Panama
News and blog
Latin America’s model law on non-conviction based forfeiture of illicit assets turns 10 – what now?
A model law on non-conviction based forfeiture NCBF , drafted 10 years ago by UNODC to support countries in Latin America in their efforts to recover stolen assets, will be updated following four days of intense discussions among practitioners and asset recovery experts from across the continent. Specialists from our International Centre for Asset Recovery ICAR team in Latin America were among those contributing to the discussions of the NCBF Model Law Ley Modelo de Extinción de Dominio . Extinción de Dominio is the dominant form of NCBF mechanism in Latin America, including in Peru, where ICAR is assisting the authorities in rolling out a national system for NCBF and has seen some encouraging successes. A model for NCBF laws across Latin America Central to the participatory review process of the NCBF Model Law, the meetings sought to illuminate its contribution to efforts to recover stolen assets in countries that have implemented such an NCBF mechanism. Speakers highlighted that the Model Law has served as a reference document for many countries in drafting NCBF legislation that fits their domestic legal systems and contexts. These laws have since helped to recover assets arising from organised crime and corruption. The discussions also highlighted good practices and aspects that require updating in line with the fast-evolving field of asset recovery, such as how to recover assets held in the form of cryptocurrencies, and evolutions in international judicial cooperation. Other key points included issues the possibility of extending international instruments, such as the Inter-American Convention on Mutual Assistance in Criminal Matters, to specifically include forms of NBCF. Participants called for more guidance on developing suitable mechanisms to manage seized and confiscated assets, as well as on procedural aspects specific to this type of law. These are areas in which countries that are further ahead in the implementation of Extinción de Dominio mechanisms can usefully take the lead. Sharing on-the-ground experiences with NCBF laws Oscar Solórzano, the Basel Institute’s Head of Latin America and Senior Asset Recovery Specialist, presented some practical case studies that demonstrate the challenges of international judicial cooperation in asset recovery. On the other hand, he pointed to encouraging experiences of such international cooperation from Peru, which has succeeded in recovering assets from abroad using its 2019 Extinción de Domino law see case links below . Oscar also remarked positively on the progress made by some European jurisdictions in recognising the validity of this model of NCBF legislation. Dennis Cheng, Senior Asset Recovery Specialist, moderated a panel reflecting on the significant advances made in Latin America in respect of NCBF over the last 10 years and participated in the closing session. Promoting innovation in asset recovery Participants in the four-day meeting included prosecutors, judges, academics and policymakers from Argentina, Bolivia, Brazil, Chile, Colombia, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Panama, Paraguay and Peru. Many of these are leading voices in the asset recovery field who are also involved in the Asset Recovery Knowledge Community established by ICAR earlier this year. It is hoped that the reflections and knowledge products emerging from the Asset Recovery Knowledge Community will support the legal foundations of the NCBF Model Law as it is revised over the coming months, as well as its application in practice. Learn more See the UNODC press release: UNODC conmemora los diez años de la Ley de Modelo de Extinción de Dominio. Encouraging cases based on Peru’s 2019 Extinción de Dominio law include the Ibárcena case involving a deceased Navy General, the Russian arms dealer case, the military aircraft case of Moshe Rothschild Chassin, and the recent terrorist financing case of The Nun La Monja . A comprehensive description of all cases can be found in the 1,100-page Compendium of Jurisprudence on Extinción de Dominio published in July by Peru’s Procuraduría General del Estado.
