Anti Money Laundering (AML) in Panama
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|Panama is regarded today as an important regional financial center with one of the fastest growing economies in the Western Hemisphere. Therefore, money laundering remains a serious problem in Panama.
The majority of money laundering activity in Panama is narcotics-related or the result of the transshipment of smuggled, pirated, and/or counterfeited goods through Panama’s major free trade zone. The funds generated from illegal activity are vulnerable to being laundered through a wide variety of methods, including the banking system, casinos, bulk cash shipments, pre-paid telephone cards, debit cards, insurance companies, real estate projects and agents, and merchandise.
Panama has a comprehensive legal framework to detect, prevent, and combat money laundering and terrorist financing, and provides excellent cooperation with United States (US) law enforcement agencies in combating drug trafficking, money laundering, and financial crimes. The government identified combating money laundering as one of five goals in its five-year National Drug Control Strategy issued in 2002, and established the Financial Intelligence Unit (FIU) of Panama, the Unidad de Análisis Financiero (UAF).
Panama’s "New Banking Law," states that banks and other supervised entities are obliged to establish policies, procedures, and controls for the prevention of money laundering, terrorist financing, and related crimes.
According to Panamanian laws and regulations, financial institutions must adhere to Know Your Customer (KYC) procedures for identification of customers, exercise due diligence, and perform accurate recordkeeping. The Superintendent of Banks supervises and examines financial institutions for compliance with Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) regulations, including compliance with KYC policies.
The Economy of Panama
Panama's economy is reliant on the movements of the United States Dollar (USD), resulting in a free market economy with a history of low inflation. The economy relies most on the service, banking, commerce, and tourism industries.
The services sectors that support much of the Panamanian economy include the Panama Canal, banking, Colon Free Trade Zone, insurance, and container ports.
Panama manufactures many items such as aircraft parts, cements, beverages, adhesives, and textiles.
The leading exports of panama include bananas, shrimp, sugar, clothing, and coffee.
Banking in Panama
Panama does not have a central bank. Primary banking oversight is conducted by the Superintendency of Banks of Panama. The Superintendency is subject to supervision by the Comptroller General of the Republic; however, this supervision does not allow for any interference of the Superintendency’s administrative powers.
The Superintendency is responsible for overseeing the preservation and efficiency of the Panamanian banking system, developing Panama as an international financial center, and promoting public trust in the banking system.
The Superintendency also oversees Panamanian banks and establishes procedures to allow for the supervision and control of international and national activities.
Panama does not have a central bank. It uses the USD as its de facto currency and has a completely market-driven money supply. This means that Panama cannot produce money; it must instead buy or obtain its dollars by producing or exporting real goods or services.
The currency in Panama is known as the Balboa, even though they use US banknotes. One Balboa is divided into 100 centésimos, and is issued in 1 centésimo, 1/10 Balboa, ¼ Balboa, and ½ Balboa coins. Balboas are only issued as coins; Panama does not issue its own banknotes, and acquired US banknotes are used instead.
Other Key Statisics of Panama
Time Zone: UTC-5 (same time as Washington, DC during Standard Time).
Location: Central America, bordering both the Caribbean Sea and the North Pacific Ocean, between Colombia and Costa Rica.
Population: 3.864 million (2013 est.).
Labor Force: Approximately 15% works in agriculture, 18% in industry, and 67% in services industries. The unemployment rate is 7.1%.
Languages Spoken: Spanish and English. Many Panamanians are bilingual.