Panama Investor Blog

State collected 14% more in Taxes for 2010

Tax revenues grew 14.4% over 2009, but did not reach the budget forecast (-1.7%). ITBMS raising fired after the amendments of the tax reform.

Roberto González Jiménez 1502281
[email protected] 

 The state's income rose in 2010 to $ 5 billion 134 million, 14.3% or $ 641.9 million more than in 2009, said yesterday at a press conference the CEO of Revenue, Luis Cucalón, who said that 2010 had been a tough year with several reforms. The collection also was slightly higher (1.4%) than estimated in the budget.

Tax revenues grew 14.4% over 2009, but did not reach the budget forecast (-1.7%), mainly by reducing the tax rates on income tax reform approved. The sacrifice in these taxes will have risen to $ 100 million.

 Increases in tax rates transfer of goods and services (ITBMS) from 5% to 7% and excise tax also had its impact on public finances, with improvements of 38% and 85.8%, respectively, the previous year.

Although accurate estimates declined to about 2011, the official predicted that it will be a better year.

Attorneys consider the effects of the Tax Information Exchange Agreement

What comes first, the chicken or the egg? In this case the chicken is the Free trade agreement (FTA) with the U.S. and the Tax information exchange agreement (TIEA) with the U.S.. As has been posted previously, the U.S. plans to ratify the FTA with South Korea, but Panama and Columbia will have to wait. For how long, no one is sure, but  Panama has pandered significantly in order to get the FTA even going as far as giving up Panama's long standing privacy in banking and business in order to get the agreement with the U.S..

Now Panama lawyers are rightfully questioning the benefits to the country of the TIEA at a recent lawyer gathering, not because of the loss of privacy for the many individuals and businesses that have put their trust in the promises of the country, but the possible losses to their firms if these individuals and businesses decide to close up their affairs and future clients dry up. I would say that this is a very good possibility and reminds me of the old say of having a bird in the hand being worth two in the bush.

I have yet to see the advantages to Panama for either of these agreements being spelled out clearly other than vague statements about U.S. companies being more apt to set up shop because of certain protections granted them under the FTA. But if you speak to any minister in Panama government they will tell you the pipeline is full and businesses are lining up to come into Panama without any agreements in place.

So one really has to wonder whay Panama would be so compelled to give up so much on the promises of an even brighter future.  I am not privy to all the machinations of politics, but I am familiar with what is right and wrong in this world and there is no question that certain powers in this one want a one world government and tax system and the rights of privacy in ones personal life and property get in the way of those grandiose plans.

The U.S. is one of the only countries in the world that taxes its citizens on their world wide income whether they live in the U.S. or not and in my humble opinion this is tantamount to making one a slave to the state. Of course statists love this and believe whole heartedly that everyone should be a slave to the state, unless of course they have to be the ones who pay. But the ones who make these insane rules do not have to pay and in fact they most likely feed at the government tit which is why they want more milk from those who can produce it.

Here is a translation of two articles regarding this subject in La Prensa today.

Martinelli said that there was trouble with the TPC

The country is not among the priorities of Obama, who did not specify a date for ratifying the treaty with Panama after three years of being signed.

Mary Triny Zea Mary Triny Zea
  [email protected]

The president, Ricardo Martinelli, said yesterday that there is "no hurry" for the United States Congress (EU) to ratify the Trade Promotion Agreement (TPA) signed between the two countries in 2007.

His reaction came after an inquiry from the news agency AFP before the U.S. president's remarks, Barack Obama, who in a speech before Congress on Tuesday said that the TPC with Panama would materialize only if it involved employment generation his country and gave no signs of an early ratification.

 Martinelli, who in 2008 was highly critical of the management of the Democratic Revolutionary Party (PRD), for having "their partisan interests above the interests of the country,"  now downplays the deal saying it is of interest for investment and U.S. products.

