Panama to be placed on FATF anti-money laundering grey list

International financial crimes watchdog FATF will add Panama to its "grey list" of anti-money laundering high-risk countries in June, local news agency ANP reported.

The decision was taken as a result of a recent IMF evaluation of the country's financial system.

Economy and finance minister Frank De Lima said Panama is working with the IMF and the Inter-American Development Bank (IDB) to develop a plan for how to comply with the 40 official FATF anti-money laundering recommendations, as well as how to create a new law pertaining to money laundering and funding of terrorism.

The OECD is also conducting a peer evaluation of Panama's financial system, which De Lima said the country is not likely to pass.

One reason, he said, is that although Panama passed a law in 2013 to immobilize bearer shares, the law has not been enforced.

He added that Panama hopes to sign a compliance agreement with the US in April under the latter's Foreign Account Tax Compliance act, which regulates reporting by US taxpayers about foreign accounts and offshore assets.

Meanwhile, Capital Bank president and former president of Panama's banking association Moisés Cohen reportedly suggested that Panama look to form alliances with countries like Luxembourg and Switzerland, who have faced opposition from the European Union over the same transparency issues.