economy

finance

Ecuador cracks down on tax havens

Ecuador President Rafael Correa this weekend issued a decree that prohibits public companies that are domiciled in countries known as "tax havens" from doing business with the government.

Correa cited Panama as one of the countries that falls under this description.

The response from Panana was immediate and forceful.

"If Ecuador does that, no Ecuadorian company will be allowed to do business in Panama," said incoming Minister of Justice and Government José Raúl Mulino.

Ecuador is the fifth largest user of the Panama Canal, and Mulino warned that "they have many interests here."

Panama passed a so-called "law of retaliation" in 2002 that allows the government to effectively "blacklist" any country that discriminates against Panama.

Panamanian authorities have no more knowledge of the proposed measure being considered in Ecuador, said Deputy Minister of Foreign Trade Severo Sousa.

Discussions will also begin over proposed tariffs that are being put in place by the Ecuadorian government. These tariffs could have an impact on business in the Colón Free Zone.