The Central American country will set up an independent commission to review financial practices following the leak of information from a local law firm that has embarrassed a number of world leaders.
In a televised speech late Wednesday, Panama's president Juan Carlos Varela announced that the country's foreign ministry would be charged with setting up an "independent commission of domestic and international experts" to evaluate current financial practices and propose measures to "strengthen the transparency of the financial and legal systems."
"We are a serious country, respectful of international law and cooperative with the efforts of the international community to seek solutions to this global problem," he said.
Governments across the world have begun investigating possible financial wrongdoing by rich and powerful offshore account holders after the leak of more than 11.5 million documents, dubbed the "Panama Papers," from the Panamanian law firm Mossack Fonseca.
In his brief statement, Varela reiterated Panama would work with other countries over the leak, which was published in an investigation by the US-based International Consortium of Investigative Journalists and various news organizations.
The papers have revealed financial arrangements of prominent figures, including friends of Russian President Vladimir Putin, relatives of British prime minister David Cameron and Chinese President Xi Jinping, as well as Ukraine's president Poroshenko.
Major offshore hideout
After the scandal broke over the past weekend, Panama has faced criticism from world leaders and major international organizations.
The Secretary General of the Organization for Economic Co-operation and Development (OECD), Angel Gurria, told journalists in Berlin on Tuesday that Panama was "the last major holdout" which was still allowing "funds to be hidden offshore from tax and law enforcement authorities."
France's government responded to the revelations on Tuesday by saying it would put Panama back on its list of "uncooperative countries."
Gian Castillero, a senior Panamanian government advisor, told the news agency Reuters that France's move was "emotional" and that its declarations "shouldn't be repeated by other countries." However, he also conceded that the leak had hurt the reputation of Panama, which has an economy that was 83 percent service-based.
Castillero said the government was still considering who would be in the review commission, which he expected would file a report within six months.
Castillero stressed that no proof had been found to show Mossack Fonseca had acted improperly. And he was adamant that the fact that founding partner Ramon Fonseca being a friend of Varela's would not affect the government's judgment of the firm.
uhe/cjc (Reuters, dpa)