Basel Institute launches new website and working paper on the High Level Reporting Mechanism (HLRM)
The Basel Institute on Governance is pleased to launch two new resources on the High Level Reporting Mechanism HLRM as a corruption prevention tool. The HLRM concept was jointly developed by the Basel Institute, OECD, and Transparency International in response to private sector concerns over the absence of quick and effective mechanisms for addressing bribe solicitation by some public officials in certain markets. An HLRM is a way for governments to demonstrate their high-level commitment to integrity standards in public procurement by creating simple procedures for the private sector and/or other actors to raise and quickly resolve alerts about suspected bribery or unfair business practices in public tenders. Our new Working Paper, High Level Reporting Mechanisms: A comparative analysis, provides an overview of the experiences and interest in designing and implementing the HLRM model to date in Argentina, Colombia, Panama, Peru, and Ukraine. It builds on our 2015 Working Paper that provided an in-depth review of the genesis of the first two pilots of the HLRM concept in Colombia, as then applied to a high-profile roads project, and in Ukraine, where with the backing of the European Bank for Reconstruction and Development, the HLRM model was adapted to create the Business Ombudsman Council BOC . Our new report tracks and compares the evolution, progress, and impact of the HLRM within the country specific context. In Colombia, the pilot HLRM implemented in 2013-2015 is credited with the effective review and resolution of a complaint raised regarding unfair business practices in the tender process. The HLRM is further credited with having a preventing impact on additional tenders subject to the HLRM in 2016-2017. Since 2018, the Colombian government is working on further expanding the HLRM and in August 2018, the Basel Institute, OECD, and Colombian officials signed a Memorandum of Understanding institutionalizing our collaboration and advice to this end. Argentina’s design and piloting of an HLRM to apply to a major roads tender under the country’s new public-private partnership law earlier this year is also described in the report. During the tender, several alerts were submitted, but none were found to raise an issue necessitating the activation of the HLRM’s expert group and the tender process was concluded on schedule. The HLRM will apply to further upcoming PPP tenders in Argentina. In Peru, there is strong interest in developing an independent and high-level mechanism to address corruption concerns, such as an HLRM, and despite changes in government, the Basel Institute and OECD stand ready to continue to work with the government to define the most appropriate mechanism tailored to the country’s needs. Alongside this report, we are launching a new web page dedicated to the HLRM within our B20 Collective Action Hub. An exciting new feature is the inclusion of several multimedia resources, including videos, interviews, and presentations by key actors involved in the development and implementation of the HLRM. The main page has links to country-specific pages with further details and related links. Private sector actors and governments in numerous contexts continue to search for new ways to strengthen corruption prevention. The Basel Institute hopes that these new resources detailing these experiences in adapting and implementing the HLRM model to date will help inspire others to consider further development of the concept in context-specific ways.
Visit us at the IACC in Panama
From 1 - 4 December 2016 you will find the Basel Institute on Governance at the International Anti-Corruption Conference IACC in Panama City. The IACC is the world’s premier global forum for bringing together heads of state, civil society, the private sector and more to tackle the increasingly sophisticated challenges posed by corruption. We will be hosting an information booth where you can obtain copies of our latest publications. Come by and learn more about our current activities and fields of research. Professor Mark Pieth, Chairman of the Basel Institute, will be moderating in a practitioner’s workshop panel on “Collective Action as a Game Changer – Private Sector Opportunities in the Fight Against Corruption” on Saturday 3 September.The workshop will take a thorough look at how to overcome lack of trust and other dialogue failures between potential stakeholders in anti-corruption Collective Action initiatives. The panelists will discuss how civil society, businesses and the public sector can capitalize on opportunities presented by a change in government to signal new forms of sustainable collaboration to tackle corruption challenges collectively, and how successful experiences in Latin America to date are encouraging examples of effective Collective Action endeavours. For more information see website:
Secrecy has to be tackled globally: Stiglitz and Pieth produce their own Panama report
Basel Institute Chairman and criminal law expert Mark Pieth and Nobel-prize winning economist Joseph E. Stiglitz have just released their analysis of the issues revealed by the so-called “Panama papers”. While the Panama Papers describe what was happening behind the secrecy, the Stiglitz and Pieth report entitled Overcoming the Shadow Economy focuses on what can and must be done, both by the international community and by the secrecy havens, to increase transparency. The two experts have previously been appointed to and then resigned from Panama’s official effort to clean up its financial sector; the report is the result of their separate analysis. To read the full report click here.
