Are we really the bad boys?

Those who have followed me since 2007 when I started writing this column know my economic and financial positions on certain topics. One of them is about the actions taken by this country to be able to “get out” of the lists of any color in which any country, region, organism or pseudo organism wants to put us.

Panama has been fighting foreign banking competition since the 1970s. First, it was Miami, accusing us of money laundering of the drug traffickers, when in Miami they laundered money right and left. Obviously, Noriega and his cronies of the time allowed the establishment of two banks linked to the Medellín and Cali cartels, but by 1990 they had already left the system. But this slip was not of the Panamanian people, it was a matter of a narco dictator and his cronies, which unfortunately embarrassed us all.

From then on, Panama has changed many laws and has improved a lot (it was obvious since we went from a narco dictatorship to 30 years of democracy and a rule of law with its virtues and defects). Yet they keep attacking us. And the worst of it is that we attack ourselves (Panamanians with an agenda I cannot fully figure out) as if we are all crooks and we all launder money, and this I cannot accept. However, I am not so "naive" to think that there is no money laundering here, but there are countries where these amounts are much higher than those that could be done in Panama and, on the other hand, I cannot accept that a large number of Panamanians are involved in these attacks.

For years, FATF, OECD, and EU, anyone else who needs someone to take advantage of somebody and "bully" puts us on the black or gray list, whatever they think, on the pretext that Panama is a tax haven and that we are crooks here (which it gets worse when some Panamanians also enter into these harmful accusations for the country, but I do not hear them criticizing any additional country - especially if it is European or European protectorate or gringo).

After the "Panama Papers", the Waked novel followed, I don't know if they are or are not guilty, they were put on the Clinton List (in which you do not have to prove anything to enter any natural or legal person) and to date (after 5 years), none have been charged for what the former US ambassador (at that moment) declared that they were part of the largest Money Laundering network in the world. If they are guilty or the US government have evidence against them that takes them to trial and put them in jail, if not, they should make a “mea culpa” about the show, not only for the Waked but especially for Panama.

From the Panama Papers there have been a few dignitaries from some other country (more than a dozen of them), who had some type of company, established by MossFon, somewhere in the world (only 10% of the companies mentioned in the Panama Papers they had been made in Panama), some resigned, others did not. But up to now, after 5 years, this scandal was proved to be more fireworks than a bomb, but Panama’s reputation continues to be harmed and nobody has apologized or at least make a statement on this matter.

Nor did we see that any bank anywhere in the world was fined for having bought these companies that they made in MOSSFON, under the pretext that they did not know (MOSS FON did not know either and has been crucified for it). Be careful, and I am not defending MOSSFON, since much of what has happened in Panama, has been their responsibility (regardless of whether these documents have been stolen from the company by journalists - including Panamanians) and they made considerably mistakes on this matter.

Just until a month ago, one of the few civilians, in a tax fraud case in the US, was sentenced, who decided to plead guilty, as did his accountant, and that here in Panama this case has been published with much exposure, and no one clarifies that he has been one of the few fraudsters that have been found in the “Panama Papers”. It is as if it were someone's systematic plan to end Panama’s service economy (in fact, the incorporation of companies has fallen from 40 thousand companies created in 2015 to about 15 thousand that will be projected to be created this year 2020, a fall of at least $ 7.5MM in one-time government set-up fees, about $ 40M less in business incorporation income for lawyers and about $ 2.5MM in resident agent income, and the unemployment generated by this decrease in business incorporations and the other state income generated by these companies).

And it is that MossFon went bankrupt, and closed its practice, and all the direct and indirect unemployment that is generated is lost, but all the other losses that this theft of documents generated and that I still do not see a conviction of fraudsters (including banks involved around the world) in the countries that they made noise about it and that there are no convictions. I would like to know if the rogue journalists of ICIJ (and the newspapers that support them) have written about it, and if they are going to take responsibility for everything that Panama has lost, including bad propaganda.

