Panama Papers: Panama to strike back if France puts it on ‘tax haven’ list

The building where the office of Panamanian law firm Mossack Fonseca is housed.
The building where the office of Panamanian law firm Mossack Fonseca is housed.PHOTO: EPA

PARIS (AFP) - Panama’s government said on Tuesday it could hit back if France makes good on a decision to put the Central American nation back on a “tax haven” list following the “Panama Papers” revelations.

“In Panama, there is a law that sets out retaliation measures against countries that include Panama in ‘grey lists’,” Alvaro Aleman, the minister for the presidency, equivalent to the post of prime minister, told a news conference.

The measures can include blocking foreign investment or withholding public tenders. 

 
 

Aleman said that “the government is going to have to analyse the situation and is inclined to take a series of steps that naturally could go towards adopting means of retaliation.” 

The government of Panama and the country’s vital financial services sector are panicking in the wake of the massive data leak from one of the country’s law firms, Mossack Fonseca. The revelations show how some of the world’s wealthy set up offshore companies for their assets to hide them from scrutiny.

They fear the revelations being published in media around the world could scupper years of work to shed Panama’s past reputation as a haven for money launderers and tax cheats.

In February this year, the country managed to get off an international “grey list” of tax havens by passing some reforms that curbed to some extent the anonymity of offshore companies.

But after the so-called Panama Papers revelations, France’s finance minister, Michel Sapin, on Tuesday told the French parliament that “France has decided to put Panama back on the list of uncooperative countries.” 

France removed Panama from the list of Uncooperative States and Territories (ETNC) in 2012 after the two countries reached a bilateral accord on fighting tax evasion.

Panama’s deputy foreign minister, Luis Miguel Hincapie, told the same media conference that the French ambassador to Panama would be summoned on Wednesday to explain France’s move.

Foreign Minister Isabel De Saint Malo was also going to speak with her French counterpart Jean-Marc Ayrault.

“Panama must categorically reject any inclusion of Panama in a list and we will take steps if that happens,” Hincapie warned.

While the Panama Papers detail complex financial arrangements benefiting the world's elite, they do not necessarily mean the schemes were all illegal.

According to the International Consortium of Investigative Journalists, most of the services the offshore industry provides can be used for legal purpose and are by law-abiding customers. But the documents show that banks, law firms and other offshore players often fail to follow legal requirements to make sure clients are not involved in criminal enterprises, tax dodging or political corruption.