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| Panama Bank SecrecyPanama’s International Banking Centre, comprised of more than 100 national and international banks, has come under attack recently by the FATF and the OECD. This is due, in part, to the strict secrecy laws which operate in Panama and which prohibit banks and financial institutions from revealing any information regarding their client to foreign authorities. As a result of this attack, Panama adopted two new laws aimed at guaranteeing that money laundering transactions be reported adequately. Laws No. 41 and 42 of 2000 amend the definition of money laundering, which previously was limited exclusively to drug related offences, to include among the crimes the following: serious fraud, illegal trafficking of arms or persons, terrorism, kidnapping and extortion. In no way should these amendments been seen to encroach on the secrecy offered by the Banking Act of 1998 for legitimate transactions. The banking secrecy laws in question are governed principally by the Banking Act of 1998, sections 84, 85 and 86. Accordingly, information obtained by the Banking Superintendence regarding clients of banks may only be revealed to the appropriate authorities, in the course of a criminal prosecution. This applies to all employees, consultants and external auditors hired by the Superintendence who may obtain confidential information in the course of their duties. Furthermore, banks in Panama and their staff may only reveal confidential information to the appropriate authorities in accordance with the law. Any breach of this confidentiality carries a penalty of up to US$100,000.00 as a fine, plus any civil or criminal liability which may be applicable. |
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