 Former Foreign Minister Jorge Ritter was skeptical of the arguments of the President, because if the TPC is so beneficial to the U.S., then it should be "Obama who was imploring that we approve." Just on 12 January, Martinelli said he had called a meeting with Obama to push the TPC because he felt it was timely. According to Laurentino Cortizo, former Minister of Agriculture and member of the PRD, it is contradictions that confuse. "

The former president Mireya Moscoso stressed that the TPC is very important for the country, while the Chamber of Commerce reiterated that they will continue to defend the  TPC because he believes in the benefits to Panama.

Former Trade Minister Joaquin Jacome said Bush shared the frustration of Martinelli, who was not able to achieved it during his administration the ratification of the agreement, but suggested further efforts in this direction.

Possible effects of the tax treaty with EU

   Roberto González Jiménez
  roberto.gonzalez @ prensa.com

 The impact on the local economy of the treaty of exchange of tax information (TIEA, for short) signed between the U.S. and Panama will depend on the interpretation and enforcement to do the same Panamanian authorities said Rigoberto Gonzalez's attorney under X National Congress of the Association of Panama.

 In general, described as positive the idea of reaching an agreement to exchange tax information and cooperate in the fight against tax evasion.  However, there are several aspects to be considered, since, in practice, could be the result of a request and provide information about a person without the affected aware of it.

 "Yes it will be a guarantee," he acknowledged, that the agreement establishes a protocol in which the information requested must be specified.

 Signed on 30 November in Washington, a treaty enters into force upon adoption by the Assembly, said Deputy Economy Minister Frank De Lima. For the moment do not know the date on which the text will be sent.

 Among the negative consequences that could be generated would be less attractive to stop the creation of trusts and foundations in the country.

 

 

What the IRS wants to know about you

Although much of the information on the Sovereign Society's website is to entice you into becoming a member or signing up for paid services they also provide a wealth of free information that I believe is invaluable. Much of the information  is targeted at U.S. citizens who in many cases are not aware of all the draconian measures the U.S. government is regularly instituting to keep tabs on its subjects. This particular link  provides some timely information for those U.S. citiznes living in Panama, especially with the tax information exchange agreement being implemented in the near future. Dual Citizen Panamanians should also take heed of this information as being a U.S. citizen has some significant drawbacks. There are still areas that one can invest without having to report and it is spelled out clearly at their website.

Here are some excerpts:

Reporting Laws You MUST Know

Whether you’re a U.S. citizen or resident, or a foreigner doing business in the United States, here’s what you need to know about reporting your offshore investments.

The Bank Secrecy Act effectively ended bank secrecy in the U.S. It requires you to file a report each year acknowledging any “foreign bank, brokerage, or ‘other’ financial accounts” you hold.

There are three separate reporting requirements:

1. You must acknowledge foreign accounts with an aggregate value exceeding $10,000 each year on Schedule B of your federal income tax return.

2. June 30 is the deadline for filing a Foreign Bank Account Report (FBAR) form with the U.S. Treasury. This form – cryptically named “Form TD F 90-22.1″ – gives the Treasury a bird’s-eye look at any foreign bank, brokerage or other financial account you held during 2010.

3. If you hold more than $50,000 of assets outside the United States, a special reporting regime has gone into effect, and it could apply to your 2010 tax returns. A law passed in 2010 requires Americans to file a new IRS form along with their income tax return that discloses any foreign financial assets valued more than $50,000. The IRS recently released a draft copy of the form (Form 8938), but it’s not clear whether the additional disclosure will apply to 2010 tax returns. I’ll know more about this requirement soon and will discuss it further down in Panama.

These reporting obligations apply to any American. The tax penalties for failing to comply are draconian! You could end up paying a $10,000 fine per unreported account. Far worse, if you “willfully” fail to file the FBAR form, you face fines up to $250,000, five years imprisonment…or both. Penalties are doubled if you violate any other U.S. law. Failure to file the form authorized in the 2010 law may be punished with a $50,000 fine.

GOP Proposal to Eliminate OECD Funding

Even though this has not yet happened, the fact that it is a top priority of the GOP makes it newsworthy IMO. The OECD does everything possible to hamper competition between countries on taxes and to eliminate your individual rights to privacy. These unelected non-taxed bureaucrats need to be eliminated and de-funding them is the way to go about it.  Be sure to watch the video below.

Here is more on the matter from the Center for Freedom and Prosperity.

(Washington, D.C., Friday, January 21, 2010) The Center for Freedom and Prosperity congratulates the Republican Study Committee for defunding the Organization for Economic Co-operation and Development (OECD) as part of its Spending Reduction Act. The act lists $2.5 trillion in savings over 10 years, including the $93 million annual subsidy to the OECD.
 
In recent months, CF&P has made defunding the OECD one of its top goals and asked the Republican Study Committee to defund the statist bureaucracy. This was part of a multi-pronged effort to increase awareness of the OECD's destructive policies, which featured coalition efforts, congressional meetings, the production of studies, and also a video highlighting 6 key reasons to halt US funding of the OECD:
 
1) promotion of a value-added tax in the US; 2) pursuit of an anti-tax competition agenda seeking to establish a global tax cartel; 3) endorsement of failed Keynesian  spending in the US; 4) advocation of unpopular Obamacare policies; 5) call for more US spending on everything from welfare to foreign aid; and 6) support of global taxation on carbon emissions and financial transactions.
 Link:  http://www.youtube.com/watch?v=oVr8R41nZJU
 
"We are delighted that Congress is now taking seriously our call to stop wasting taxpayer money on this corrupt, failed bureaucracy," said CF&P President Andrew Quinlan. "We now urge all members of Congress to side with the interests of taxpayers over those of European bureaucrats," he concluded.
 
Originally created to promote economic cooperation and trade among developed countries, the OECD for decades played a benign role, collecting statistics and publishing studies. Beginning in the 1990s, however, the Paris-based bureaucracy started to pursue a policy agenda to advance the interests of the European welfare states that dominate the OECD's membership.
The United States provides almost one-fourth of the OECD's funding - far more than any other nation - yet the Paris-based bureaucracy constantly works against the interests of U.S. taxpayers.

  

For additional information:
Andrew Quinlan can be reached at 202-285-0244, [email protected]
Dan Mitchell can be reached at 202-218-4615, [email protected]

Panama's new car tag tax

The Panama municipal was struggling over the amount to charge vehicle owners for their yearly vehicle tags. I  thought Panamanians had it good with a set $26 fee no matter the value of the car. I remember foolishly buying a luxury vehicle in Argentina years ago and they hit me with a $5000 luxury tax fee each year. I did not keep it long! So Panama's $26 fee seemed like such a deal. Well, that will soon be changing as the law now allows for the tax to be based on the value of the vehicle instead of a set fee. There are those who believe this to be fair, but a higher priced vehicle uses no more road than a low priced one and the higher valued vehicle has already paid a higher sales tax and in some cases a luxury tax so this new graduated tax is just another innovative way to get more income to the state. But in typical fashion the law was not clear on used vehicles and depreciation and would have been implemented strictly based on the car value of that specific model when originally regestered and stay the same each year. Fortunately smarter heads prevailed and the tax will be based on a depreciated value which at least we all agree is some consolation. Here is an article from La Prensa with the details of the tax controversy.

Machine translated from La Prensa

Gricel Yaritza Mojica
[email protected]

The Mayor of Panama has made further adjustments to the vehicle road tax, which is paid out when getting the plate.

The MP and ad honorem advisor to the Mayor, Jose Isabel Blandon, admitted yesterday that there were many doubts and conflicts over taxes paid by owners of vehicles, from 1 March.

The new tax regime, which was approved in December 2010 by the City Council of Panama, meant that the tax would be determined by the value of the vehicle at the time of registration.

Following that announcement, critics were multiplied because vehicles worth more than $ 20,000 would pay $ 38 in tax, and $ 50,000  to $ 75 000 would pay $ 50 and $ 75 thousand to pay above $ 150. Cars less than $ 20,000 only pay $ 28. Previously the tax was $ 26 for all vehicles.

