Grimy Panama: new report

A new report from Public Citizen in the US makes some worrying statements about Panama and about US President Barack Obama's agenda towards the grubby little tax haven.

As the news release says:

"The new report details how Panama explicitly created an industrial policy designed to create a "comparative advantage" in tax-evasion and money-laundering services for entities such as the bailed-out American International Group (AIG) and Mexican and Colombian narcotraffickers."

and it notes that

"President Obama's ability to deliver on his campaign commitments to close tax loopholes that promote offshoring and re-regulate the financial sector would be dealt a sharp blow if the U.S.-Panama Free Trade Agreement (FTA) is passed."

Panama is an especially unpleasant secrecy jurisdiction. As one service provider boasts:

"According to a Panamanian law firm’s advertisement touting Panama’s lax standards: “Even Switzerland cooperates on income tax cases if the return is filed falsely like all income was not declared, things were omitted or so the complaining government says. Belize has tax treaties, as do most of the so-called ‘tax havens.’ There is no better jurisdiction than Panama today!!!!!!!”

Among other things, the report notes:

• Some of the largest recipients of U.S. federal procurement contracts and money under the Troubled Asset Relief Program (TARP) – including Citigroup and AIG – have a combined dozens of subsidiaries in Panama that would be empowered with expansive new rights if the FTA is implemented. These firms have been among the top advocates for the Panama FTA.
  
  
• Panama is one of only 13 countries – and the only current or prospective FTA partner – that is listed on all of the major tax-haven watchdog lists.
  
  
• In the face of recent pressure to reform related to the G-20 Financial Crisis summit process, Panama wrote to the Organisation of Economic Cooperation and Development (OECD) defiantly outlining its refusal to adopt key reforms.
  
  
• The OECD notes that Panama made a commitment in 2002 to conform to international tax norms but since has completed not a single agreement to implement its promise.
  
  
• According to the U.S. Department of Justice and other entities, Panama is also a major financial conduit for Mexican and Colombian narcotraffickers’ money laundering activities.
  

As Todd Tucker, research director of Public Citizen’s Global Trade Watch division put it: at a time of massive public anger at Wall Street, the Panama FTA is the wrong handout for the wrong interests.