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Panamanian Bankers Reasonably Concerned Foreign Account Tax Compliance will Wipe-Out Competitiveness

Article Summary:

The Panamanian banking sector remains concerned about certain challenges facing the International Banking Center (CBI) as it fears it will be less competitive as the effects of the Foreign Account Tax Compliance Act (Fatca) signed with the United States (USA), have not yet been measured, or that Panama continues to be considered as “tax haven” by some countries.

Photo Credit: Revista Summa

Original Article Text From Revista Summa via Google Translate :

Panamanian Bankers Concerned about Competitiveness

The banking sector remains concerned about certain challenges facing the International Banking Center (CBI) will be less competitive as the effects of the Foreign Account Tax Compliance Act (Fatca) signed with the United States (USA), who have not yet been measured, or that Panama continues to be considered as “tax haven” by some countries.

For the list of “tax havens” or “non-cooperative countries in the fight against money laundering”, despite the progress the country has made in this area with the signing of treaties to avoid double taxation ( DTT) and Fatca with the U.S., and has brought negative consequences for the country given that the International Finance Corporation (IFC, for its acronym in English) has come to deny loans to companies with offices in Panama.

This issue was addressed by both the president of the Panama Banking Association (ABP), Jaime Moreno, and Minister of Economy and Finance, Frank de Lima, during the inauguration of the new Board of Directors of the business organization last week.

Moreno, in his inaugural speech said that while Panama has made significant adjustments to ensure the transparency of its financial system is still appear on these lists and is regarded as a “tax haven” and therefore urged the authorities to take steps to help improve the competitiveness of the CBI, but causing no damage.

He also called for multilateral agencies not “keep up the rod” or changing the requirements that Panama must meet to get out of these lists, remembering that the Organization for Economic Cooperation and Development (OECD) called on Panama to stop new requirements be considered a non-cooperative country in the fight against money laundering, such as making changes to the rules governing the issue of bearer shares.

For his part, Minister De Lima said he already is studying the issue of bearer shares, which could be immobilized or eliminated.

He also noted that in a study released a couple of years on the competitiveness of CBI mentioned four weaknesses: Not having a Central Bank, have no lender of last resort, not located in a country with investment grade and be considered as a “tax haven”.

De Lima said that two of these weaknesses has been or are on track to be overcome because Panama is now a country with investment grade and has made progress in its efforts to emerge from the lists of “tax havens”, while what happened in the international financial system has shown that the first two themes rather than weaknesses were a strength.

As for the Fatca Moreno said that even the Latin American Banking Federation (FELABAN) has sent a letter to the Bureau of Internal Revenue (IRS) of USA

noting that this agreement violates the laws of each country, including topics such as banking secrecy, consumer protection and tax laws of each country.

Perspectives
By 2012 economies are expected to slow down their growth and this step could affect the growth of banks’ portfolios, this is because the economic situation in the United States has not yet stabilized and the crisis currently living European markets.

Until November, the assets of CBI registered a total of U.S. $ 1,242 million, according to a report by the Superintendency of Banks of Panama, which also indicates that for this period, the total loan portfolio grew 16%, and the investment portfolio 13.35% of which became major elements

The Superintendent of Banks of Panama, Alberto Diamond, is confident that local bankers will continue with the same level of prudence that to date have shown and of course will be watching the development of the crisis that exists in international markets and their potential effects in local banks.

The growth is going to pitch the country’s growth Raul said German, general manager of Banco General, who also noted that there are a lot of liquidity in the market, but do not forget that there is a very tangled international environment and that Panama is interconnected with the rest of the world and that the bank is very careful to understand that although we live in the country an economic boom, there is a crisis out.

Link to Original Article:

From Revista Summa

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