Treasury sanctions Panama-based money laundering network

The Treasury Department on Thursday announced sanctions on a drug money laundering network based in Panama.

The Office of Foreign Assets Control (OFAC) sanctioned the Waked Money Laundering Organization and its leaders as specially designated narcotics traffickers. The department also said it targeted six Panama-based associates of Waked MLO for providing support and, or acting on behalf of the organization, as well as 68 companies connected to Waked MLO.

{mosads}Treasury’s actions mean that assets of the individuals and companies that are under U.S. jurisdiction are frozen and that American citizens are generally barred from engaging in transactions with them.

“This action exposes the Waked Money Laundering Organization and disrupts its ability to launder drug trafficking proceeds using trade-based methods, duty-free retail, real estate development, and financial services throughout the region,” OFAC Acting Director John E. Smith said in a statement.

“We look forward to working jointly with the Panamanian authorities to protect the Panamanian and U.S. financial systems from abuse by narcotics traffickers and other illicit actors.”

Panama has received increased attention lately after the leak of the “Panama Papers,” documents from a law firm based in the country that sets up shell companies for clients. Having an offshore account is not itself illegal, but the accounts can be used for illegal purposes, including money laundering.

Last week, Panama formally signed an agreement with the United States under the Foreign Account Tax Compliance Act. Under such agreements, countries require foreign financial institutions in their jurisdictions to report information about the accounts of U.S. citizens.