En defensa de Panamá y su economía

By Alvaro Tomas

This past February, Australian lawyer Dr. Terry Dwyer wrote an extremely important article to help in the understanding of OECD’s attacks against countries such as Panama and what these attacks mean for the international legal order. The distinguished jurist resides and practices in a country that is a member of the OECD, the more reason why the letter, published in Offshore Investment and entitled The War on Privacy- can the OECD’s exchange standard be resisted? deserves special attention.

In 1998, the wealthy countries’ club (OECD) launched an offensive called “Harmful Tax Competition”. Since then, this evil organization led by the United States and its European sidekicks has violated international law and blatantly attacked the small countries who dare to break into the business of managing international assets. Unable to accept their inability to create economic and fiscal policies that address the financial collapse of their economies, they attempt to trample the sovereignty and right to self-determination of the social and economic direction of smaller countries.

The distinguished Panamanian colleague, Adolfo Linares Franco, an advocate of national sovereignty makes in this regard the following claims about the OECD: “In open violation of International Law, the OECD seeks to impose by force some so-called standards on tax matters in detriment of countries such as Panama for the sole purpose of putting them – OECD countries – ahead.  Panama should not fall into that game. We must denounce this outrage before the United Nations and demand respect for the principle of legal equality of the states. Not doing it and giving in, would surrender our sovereignty to the interests of the OECD which is unacceptable”.

Dr. Dwyer agrees with the position of Adolfo Linares as well as with the arguments of many lawyers and local economists: sovereign countries such as Panama are being forced to become tax collectors regardless of their sovereignty, their internal laws and probably violating in the process constitutional principles as fundamental as the right to privacy and the inviolability of documents and correspondence.

It seems absurd that an army of bureaucrats locked in their palatial offices in Paris, the OECD headquarters, where, paradoxically,  they are exempt from taxes, has gone so far towards the detriment of the sovereignty of many small nations. The latest move by the OECD, endorsed by other wealthy countries of the G-20 is to establish an automatic information exchange, which is equivalent to a form of financial intervention.

Quoting Dr. Dwyer: “Thus, logic and long-standing dual criminality norms, other countries income unenforceability laws, the respect of local laws on privacy and confidentiality have all come under attack by expert international bodies, not elected but rather designated by different tax bureaucracies. Somehow, these unelected bodies such as the Financial Action Task Force (FATF), the Global Forum on Taxation, the OECD and the IMF have self-appointed themselves as masters of sovereign governments. Many financial institutions do not seem to realize that their service sectors are under a real threat. Some seem to want to console themselves with the idea that there will be enough corporate work to compensate for the loss of working with private clients. ”

As it often happens in life, there are grays. Countries smaller than Panama such as Barbados in 2011 and most recently, The Bahamas, have told the OECD that they will not sign any standard agreement that will hurt their financial industry and that they prefer to sign treaties to avoid double taxation with countries that respect them as well as the international laws and agreements which bring them tangible benefits. Panama must not surrender to this abuse and should mount an aggressive strategy in defense of its sovereignty and national constitution. This has been the key to our success as a nation.

Yes, the world has changed. There is need for greater financial transparency and better due diligence practices. Panama is complying with this new reality as the new 23 Act of April 27^th, 2015 attests to, which extends, among other things, the need to know your customer to more than 20 industries that were previously unregulated. But we must accept that the world has not changed in other ways: as when the powerful countries want to impose their ideas and policies using a double standard without any regard for the consequences. Interventionism is still alive in the 21st century.