Wednesday, August 10, 2016


Joseph Stiglitz, the sole American members of the financial reform commission, more commonly known as the Panama Papers Committee, angrily resigned recently, when he saw Panama's overbearing influence in what was supposed to be an independent body. In his first interview since his resignation, he warns that Panama cannot avoid the central issues the commission has identified as critical to reform.

Stiglitz, who has stated that he understood that the commission was to have complete independence, later learned that the Government of Panama asserted ownership over the the final report, including the right to see it first, and the right to release it to the public. Panamanian members of the committee seem to have agreed to the Government's rights to the report, and claim that this was the agreement from the creation of the commission; Stiglitz disputes this, stating that complete independence was offered to him.

It is, of course, one thing to give the Government time to formulate a response, but another to allow it to indefinitely delays public release of the report, according to Stiglitz, who stated that the commission requires total transparency to effectively perform its role.

Finally, Stiglitz points to two principal issues, which Panama must approach, if it is to truly reform itself. They are:

(1) the formation of a public national registry, identifying the beneficial owners of Panama's bearer-share corporations.

(2) Closer monitoring and supervision of tax-free zones in Panama.

Will the final report,  which is due out next month, tackle these essential points ? If not, Panama can count on additional jurisdictions labeling it as a tax haven, and a jurisdiction where money laundering, tax evasion, and the deposit of the proceeds of corruption make it a high-risk country which is to be avoided, and blacklisted.

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