Panama Papers showed vulnerability of whole system: Panama president

Yahoo – AFP, May 3, 2016

Panama's President Juan Carlos Varela delivers keynote address at a luncheon
during the Washington Conference on the Americas at the State Department on
May 3, 2016 in Washington, DC (AFP Photo/Mandel Ngan)

Washington (AFP) - The scandal triggered by the Panama Papers leak of information on how and where the world's wealthy stash funds to avoid detection or taxes underscored many countries' vulnerabilities, President Juan Carlos Varela said Tuesday.

Speaking at the State Department in Washington, the Panamanian president said the documents "reveal a worldwide problem, that involves many countries with legal and financial institutions" vulnerable to actions "that are not in the public interest."

Mossack Fonseca's founder lawyer Ramon

 Fonseca is a friend of Panama's President 

Juan Carlos Varela (shown here) and, until 

March, served as a senior advisor in his 

cabinet (AFP Photo/Rodrigo Arangua)

To that end, countries need to improve transparency and information sharing, Varela argued.

"We urge the international community to maintain a respectful dialogue through diplomatic channels," he added.

Panama and the United States last week signed an agreement on sharing of back account information in a step Panama's finance minister hailed as proof of his country's cooperation in fighting tax evasion.

The bilateral agreement comes weeks after the Panama Papers, a series of reports around the world revealing how one Panamanian law firm set up offshore entities to help the world's wealthy stash their assets.

Following the revelations, Panama has come under intense international pressure to open its financial sector to greater transparency or risk being put back on a global "tax haven" blacklist.

While the government has long said it is committed to that goal and has made some reforms in that direction, it has so far not signed up to an international standard on automatic sharing of tax information set by the Organisation for Economic Cooperation and Development.

Panama's President Juan Carlos Varela, left, sits with Singapore's President 

Tony Tan, right, for a meeting at the Istana or presidential palace on Friday, 

April 22, 2016, in Singapore. (AP Photo/Wong Maye-E)

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