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Panama gives Colombia a week to remove it from tax-haven list

Panama gives Colombia a week to remove it from tax-haven list

Posted by Juan Gavasa on October 15, 2014

Panama is demanding that it be removed from the Colombian government's list of tax havens within a week, saying the two neighbors can begin negotiating a mechanism for sharing financial information once Bogota takes that step.

If Colombia does not accede to its demand within a "period of seven days," the Central American nation will include its neighbor on a list of countries that discriminate against it and unveil other retaliatory measures, Panamanian President Juan Carlos Varela said in a statement Tuesday.

A committee made up of Panama's Foreign Relations, Economy and Finance, and Trade and Industries ministries will draw up those measures, the statement said, without providing specifics.

Bogota formally designated Panama as a tax haven on Oct. 8, three days after that country failed to meet a deadline for signing a fiscal information-sharing agreement.

The Panamanian Foreign Ministry said Colombia had been told prior to last Wednesday that the proposed information-sharing agreement would be detrimental to the Central American country's position as an international financial center.

Panama's vice president and foreign minister, Isabel De Saint Malo de Alvarado, said Monday that her country had proposed three different alternatives for sharing fiscal information with Colombia, but the South American country rejected all of them.

She said Panama is willing to start negotiations on a bilateral mechanism for sharing fiscal information, but only if Bogota first removes the country from its list of tax havens.

Bogota is seeking greater clarity about the amount of assets that its citizens are holding abroad so that information can be included in a tax-overhaul bill currently before Congress, the head of Colombia's DIAN revenue agency said.

The bill aims to raise more revenue to fund post-conflict development projects envisioned in draft agreements reached in peace talks between the government in Bogota and the Revolutionary Armed Forces of Colombia, or FARC, guerrilla group. 

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