Published On: Fri, May 13th, 2016

Panama banks lose US correspondent accounts

moneylaudringMIAMI - Multiple sources in Panama City are reporting that several local financial institutions have lost their correspondent accounts in the United States, and American bank clients seeking to transfer funds to Panama are unable to complete any wire transactions through those correspondents.

Banco General SA and Banco Nacíonal de Panama SA are among those who reportedly are now without any means of receiving funds from the United States financial structure.

To add to the unease in Panama City, Banco General is alleged to be currently under investigation by a US law enforcement agency, together with a number of other banks.

Americans who own businesses in Panama are now completely unable to pay their staff, and to cover expenses incurred in the normal course of business. Given Panama's strong laws regarding employee rights, absentee owners face immediate civil, as well as even criminal, liability, for non-payment of salaries and social security taxes.

Additionally, if nonresidents cannot pay their mortgages on Panamanian real estate holdings, the banks will foreclose; personal property or other assets of foreign investors could also be seized, with or without legal action, if Americans default on their obligations.

The abrupt American termination of correspondent account relationships with banks located in several small Caribbean tax havens has left several other countries in the region without the ability to transact business with US companies, and there does not seem to be a solution to this vexing problem.

By Kenneth Rijock

Kenneth Rijock is a banking lawyer turned-career money launderer (10 years), turned-compliance officer specialising in enhanced due diligence, and a financial crime consultant who publishes a Financial Crime Blog. The Laundry Man, his autobiography, was published in the UK on 5 July 2012.

Click Tag(s) for Related Articles: