Caribbean & Central America - August 2025

On 9 July the Panamanian government confirmed that the country had been removed from the European Union (EU)’s list of countries with strategic deficiencies in their anti-money laundering (AML) and counter-terrorist financing (CFT) frameworks.

President José Raúl Mulino hailed the EU decision, saying that he was “pleased” that the country had been removed from the list of high-risk jurisdictions. Mulino said that the development had required “a titanic effort” from officials, and that every effort would be taken to prevent Panama from being re-added to the list. Panama had been on the EU list since October 2020, remaining in place despite the fact that the Financial Action Task Force (FATF) of the Organisation for Economic Co-operation and Development (OECD) removed the country from its own list in October 2023. The EU cited deficiencies such as a lack of transparency around beneficial ownership for its decision, but the European Commission has now concluded that these deficiencies have been dealt with. 

In a statement, Panama’s economy and finance ministry (Mef) highlighted various positive effects of leaving the list, including a strengthening of its reputation and international image; improved investor confidence and investment climate; facilities for carrying out financial and trade transactions with European entities without additional due diligence measures; a boost to Panama’s competitivity as a financial and logistical centre; and the facilitation of imports and exports, boosting the country’s trade and economy.

Also in a boost for the government, on 3 July, international credit ratings agency Moody’s confirmed that it had classified Panama’s sovereign risk rating at Baa3, maintaining its investment grade status. Although the firm said that the outlook remains negative due to fiscal challenges, it also recognised its economic resilience and efforts in maintaining macroeconomic stability. There had been concern within Panama that the country would lose its investment grade status, making it more expensive to borrow money on international markets in order to finance spending priorities.

These developments were hailed by Panama’s main business lobby Cámara de Comercio, Industrias y Agricultura de Panamá (CCIAP), which said that the Moody’s and EU decisions demonstrated that Panama had made progress in transparency and competitiveness. CCIAP President Juan Alberto Arias said that these demonstrations of trust from the international community can have a direct impact on the lives of ordinary Panamanians. “When the world trusts Panama, we all win,” Arias wrote in his regular column published by the CCIAP. 

A stronger international reputation will help attract foreign direct investment, reduce trade barriers and facilitate access to credit, according to Arias, helping to unlock the country’s potential. “Panama has everything it needs to compete at the highest level: a privileged geographic location, human talent, and an economy with the potential for sustainable growth,” wrote Arias, who nonetheless emphasised that continued efforts will be needed to prevent Panama’s inclusion on the EU and FATF lists in future.