Panama Responds to EU Tax List Decision

Panama, based on its own realities, has been extremely complacent with countries and organizations that demand from us what they do not practice themselves. Economist Raúl Moreira stated that even before Panama was included in discriminatory lists, it already had a rather efficient and robust banking supervision regime. As Mulino noted, the government took for granted that Panama would remain on the list and trusts that the progress made to date and ongoing will allow for its removal in 'future reviews,' as indicated by the Ministry of Economy and Finance (MEF) in a communiqué published on its social networks. The European body kept Panama on this list, pending the country's remedy of its deficiencies in tax exemptions and information exchange. The measure comes in a year when the government plans to launch its most emblematic project, the Panama-David-Frontera railway, in which European countries have shown interest. President José Raúl Mulino communicated the measure on his social networks and added that he has instructed the heads of public entities to ensure compliance. He adds that after being included in these lists, the country continues to strengthen banking and financial supervision mechanisms, and each time it was believed that the requirements had been met, new ones would emerge. The decision to keep Panama on the European Union's (EU) list of non-cooperation in tax matters generated a reaction from the government, which restricted companies from that continent from participating in bids for important projects. 'I have requested this of the various entities,' wrote the head of state. 'At the end of the day, what this is about is that no country or economic bloc should arrogate itself the power to impose a certain behavior on us according to its opinion or benefit, in the case of the European Union, the right to demand from us the taxation system that they find suitable,' he stated. 'This is not about getting into a fight, it is about them respecting us,' the politician mentioned on social networks. 'Although we knew that in this EU review we would not be removed from the list and we are preparing for the October review, we maintain the restriction that no European company can bid on our projects from now on. Meanwhile, deputy Luis Eduardo Camacho, of Realizando Metas (RM), believes the measure is correct. 'If the EU intends to allege non-compliance with the EU-Central America agreement, it can remind them of their multiple violations of that Free Trade Agreement (FTA) in the area of financial services,' he expressed. Reactions. Mulino's decision drew a reaction from former Foreign Minister Francisco Álvarez de Soto, who considered it appropriate.