However, Blandon said that now the new tax will be paid according to the depreciation of the car.

The change came after the Automobile Dealers Association of Panama (ADAP) to request an extension of the entry into force of the new vehicle tax to the Treasury of the Municipality of Panama.

The ADAP submitted a proposal to the Municipality so that, through a table, the charge is levied according to the annual depreciation of the vehicle. The municipality reported that studies the proposal, which has not been disclosed.

According to Blandon, a new car will pay the tax the first year for the value that was purchased, but that same vehicle will lose value in the coming years, so you should pay less.

He said, for example, a Toyota Prado whose value is between $ 50,000 to $ 75,000, will pay first years $ 50, then the vehicle owner may pay $ 28 the following year.

 

 

100 cases of tax evasion detected DGI

For the first time Panama is getting serious about tax collection and the DGI (IRS) announced that they have found more than 100 case of tax fraud by various companies in the past 18 months. Actually I think that is a rather low number when you consider that tax evasion has been a national sport in the past. Now with the increased state budget they have had to get serious about tax collection, even to the point of hiring ex-IRS agents to teach them the ropes. First and foremost is highly publicized prosecutions in order to scare individuals into compliance. I would expect to hear more about this in the coming months and years. Here is an article from La Prensa on the subject.

The institution pointed out that without the internal complicity, the companies involved could not have committed the crime against the public treasury.

FISCO. LA DGI reported that most cases of tax fraud has been in business. PRESS / File1484388

Rafael E. R. Berrocal
[email protected]

The Internal Revenue Service (DGI) said it has discovered more than 100 cases of tax fraud in the past year and a half, most of them in companies engaged in business.

The Director of Revenue, Luis Cucalón, said it would keep in reserve the amount of involvement from the state and the names of companies, but cautioned that it is a criminal offense in which the fine reaches 5 to 10 times the amounts disappointed and 1 to 3 years in prison.

"Without the internal complicity in the DGI had not been such cases of tax fraud," said Cucalón without detailing whether officials of your institution is provided to help these companies to commit this crime.

The DGI said it would keep constant vigilance to prevent fraud. "Why set a date for a program that has had to operate forever," said Cucalón.

Trade is one of the main economic activities in the country, which operate more than 22 000 such companies that generate more than 99 000 places of employment.

Only in the first half retail sales amounted to 3,248 million and wholesale sales reached 4,444 million dollars. On the issue, the Chamber of Commerce, Industries and Agriculture said he was unaware the 100 cases of tax fraud were found by the DGI. "However, the Chamber of Commerce has always been a believer that tax laws must be met and it is for the DGI investigate any cases of this nature," the institution.

The Chamber of Commerce also warned that tax evasion can be proven to be causal to implement its code of ethics when those involved are members of the guild.

Another problem that is attacking DGI, through direct auditing companies, is tax evasion. In October, the institution announced that they have been able to raise 40 million in companies that found they were evading the tax authorities, most of them in the Free Zone of Colon and Panama City.

Until then the penalties for proven cases of tax evasion reached the 2 million dollars.

The Government has denied that tax audits against the companies are being used as a method of political pressure.

Argues that only part of the management of the institution to achieve the lofty goals of government tax. For 2011 the budgeted tax revenues were set at 3 billion 923 million dollars.

Why dual citizens are worried about the tax treaty

Although it is not clear just why the Panama ambassador to the U.S. would resign so suddenly, it comes at a time of the signing of the tax exchange agreement and many speculate it is related. Many Panamanians in high level government positions as well as the private sector are concerned about the ramifications of the treaty both on foreigners and Panamanians, many of whom have dual citizenship.

Few dual citizens file tax returns in the U.S. even though the U.S. law states that failure to do so can be penalized with up to five years in prison. Some might say that this would not be put into force, but the fact is that failure to file was what landed Blade star Wesly Snipes in the pen.

