Panamanian Law Firms Have A Requirement to Report

Diaz Reus Global Managing Partner Michael Diaz, Jr. was interviewed by WLRN-Miami Herald News’ Americas correspondent covering Latin America and the Caribbean, Tim Padgett, regarding the implications of the Panama Papers controversy and what it means to Miami and Panama City.  Listen to the broadcast segment here. 

Follows is the transcript:

Law Firm Leak A Wake-Up Call For Panama Authorities – And Florida Legislators?

Not surprisingly, the Panama Papers controversy that erupted this week is shining a renewed spotlight on the financial practices of…Panama. Money-laundering experts say that’s a good thing – and it just might be a good thing for South Florida too.

The massive leak of documents confirms at least two things:

Panamanian law firms are very prolific at creating offshore firms where clients can secretly park vast sums of money.

And the wealth that’s being parked in those shell companies is often earned less than honestly – if not downright criminally. In other words, it’s being laundered.

Panamanian law firms like Mossack Fonseca – the source of the Panama Papers leak – say they’re not liable for the nature of those assets. But money-laundering experts here in South Florida call that a disingenuous claim at best.

«Panamanian law firms have a requirement to report,» says Michael Diaz Jr., managing partner at the Miami law firm Diaz Reus & Targ. Diaz has helped governments around the world sue Panamanian law firms for the return of allegedly corrupt assets hidden in shell companies.

Ironically, Panama was just removed from an international blacklist of countries that aid money-laundering. Diaz says Panama should be applauded for its financial reforms. But the Panama Papers show it still has a big problem:

“Slack enforcement,» he says. «The law firms have been operating in this way for quite some time. Sadly that’s the practice there. And the only way that’s going to change is enforcement to make sure those reforms mean something.”

Miami and Panama City are competing to be the financial services hub of the Americas – and this week, at least, Miami may look like the more reputable option.

“If you have a clean operation, you’re going to want to be in Miami, which has stronger enforcement,” says Diaz.

That said, however, Diaz acknowledges that Florida – and the rest of the U.S. – have their own flaws to fix. Here, for example, law firms are not even required to report on assets coming into the shell companies they help set up.


Diaz Reus is headquartered in Miami, Florida. The firm has 15 additional offices in the U.S., Europe, the Middle East, Asia, and throughout Latin America, including an office in Panama City, Panama.