High Level Reporting Mechanism update
The High Level Reporting Mechanism HLRM has received increased attention in recent months, making it worthwhile to take stock of developments surrounding the tool as well as supporting items for their implementation. Developed by the Basel Institute on Governance in cooperation with the Organisation for Economic Co-operation and Development OECD and Transparency International, and promoted during the 2012 G20, the HLRM seeks to address corruption from the ‘demand’ side, essentially solicitation and extortion of companies from public officials. Since then, versions of the tool have been in operation in both Colombia and Ukraine, and now, and as of March 2016, and HLRM has also been introduced in Panama. The HLRM takes a multi-stakeholder approach to develop an institutional framework for the efficient resolution of complaints raised by businesses in cases of unfair treatment. From these activities, the HLRM seeks to build confidence from the business community, the public and other stakeholders at large, in areas such as procurement, licensing and other activities at the interface of business and government interaction, promoting increased efficiency and transparency. To ensure that gains are recognised more broadly, the HLRM can include regular reporting to stakeholders on outcomes. In addition, the HLRM can serve as a vehicle for long-term change by identifying systematic regulatory risks. In recent activity, promotion of the HLRM remains at the front of the agenda in the G20/B20 process. The 2015 B20 in Turkey included among its final recommendations that the G20 “continue to develop and promote the concept of high level reporting mechanisms.” For the Basel Institute, which took part in the B20 Turkey Anti-Corruption Task Force, the HLRM has been an area of focus in 2015 and will remain as such over the coming years. In August 2015 the Basel Institute published a working paper on the B20 Collective Action Hub analysing the initial experiences with HLRMs in Colombia and Ukraine. This first step towards analysis and review of the tool will provide insights moving forward for parties interested in adapting the HLRM in other national contexts. In addition, a policy guide for governments interested in conducting HLRMs was produced. The latest introduction of an HLRM, in Panama, also reflects its expanding uptake in recent years. The HLRM in Panama will focus specifically on the health sector and the procurement of medical equipment, with an official start date slated for May 2016. The Basel Institute, through experts from the International Centre for Collective Action ICCA , worked closely with local stakeholders from government, business and civil society within Panama in order to find solutions most suited to the specificities of the Panamanian context. This latest practical iteration of the tool should provide further examples and material for inspiration, lessons learned and knowledge transfer for stakeholders in other jurisdictions interested in pursuing HLRMs as a tool to promote integrity in the business environment.
Publications
Basel AML Index briefing: Panama's delisting from the FATF grey list
A Basel AML Index briefing following the decision of the Financial Action Task Force (FATF) to remove Panama from its list of jurisdictions under increased monitoring (“grey list”) in October 2023.
The briefing covers the main issues that led to Panama being grey-listed in June 2019, the action plan developed to address them, and publicly available data on how it was implemented.
About jurisdiction briefings
As part of the FATF assessment process, a jurisdiction may be placed on a “grey list” (subject to increased monitoring) or “black list” (a high-risk jurisdiction subject to a call for action). This follows identified failings in how the jurisdiction addresses its money laundering and terrorist financing risks. Being placed on the FATF’s grey or black lists has a negative impact on a jurisdiction’s investment climate, trade and capital flows.
The Basel AML Index Expert Edition dashboard highlights a jurisdiction’s placement on the FATF grey or black lists for informational purposes, but these lists are not used when calculating its overall risk score.
As an additional service, from June 2022 the Basel AML Index started to publish special briefings on jurisdictions delisted from the grey or black lists.
Learn more about the Basel AML Index at: index.baselgovernance.org
Working Paper 25: High Level Reporting Mechanisms: A comparative analysis
This report discusses the different contexts and processes through which a High Level Reporting Mechanism (HLRM) has been designed and implemented in Colombia, Ukraine, Panama and Argentina, as well as initial interest in the HLRM model in Peru.
Its aim is to understand the specificities of each case and draw lessons applicable to future projects in other countries, whilst respecting the commitment to develop an HLRM that takes account of the specific country’s context.
About this Working Paper
This paper is part of the Basel Institute on Governance Working Paper Series, ISSN: 2624-9650.
Overcoming the shadow economy
The Panama Papers provided proof to the world of something that had long been suspected: the secrecy havens – jurisdictions in which global financial flows were hidden in ways that not even those entrusted with enforcing the laws and regulations of countries around the world could detect – were being used by those engaged in a host of nefarious activities, from tax evasion to corruption and even to child pornography.
In a real sense, the secrecy havens facilitate these activities, because if the money flows were exposed, it would be easier to identify and prosecute the perpetrators. Though typically the managers of the banks, the lawyers who put together the impenetrable web of corporations and the public officials who pass laws ensuring secrecy may think of themselves as just “doing business” and helping them, their employees, and their country prosper, more properly these secrecy havens could be viewed as co-conspirators in these crimes.