Even though these Panamanians may pay taxes in Panama, they must also file tax returns and other documents with the IRS that go beyond just a statement of income such as bank account holdings and foreign corporation in which they are shareholders. Along with that much sought after privilege of holding dual citizenship comes the real possibility that they can be charged with tax evasion and other crimes for which until now they were shielded by Panama's privacy laws.

The fact is that the new law will criminalize many dual citizen Panamanians while at the same time putting a black mark on Panama in the eyes of anyone considering banking here. The country has broken its commitment to protect the privacy of depositors in Panamam banks. If they have thrown their own citizens into such a situation they certainly will not think twice about foreigners. That is already the case with U.S. citizens, but many other nationalities will think twice before banking here as they may be next on the tax information exchange list.

How can Panama solve this crisis while still signing the tax information exchange agreement? It would seem more prudent and fair to make the agreement effective only from the date it is signed or sometime in the future as all other tax exchange agreements have been. By going back three years it opens up Panama to all kinds of potential problems that could be avoided simply by eliminating the retroactive aspect of the agreement.

Dual citizen Panamanians can begin filing their tax returns along with disclosure of all their holdings and if foreigners want to continue to use Panama banks for their funds they may do so and those who want to leave quietly may do so without the concern of being prosecuted for failing to report a bank account in the past.

Some will say that they deserve what they get for not obeying the letter of the the law, but I contend that most are account holders for the protection of the money they have paid taxes on rather than trying to evade taxes. Under the current U.S financial situation and the litigious state of that Union, there is no question that keeping ones hard earned savings hidden is prudent and even necessary for future survival. To make criminal out of good people who are trying to protect what is rightfully theirs is un-justified IMO. With the new death tax being implimented,  U.S. citizens and Dual Citizen Panamanians can look forward to paying 35% of their assets to the state when they die as well. In reality it waybe that the prized dual citizenship is more a liability than a benefit.

Why did Panama do it?

Why did Panama enter into a what appears to be a one sided tax information exchange with the U.S.? These and other questions were put to Panama's Vice Minister of Economy and Finance by my friend Bob Bauman at a meeting late this afternoon. Here is his report.

Why Did Panama Do It?

Bob Bauman (December 3, 2010)

REPORTING FROM PANAMA CITY, PANAMA:

The official answer to why the government of the Republic of Panama abandoned many decades of bank secrecy and signed a Tax Information Exchange Agreement (TIEA) with the United States was provided to me this afternoon in a personal interview with Hon. Frank DeLima, Panama’s Vice Minister of Economy (shown below).

I spent more than an hour in his office at the Ministry. In a candid talk Sr. DeLima said that President Ricardo Martinelli had made this decision in order to advance Panama’s economic world standing and to shed the blacklist status arbitrarily assigned the country by the U.S. and the OECD.

Off the Black List?

One of the major and repeated criticisms of Panama has been its (until now) iron clad law protecting financial privacy and bank secrecy, including a refusal to share tax information.

I also learned that Obama administration officials have suggested that signing the TIEA with Washington will go a long way towards achieving U.S. Senate approval of a 2007 U.S.-Panama Free Trade Agreement, a business deal very much wanted by Panama business interests.

Until now President Obama has given lip service support for the Panama FTA, but has done little to overcome opposition from U.S. unions and anti-offshore leftist politicians such as Michigan Sen. Carl Levin.

Panama in Control?

Mr. DeLima was joined in our meeting by Luis Alberto Laguerre, one of the official TIEA negotiators with Washington. Both insisted that the TIEA as signed, and the accompanying declaration, gives the upper hand to Panama in administering its terms.

However, a literal reading of both documents does not exactly support that claim.

I was told Panama rejected IRS demands to allow IRS agents to be placed in Panama and conduct investigations. That will be done only by Panamanian officials who will control each tax probe.

DeLima also said that independent of the TIEA, Panama has decided administratively to allow all persons subject to IRS request for tax information to be notified of that fact. He also suggested that the requirements for the IRS to submit specific names, particular bank accounts and bank identification would be strictly enforced.

