Panama-OECD Engagement Post “Panama Papers”

Panama, the nation at the center of a global financial scandal, has vowed to deepen its ties to the Organization for Economic Cooperation and Development (OECD) in order to create greater transparency and avoid future such scandals. The nation will seek to provide greater tax regulation in line with the OECD’s guidelines, offering enhanced openness and fewer incentives for tax evaders from other countries.

Panama, the nation at the center of a global financial scandal, has vowed to deepen its ties to the Organization for Economic Cooperation and Development (OECD) in order to create greater transparency and avoid future such scandals. The nation will seek to provide greater tax regulation in line with the OECD’s guidelines, offering enhanced openness and fewer incentives for tax evaders from other countries.

Isabel De Saint Malo, Panama’s Foreign Minister, said, “We are going to establish technical-level dialogue between Panama and the OECD specifically on exchanging information.” She went on to say that early talks with the OECD were “very good” and that the two sides had agreed to further discussions on the matter.

Panama suffered a public relations black eye over the weekend when an embarrassing data dump, apparently pulled from the files of a Panamanian law firm, revealed that a number of prominent figures had been funneling money through Panama in an effort to hide them or evade taxes. The so-called Panama Papers include millions of documents spanning nearly 40 years of business. They appear to have been pilfered from the Panamanian law firm Mossack Fonseca.

These revelations have left Panama scrambling to avoid being deemed a tax haven that facilitates money laundering. The OECD has accused the Latin American nation of being intentionally lax on transparency and information-sharing standards. It has even gone so far as to call Panama “the last major holdout” on transparency laws, allowing funds to be laundered and hidden from the oversight of the other nations from which the funds originate.

In response, De Saint Malo’s office called the OECD “unfair and discriminatory.” Nevertheless, De Saint Malo promised to improve information sharing with other nations. This came on the heels of France warning that it would put Panama on a blacklist of identified tax havens. Panama had just escaped a similarly unfavorable “gray list” of nations not doing enough to combat money laundering just a few months ago.

Panama has taken a few steps to improve transparency and reporting standards, but these measures have not gone far enough in the eyes of the OECD and the international community. De Saint Malo struck an optimistic tone, nevertheless, promising to hear the world’s concerns and do more to improve transparency. “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.”