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The European Union’s Commission has proposed the exclusion of Panama from its official list of high-risk jurisdictions associated with money laundering and terrorist financing activities. This recommendation is part of an updated Delegated Act that revises the EU’s list of countries under enhanced scrutiny, incorporating additions and removals.
Background on Panama’s AML and CTF Reforms
The decision to recommend Panama’s removal follows the guidance provided by the Financial Action Task Force (FATF), which officially removed Panama from its blocklist on October 27, 2023. Panama has demonstrated continued improvements in financial transparency and has strengthened its national frameworks to combat illicit financial flows.
Role of FATF in Panama’s Delisting
The FATF’s evaluation was crucial, as it assesses jurisdictions’ adherence to international standards for anti-money laundering (AML) and counter-terrorism financing (CTF). Panama’s delisting reflects its compliance progress, which the EU Commission now acknowledges.
Next Steps in EU’s Approval Process
Before becoming final, the Commission’s proposal must be ratified by the European Council and the European Parliament. If no objections arise, the updated list will take effect within one month.
Implications for International Business and Compliance
Panama remains committed to international financial transparency standards and continues reinforcing its AML and CTF systems. This anticipated removal from the EU’s high-risk list will enhance Panama’s global reputation, facilitate cross-border business, and encourage foreign investment by reducing regulatory barriers for multinational corporations operating in the region.
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