Panama Country Summary

FATF Status

Panama is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The latest follow-up to the Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Panama was undertaken in 2019. According to that Evaluation, Panama was deemed Compliant for 15 and Largely Compliant for 23 of the FATF 40 Recommendations. It was also deemed Highly Effective for 0 and Substantially Effective for 2 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

Panama continues to grapple with significant challenges related to corruption and crime, with widespread perceptions of corruption affecting both public trust and foreign investment. The country serves as a major hub for various illicit activities, including drug trafficking, human smuggling, and environmental crimes, while its political institutions and judicial system struggle with inefficiency and corruption, hindering effective governance and accountability.

Panama's economy and investment climate are characterized by a generally favorable environment bolstered by its strategic geographic location and robust economic growth, despite facing challenges such as fiscal strain, political fragmentation, and social unrest. Under President Jose Raul Mulino, who took office in July 2024, efforts to stabilize public finances and attract foreign direct investment (FDI) have been met with protests, particularly in response to reforms aimed at the social security system and the controversial Cobre Panamá copper mine. While Panama continues to attract significant FDI, averaging $2 billion to $4 billion annually, issues such as corruption, insufficient transparency, and a high level of labor informality complicate the investment landscape, alongside a recent credit rating downgrade that has raised concerns among potential investors.