATF’s grey list before the end of the year. The grey list is the FATF’s list of countries that are under increased financial monitoring.

Devising and implementing a registry for companies in Panama is part of its response to the FATF highlighting the obscure nature of company ownership structures in the country’s financial system.

The FATF, which was founded by the G7 nations, leads global action to tackle money laundering, terrorist and proliferation financing. It researches how money is laundered and terrorism is funded, promotes global standards to mitigate the risks, and assesses the effectiveness of countries’ efforts to tackle those risks.

The United States backed Panama’s attempts to put right the problems facing its financial industry. Panama has long been criticised for its use as an offshore hub to incorporate shell companies created with the aim of disguising the true owners of such companies.

Information in the proposed new registry will be able to be used to properly identify those who control and operate Panamanian companies – and could be used for law enforcement purposes when necessary.

The FATF released its updated grey list earlier this year. Panama, which was one of 23 countries on it, was given a June deadline to substantially put in place its action plan or face even greater scrutiny from the G7 member states.

The other nations currently on the grey list are Albania, Barbados, Burkina Faso, the Cayman Islands, the Democratic Republic of the Congo, Gibraltar, Haiti, Jamaica, Jordan, Mali, Mozambique, Nigeria, the Philippines, Senegal, South Africa, South Sudan, Syria, Tanzania, Turkey, Uganda, United Arab Emirates and Yemen

The FATF was created in 1989 under a G7 initiative to develop guidelines for a stable and transparent global financial system. Based in Paris, its member countries are Canada, France, Germany, Japan, Italy, the UK and the United States. The European Union sits on the G7 as a non-enumerated member.

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Zulfi Meerza

Senior Associate Solicitor

zulfi.meerza@rahmanravelli.co.uk
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Zulfi’s in-depth expertise in business crime investigations and serious regulatory matters makes him a logical choice to advise and represent corporates, board members, senior business figures and high net worth individuals throughout the life of a case.

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