Today we announce a significant milestone for Panama’s financial landscape – the country’s removal from the Financial Action Task Force (FATF) Grey List. This accomplishment is a testament to Panama’s unwavering dedication to enhancing its anti-money laundering (AML) and counter-terrorism financing (CTF) framework.
A Journey to Compliance
Panama’s journey began in June 2019 when the nation was flagged with 15 non-compliant actions. Over the years, Panama has demonstrated a strong commitment in addressing these issues, and to strengthening its financial and legal systems.
This momentous decision was reached during the FATF plenary meeting in Paris, France. It demonstrates that Panama has made substantial improvements in its AML and CTF systems. These efforts received overwhelming support from regional partners, international bodies, and GAFILAT, an organization Panama has been a member of since 2010.
Key Actions Taken
- Comprehensive updates to the National Risk Assessment Chapter V on Terrorism Financing (TF) to cover relevant threats, vulnerabilities, and mitigation measures.
- Increase of personnel in the Financial Analysis Unit (UAF) and the Public Prosecutor’s Office for TF analysis and investigations.
- Development of sector-specific guidelines for identified risks and mitigators.
- Implementation of enhanced risk-based supervision, incorporating TF analysis in inspections.
- Adoption of a risk-based supervision plan for non-financial regulated entities.
- Revised AML/CTF prevention regulations, imposing sanctions for non-compliance, thus ensuring deterrence and proportional responses.
Significant Benefits for Panama
- Enhanced International Reputation: Panama has reinforced its international standing, signaling an unwavering commitment to transparency, and facilitating global economic and financial relations.
- Attracting Foreign Investment and Job Creation: Improvements are expected to draw foreign investment, fostering economic growth, tourism, trade, job creation, and new business opportunities.
- Accessible Credit Lines: Financial institutions may offer more favorable and expanded lines of credit to individuals and businesses seeking financing.
- Correspondent Banking and International Relations: Panama’s removal from the Grey List will substantially enhance relationships between local banks and their international counterparts.
- Reduced Pressure on the Financial System: The elimination of special reviews will enable Panama’s financial system to operate more effectively and with heightened confidence.
- Benefits for the Insurance and Securities Industry: Panama’s removal from the FATF Grey List will attract major reinsurance companies to serve the Latin American market.
Panama’s removal from the FATF Grey List is a remarkable accomplishment, underscoring the nation’s commitment to combating money laundering and terrorist financing. It reaffirms Panama’s position as an equitable and competitive player in the international financial community.
This success is the result of collective efforts from the Panamanian authorities, the private sector, and the international community.
Source: EY Panamá