No Appeal

However, unlike procedure under a similar TIEA between the U.S. and Switzerland, Panama’s rules will not permit a judicial appeal by those subjected to an IRS information request.

“I can guarantee that no IRS ‘fishing expeditions’ with lists of names will be allowed,” DeLima insisted.

He added: “I do not think that anyone in Panama who is obliged to comply with US tax laws and who has done so has anything to worry about with this treaty and the way in which we will enforce it.”

The Minister said that while some changes in Panamanian law may be needed they will be limited to assuring beneficial ownership of all legal entities is known and available to the government, including a requirement that owners of bearer shares must be known.

I told Mr. DeLima that many astute Americans were well aware that the PATRIOT Act and other laws had abolished financial privacy in the U.S. – that they looked to Panama as a haven not for tax evasion, but for true financial privacy.

To that observation the Minister had no response.

Public Relations

Asked if the TIEA was in fact a “one-sided deal” that benefited only the U.S., the Minister admitted that the IRS has more to gain since Panama’s territorial tax system does not tax offshore earning.

Nevertheless, DeLima insisted that the increased world standing that Panama will supposedly now achieve, together with the possible approval of the US-Panama trade agreement, is worth abandoning bank secrecy.

“The only ones who should be disturbed are the law breakers,” he insisted. He predicted no real economic harm to Panama from the TIEA.

We should know soon enough whether President Martinelli’s TIEA gamble pays off.

In any case, this is an historic change of course for Panama — and a victory for the tax hungry major deficit spending governments led by the Obama administration.

From the U.S. department of Treasury regarding the Tax Agreement

Here is some additional information rpovided by the U.S. government website on the tax treaty. There is an additional document called the U.S. Panama joint declaration and the Tax agreement you will find at the bottom of the treasury web page. The links are to down load PDF files. Below is information from the U.S. treasury website.

 

November 30, 2010
TG-982

U.S., Panama Sign New Tax Information Exchange Agreement

WASHINGTON – In a ceremony at the U.S. Department of the Treasury today, Treasury Secretary Tim Geithner and Panamanian Vice President and Minister of Foreign Affairs Juan Carlos Varela signed a new tax information exchange agreement (TIEA) between the United States and Panama.

"Today, we are ushering in a new era of openness and transparency for tax information between the United States and Panama" Secretary Geithner said.  "This bilateral agreement to provide for the exchange of tax information between our two countries reflects the commitment of the United States and Panama to the importance of transparency of tax information."

Upon entry into force, the new TIEA will provide the United States with access to the information it needs to enforce U.S. tax laws, including information related to bank accounts in Panama. 

The TIEA will permit the United States and Panama to seek information from each other on all types of national taxes in both civil and criminal matters for tax years beginning on or after November 30, 2007.  Information exchanged pursuant to the TIEA shall be used for tax purposes, although the information may also be used for other purposes as permitted under the the provisions of the Treaty on Mutual Legal Assistance in Criminal Matters between the United States and Panama as long as the tax authorities of the country providing the information consents to such use in writing.  

The full text of the TIEA and the TIEA Joint Declaration can be viewed at the links below.

###

LINKS

• U.S., Panama Tax Information Exchange Agreement
• U.S., Panama TIEA Joint Declaration

Panama's expectation of the U.S. tax agreement

I will continue to post information relevant to this agreement as it affects many folks who have invested in Panama and those that may consider to do so in the future.

This article from La Prensa brings to light Panamanian officials statements that "there will be no automatic exchange of information, calls or fishing expeditions, and information exchanged will be treated as confidential and not disclosed to other countries."  And from the banking association we get "However, ABP said that the agreement can be beneficial, "provided that" the disclosure is made in an objective manner as to affect only the accounts of customers who are under investigation in the U.S. for tax evasion or tax fraud."

