Over at our sister blog Corporate Foreign Policy, team member Andrea Zanon writes on the subject of Panama’s reputation recovery following one of the largest whistleblower leaks in history. It’s an interesting case study of what countries need to do to build trust and transparency to continue to compete in the international business environment. Excerpt below:
In a crisis of this scale, the speed of response is very important. The Government of Panama wasted no time in taking action, responding quickly to the scandal by passing laws to toughen accounting standards and transparency requirements for offshore companies, while also allowing Panama to share tax information with other countries. Immediately after the crisis, the government signed financial data sharing agreements with Japan and the U.S., and with the OECD. This was a welcomed development, given that these governments have been pushing Panama for years to disclose what their citizens are holding offshore.
Furthermore, Panama created a panel of experts to help improve transparency in the offshore financial sector, although two prominent members later resigned (Joseph Stiglitz and Mark Pieth) over concerns about the panel’s independence. About six months after the leak, Panama signed on to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters in October 2016. A few months later, in January 2017, Panama reported that it would soon be engaging in talks with France about “normalizing relations” and being removed from France’s “black list,” since France had reacted to the leak by putting Panama back on to its black list of uncooperative tax jurisdictions.