New Delhi: Panama is ready to get off the ‘grey list’ of global money laundering and terror financing watchdog Financial Action Task Force (FATF), and will work “proactively” with countries like India on the 2016 Panama Papers leak case, the central American country’s foreign minister Janaina Tewaney Mencomo has said.
In an exclusive interview with ThePrint, Tewaney said Panama had completed nearly all the 15 requirements under its FATF Action Plan, the deadline for which expires in June.
“Very soon we’re going to have a technical group meeting [under FATF] with the countries that are involved and I believe India is part of it. For us, it’s very important that those countries that are part of that group, can see our progress,” said the minister.
In recent years, Panama has come under pressure to clean up its financial and banking system in the wake of the Panama Papers case, which featured names of rich and powerful people around the world who allegedly paid huge amounts of money to the Panama-based firm Mossack Fonseca to set up offshore entities to evade taxes.
Over 500 Indians reportedly figured on the list, including fugitive liquor baron Vijay Mallya, former solicitor general of India Harish Salve, actor Amitabh Bachchan and others.
India’s External Affairs Minister S. Jaishankar visited Panama earlier this week, as part of an ongoing tour of Latin America. Panama Foreign Minister Tewaney confirmed that money laundering and terror financing came up in her discussions with Jaishankar.
“Panama has briefed Minister Jaishankar about the efforts and progress we have made to get out of the FATF [Grey] List. As you can see our country has invested not only human resources but technology to be out of that list. I think he received it well,” she said.
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‘No more anonymous entities in Panama’
According to Tewaney, the country is in the midst of drawing up a registry of company ownership related to the Panama Papers case.
“There are no more anonymous entities in Panama. What we are doing is trying to register all companies so they can be available in case countries request it. This is not only a fact about India, it will be about the whole international community,” she told ThePrint.
“Any other country or any judiciary that requests will be able to get that information,” she explained.
The FATF, in its latest review in February, noted that Panama has “taken important steps” and has demonstrated the ability to investigate and prosecute money laundering involving foreign tax crimes. However, it adds that Panama should fully address remaining measures in its action plan such as ensuring adequate verification, up-to-date beneficial ownership information and more.
It also adds that if Panama fails to complete its Action Plan by the June deadline, the FATF will consider calling on its members and urging them to apply “enhanced due diligence” to business relations and transactions with the central American country.
“We know (that) if we want to remain as a competitive banking system, we need to cooperate with countries,” Tewaney told ThePrint, adding that she is confident her country will meet the June deadline.
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‘Logistics hub for Indian firms’
Due to its geographical location and five seaport areas, Panama has long positioned itself as a major logistics and transport hub in Latin America. The Panama Canal, an artificial 82 km waterway that divides North and South America, is also a key goods route.
During his two-day visit to the country this week, Jaishankar said India is exploring the possibility of opening a logistics hub in Panama for Indian firms, adding that trade between India and Latin America is close to reaching $50 billion.
For India, Panama is its largest trading partner in central America, and goods trade between the two countries stood at $610 million in 2021-22.
“As India increases its engagement with the world, it will need a hub like Panama in Latin America,” said Tewaney.
There are some free ports in Panama like the Colón Free Trade Zone that have developed a reputation in recent years for the sale and exchange of contraband, counterfeiting and cocaine, according to a report by The Guardian.
Asked if this has hampered Panama’s reputation, Tewaney argued that drug production begins in South America and this issue often “heats” or highlights port countries like Panama through which drugs are trafficked.
‘No. of migrants crossing Darien Gap unsustainable‘
The Darién Gap, a jungle on the border of Colombia and Panama, is considered one of the most dangerous migrant routes in the world due to the challenges of the wilderness and cartels. Yet, migrants from across the world, including from India, continue to embark on the journey year after year in the hope to reach the US or Mexico.
In 2019, a report by The Indian Express revealed that over 300 young migrants from Punjab and Haryana reached Mexico in a journey that involved travelling through the Darién Gap, only to be deported and sent back to India.
Panama received over 2 lakh migrants who crossed the Darién Gap last year and expects 4 lakh this year.
According to the Panama foreign minister, these numbers are “unsustainable”. She claims that her country provides shelter, food and healthcare to migrants coming from the jungle, many of whom have been “abused” by cartels and gangs that operate there.
Panama has held several meetings with the US Department of Homeland Security and the Colombian government on coordination and financial support in tackling such illegal migration.
(Edited by Anumeha Saxena)
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