Commercial and diplomatic relations between Venezuela and Panama in a lowest point in recent history

PANAMA - In Brief 06 Apr 2018 by Marco Fernandez

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Venezuela suspended several commercial and financial activities with Panama’s Government and a group of Panamanian companies as a measure to protect “their economic system”. The list includes President Juan Carlos Varela and all his Ministers, and Panama’s flag carrier Copa Airlines. On April 5th, the Venezuelan suspended for 90 days (extendable) any financial, commercial, and economic activities with 22 Panamanian individuals and 46 companies. One large international bank, Banistmo, of Colombian ownership, was also included in the list. The South American country justified the suspension of economic activities with Panamanian figures and companies claiming that it does so as a "measure of protection of the financial, economic and commercial system." Yesterday, Panama recalled its Ambassador to Venezuela in a de facto breaking of political relations. The Venezuelan government's decision comes a week after Panama included President Nicolás Maduro and other top Venezuelan political leaders on a list of "high risk" personalities in terms of potential money laundering. Panama recommended banks and other entities to extremely supervise transactions involving these people. The listed Panamanian companies are mostly located in the Colon Free Zone, an erstwhile provider of goods to the Venezuelan markets. Almost all these companies had difficulties in obtaining official dollars to pay for their banking and suppliers’ debts in the first place, and therefore this new limitation adds very little to the already strained cash flow position of those companies. The Varela Administration moved from a soft to a hard position regarding the Venezuelan human rights violations and the lack...