Panama a poster child for tax evasion
(laestrella.com.pa) Citizen’s group accuses Panama of being a tax-haven and says that for that reason alone the United States should not ratify the FTA
Panama Star PANAMA. The attack on Panama’s tax haven reputation and with it the potential Free Trade Agreement (FTA) continues.
A civil organization called Public Citizen’s Global Trade Watch Division has joined the list of Panama’s detractors and sent a letter to the US House of Representative on March 3, in which it launched a vitriolic attack against the FTA between the two countries.
Global Trade Watch (GTW) is a division of Public Citizen, the national consumer and environmental group founded in 1971. Public Citizen has about 90,000 due-paying members mainly in the U.S.
The organization promotes democracy by challenging corporate globalization, arguing that the current globalization model is neither a random inevitability nor "free trade."
The letter sent by the director of Public Citizen’s Global Trade Watch Division, Lori Wallach to the House of Representatives said in clear terms that the United States should have never signed an FTA agreement with Panama, because of its tax haven reputation.
According to GTW: “Bush signed a U.S.-Panama FTA in mid-2007 despite this country’s inclusion in the initial list of “Offshore Secrecy Jurisdictions” listed in the Stop Tax Haven Abuse Act and the agreement remains lurking with Fast Track authority still attached to it. The Panamanian government and various corporate interests who have taken advantage of Panama’s comparative advantage in banking secrecy, tax evasion and money laundering are expected to push President Obama and Congress to approve Bush’s Panama agreement.”
The GTW said in its letter to the representatives that: “The proponents of a Panama FTA have peddled this agreement as “non controversial”.
Unless advocates of tax-haven reform ensure that Panama´s role as a poster child for the problem is raised, this falsehood could gain momentum.”
The U.S. organization also added that to make matters worse, “Pedro Miguel Gonzalez Pinzón, who is under indictment in the United States for murdering a U.S. soldier Zak Hernández in 1992, was elected as president of the National Assembly.”
GTW believes that Panama’s refusal to hand over Gonzalez has effectively shut down the examination of other aspects of the Bush FTA proposal, which is opposed by many labor and other organization because it also replicates much of Bush’s trade agreement model, premised on the Central America Free Trade Agreement CAFTA.
The document gives some insights into how Panama is perceived in the US, for example Panama was one of the 34 tax-haven jurisdictions identified in H.R. 2136 and that the country’s economy thrives on banking secrecy and its advantage rests on the ease with which US and other companies can create subsidiaries.
With regards to Panama’s involvement in money laundering, the GTW said that “the State Department and the Drug Enforcement Agency have consistently identified Panama’s financial sector as a conduit for Colombian and Mexican narco-trafficking funds. Furthermore, a Government Accountability Office study identified Panama as one of only eight countries - and the only current or prospective FTA partner - that was listed on all of the major tax-haven watchdog lists.”
“Panama has long been a key target of the Organization for Economic Co-operation and Development and other tax transparency entities for its resistance to international norms in combating tax evasion and money laundering.”
The attack about Panama being a money laundering country continues when it said: “Panama is one of the few countries that have refused to sign any tax information exchange treaties.
The international legal instrument that allows for a standard exchange of tax-related information between countries, that helps catch and prevent tax evasion, money laundering and funding for terrorist.”
The GTW thinks that no FTA with Panama should be contemplated until the country eliminates its excessive banking secrecy practices, re-regulates its financial sector and forces banks and multinational subsidiaries to pay their fair share of taxes.
The organization insisted that an FTA will not only fail to remedy these problems but will actually makes thing worse, because the agreement will extend expansive North American Free Trade Agreement (NAFTA) style investor rights to over 350,000 subsidiaries of large and small companies based in Panama.
The GTW fears that these FTA investor privileges would provide an array of new rights to these firms and limit US government policy space regarding how to deal with their bad conduct.
The letter concluded by saying that if the FTA were passed US taxpayers would be opened up to a triple fleecing by multinational companies which will use the agreement as a way to sue taxpayers for cash damages.
