We have on several occasions fingered Panama as a particularly recalcitrant secrecy jurisdiction: our recent Panama Narrative Report spills a fair number of beans in that respect. Its recalcitrance is perhaps hardly surprising, given the quantity of Colombian and Mexican drugs money believed to be sheltered there – to name just one part of the problem.
Now, via Mark Morris, a list of conditions that Panama wants to impose on the international community before it provides any transparency:
“The commitment to the AEOI be developed on the basis of the following principles:
The exchange will be based on bilateral agreements without accepting external pressures regarding which countries should sign agreements;
Absolute reciprocity will be required to exchange information;
There must be equal to the level of all members of the Global Forum on Transparency and Exchange of Information and financial centers, in order to prevent the AEOI be used as a deterrent to affect the country’s competitiveness for the benefit of other financial institutions;
Existence of legal framework to protect the confidentiality, safe methods to protect the data backup, and to ensure that the information will be used appropriately and only for the purposes specified in agreements that support the AEOI;
Certainty that the countries with which agreements are signed in a position to protect basic guarantees users Panamanian platform services and not exposed to unreasonable risks of political, economic or personal security nature.
Any cooperation should always be in compliance with the fundamental principles of public international law.”
Read those carefully. Morris provides a detailed fisking: our summary would be this: this list is a finger (or two fingers, or a fist and forearm, depending on your cultural background) raised in the general direction of the international community and the rule of law.
Point 3 is a case in point: they won’t give out information until everyone else is fully on board: the devious old “level playing field” argument, which is a recipe for inaction. As Morris puts it:
“In effect, Panama is saying it won’t agree to the CRS until all 130 members of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes are doing automatic exchange of information. . . There are 130 members of the OECD Global Forum on Transparency, many of which are developing countries, such as Albania, Armenia, Azerbaijan, Botswana, Brunei, Burkina Faso, Cameroon, Costa Rica, Gabon, Ghana, Grenada, Guatemala, Kenya, Lesotho, Morocco, Niger, Pakistan, Trinidad and Tobago, Papua New Guinea, Samoa, Senegal, Tanzania and Uganda. The Common Reporting Standard does not include developing countries.”
Morris explains, based on established OECD positions, that this intransigence will not be accepted, and blacklisting can’t be far away. Throw the book at ’em.