Panama president vows lead role in financial transparency

Panamanian President Juan Carlos Varela on Wednesday pledged that his country will stand at the forefront of a global push for greater financial transparency in the wake of the “Panama Papers” scandal.

Panama is scrambling to avert redesignation as a tax haven that assists money laundering after the disclosure of the offshore dealings of many of the world’s wealthy, famous and infamous.

They came to light when millions of documents — the so-called Panama Papers — covering nearly 40 years of business were leaked from the archives of the Panamanian law firm Mossack Fonseca.

The revelations have had far-reaching political consequences, already bringing down the Icelandic prime minister and Spain’s industry minister, while forcing others to explain their financial dealings.

“Our goal is to cooperate actively and to lead the efforts of the international community on the topic of the global problem,” Varela said during a joint press conference with Prime Minister Shinzo Abe.

Varela, who arrived in Japan on Sunday, also said that Panama has agreed “to advance discussions for negotiating a bilateral taxation scheme with the Japanese government” under Organisation for Economic Cooperation and Development standards.

At an investment seminar on Tuesday, he said that Panama is willing to cooperate with an OECD initiative to share tax information.

Varela also defended his country while in Japan, saying in an interview with Jiji Press on Tuesday that Panama has been “wrongly” labelled a tax haven.

“Panama is a country respectful of laws,” he said.

Varela also told Jiji that Panama will establish a high-level commission, to be composed of six to eight internal and external members, within six months in order to improve transparency of its financial system.

The members are slated to include Nobel Prize-winning economist Joseph Stiglitz, Jiji reported.

The Panamanian president’s visit to Japan comes after the world’s leading economies took a step last week toward denying tax evaders and money launderers the ability to hide behind anonymous shell companies.

Acting in the wake of the scandal, finance chiefs of the Group of 20 meeting in Washington on Friday supported proposals requiring authorities to share the identities of shell companies’ real owners.

They also backed creating a blacklist of international tax havens that do not cooperate with information-sharing programmes.