Panama: Which banks are involved in money-laundering?

Prosecutors are making strides in pursuing corruption networks and identifying where misappropriated funds have been concealed - but the identity of which Panamanian banks have been used to launder the funds is being kept under wraps.

Chief public prosecutor Kenia Porcell disclosed that investigations by anti-corruption prosecutors into schemes involving almost USD520m led to the freeze during the past year of USD72.4m held in Panamanian bank accounts.

She added that 665 corruption cases were opened in 2015, and that 292 officials and businesspeople were being investigated.

However, the Supreme Court has ruled that the banking superintendent, SBP, must maintain the identity of banks that have been sanctioned for money-laundering and other compliance failures as confidential.

The SBP has since last year been probing a number of financial institutions in relation to a series of corruptions scandals, including several centred on irregularities surrounding major infrastructure and procurement contracts. The court’s ruling was in response to a habeas data request by a local newspaper.

Panama has appealed to the Paris-based Financial Actions Task-Force, FATF, to remove it from the so-called ‘grey list’ of jurisdictions deemed to have AML deficiencies at its plenary meeting next month. A FATF technical team visited Panama earlier this month to review a number of legislative and regulatory changes introduced last year.

An anti-corruption prosecutor has indicted former public security minister José Raúl Mulino and ex-national security council secretary Alejandro Garuz for irregularities in the execution of a USD125m contract for 19 counter-narcotics radars acquired form Italy’s Selex, a subsidiary of Finmeccanica, in 2014. A USD25m ‘commission’ was allegedly included in the price tag and the payment channelled through a Panamanian company called Agafia Corp.

Separately, three US citizens, Michael Dodd, resident in Panama, James Robert Shipman and Kenneth Landgaard last week pleaded guilty in the US to conspiring to launder more than USD2.2m in proceeds from a purported securities fraud scheme by taking cash in private jets from the US to be laundered through banks in Panama and Belize. The individuals were arrested in July last year as a result of a FBI sting operation.