But now a bigger scandal is coming out, and I don't see the "big fuzz" that was made with our country. Now, the FinCen - Financial Crimes Enforcement Network, an entity of the Department of the Treasury of the United States made an investigation on financial information in banks of the United States, with data that fell into the hands of the "ICIJ journalists ”. This data and its respective analysis, "report on the behavior of customers are evidence of more than $ 2 billion of suspicious banking transactions carried out between 2000 and 2017 that went through the banks with a simple alert, which did not prevent the collection of service fees" (The banks in question are - JPMorgan, HSBC, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon).

What is interesting about this revelation is that in “May 2020, Panama was included in a list of jurisdictions with deficiencies in the fight against money laundering. The data from the consortium of journalists indicates that 123 suspicious transactions were carried out in Panama in several banks based in the United States. The country received $ 19.6 million and sent $ 23.1 million. " But nothing has happened with the United States or the other countries were the banks allowed the more than $2 billion in suspicious transactions! The only bad thing that happened to these banks is that their shares in the stock market have plummeted, but as the markets have no memory, expect these shares to return to normal soon and recover and even rise.

These documents have been able to “trace dollars from traffickers, explored scandals that paralyzed economies in Africa and Eastern Europe, identified grave robbers with Buddhist relics that were sold in galleries in New York, and followed Venezuelan tycoons who diverted money from public housing and hospitals. " However, the $ 40 million that they found suspects in Panama - going in and out - is enough for them to continue taking us as stupid and to continue including us on black and gray lists and for the government not to take actions - offensive - to end this problem of once and for all and the end of the  “bullying” against Panama. Nor do I listen to the internal accusers speak on this issue (of course they are going to tell me that this does not interest them, only Panama).

Now, if Panama were as bad as they say, why do international markets continue to lend us, in the middle of a pandemic, and at very low prices (interest)? Panama "carried out an operation in the financial markets that allowed it to place the sum of $ 2,575 million in bonds." With this operation, the MEF (Finance Minister) will use part of these funds to buy back local bonds that mature in 2021 and 2022 respectively and thus obtain more favorable rates (this is an exchange of expensive debt for cheap debt). Panama received offers for US$10,000 million, almost 5 times what was needed.  US$1,250 million were placed due in 2032 at a yield of 2,252%, the reopening of the bond due in 2060 at a yield of 3.28% per US$1,000 million and the reopening of the local note due in 2026 at a yield of 2.77% for US$325 million. These are really low-interest rates, never seen before in Panama.

And another case, older, but which now comes up with the FinCen scandal is that of Danske Bank, a bank of Danish origin, which laundered, according to the Finantsinspektsioon (FSA), about $ 230,000 million in Estonia, and that It has led it to close its operations in Russia, Estonia, Lithuania, and Latvia. But neither the OECD nor the EU will dare to do anything about it, only to the stupid Panamanians.

Now, I'm not advocating money laundering either, for any amount. On the contrary, whoever is involved in the matter, take him to court and prove his real complicity - do not come to me with the story that bankers must know if a client is a money launderer, for whatever reason. This is not easy; bankers are not magicians whatsoever. Now, if there are suspicious transactions, things change, but here in Panama, the reasoning is that if the guy, after 5 years of opening the account, for example, is a launderer, it is assumed that the banker should have known from the beginning, even when there was no type of accusation against the client.

Panama is not the bad boy for money laundering, not even in the days of Noriega - much more money was laundered in Miami, and in a generalized way (and even in other cities in the United States). Nor do I say that here we are all saints, there are criminals, but this is not generalized, they are a small minority. We are not perfect, nor do we pretend to be, but our banking system has improved year after year, and it is something we should be proud of. We need the authorities to take action on the matter and protect what has taken us many years to develop our service economy. I would like to end with a quote from Voltaire, “We are neither pure, nor wise, nor good; we just do the best we can".