Panama Off the FATF Grey List: What Actually Changed, and What Didn't
Panama's FATF exit is real and it's good news. It is not the same thing as Panama's current EU blacklist status — and conflating the two is the most common mistake in how this story gets told.
Last edited 5 September 2026 - Authors: Joe Martin Hanson, Director & Global Partner, with advice from FTR’s Panamanian Compliance Partners.
Two Lists, Not One
Panama left the FATF grey list in October 2023. It is still on the EU's own, separate blacklist as of the European Commission's 17 February 2026 update. One is a genuine exit and real good news; the other is a current, more serious listing. Treating them as the same story — or worse, as a story that's already resolved — is the single most common mistake in how Panama's compliance position gets described.
What Changed, Side by Side
FATF status
2019–2023 (grey-listed): On the grey list since June 2019, post-Panama Papers
2024–2026 (post-exit): Off the list since October 2023EU Annex I status
2019–2023 (grey-listed): Also listed
2024–2026 (post-exit): Still listed — one of 10 jurisdictions on the EU's "non-cooperative jurisdictions for tax purposes" list as of the 17 February 2026 updateCorrespondent banking
2019–2023 (grey-listed): Significant narrowing; outright rejections common
2024–2026 (post-exit): Partial recovery; some relationships restored, others gone for goodInternational reputation (professional finance)
2019–2023 (grey-listed): Damaged
2024–2026 (post-exit): Improving, but slowlyCompliance requirements
2019–2023 (grey-listed): New reforms being introduced
2024–2026 (post-exit): Beneficial ownership registry, enhanced KYC and tax information exchange now permanent Panamanian practiceBank onboarding for foreigners
2019–2023 (grey-listed): Slow
2024–2026 (post-exit): Still slow — 30–90 days is typical, with multiple layers of KYC documentationMinimum deposits, good-tier banks
2019–2023 (grey-listed): High
2024–2026 (post-exit): Still high — USD 10K–50K+ personal, USD 50K–250K+ corporateMedia perception
2019–2023 (grey-listed): Post-Panama Papers fallout
2024–2026 (post-exit): Panama Papers legacy still persists in general-audience coverage
Why These Are Genuinely Different Things
FATF's grey list flags weaknesses in anti-money-laundering controls. Panama's exit in October 2023 followed real reform, and it's a legitimate improvement — this part of the story is straightforwardly good news, and there's no reason to hedge it.
The EU's Annex I list is a separate, ongoing judgment run by the European Commission about tax transparency and fair taxation, not money laundering controls. As of the 17 February 2026 update, Panama is one of only ten jurisdictions on it worldwide — alongside American Samoa, Anguilla, Guam, Palau, the Russian Federation, Turks and Caicos, the US Virgin Islands, Vanuatu and Vietnam. Being off FATF's list and on the EU's at the same time isn't a contradiction: two different bodies are measuring two different things, and Panama currently clears one bar and not the other.
What This Means For You
HNW families planning Panama residency
Practical implication: Genuine improvement; paired with real substance, a defensible positionBusiness owners with Panama entities
Practical implication: The reformed environment reduces historic friction; banking still needs careFoundation and structure users
Practical implication: Improved regulatory environment; still needs a proper compliance framework around itNomads and lifestyle-only residents
Practical implication: Less affected either way; territorial tax remains functionalAsian HNW families using Panama as a Plan B
Practical implication: Grey-list exit helps, but doesn't remove correspondent-bank friction on large USD transfersUS clients
Practical implication: FATCA compliance in Panama is solid; onboarding is manageable with the right documentation from the start
Where the EU Listing Actually Bites
The EU blacklist doesn't stop you from banking or structuring in Panama. What it can affect is how EU counterparties, banks and tax authorities treat payments to and from Panama-based entities — some EU jurisdictions apply defensive tax measures against Annex I countries specifically. If you're structuring with EU counterparties or EU-resident beneficial owners in the picture, this is the fact to plan around, not the grey-list exit.
The Longer Trajectory
Panama continues investing in its compliance reputation, and further reform is plausible over a 5–10 year horizon. That's a reasonable expectation, not a promise — expect continued change rather than a snap back to pre-2019 friction levels, and expect the EU listing question to be the one that takes longest to resolve.
Where This Actually Leaves You
Whether current Panama banking and compliance friction is a dealbreaker depends on your specific structure, not on the grey-list headline. Book a scoping call and bring the shape of what you're planning — residency, a corporate structure, or banking alone — and we'll tell you plainly where the FATF exit helps, where the EU listing still matters, and where neither changes your answer.
General information based on the sources cited. Compliance and banking conditions in Panama shift; confirm current status directly before relying on it for a structuring or banking decision.
Next Steps
If you're evaluating offshore structuring and want an honest assessment of what CRS and UBO registries mean for your specific situation, book a scoping call. We don’t time-bill and the initial call is free - click the ‘Book a Consultation’ button or email us at hello@ftr.finance today.
Important note: This article is general information for readers considering cross-border retirement or asset structuring. It is not personal tax, legal, or financial advice. Tax laws, visa rules, and treaty positions change regularly, and how they apply to you depends on your specific facts, citizenship, source of income, and prior tax history. Speak to a qualified adviser at FTR or elsewhere before acting on anything in this article.
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