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U.S. Law Jeopardizes the Panamanian Banking Secrecy

Contributed by Molina & Co.
15 August, 2012

Investment millionaire. The park benches would have to invest heavily in their operating systems.

The FATCA (for its acronym in English) or Tax Compliance Act of foreign accounts, an initiative approved by the Congress of the United States, jeopardizing the bank secrecy in Panama.

This was announced by the chairman of the Compliance Officer of the Panama Banking Association (ABP), Julio Aguirre, who said they are waiting for final regulations to establish how this issue will attend.

This standard establishes a new regime of reporting requirements of the U.S. Government financial institutions abroad, such as signing a partnership with the Department of Internal Revenue Service (IRS), which commits them to send all the information of customers of that country.

"There is still no regulation that you identify all the steps to follow and the different activities to do as a financial intermediary, but the U.S. must soon be releasing that document," he said.

Nevertheless, the Banking Association of Panama has made these tests and has had some approaches with regulators to discuss the documents have been issued so far on this U.S. law.

The initiative would begin to govern the January 1, 2013 could be postponed a year, to January 1, 2014, despite this, there are steps that must be met from the 2012 financial intermediary.

Aguirre, who is also the second vice president of the Committee for the Prevention of Money Laundering and Terrorism Financing of the Latin American Banking Federation (FELABAN), insisted that this rule has a sensitivity to local law enforcement in banking secrecy.

According to Aguirre, the key point is that the law is asking different financial intermediary that have some relationship with the United States sign an agreement with the IRS in which he will give information on U.S. citizens that have a business with the bank.

"This will not affect the International Banking Center, but the American citizen as such because the banks may choose to say that not going to manage accounts for Americans," he said.

For banks, said Aguirre, one of the greatest damage is the work that has to do to achieve financial institution support that they are doing what is defined in U.S. law, that's the part you are looking at all countries, including some have claimed through their bodies.

"Through the FELABAN we put our wake-up call that this legislation is but one country and will increase operating costs. This law is not ours, is a U.S. initiative out, which seeks to evaluate compliance payment of taxes by its citizens, "he said.

Meanwhile, the U.S. attorney at law, Martin Press, said the FATCA will affect the world and Panama. "There are a lot of money in Panama U.S. and according to FATCA, banks will have to provide information to U.S. authorities on their American customers and their accounts. "If banks do not provide this information, the U.S. Government can stop doing business. "

Press added that U.S. is accusing foreign banks to conceal information about their American customers and an estimated one million of taxpayers are reporting their accounts and the authorities want to collect the money and put people in jail.

Meanwhile, Alan Lederman, a lawyer in U.S. law, said the banks, according to the FATCA must provide the information without being asked on U.S. accounts, and announced that by June 2013 will be presented writing a model of the initiative.


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