The production of child pornography has exploded in the Republic of Panama over the past five years. Currently, there are over 100 cases under active investigation, according to the Public Ministry, working from information supplied by Panama's Sex Crimes agency.
Under Panamanian law, individuals convicted of child pornography can be sentenced to 5-10 years in prison. The local production of child pornography has grown so large that INTERPOL has brought the matter to the attention of Panamanian authorities, and assisted in investigations. Some of the cases reportedly involve networks of individuals engaged in that illegal activity, either as customers or producers .
Bankers in the United States and Canada should be aware that Panamanian child pornographers, who deal with clients on a worldwide basis, and therefore need access to the global banking system, receive payment in US dollars, and therefore pose a direct threat to banks who unwittingly serve their financial needs. The reputation damage that could occur, if a major American or Canadian newspaper or website exposed the bank's role, as a facilitator of child pornography, may result in existing bank customers exiting long-standing, and profitable, relationships with the bank.
Perhaps it is time to audit, and conduct enhanced due diligence upon existing high-volume Panamanian clients, to rule them out as child pornographers, to reduce potential risk. Does the client actually have a legitimate business operating openly in Panama, to justify its account volume ? Have you checked out the senior management, to ascertain whether there are any officers with prior involvement in pornography ?
You do not want to wait until a US law enforcement agent comes into your bank with a subpoena; check your Panamanian corporate clients now.