I received a note from President Martinelli this morning stating the same thing, however I see nothing in the 12 articles that would require the U.S. to have an individual under criminal investigation for tax evasion. In article 5 section 5 it states " All requests for information made by one party must be made with the highest degree of specificity possible. In all cases, such requests must specify in writing the following:

(A) the identity of the taxpayer whose taxes or criminal liability which is under investigation;

In article 4 under definitions it states "(B) "criminal tax matters" means tax matters involving intentional conduct which is liable to prosecution under the criminal laws of the Requesting Party;"

This is an important distinction because these are the only references to any investigation and it states "criminal liability" and the IRS would not necessarily need to have a criminal case open on an individual to believe he has a criminal liability. From the viewpoint of the IRS we are all guilty until proven innocent.

I interpret this to allow the IRS to open an investigation without filing any criminal action against the individaul in a court of law. Where from their statements I believe the Panamanian authorities interpret this as a criminal investigation which would involve a court. If this is the case then it does allow for a fishing expedition. I have lived in Panama long enough to know that there is ALLWAYS some confusion regarding interpretations and this is much too important to allow for confusion.

I hope to be able to get answers directly from the MICI on this when the signers return from Washington.

Machine translated from La Prensa:

Edith Castillo Duarte
Rafael Berrocal
[email protected]

The Panamanian government believes that the signing of tax information agreement will bring significant economic benefits to the country.

This would be vital in the Panama route has taken out of the gray list of the Organization for Economic Cooperation and Development (OECD) and could encourage ratification of the Trade Promotion Authority (TPA) was signed with the U.S. in 2007 whereas Washington has said it expects fiscal reforms in the Panamanian regime before the trade agreement is in effect.

The Minister of Economy and Finance, Alberto Vallarino, who attended yesterday's ceremonial act, he reiterated that the agreement of tax information privacy of individuals continue to be protected and secured against undue intrusion.

He said there will be no automatic exchange of information, calls or fishing expeditions, and information exchanged will be treated as confidential and not disclosed to other countries.

The Banking Association of Panama (ABP) endorsed the agreement with the United States in order to exit the list of tax havens, while lawyers launched heavy criticism.

For PBL, the signing of the agreement with the United States gives Panama a cooperating country image in the international community, something positive for foreign investment, which could allow the output of the gray list of tax haven.

"The Panamanian Banking Center has been harmed by being in these OECD greylisting, as has been the reason for the withdrawal of some banks in our country and has prevented some companies from those countries deemed to Panama for investment and business" , said the guild bank.

However, ABP said that the agreement can be beneficial, "provided that" the disclosure is made in an objective manner as to affect only the accounts of customers who are under investigation in the U.S. for tax evasion or tax fraud.

The ABP also recommended the Government to ensure that mechanisms for the exchange of information will guarantee to the Panamanian banking center customers full transparency, and verify that there are equal at all points of the agreement, "as it would be beneficial that we force them to comply with an agreement that is not feasible for both parties. "

Vallarino, along with Vice President and Foreign Minister, Juan Carlos Varela, and Deputy Minister of Economy, Frank De Lima, responded yesterday to questions that "unfairly" you make this agreement.

The lawyers do not like to admit, Vallarino said that with respect to bearer shares was adopted more flexible for them. Not being eliminated, he said, but is being asked to identify their owners.

The lawyer Eduardo Morgan maintains its position that the agreement itself could affect the country. "The perception that Panama gave the United States would lead to many foreign depositors pull their money from the banking center of Panama, especially the Latin countries like Venezuela, Colombia and Argentina," said Morgan.

He said such a situation would lead to Panama's economy foundered.

Meanwhile, the Bar Association sent a letter to Economy Minister Alberto Vallarino, which highlights some points that says concern. "We are concerned in the same way that Panama agree to provide factual information that may be criminal in the United States but who are not in Panama, specifically in the area of tax issues," says the letter signed by union president Ruben Elias Rodríguez.

"We believe this agreement, the importance of the national economy, but also for the dignity and respect they deserve as free, independent and sovereign country, should be widely discussed in all forums to debate issues that are important for our present and our future ", claimed the National Bar Association.