Mon. Oct 18th, 2021

Panama Updates

Panama, known for its channel and notoriety as a foreign financial center, now wants to earn a different reputation: as a beacon of female empowerment in Latin America.

Six of the 16 ministers in the Panamanian cabinet are women and the Central American country has set a quota of 30 percent female participation for the boards of state-owned enterprises, an unusual step in the male-dominated corporate world.

“We have historically had family businesses without women participating, at least in the high positions, and the same with the government,” said Erika Mouynes, a former U.S. corporate law firm, Panama’s Secretary of State. “So we took. . . a more holistic approach: not just the government or not just the private sector, everyone has to comply with it. “

The President of Panama, Laurentino Cortizo, 2019 election as an outsider against the establishment who promises to fight corruption, inequality and poverty. In his first two years in office, however, he struggled with the resignation of several ministers, a failed attempt at constitutional reform and the devastating impact of coronavirus.

The economy collapsed 18 percent last year and the country has the highest death rate in Covid-19 in Central America after an inefficient closure. The government has stepped up vaccinations in recent weeks and more than 4 million vaccines have now been administered to the 4.3 million population.

Mouynes said Panama was one of the first countries to team up with the Equal Pay International Coalition and is a member of the steering committee of the UN-backed body. However, the government’s pursuit of greater female representation and more equal rewards is at odds with the passion of some of its neighbors.

Mouynes still meets rooms full of men at Latin American diplomatic meetings. “Out of 35, we are only four foreign ministers who are women in the region,” she said in an interview with the Financial Times. “So you can see that it’s quite a challenge, especially in Latin America.”

Cortizo, she says, feels so strongly about the issue that he has chosen a female bodyguard.

“If you trust your life to a woman, a policewoman, rather than a man, it says a lot about the trust he has,” she said.

President Laurentino Cortizo

President Laurentino Cortizo, pictured in 2019, has a female bodyguard © Arnulfo Franco / AP

Efforts to put women at the center of Panama’s recovery from the coronavirus pandemic have allocated 70% of the government’s microfinance loans of up to $ 5,000 to female entrepreneurs, Mouynes said. The IMF expects the economy to grow by 12% this year.

Progress in reforming Panama’s reputation as a haven for illegal financial flows has been more difficult. Mouynes urges the government to work hard to address shortcomings identified by bodies such as the Financial Action Task Force (FATF), the intergovernmental watchdog for financial crime and terrorist financing.

For example, more than half of Panama’s 762,709 registered corporations were suspended after failing to fully comply with local standards, in an effort to clean up the corporate registry, she said. Panama now shares tax information with 76 countries.

But the IMF earlier this year noticed that Panama has missed the original deadlines for leaving the “gray list” of 22 countries that required more oversight due to the shortcomings in the fight against money laundering. The list includes Syria, South Sudan and Zimbabwe.

“The authorities must tackle the remaining shortcomings in Panama’s regulatory framework against anti-money laundering / counter-terrorism (AML / CFT) effectively,” the IMF said in a statement in May following a virtual visit.

The EU blacklisted Panama in February from non-cooperative jurisdictions for tax purposes, and Panama is a high 15th on the Tax Justice Network Financial Secrecy Index of 133 jurisdictions, although it is under the United Kingdom and the United States.

“Panama is still going bad,” said a researcher at the Tax Justice Network. “It has approved a new beneficial ownership law, which would be an improvement, but it does not appear to cover trusts and there is no public access.”

Mouynes is reluctant to commit to a target date for Panama to leave the FATF gray list, saying the government wants to do thorough work on compliance to reduce the risk of relapse. “It would be easy to get off the list, but then be back in two years or three years, so all we are trying to do is lay the foundation that this can never happen to Panama again,” she said. said.

Meanwhile, Panama is stuck with the bad publicity it received over the Panama Papers scandal in 2016. It erupted when Mossack Fonseca, a law firm in Panama, had its customer data hacked and sent to a consortium of news media around the world. leak. The size of 11.5 million files revealed a web of 214,000 foreign entities, some of which were used by government and public officials to illegally hide wealth and avoid taxes.

Countries have recovered more than $ 1.36 billion in unpaid taxes, fines and penalties due to inquiries by the Panama Papers, according to the International Consortium of Investigative Journalists, which coordinated the effort.

Mouynes maintains that Panama is being unfairly blamed for a global problem. ‘We suffer from this very terrible reputation of. . . “Panama Papers where the only issue that mattered to Panama was that the law firm was located here,” she said.

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