May 20, 2016: The Republic of Panama will host an official delegation from Japan visiting Panama City as both countries begin negotiations to establish a bilateral Tax Information Exchange Agreement (TIEA) on Friday, May 20, 2016. The announcement follows a visit last month to Japan by Panama’s President Juan Carlos Varela, during which the two countries agreed to cooperate on an agreement of automatic exchange of information.

“Panama reiterates our full commitment to global financial transparency and we look forward to launching negotiations with our Japanese counterparts,” said Panama’s Vice Minister of Foreign Affairs, Luis Miguel Hincapie. “We will continue to negotiate additional bilateral agreements in accordance with the OECD’s Common Reporting Standard, including with countries such as Singapore and Germany, which expand on existing commitments of a similar nature with other relevant partners.”

Representatives of the ministries of foreign affairs and finance of Japan will arrive in Panama to discuss with a delegation from Panama led by Farah Urrutia, Director General of Legal Affairs of the Ministry of Foreign Affairs, the framework for a bilateral agreement based on the Common Reporting Standard (CRS) of the Global Forum of the OECD.

The Japanese delegation will be led by Osamu Kawanishi, Director for Tax Treaties and International Affairs of Tax Bureau (Minsitry of Finance), and Ken Hashiba, Director, Mexico, Central America and Caribbean Division Latin American and Caribbean Affairs Bureau (Ministry of Foreign Affairs).Other members joining the delegation will be Kaoru Matsumura and Takeshi Ogawa, from the Ministry of Finance, Ko Takahashi and Yuki Araki, from the Minister of Foreign Affairs, and Keiko Fukuchi and Hisakazu Ikegami, from the Japanese National Tax Agency.

The negotiations are a continuation of the many steps that have been taken by the Government of Panama during the twenty-two months of the Varela administration to ensure fulfillment of their international responsibilities regarding financial transparency, including the implementation of enhanced and extended “know your client” regulations and the requirement of identity certification of shareholders of all Panama companies.

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May 19, 2016: Luis Miguel Hincapie, Minister of Foreign Affairs of Panama, met with France’s Presidential Special Appointee for Latin America and the Caribbean, Jean-Pierre Bel. During the meeting in Paris, the Panamanian diplomat emphasised the importance of working under equal conditions to solve the differences between both nations through diplomatic means — to advance the bilateral agenda, and to cooperate effectively on tax issues, without the pressure of being part of a discriminatory list.

Hincapie shared the steps that Panama has taken to reform its legal framework, to strengthen its service center, and to shield it against illegal tax and financial activities. Additionally, he stated that Panama is currently enhancing its capacities to fulfill the existing agreements with France.

“Panama is willing to continue working to improve effectiveness in tax cooperation with the international community, and to continue negotiating agreements about this matter. But we do not think that it is positive that friendly countries such as France insist on not recognizing our efforts and the progress that we have made, taking into account every aspect of our bilateral relationship,” said Hincapie.

He also emphasised the importance of the French investments in Panama and the interest in continuing this relationship expressed by companies in France, as shown by the visit of  Panama Vice President Isabel de Saint Malo de Alvarado last October.

“During the meeting de Saint Malo with the then Minister of Foreign Affairs, Laurent Fabius, it was agreed that we would advance on a mutually beneficial bilateral agenda, including tax cooperation. This would be very difficult if we are part of the non-cooperating countries for tax purposes,” Hincapie added.

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May 18, 2016: As part of President Juan Carlos Varela administration’s ongoing commitment to financial transparency, a delegation of government officials from Panama will travel to Paris this week to meet with members of the OECD to discuss various issues related to financial transparency. The visit follows an official communication from Panama to the Global Forum of the OECD stating that starting in 2018, the Government would begin implementing the Common Reporting Standard through bilateral agreements.

In a letter to the OECD, Vice President Isabel Saint Malo pointed out that recent events had shown the world the vulnerabilities of the global financial system and that according to the expectations of the international community, Panama would advance in the implementation of automatic exchange of information. Panama will work with the OECD on a framework based on the realities of the country and the region. Panama is currently negotiating such bilateral agreements with countries including Japan, Germany, and Singapore, which expand on existing commitments of a similar nature with other relevant partners.

Panama considers the implementation of CRS through reciprocal bilateral agreements appropriate because it will allow the country to safeguard information and privacy with greater certainty and greater efficiency.
The delegation will also discuss the second phase of Panama’s peer review process by the Global Forum of the OECD, as well as a framework for the Base Erosion and Profit Shifting (BEPS) project, to allow countries and jurisdictions to work together to fight tax avoidance. The BEPS Project helps governments close the loopholes in international rules that cause profit to be artificially shifted between countries.

The meeting will take place in Paris on May 17, 2016, and members of the delegation include Vice Minister of Foreign Affairs, Luis Miguel Hincapie, advisors and technical team from the Ministry of Foreign Affairs and the Ministry of Economy and Finance (from the Income Direction).

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