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RISK FACTOR FOR PANAMA HAS BEEN UPGRADED TO A HIGHER LEVEL OF CAUTION”!!
FROM A
DIFFERENT POINT OF VIEW by Monte Friesner > 
Financial Crime Consultant for WANTED SA >
Wednesday November 03, 2010 >
WANTED SA has just learned this morning that the section on the Republic of Panama in the 2010 US State Department International Narcotics Control Strategy Report* [INCSR] was highly critical of that country's AML/CFT enforcement programme.
We did not see the Government of Panama arrest any of the major money launderers who are known to ply their dark trade in that country's financial system during the past year. These money launders were uncovered and reported to authorities; however, the conclusion is no arrests and still slow investigations.
Official government statistics obtained by the USA show that only 9 money laundering investigations were opened in 2009**. We will summarize the important provisions of the INCSR with regard to Panama below.
Should the Compliance Officer adjust country risk for Panama?
Read on and see why in our opinion Compliance Officers tasked with assessing country risk must now raise it for the Republic of Panama.
These are direct quotes from the Report:
- The Government of Panama should increase its efforts to prevent, detect, investigate and prosecute money laundering and terrorist financing.
- A judicial system capable of prosecuting money laundering cases is still a work in progress.
- Financial and other institutions should be regularly audited for compliance with reporting obligations.
- The issuance of bearer shares is a primary concern and the Government of Panama should take adequate steps to eliminate or immobilize the instruments.
- The FIU is overworked, and lacks adequate resources, institutional knowledge, and the ability to enforce reporting requirements.
Add to these conclusions rampant reports that there is corruption in the judicial system and that elected officials at a high level are tied to money laundering. That corrupt Politically Exposed Persons [PEPs] are allowed to posses large accounts without Source of Funds enquiries and that certain high-risk Venezuelan banks are funneling money into and through Panama and must conclude high-risk.
For the above reasons, it is prudent at this time to increase country risk for Panama.
* INSCR Volume II, Money Laundering and Financial Crimes
http://www.state.gov/documents/organization/137429.pdf
** Consider this: there were 214 credit card investigations during the same time period.
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The facts and opinions stated in this article are those of the author and not those of WANTED SA. WANTED SA does not warrant the accuracy of any facts and opinions stated in this article; does not endorse them, and accepts no responsibility for them.
