Tuesday, August 19, 2014


Reports I am receiving,  from bank customers in the United States and Canada, have confirmed that financial institutions in North America are declining to open new accounts for Panamanian  corporations, and are advising existing Panamanian corporate clients that they will be exiting the account relationship. Don't act so surprised; FinCEN's recent Notice of Proposed Rule making*tells us that shortly, banks with be required to identify the beneficial ownership of corporate clients, be knowledgeable about the client's business activities, and the nature and purpose of the client relationship, and know who controls the company's business operations.

This might be a little difficult, as Panamanian corporations have bearer shares, making positive verification of shareholder and control person identities impossible. Therefore, the risk levels of banking a corporation whose beneficial owners cannot be ascertained, are unacceptable. I salute those banks, for having the foresight to shut down those accounts early on, and for refusing to open new ones, for Panamanian companies, many of whom are shells, formed for an illicit purpose, be it tax evasion,  money laundering, concealment of assets, or hiding the proceeds of crime.

Panamanian attorneys have resisted reforming corporation laws; perhaps now customer pressures will force them to seek legislative change, lest they lose all their foreign clients. The Republic of Panama needs to abolish the ability of corporations to issue bearer shares, which only exist to hide the truth. Panama needs to bring its corporations out into the sunshine.
*Financial Crimes Enforcement Network: Customer Due Diligence Requirements for Financial
Institutions. Can be accessed at: http://www.fincen.gov/statutes_regs/files/CDD-NPRM-Final.pdf

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