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El Panamá América

Wednesday, 7th February 2001

No to blank check demanded by world powers:
PANAMA WILL NOT SIGN COMMITMENT WITH OECD 

by Rafael E. Berrocal R.
El Panamá América

     Panama will not sign the memorandum of understanding submitted by the Organization for Economic Cooperation and Development (OECD) which commits this country to making any change to get off its list of so-called tax havens, disclosed Vice Minister of Economy Domingo Latorraca.

     He pointed out that accepting this memorandum was akin to signing a blank check where the country commits itself to make any changes that the OECD stipulated.

     "We will not accept that, as Panama is a Republic and it has its Constitution and laws", said the Vice-Minister of Economy.

     He stated that Panama is already completing a strategy for getting off this blacklist in which it will prove that this country is not a tax haven.

     Also, the Ministry of Economy and Finance has invited the OECD to visit Panama in March.

     Latorraca declared that this blacklist is related to the problem of tax evasion "that industrialized countries have with their citizens."

     The memorandum of understanding was sent by fax to countries known as tax havens. 

     "The United States, France and other industrialized countries that have included Panama on a blacklist are those that have problems with their citizens concerning tax collection," Latorraca pointed out.

     These countries have tax evasion problems with their citizens, and what they are seeking is to have countries like Panama help them to collect taxes. "What we have to do is to worry about Panamanians", he asserted.

     He stated that the strategy that the government will use to get off this blacklist will be submitted this month to the main parties involved in international services, banks and lawyers.

     "We will defend the view that Panama is not a tax haven, that this country has its laws and regulations", Latorraca stressed.

     "The government has already contacted OECD and has asked them to meet in Panama for talks, mainly in order to let them know what Panama actually is like, what its laws relating to all aspects of international services are, and how we are regulated, so that they may truly understand and not make such assessments," said the Vice Minister.

     The OECD submitted a draft resolution recommending the so-called tax havens adopt changes in their tax collection regulations by 31st December 2001.

     By 31st December 2003, "every party shall apply a mechanism for providing information requested by OECD fiscal authorities within the framework of investigations and instructions in illegal tax matters.

     Countries that have ratified the agreement shall by 31st December 2002 have access available for tax authorities to information on persons, companies and other organizations, particularly those that gain profits.

     Likewise, these entities shall be obliged to render account in accordance with accounting standards, audit and register such accounts, as well as place them at the disposal of banks and insurance companies.

     And, lastly, the so-called tax havens shall by 31st December 2005 cease the alleged practices allowing tax evasion, through an information exchange system that covers all tax subjects and not only persons that carry out questionable practices.

     Related to this, the Financial Action Task Force (FATF) has decided not to change the blacklist of the so-called non-cooperative countries in the fight against money laundering, among which Panama is also to be found.    

 

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