OECD says Panama pledge a positive step
The country faces a review on its financial services sector by the Global Forum.
Following the announcement of President Juan Carlos Varela on the commitment of Panama to exchange financial information, the director of the Center for Fiscal Policy and Administration of the Organization for Economic Cooperation and Development (OECD) Pascal Saint-Amans acknowledged that the pledge is a step forward for Panama but said the country still has a long way to go.
Saint-Amans spoke with La Prensa during the annual meetings of the International Monetary Fund and World Bank, which concluded yesterday in Lima, Peru. The following are questions and answers from the interview.
What do you think of Varela's pledge?
It is a good step forward. In October of last year, 94 countries committed themselves to the automatic exchange of information. They pledged to implement the standard. Panama was one of the few jurisdictions that did not make the pledge, along with Bahrain, the Marshall Islands, Vanuatu and Nauru, with Panama being the only significant financial center.
Panama said it would exchange information, but that it would not accede to a multilateral convention. what is your opinion of that?
From a legal point of view, once a commitment is made, it has to be implemented. To share information, it can be done through a multilateral convention, or it can be done bilaterally. In that case, one should move fast if you want to grant the exchange of information to all interested countries that meet the standard of confidentiality.
Do you think that Panama will pass to the second phase of the review of its jurisdiction?
The peer review, which includes 30 countries, has made that recommendation to the Global Forum, which has until the end of October to decide. I think it was premature of Panama to announce that, as it broke the rules of confidentiality. It is more than likely, but who knows. There are members of the Global Forum who are not in the peer review group. We have to wait for the Global Forum, which is the sole decision-making body in this matter. In substance, it is true that the members of the review group have recognized some progress that was made in Panama.
Varela said that debate on the exchange of information should be conducted in the UN. Do you agree?
It is an opinion I respect completely. But in this case, there are 127 jurisdictions, including Panama, that are members of the Global Forum. What matters is that all countries are equal. No longer is the OECD a group of countries dictating what rules other countries have to make.
In Panama there is a concern because the steps demanded by the OECD could hurt the competitiveness of the financial services industry. Do you agree?
It is not true. Because all countries have moved. What happens is actually the opposite. Panama won a competitive advantage by not conforming. That is why other countries think that the situation is very unfair because Panama is receiving money that they have lost. The perception in Panama is really different from the perception outside.
Do you think that those flows of money look to hide the funds from tax authorities?
The reviewer group will decide that. But that's basically what we heard from the banking industry.
In the country there is a sense that a double standard is used. That the United States is not required to provide information with the same level of transparency that it demands from Panama. Is that a fair statement?
The rules are the same the United States is expected to act with reciprocity with any other country. Look at the review of the United States. It has a mark in regards to beneficiaries and they have to change. Currently they are providing required information, but not enough
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More Pascal Saint-Amans statements in Panama: Profits for two men and a dog http://mypanamalawyer.blogspot.com/2015/07/panama-profits-for-two-men-and-dog.html
The Economic Case for Tax Havens http://mypanamalawyer.blogspot.com/2014/10/the-economic-case-for-tax-havens.html