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Panama City glistens in the daytime sun and is decorated with enough skyscrapers that make it appear like a miniature Manhattan. But what is more important is the way in which banking in Panama in general is enjoying its moment in the sun. The banking industry in Panama has developed quite an allure for businesses and corporations that are engaged as offshore operations.

Panama's offshore banking success story can be attributed to the fact that the United States removed Panama from the uncooperative tax haven list after Panama overhauled it's banking standards and regulation to help the international community root out serious criminals such as drug traffickers.

Panama's banking and financial sectors made the right choices by supporting the FATF and OECD rules which were enacted to root out international criminals who use the allure of financial privacy to perform illicit activities. This stance has helped Panama to get removed from the uncooperative tax haven list and in conjunction with the real estate boom has led to a renewed prosperity in Panama's banking sector.

Just as the practice occurs in the United States, it has become common practice in Panama to put tighter controls on banks so that they now are reporting all deposits and withdrawals in amounts exceeding $10,000. This control was also implemented as a direct result of the FATF and OECD movements as well. Panama has been removed from the non-cooperative tax haven list and is reaping the rewards.

Panama had a lot riding on making the proper choices in terms of what regulations they needed to accept to continue to draw new banking clients as well as keep capital from leaving the country if they gave up too much privacy which is the big attraction of Panama to many investors.

Panama has climbed to the top of the offshore banking world and is arguably right behind Switzerland in popularity now. Switzerland gets all the spotlight and Panama is just fine with that. Panama continues to enforce it's banking secrecy laws with vigor as they know their international reputation depends on it.

In the end it's the customers of Panama's offshore banking system that will reap the rewards of their cleanup activities. With an improved reputation and tighter controls this means transactions coming out of Panama will not receive the same level of scrutiny they would if Panama had not taken the steps that were taken. As an offshore banking customer in Panama you will no longer have to worry about your money being incorrectly flagged by the international community monitoring for illicit activity since they know Panama is really screening their banking customers now instead of accepting money from anyone.

The government of Panama and Panama's banking industry are working together and know the value a good reputation has in the international community. There are literally billions of dollars at stake to maintain this position and Panama bankers will not accept clients that will do anything to draw attention to the nice little system they have created for their customers. Criminals stay away.

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